EXHIBIT 2.1
SHOE PAVILION, INC.
EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT is made as of February ___, 1998, by and among
Shoe Pavilion, Inc., a Delaware corporation (the "Company"), Shoe Inn, Inc., a
Washington corporation ("Shoe Inn"), and Xxxxxx Xxxxxx the sole holder of common
stock of Shoe Inn (the "Shareholder").
R E C I T A L S
A. The Shareholder holds of record all of the outstanding shares of
the common stock of Shoe Inn (the "Shoe Inn Shares"), such common stock being
the only outstanding class of shares of Shoe Inn.
B. The Company is a new corporation formed to exchange or substitute
its common stock (the "Company Shares") for Shoe Inn Shares (the "Exchange"),
which the Shareholder and the Company will treat as a transaction pursuant to
Section 351 of the Internal Revenue Code of 1986, as amended.
C. In order to take advantage of various provisions of Delaware
corporate law, the Board of Directors of the Company has approved the Exchange.
The Board of Directors of Shoe Inn also has approved the Exchange, determined
that the Exchange is in the best interests of the Shareholder and has
recommended that the Shareholder exchange the Shareholder's Shoe Inn Shares for
the Company Shares in accordance with the terms of this Agreement.
D. The Company has filed with the Securities and Exchange Commission
(the "Commission") a Registration Statement on Form S-1, File No. 333-41877 (the
"Registration Statement") pursuant to which the Company intends to register
Company Shares under the Securities Act of 1933, as amended (the "Act").
E. The Company, Shoe Inn and the Shareholder desire to effect the
Exchange as of the date that the Commission declares the Registration Statement
effective under the Act (the "Effective Date").
AGREEMENT
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The parties hereby agree as follows:
1. Exchange
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1.1 Exchange of the Shares. Subject to the terms and conditions
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hereof, the Company will issue to the Shareholder 4,500,000 Company Shares for
all of the outstanding Shoe Inn Shares.
1.2 Concurrent with the execution of this Agreement, the
Shareholder is delivering to the Company the certificate(s) representing all of
the outstanding Shoe Inn Shares, together with duly executed stock power(s) for
such certificates.
2. Closing Date; Delivery.
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2.1 Closing Date.
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(a) The closing of the Exchange shall be held at the offices
of Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx LLP, 000 Xxxxxxx Xxxxxx, Xxx Xxxxxxxxx,
Xxxxxxxxxx, at 10:00 a.m. on the Effective Date. If the Effective Date does not
occur, this Agreement shall be null and void and the Exchange shall not be
consummated.
(b) The closing referred to in subsection (a) above is
hereinafter referred to as the "Closing" and the date of the Closing is
hereinafter referred to as the "Closing Date".
2.2 Delivery.
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(a) Subject to the terms of this Agreement, at the Closing
the Company will deliver to the Shareholder the certificates representing the
Company Shares to be received by the Shareholder in the Exchange.
(b) Despite anything in this Agreement to the contrary, the
rights and obligations of the parties to this Agreement are conditional upon the
occurrence of the Closing and are and will be of no force and effect until the
occurrence of the Closing. The parties hereto agree that this Agreement may be
terminated unilaterally by the Company at any time prior to the Closing on
written notice to the other parties hereto.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first set forth above.
SHOE PAVILION, INC.
a Delaware corporation
By:______________________________
Name: Xxxxxx Xxxxxx
Title: Chairman, President, and
Chief Executive Officer
SHOE INN, INC.
a Washington corporation
By:______________________________
Name: Xxxxxx Xxxxxx
Title: Chairman, President and
Chief Executive Officer
SHAREHOLDER OF SHOE INN, INC.
_________________________________
Xxxxxx Xxxxxx
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