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EXHIBIT 10.18
AGREEMENT
This agreement, made and entered into this 18th day of November, 1993, by
and between Xxxxx X. Xxxxxx, an individual residing in Tell City, Indiana,
hereinafter referred to as Xxxxxx; and the Thermwood Corporation, an Indiana
corporation having its principal place of business in Dale, Indiana,
hereinafter referred to as Thermwood,
WITNESSETH THAT:
WHEREAS, on or about the 13th day of February, 1987, Xxxxxx and Thermwood
entered into a certain lease agreement, a copy of which is attached hereto and
made a part hereof, designated Exhibit A, hereinafter referred to as the Lease
Agreement, with respect to which, as of the effective date of this agreement,
Thermwood has been in arrears in lease payments in the amount of $122,491.36
and is obligated to future lease payments in the amount of $1,608,628.95, for
an aggregate lease payment obligation in the amount of $1,731,120.31,
hereinafter referred to as the Lease Obligation; and
WHEREAS, on or about the 1st day of July, 0000, Xxxxxxxxx executed and
delivered to Xxxxxx a certain promissory note in the amount of $250,000.00, a
copy of which is attached hereto and made a part hereof, designated Exhibit B,
with respect to which, as of the effective date of this agreement, Thermwood
has been in arrears in interest payments in the amount of $13,970.92 and is
obligated to future principal payments in the amount of $169,218.06, for an
aggregate principal and interest payment obligation in the amount of
$183,188.98, hereinafter referred to as the 1990 Promissory Note
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Obligation; and
WHEREAS, on or about the 25th day of September, 0000, Xxxxxxxxx executed
and delivered to the Xxxx State Bank of Dale, Indiana, a certain promissory
note in the amount of $1,500,000.00, a copy of which is attached hereto and
made a part hereof, designated Exhibit C, the entire right, title and interest
to and in which was sold, transferred and assigned to Xxxxxx on the 10th day of
June, 1993 and with respect to which, as of the effective date of this
agreement, Thermwood has been in arrears in interest payments in the amount of
$23,010.63 and is obligated to future principal payments in the amount of
$1,499,800.00, for an aggregate principal and interest payment obligation in the
amount of $1,522,810.63, hereinafter referred to as the 1992 Promissory Note
Obligation, and
WHEREAS, the parties hereto are desirous of entering into a restructuring
arrangement providing for the forgiveness by Xxxxxx of said Lease Obligation,
1990 Promissory Note Obligation and 1992 Promissory Note Obligation of
Thermwood in the total amount of $3,437,119.92, hereinafter collectively
referred to as the Total Thermwood Obligation, in consideration of the issuance
and grant by Thermwood to Xxxxxx of certain securities of Thermwood, under the
following terms and conditions.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto agree as follows:
1. Forgiveness of Thermwood Obligations. Xxxxxx shall and hereby does
release, remise and forever discharge Thermwood from
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said Total Thermwood obligation, in the total amount of $3,437,119.92, as of
the effective date of this agreement. All other terms and conditions of said
Lease Agreement shall remain in full force and effect.
2. ISSUANCE OF SECURITIES. In consideration of the release, remise and
discharge provided for in Paragraph 1 hereof, within Ten (10) days of the
effective date of this agreement, Thermwood shall issue and grant to Xxxxxx One
Million (1,000,000) shares of Series A Preferred Stock of Thermwood, the
rights, preferences and restrictions of which are set forth in a resolution of
the Board of Directors of Thermwood duly held on November 18, 1993, a certified
copy of which is attached hereto and made a part hereof, designated Exhibit D.
3. REPRESENTATIONS AND WARRANTIES OF THERMWOOD. Thermwood hereby
represents and warrants to Xxxxxx as follows:
a) Thermwood is a corporation duly organized and existing under the laws
of the state of Indiana and is in good standing under such laws;
b) Thermwood has requisite corporate power to own the properties owned
by it and to conduct business as being conducted by it;
c) Thermwood has all requisite power to enter into this agreement and to
carry out and perform its obligations under the terms of this agreement;
d) all corporate action on the part of Thermwood, its directors and
shareholders necessary for the authorization, execution, delivery and
performance by Thermwood of this agreement
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and the consummation of the transactions contemplated therein, and for the
authorization, issuance and delivery of said shares of Series A Preferred Stock
of Thermwood has been taken as of the effective date of this agreement;
e) this agreement is a valid and binding obligation of Thermwood and
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization and other laws of general application;
f) the execution, delivery and performance by Thermwood of this agreement
and compliance therewith, and the issuance and delivery of said shares of
Series A Preferred Stock of Thermwood will not result in any violation of and
will not conflict with or result in a breach of any of the terms of or
constitute a default under any provision of any state or federal law to which
Thermwood is subject, Thermwood's articles of incorporation, as amended, or
by-laws, as amended, or any mortgage, indenture, agreement, instrument,
judgment, decree, order, rule or regulation or other restriction to which
Thermwood is a party or by which it is bound, or result in the creation of any
mortgage, pledge, lien, encumbrance or charge upon any of the properties or
assets of Thermwood pursuant to any such term;
g) no present shareholder of Thermwood has any preemptive rights or
right of first refusal by reason of the issuance of the shares of said Series A
Preferred Stock of Thermwood;
h) said shares of Series A Preferred Stock of Thermwood when issued in
compliance with the provisions of this agreement will be validly issued, fully
paid and nonassessable, and will be free of
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any liens or encumbrances except as herein provided;
i) no consent, approval, qualification, order or authorization of, or
filing with any governmental authority, including the Securities Commissioner
of the state of Indiana, is required in connection with the Company's
execution, delivery or performance of this agreement, or the issuance or
delivery of said shares of Series A Preferred Stock of Thermwood, or the
consummation of any other transaction contemplated on the part of Thermwood
hereby; and
j) subject in part to the truth and accuracy of Xxxxxx'x representations
as set forth in this agreement, the issuance and delivery of said shares of
Series A Preferred Stock of Thermwood as contemplated by this agreement are
exempt from the registration requirements of the Securities Act of 1933,
hereinafter referred to as the Securities Act.
4. Representations and Warranties of Xxxxxx. Xxxxxx represents and
warrants to Thermwood as follows:
a) Xxxxxx is experienced in the evaluating and investing in high
technology companies such as Thermwood;
b) Xxxxxx is acquiring said shares of Series A Preferred Stock of
Thermwood hereunder for investment for his own account and not with the view to,
or for resale in connection with, any distribution thereof, and Xxxxxx
understands that said shares of Series A Preferred Stock of Thermwood as
provided hereunder have not been registered under the Securities Act by reason
of specified exemption from the registration provisions of the Securities Act,
which depends upon, among other things, the bona fide nature of
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Xxxxxx'x investment intent as expressed herein;
c) Xxxxxx acknowledges that said shares of Series A Preferred Stock of
Thermwood issued and delivered under this agreement must be held indefinitely
unless they are subsequently registered under the Securities Act or any
exemption from such registration is available, and Xxxxxx has been advised or
is aware of the provisions of Rule 144 promulgated under the Securities Act
which permits limited resale of shares purchased in a private placement subject
to the satisfaction of certain conditions and that such rule may not become
available for resale of such shares; and
d) Xxxxxx, who is a director of Thermwood, has received, reviewed and
signed in his capacity as a director, all of Thermwood's filings with the
Securities and Exchange Commission, including but not limited to SEC Form 10-K
for the fiscal year ending July 31, 1993, has had an opportunity to discuss
Thermwood's business, management and financial affairs with Thermwood's
management, has had an opportunity to review all other documents and things
necessary to make an informed decision and is aware, among other things, of the
tenuous financial condition of Thermwood.
5. Restrictions on Transferability. The shares of Series A Preferred
Stock of Thermwood issued and delivered pursuant to this agreement shall not be
transferable except as provided for under this agreement, and Xxxxxx shall
cause any proposed transferee of such securities to agree to receive and hold
such securities subject to the provisions and upon the conditions specified in
this
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agreement.
6. Restrictive Legend. Each certificate representing said shares of Series
A Preferred Stock of Thermwood, unless otherwise permitted or unless the
securities evidenced by such certificate shall have been registered under the
Securities Act, shall be stamped or otherwise imprinted with a legend in the
following form, in addition to any legend required under any applicable state
securities law:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
OR ANY STATE SECURITIES LAW. THEY MAY NOT BE SOLD OR OFFERED FOR SALE IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES
UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAW OR AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED.
Upon request of a holder of record of such certificate, Thermwood shall remove
the foregoing legend from the certificate or issue to such holder a new
certificate therefor free of any transfer legend, if, with such request,
Thermwood shall have received either the opinion referred to in sub-section (a)
of Paragraph 7 hereof or the "No Action" letter referred to in sub-section (b)
of Paragraph 7 hereof to the effect that any transfer by such holder of the
securities evidenced by such certificate will not violate the Securities Act
and applicable state security laws.
7. Notice of Proposed Transfers. Prior to any proposed transfer of any
securities issued and delivered by Thermwood under this agreement, unless such
securities have been registered pursuant to the Securities Act, the holder
thereof shall give written notice of such holder's intention to effect such
transfer.
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Each such notice shall describe the manner and circumstances of the proposed
transfer in sufficient detail, and except in transactions in compliance with
Rule 144, shall be accompanied by either (a) a written opinion of legal counsel
who shall be reasonably satisfactory to Thermwood, addressed to Thermwood and
reasonably satisfactory in form and substance to Thermwood's counsel, to the
effect that the proposed transfer of the securities may be effected without
registration under the Securities act, or (b) a "No Action" letter from the
Securities and Exchange Commission to the effect that the distribution of such
securities without registration will not result in a recommendation by the staff
of the Securities and Exchange Commission that action be taken with respect
thereto, whereupon the holder of such securities shall be entitled to transfer
such securities in accordance with the terms of the notice delivered by the
holder to Thermwood. Each certificate evidencing the securities transferred as
hereinabove provided shall bear the appropriate restrictive legend as set forth
in Paragraph 6 hereof, except that such certificate shall not bear such
restrictive legend if the opinion of counsel or a "No Action" letter referred to
above is to the further effect that such legend is not required in order to
establish compliance with any provisions of the Securities Act.
8. Finders Fee or Brokerage Commission. Each party hereto represents and
warrants to the other that no finders fee or brokerage commission is payable
with respect to any transaction contemplated by this agreement.
9. Notice. All notices and other communications require or permitted
hereunder shall be in writing and shall be mailed by
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first class, postage pre-paid, or delivered either by hand or by messenger, at
the following addresses:
As to Xxxxxx:
Xxxxx X. Xxxxxx
000 00xx Xxxxxx
Xxxx Xxxx, Xxxxxxx 00000
As to Thermwood:
Xxxxxxx X. Xxxxxxxx, President
Thermwood Corporation
X.X. Xxx 000
Xxxx, Xxxxxxx 00000
10. Successors and Assigns. Except as otherwise expressly provided herein,
the provisions hereof shall enure to the benefit of and be binding upon the
heirs, successors and assigns of the parties hereto.
11. Entire Agreement. Except as otherwise provided for herein, this
agreement and the other documents delivered pursuant thereto constitute the
full and entire understanding and agreement between the parties hereto with
regard to the subjects hereof and thereof. Neither this agreement or any term
hereof may be amended, waived, discharged or terminated, except by a written
instrument signed by the parties hereto.
12. Governing Law. This agreement shall be interpreted under and governed
by the laws of the state of Indiana.
13. Counterparts. This agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
14. Effective Date. The effective date of this agreement shall be the 1st
day of December, 1993.
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IN WITNESS WHEREOF, Xxxxxx has caused this agreement to be signed and
sealed and Thermwood has caused this agreement to be signed by its proper
officers hereunto duly authorized on the date hereinabove set forth.
WITNESS:
/s/ illegible /s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
Attest: Thermwood Corporation
/s/ illegible /s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx, President
