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EXHIBIT 7.4
XXXXX XXXXX
0000 XXXX XXXXXX
XXX XXXX, XXX XXXX 00000
October 17, 1995
AMRE, Inc.
0000 Xxxxx Xxxxxxxx Xxxxxxx
Xxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx Xxxxxx, President
Gentlemen:
1. Reference is made to the letter agreement between AMRE, Inc. ("AMRE")
and Xxxxx Xxxxx ("XXXXX"), dated June 17, 1994 (the "LETTER AGREEMENT"), the
Plan of Compensation and Indemnification Agreement entered into by such parties
as of August 1, 1994 (the "COMPENSATION PLAN"), the reinstatement letter
between the parties dated September 12, 1995 (the "REINSTATEMENT LETTER") and
all amendments thereto.
2. Pursuant to paragraph 6 of the Letter Agreement, AMRE's right to
consummate the Strategy (as defined in the Letter Agreement) expired on June
17, 1995. Such right was reinstated pursuant to the Reinstatement Letter
through October 15, 1995, which was terminated due to a failure of condition on
or about September 27, 1995. At AMRE's request, Xxxxx hereby again reinstates
AMRE's right to consummate the Strategy as of the date hereof through November
15, 1995 (the "REINSTATEMENT PERIOD"); on condition and in consideration of the
following actions and undertakings by AMRE as set forth herein:
3. The Board of Directors of AMRE shall or shall cause AMRE to: (a) on
or before November 15, 1995 increase the size of the AMRE Board of Directors by
one seat and shall appoint Xxxxx to fill such new director's seat for an
interim term commencing on the earlier of (i) November 15, 1995 and (ii)
immediately prior to the next AMRE Board of Directors meeting, and running
until the general election of directors at the next meeting held for the
purpose of such election; (b) prior to the next such meeting, the AMRE Board of
Directors shall nominate Xxxxx as a member of the directors' slate for a
subsequent one year term as director and the AMRE Board of Directors will vote
all shares of Common Stock which they have the right to so vote as a body (if
any) at such meeting in favor of Xxxxx'x election to such one year term; (c)
during his term as a director of AMRE, AMRE shall pay to Xxxxx the same
compensation and benefits, including without limitation director and officer
insurance, available to other AMRE outside directors; (d) promptly upon notice
from Xxxxx of the identity of the parties thereof, execute and deliver a Stock
Purchase Agreement in the form annexed hereto as Exhibit A; (e) on or before
November 15, 1995 deliver to Xxxxx 200,000 shares of AMRE common stock (the
"XXXXX SHARES"); (f) simultaneously with the execution hereof execute and
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AMRE, Inc.
October 17, 1995
Page 2
deliver the Stock Option Agreement in the form annexed hereto as Exhibit B; (g)
simultaneously with the execution hereof execute and deliver the Stock Option
Agreement in the form annexed hereto as Exhibit C; and (h) promptly pay to
Xxxxx $900,000 in cash if Xxxxx does not receive such cash payment from HFS
Incorporated on or before November 15, 1995; and (i) on or before November 15,
1995 AMRE shall execute and deliver a sub-license agreement between AMRE and
Garden State Exterior Remodeling, Inc., reasonably satisfactory to the parties
and containing the material terms set forth in the term sheet annexed hereto as
Exhibit D. The Xxxxx Shares shall have registration rights as a separate block
of registerable securities, not contingent on any conversion of the HFS Senior
Convertible Preferred Stock, identical to the registration rights set forth in
paragraph 10 of that certain Stock Purchase Agreement, dated as of the date
hereof, between AMRE and HFS Incorporated, except that the demand and
incidental registration rights shall be exercisable for five years from the
date hereof. Notwithstanding anything to the contrary herein, all payments and
other obligations in favor of Xxxxx set forth in (a) - (i) above shall be
deemed to have been earned and Xxxxx'x rights thereto established irrevocably
as of the execution of the License Agreement between AMRE and an affiliate of
HFS Incorporated and shall be payable as described above.
4. If AMRE does not consummate the Strategy, execute and deliver the
aforementioned documents and perform the foregoing actions, and if Xxxxx does
not receive such $900,000 in accordance with and within the time frames set
forth in the foregoing paragraph during the Reinstatement Period, AMRE shall
immediately return to Xxxxx all information furnished to AMRE with respect to
the Strategy and shall not implement and/or use any part of the Strategy until
June 17, 1999.
5. By granting this reinstatement, Xxxxx is in no way agreeing,
representing or implying that he will grant any further reinstatement or
extension in the future. The decision to grant or withhold any such future
reinstatements or extensions shall be within Xxxxx'x absolute discretion.
6. Each of paragraph 3 of the Letter Agreement and paragraphs 1, 2, 3, 4,
5 and 6 of the Compensation Plan is hereby terminated in its entirety and shall
be of no further force or effect. Xxxxx hereby irrevocably releases and
forever discharges AMRE, its officers, directors, agents, representatives and
affiliates of and from any and all claims, actions, demands, lawsuits, causes
of action, losses, costs or liability of whatever kind or nature, now existing
or which may hereafter accrue, whether known or unknown, that have been or
might be asserted, whether or not heretofore asserted, arising from paragraph 3
of the Letter Agreement and paragraphs 1, 2, 3, 4, 5, and 6 of the Compensation
Plan.
7. Other than as expressly provided herein, this Agreement does not
supersede the Letter Agreement, the Compensation Plan, the Reinstatement
Letter, the Agreement of Consent, Waiver and Release, dated December 5, 1994
between Xxxxx Xxxxx and AMRE, or the Second Agreement of Consent, Waiver and
Release dated December 28, 1994, between Xxxxx Xxxxx
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AMRE, Inc.
October 17, 1995
Page 3
and AMRE, or any amendments thereto all of which, except as specifically
modified hereby, remain in full force and effect as described therein.
8. AMRE has all requisite corporate power and authority to enter into
this Agreement and the Agreements annexed hereto and the actions contemplated
thereby. This Agreement and the Exhibits annexed hereto and the actions
contemplated thereby have been duly and validly authorized by all necessary
corporate action on the part of AMRE, and with respect to the documents being
executed and delivered simultaneously herewith, such documents have been duly
executed and delivered by AMRE and constitute legal, valid and binding
agreements of AMRE, enforceable in accordance with their respective terms and,
with respect to the documents to be executed hereafter, such documents shall,
upon execution and delivery by a duly authorized officer of AMRE, constitute
legal, valid and binding agreements of AMRE, enforceable in accordance with
their respective terms.
Sincerely,
/s/ XXXXX XXXXX
-----------------------------------
XXXXX XXXXX
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AMRE, Inc.
October 17, 1995
Page 4
ACCEPTED AND AGREED:
AMRE, INC.
By: /s/ XXXXXX X. XXXXXX
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THE FOLLOWING INDIVIDUALS ARE SIGNATORIES TO THIS LETTER AGREEMENT FOR PURPOSES
OF THE FOLLOWING PARAGRAPH ONLY:
EACH OF THE UNDERSIGNED HEREBY AGREES TO VOTE ANY AND ALL SHARES OF COMMON
STOCK OF AMRE OVER WHICH THEY HAVE VOTING POWER IN FAVOR OF XXXXX XXXXX AT
AMRE'S NEXT ANNUAL MEETING OF STOCKHOLDERS.
/s/ XXXXXX XXXXXX
-----------------------------------
Xxxxxx Xxxxxx
/s/ XXXXXX XXXXXX
-----------------------------------
Xxxxxx Xxxxxx
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EXHIBIT A
TO LETTER
AGREEMENT
FORM OF
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT (this "AGREEMENT"), dated as of
________________ __, 1995, by and among AMRE, Inc., a Delaware corporation (the
"CORPORATION") and [INSERT NAME(S) OF INDIVIDUAL PURCHASERS], an individual
residing in [INSERT PLACE OF RESIDENCE] (the "INVESTOR").
RECITALS:
A. The Corporation desires to raise money by the sale of shares
of the Corporation's Common Stock, $0.01 par value per share ("COMMON STOCK")
to the Investor and to satisfy its obligations under that certain Plan of
Compensation and Indemnification Agreement between the Corporation and Xxxxx
Xxxxx. The closing of the transactions contemplated hereby shall be
simultaneous with, and subject to, the closing of the sale of shares of Common
Stock to HFS Incorporated ("xxx "XXX XXXXXXX")
B. The Investor desires to purchase shares of Common Stock on the
terms and subject to the conditions hereinafter set forth.
AGREEMENT:
NOW, THEREFORE, in consideration of the mutual agreements, covenants,
representations and warranties contained in this Agreement, the parties hereto
hereby agree as follows:
1. SALE OF COMMON STOCK. Subject to the terms and conditions
hereof, the Corporation will issue and sell to the Investor, and the Investor
will purchase from the Corporation an aggregate of 200,000 shares of Common
Stock (the "SHARES") at $5.00 per share, for an aggregate purchase price of
$1,000,000.
2. ISSUANCE AND PAYMENT.
a. CLOSING. Subject to the terms and conditions hereof,
the closing of the purchase and sale of the Shares (the "CLOSING") shall be
held at the offices of Skadden, Arps, Slate, Xxxxxxx & Xxxx, 000 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx on, or about January 2, 1996, or at such other time and
place upon which the Corporation and the Investor shall agree (the "CLOSING
DATE").
b. DELIVERY. At the Closing, the Corporation will
deliver to the Investor certificates, registered in the name of the Investor,
representing the Shares, against payment of
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the purchase price therefor, by certified bank check payable to the
Corporation, or by wire transfer per the Corporation's instruction.
3. CORPORATION'S REPRESENTATIONS AND WARRANTIES. Except as set
forth in the disclosure schedule attached hereto as Exhibit A (the "DISCLOSURE
SCHEDULE"), the Corporation hereby represents and warrants to the Investor as
follows:
a. CORPORATE ORGANIZATION AND STANDING. The Corporation
is a corporation duly formed, validly existing and in good standing under the
laws of the State of Delaware and has the power and authority as a corporation
to own, operate or lease the properties and assets now owned, operated or
leased by the Corporation and to carry on its business in all material respects
as currently conducted; and is duly qualified as a foreign corporation to do
business in each jurisdiction where the failure to be so qualified would
materially and adversely affect the business and operations of the Corporation
and its Subsidiaries taken as a whole.
b. SUBSIDIARIES. The Corporation owns or controls the
subsidiaries or affiliated companies listed on Exhibit B hereto and does not
otherwise own or control, directly or indirectly, any equity interest in any
corporation, association or business entity (collectively, the "SUBSIDIARIES").
Each Subsidiary is a corporation duly organized, validly existing and in good
standing under the laws of each Subsidiary's jurisdiction of incorporation.
c. AUTHORITY RELATIVE TO THIS AGREEMENT. The
Corporation has the necessary power and authority to execute and deliver this
Agreement and to perform its obligations and to consummate the transactions
contemplated hereunder. The execution, delivery and performance of this
Agreement by the Corporation has been duly and validly authorized by all
necessary action of the Corporation and no other proceedings on the part of the
Corporation are necessary to authorize this Agreement or to consummate the
transactions contemplated by this Agreement. This Agreement has been duly and
validly executed and delivered by the Corporation and, assuming the due
authorization, execution and delivery hereof by the Investor and payment for
the Shares as contemplated by this Agreement, constitutes the legal, valid and
binding obligation of the Corporation enforceable against the Corporation in
accordance with its terms, except as may be limited by principles of public
policy, and subject to the effect of any applicable bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or similar laws affecting creditors' rights and
remedies generally, and subject, as to enforceability, to the effect of general
principles of equity (regardless of whether enforcement is considered in a
proceeding at law or in equity). The Shares, when issued in compliance with
the provisions of this Agreement, will be validly issued, fully paid and
nonassessable (except as provided herein), free of pre-emptive rights and will
be free of any liens or encumbrances.
d. MATERIAL AGREEMENTS; NO CONFLICT; REQUIRED FILINGS
AND CONSENTS.
(1) The execution and delivery of this Agreement
by the Corporation does not, and the performance of this Agreement by
the Corporation shall not, (i) conflict with or violate any provisions
of the Certificate of Incorporation or the Bylaws of the Corporation,
(ii) conflict with or violate any provision of any law, rule,
regulation, order, judgment or decree applicable to the Corporation or
(iii) result in any breach of
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or constitute a default (or an event which with notice or lapse of
time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation of, or
result in the creation of any lien on any of the properties or assets
of the Corporation pursuant to any note, bond, mortgage, indenture,
contract, agreement, lease, license (including, but not limited to,
the License Agreement between the Corporation and an affiliate of HFS
Incorporated (the "LICENSE AGREEMENT")), permit, insurance policy or
other instrument or obligation to which the Corporation is a party, or
by which the Corporation is bound or affected, except, in the case of
clauses (ii) and (iii) above, for such conflicts which would not,
individually or in the aggregate, have a material adverse effect on
the business and operations of the Corporation and its Subsidiaries
taken as a whole. The Corporation is not in material breach of the
License Agreement.
(2) The execution and delivery of this Agreement
by the Corporation does not, and the performance of this Agreement by
the Corporation shall not, require any consent, approval,
authorization or permit of, filing with or notification to, any
governmental or regulatory authority, domestic or foreign, on the part
of the Corporation where the failure to do so which has not been
obtained or would not have a material adverse effect on the business
or operations of the Corporation and its Subsidiaries taken as a
whole.
e. COMPLIANCE WITH LAWS. Neither the Corporation nor
its Subsidiaries are in conflict with, or in material violation of, any law,
rule, regulation, order, judgment or decree applicable to the Corporation or
its Subsidiaries or by which the Corporation or its Subsidiaries are bound or
affected, except for any such conflicts or violations which would not,
individually or in the aggregate, have a material adverse effect on the
business or operations Corporation and its Subsidiaries taken as a whole.
f. FINANCIAL STATEMENTS; OTHER FINANCIAL MATTERS. (1)
The Corporation has made available to the Investor complete, true and correct
copies of the audited consolidated financial statements of the Corporation for
the fiscal year ended December 31, 1994 and the unaudited consolidated
financial statements of the Corporation for the period ending on June 30, 1995
(collectively the "FINANCIAL STATEMENTS"). The Financial Statements, including
the related notes thereto, (i) present fairly the financial condition and
results of operations for the Corporation as of the dates thereof and for the
periods indicated therein and (ii) except as disclosed in the related notes
thereto, have been prepared in accordance with generally accepted accounting
principles.
g. NO UNDISCLOSED LIABILITIES. Neither the Corporation
nor its Subsidiaries have any material liabilities or obligations, absolute or
contingent (individually or in the aggregate), except (i) the liabilities and
obligations set forth in the Financial Statements, and (ii) liabilities and
obligations which have been incurred subsequent to June 30, 1995, in the
ordinary course of business which have not been, individually or in the
aggregate, materially adverse to the Corporation and its Subsidiaries taken as
a whole.
h. TITLE TO PROPERTY. Except as would not, in the
aggregate, have a material adverse effect on the Corporation or its
Subsidiaries taken as a whole, the Corporation has valid
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fee interests in all of its real property and insurable title thereto, and such
real property is owned by the Corporation free and clear of all liens other
than (i) liens for current taxes not yet due and payable or being contested in
good faith by appropriate proceedings and (ii) imperfections of title,
easements, pledges, charges and encumbrances which do not materially interfere
with the Corporation's ability to use the real property.
i. LITIGATION. There is no pending or, to the knowledge
of the Corporation, threatened litigation, arbitration or governmental
investigation or legal, administrative or regulatory proceeding against the
Corporation or to which any of its properties is or would be subject that (a)
if adversely determined, would have a material adverse effect on the business
or operation of the Corporation or the Subsidiaries taken as a whole or (b)
relates to this Agreement.
j. TAX MATTERS. (1) All tax returns required to be
filed by the Corporation and its Subsidiaries have been or shall be timely
filed and all taxes for which the Corporation and its Subsidiaries may be held
liable have been or shall be paid or accrued within the prescribed period or
any extension thereof, except for taxes which are being contested in good
faith.
(2) Except as would not have a material adverse
effect on the Corporation or the Subsidiaries taken as a whole, there
are no tax liens upon any property of the Corporation except for liens
for current taxes not yet due and payable. All material employee
payroll taxes required to be withheld by the Corporation have been
withheld by the Corporation.
k. NO OUTSTANDING SECURITIES. There are no outstanding
options, warrants, calls, rights or commitments or any other agreements of any
character for the purchase or acquisition from the Corporation of any shares of
its capital stock, nor does the Corporation have any obligation to repurchase
any outstanding capital stock of the Corporation.
l. BOOKS AND RECORDS. The minute books, Bylaws, stock
ledgers and books of account of the Corporation have been made available to the
Investor and are accurate in all material respects and reflect all material
matters and transactions which should currently be reflected therein.
m. INSURANCE. The Corporation and its Subsidiaries
maintain insurance in such amounts and against such risks as maintained by
companies of similar size and in businesses similar to that of the Corporation.
n. DISCLOSURE. No representation or warranty by the
Corporation in this Agreement or the Disclosure Schedule or in any written
statement or certificate furnished or to be furnished to the Investor pursuant
hereto contains or will contain any untrue statement of a material fact or
omits or will omit to state a material fact necessary to make the statements
made therein, in the light of the circumstances under which they were made, not
misleading in any material respect.
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4. INVESTOR'S REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
a. ACQUISITION FOR OWN ACCOUNT. The Investor represents
and warrants to the Corporation that the Investor is acquiring the Shares for
investment for its own account, and not with a view to, or resale in connection
with, any public distribution thereof.
b. DISCLOSURE. No representation or warranty by the
Investor in this Agreement or in any written statement or certificate furnished
or to be furnished to the Corporation pursuant hereto contains or will contain
any untrue statement of a material fact or omits or will omit to state a
material fact necessary to make the statements made therein, in the light of
the circumstances under which they were made, not misleading in any material
respect.
c. RESTRICTION ON ACQUISITION OF SHARES. During the
period five years from the date hereof, neither Investor nor any of its
Affiliates (as defined in Rule 12b-2 under the Securities Exchange Act of 1934,
as amended) shall directly or indirectly, as part of a Group (as defined in
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended) or
otherwise, without the prior written consent of the Corporation, acquire or
make any proposal to acquire more than 20% of the outstanding shares of Common
Stock of the Corporation.
5. COVENANTS PENDING CLOSING. From the date of this Agreement
until the Closing Date (or later as specified below), the parties hereto hereby
covenant as hereinafter set forth:
a. Except as previously disclosed to Purchaser, the
Corporation will conduct its business and operations according to its ordinary
and usual course of business. Without limiting the generality of the
foregoing, and, except as otherwise expressly provided in this Agreement, prior
to the Closing Date, without the prior written consent of the Investor, the
Corporation will not:
(i) declare, set aside or pay any dividend or
other distribution (whether in cash, stock or property or any
combination thereof) in respect of the Common Stock, or redeem or
otherwise acquire any shares of the Common Stock;
(ii) (a) increase in any manner the compensation of
any of its directors, officers or other employees, except such
increases as are granted (1) in the ordinary course of business in
accordance with its customary practices (which shall include normal
periodic performance review and related compensation and benefit
increases but not any general across-the-board increases) or (2) by
the Corporation's Compensation Committee and approved by a
representative of the Investor or (b) increase the rate or terms of
any bonus, insurance, pension or other employee benefit plan, payment
or arrangement made to, for or with any such directors, officers or
key employees except increases occurring in the ordinary course of
business in accordance with its customary practices (which shall
include normal periodic performance reviews and related compensation
and benefit increases) and except pursuant to any Corporation plans;
or
(iii) enter into any agreement, commitment or
transaction (including without limitation any borrowing, capital
expenditure or capital financing) material to the business, operations
or financial condition of the Corporation, except agreements,
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commitments or transactions in the ordinary course of business or as
contemplated hereby.
b. The Corporation will (i) give the Investor and its
authorized representatives reasonable access to all books, records, plants,
offices, warehouses and other facilities and properties of the Corporation and
its Subsidiaries, (ii) permit the Investor to make such inspections thereof
during normal business hours as the Investor may reasonably request and (iii)
cause its officers to furnish the Investor with such financial and operating
data and other information with respect to the business and properties of the
Corporation and its Subsidiaries as the Investor may from time to time
reasonably request; provided, however, that any such investigation shall be
conducted in such a manner as not to interfere unreasonably with the operation
of the business of the Corporation.
c. Subject to the terms and conditions of this
Agreement, each of the parties hereto will use all reasonable efforts to take,
or cause to be taken, all action, and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the sale of the Shares pursuant to this
Agreement. From time to time after the date hereof, without further
consideration, the Corporation will execute and deliver such documents to the
Investor as the Investor may reasonably request in order more effectively to
vest in the Investor good title to the Shares.
d. The Investor and the Corporation will make or cause
to be made all filings and submissions as may be required under applicable laws
and regulations, if any, for the consummation of the transactions contemplated
by this Agreement. The Investor and the Corporation will coordinate and
cooperate with one another in exchanging such information and reasonable
assistance as another may request in connection with all of the foregoing.
6. CONDITIONS TO INVESTOR'S OBLIGATIONS. The obligation of the
Investor to purchase the Shares pursuant to this Agreement is subject to the
satisfaction at or prior to the Closing Date of the following conditions, any
or all of which may be waived by the Investor:
a. The representations and warranties of the Corporation
contained in Section 3 hereof shall be true and correct in all material
respects on and as of the Closing Date as if made on and as of such date;
b. The Corporation shall have performed and complied in
all material respects with all covenants and agreements required by this
Agreement to be performed or complied with by it at or prior to the Closing
Date;
c. The Investor shall have received duly executed
certificates representing the Shares and duly registered in the name of the
Investor or its designated agent on the Closing Date;
d. The Investor shall have received certificates dated
the Closing Date signed on behalf of the Corporation by its duly authorized
officer or duly authorized officers to the effect that all of the conditions to
the Closing set forth in Sections 6(a) and 6(b) have been satisfied;
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e. The Investor shall have received opinions, dated the
Closing Date, from Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P., the Corporation's
counsel, reasonably acceptable to Investor;
f. There shall be no action or proceeding commenced or,
to the knowledge of the parties, threatened before any legal or administrative
tribunal or by any administrative organization, and no judgment, order or
injunction shall have been rendered by any such tribunal or organization for
the purpose of restraining or prohibiting the transactions contemplated in this
Agreement or otherwise adversely affecting Investor's ownership of the Shares;
and
g. The conditions precedent to the HFS Closing shall
have been fulfilled and such closing shall take place simultaneously with the
Closing.
7. CONDITIONS TO THE CORPORATION'S OBLIGATIONS. The obligations
of the Corporation to issue and sell the Shares pursuant to this Agreement are
subject to the satisfaction, at or prior to the Closing Date, of the following
conditions, any or all of which may be waived by the Corporation:
a. The representations and warranties of the Investor
contained in Section 4 hereof shall be true and correct in all material
respects on and as of the Closing Date as if made on and as of such date;
b. The Investor shall have performed and complied in all
material respects with all covenants and agreements required by this Agreement
to be performed or complied with by the Investor at or prior to the Closing
Date; and
c. The Corporation shall have received certificates
dated the Closing Date signed on behalf of the Investor by a duly authorized
officer or duly authorized officers to the effect that all the conditions to
Closing set forth in Sections 7a and 7b have been satisfied.
8. INVESTOR REGISTRATION RIGHTS. The Investor shall have
registration rights with respect to the Shares, as a separate block of
registerable securities not contingent on the conversion of the HFS Senior
Convertible Preferred Stock, identical to the registration rights described in
Section 10 of that certain Stock Purchase Agreement, dated the date hereof,
between the Company and HFS Incorporated, except that the demand and incidental
registration rights shall be exercisable for five years from the date hereof.
9. TERMINATION.
a. TERMINATION. This Agreement may be terminated and
the transactions contemplated hereby may be abandoned at any time (i) by mutual
agreement of the Investor and the Corporation or (ii) prior to the Closing, by
either the Corporation or the Investor if the Closing shall not have occurred
by January 15, 1996; provided, however, that a party who has violated or
breached this Agreement may not terminate this Agreement if such violation or
breach is continuing and such party is not using its best efforts to diligently
cure such breach. Notwithstanding the foregoing, in the event that the
Corporation and HFS Incorporated shall have agreed to extend the termination
provision of Section 11 of the HFS Stock Purchase
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Agreement, then the date set forth in (ii) above shall be deemed extended by a
like period of time.
b. EFFECT OF TERMINATION. In the event of termination
of this Agreement pursuant to clause a. above, written notice thereof shall
forthwith be given by the party electing to terminate to the other party and
the transactions contemplated by this Agreement shall be terminated and
abandoned, without further action by or on the part of either the Investor or
the Corporation. Termination of this Agreement pursuant to this Section shall
not in any way limit or restrict the rights and remedies of any party hereto
against any other party hereto who has violated or breached any representation,
warranty, agreement or other provision of this Agreement prior to the
termination hereof. The representatives and warranties of the Corporation and
the Investor shall survive the Closing.
10. MISCELLANEOUS.
a. REFORMATION AND SEVERABILITY. If any provision of
this Agreement is held to be illegal, invalid or unenforceable under present or
future laws effective during the term hereof:
(1) in lieu of such illegal, invalid or
unenforceable provision, there shall be added automatically as
a part of this Agreement a provision as similar in terms to
such illegal, invalid or unenforceable provision as may be
possible and be legal, valid and enforceable; and
(2) the legality, validity and enforceability of
the remaining provisions hereof shall not in any way be
affected or impaired thereby.
b. NOTICES. Any notice, payment, report or other
communication required or permitted to be given by one party to any other party
by this Agreement shall be in writing and either (i) served personally on the
other party or parties or (ii) sent by overnight courier, express, registered
or certified first class mail, postage prepaid, addressed as follows:
(a) If to the Corporation, at
AMRE, Inc.
0000 Xxxxx Xxxxxxxx Xxxxxxx
Xxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: President
Telephone: (000) 000-0000
Fax: (000) 000-0000
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(b) If to the Investor(s), at
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Telephone:
Fax:
or to such other address as shall have theretofore been furnished to the other
party by like notice. Such notice shall be deemed received on the date on
which personally delivered, or three (3) business days after the same shall
have been deposited in the United States mail.
c. HEADINGS. The headings of sections contained in this
Agreement are for convenience only and shall not be deemed to control or affect
the meaning or construction of any provision of this Agreement.
d. WAIVER. The failure of any party to insist, in any
one or more instances, upon performance of any of the terms, covenants or
conditions of this Agreement shall not be construed as a waiver or a
relinquishment of any right or claim granted or arising hereunder or of the
future performance of any such term, covenant, or condition, and such failure
shall in no way affect the validity of this Agreement or the rights and
obligations of the parties hereto.
e. GOVERNING LAW. THIS AGREEMENT INCLUDING, BUT NOT
LIMITED TO, THE VALIDITY AND ENFORCEABILITY HEREOF, SHALL BE GOVERNED BY AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE
WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS RULES OR CHOICE OF LAWS RULES
THEREOF.
f. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, and
all of which together shall constitute one and the same instrument
notwithstanding that all parties are not signatories to each counterpart.
g. ASSIGNABILITY AND BINDING EFFECT. This Agreement may
not be assigned by the Investor without the prior written consent of the
Corporation. This Agreement shall inure to the benefit of and be binding upon
the parties hereto and their respective successors and permitted assigns.
h. AMENDMENTS. This Agreement may not be amended,
supplemented or modified except by an agreement in writing signed by all of the
parties hereto.
i. EXPENSES. Except as otherwise provided in this
Agreement, each party hereto shall pay its own expenses, including, without
limitation, fees and disbursements of legal counsel, financial advisors and
accountants incurred in connection with this Agreement.
j. CONSTRUCTION OF AGREEMENT; MODIFICATIONS. This
Agreement and any schedules and exhibits attached hereto and the other
documents delivered pursuant hereto
9
14
represent the final agreement of the parties and may not be contradicted by
evidence of prior, contemporaneous or subsequent oral agreements of the
parties. There are no unwritten oral agreements between the parties.
Furthermore, this Agreement supersedes all prior written agreements and
understandings, if any.
k. WAIVER OF TRIAL BY JURY. TO THE EXTENT PERMITTED BY
APPLICABLE LAW, EACH OF THE CORPORATION AND THE INVESTOR HEREBY IRREVOCABLY
WAIVES ALL RIGHT OF TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY MATTER ARISING
HEREUNDER.
l. PUBLICITY. No public release, announcement or other
form of publicity concerning the transactions contemplated hereby shall be
issued by either party without the prior consent of the other party, except to
the extent that such release or announcement is required by law or the rules or
regulations of the Securities and Exchange Commission or any securities
exchange.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
AMRE, INC.
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
--------------------------------------
[INVESTOR]
[OTHER INVESTORS, IF ANY]
10
15
EXHIBIT A
j. Corporate Capitalization:
There are no outstanding options, warrants, calls, rights or commitments, or
any other agreements of any character for the purchase or acquisition from the
Corporation of any shares of its capital stock, nor does the Corporation have
any obligation to repurchase any outstanding capital stock of the Corporation,
except as follows:
1. There are outstanding options under the Corporation's stock
option plan to purchase an aggregate of 819,881 shares of
common stock of the Corporation at exercise prices ranging
from $3.00 to $8.50 per share.
2. There are outstanding options to purchase an aggregate of
1,342,500 shares of common stock of the Corporation which were
granted outside of the Corporation's stock option plan. These
options are held by directors (two of whom are also officers),
a former director, a former employee and the widow of a former
director, and are exercisable at prices ranging from $3.50 to
$7.875 per share.
3. Options to purchase an aggregate of 400,000 shares of common
stock of the Corporation may be granted to Xxxxx Xxxxx in
connection with transactions being entered into concurrently
with this agreement. These options will be at prices ranging
from $5.00 to $5.50 per share.
11
16
EXHIBIT B
The subsidiaries of the Corporation, all of which are wholly-owned, are as
follows:
American Remodeling, Inc., a Texas corporation
CANRE Remodeling, Corp., incorporated under the Canadian Business
Corporations Act
12
17
EXHIBIT B
TO LETTER
AGREEMENT
FORM OF AMRE, INC.
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT is made as of the 17th day of October,
1995, between AMRE, Inc., a Delaware corporation (the "COMPANY"), and Xxxxx
Xxxxx, an individual resident of New York, New York (the "OPTIONEE").
The Company wishes to grant to the Optionee an option to purchase
shares of common stock of the Company pursuant to the Plan of Compensation and
Indemnification Agreement dated as of August 1, 1994 (as amended to date),
between the Company and the Optionee, and the Optionee wishes to accept the
Option (as defined below). Therefore, in consideration of the mutual covenants
herein contained, the parties hereto agree as follows:
ARTICLE X. XXXXX AND EXERCISE OF OPTION
1.1 GRANT OF OPTION. The Company grants to the Optionee an option
(the "OPTION") to purchase an aggregate of 200,000 shares of Common Stock,
$0.01 par value, of the Company (the "SHARES"), at a price of $5.50 per share
(the "EXERCISE PRICE"), subject to the terms and conditions hereinafter set
forth. The Option is a non-qualified option and is not intended to constitute
an incentive stock option within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended. The Option shall be irrevocable.
1.2 VESTING OF OPTION. All or any part of the Shares may be
purchased at any time or times during the term of the Option.
1.3 TERM OF OPTION. The term of the Option is five years from
the date hereof.
1.4 EXERCISE OF OPTION. The Option may be exercised by giving
written notice to the Company, addressed to its corporate headquarters,
attention of the Secretary, specifying the number of Shares to be purchased,
accompanied by payment in full of the Exercise Price, either in cash or by
check, bank draft or money order; provided, however, that in lieu of cash the
Optionee may exercise the Option by instructing the Company to withhold from
the Shares otherwise issuable upon the exercise of the Option that number of
Shares having a fair market value equal to the cash Exercise Price of the
Shares being purchased. For this purpose, the per share value of the Shares
shall be the fair market value on the date of exercise (or, if the date of
exercise is not a trading date, on the first trading date immediately preceding
the date of exercise), which shall be the average of the highest and lowest
sales prices of shares of common stock of the Company on the New York Stock
Exchange (or, if the shares of common stock of the Company are not listed on
the New York Stock Exchange, Inc., on the principal national stock exchange or,
if not so listed, on the quotation service on which such shares are listed) as
reported in The Wall Street Journal--Southwest Edition, on such date.
18
1.5 RESTRICTIONS ON EXERCISE. Any exercise of the Option by the
Optionee is subject to the representation by the Optionee that he is acquiring
the Shares solely for his own account for investment and not with a view to, or
for offer or sale in connection with, the distribution of all or any part of
the Shares within the meaning of the Securities Act of 1933, as amended (the
"ACT"), and it is understood that a legend to the following effect will be
placed on any certificates representing the Shares:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, MAY NOT BE OFFERED, SOLD
OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL
SUCH SHARES ARE REGISTERED UNDER SUCH ACT OR AN OPINION OF COUNSEL IS
OBTAINED SATISFACTORY TO AMRE, INC. TO THE EFFECT THAT SUCH
REGISTRATION IS NOT REQUIRED.
The Optionee understands and agrees that the Shares may not be sold, pledged,
hypothecated or otherwise transferred unless they are registered under the Act
and applicable state securities laws or an opinion of counsel is obtained
satisfactory to the Company to the effect that said registration is not
required. The Optionee further understands that stop transfer instructions
will be placed with the Transfer Agent of the Shares so as to restrict resale,
pledge, hypothecation or other transfer thereof subject to the provisions
hereof, including the provisions of the legend referred to above. The Optionee
understands and agrees that he shall have no registration rights of any kind or
character with respect to the Shares.
1.6 LIMITATIONS ON EXERCISE. The provisions of Paragraph 3.1
hereof notwithstanding, the Option shall not be exercisable following
expiration of the term of the Option as set forth in Paragraph 1.3 hereof.
ARTICLE II. REPRESENTATIONS, WARRANTIES AND AGREEMENTS
The Company represents, warrants and agrees as follows:
2.1 The Shares to be issued under the Option will be validly
issued, fully paid and non-assessable and will be free of any liens and
encumbrances. The Shares subject to the Option are not subject to any
pre-emptive rights.
2.2 Upon the occurrence of any event requiring an adjustment
pursuant to Section 3.3 hereto, the Company shall give written notice to
Optionee of any adjustment thereunder and shall set forth the calculations and
basis therefor. Optionee shall have ten days within receipt of such notice to
object to the proposed adjustment. In the event Optionee objects to such
adjustment, the dispute shall be resolved by an independent accountant mutually
agreed to, and whose expenses shall be shared equally by, the Company and
Optionee.
2.3 Within 60 days of the date hereof, Company shall file a
listing application for the Shares with the New York Stock Exchange, Inc.
2
19
2.4 Optionee shall be entitled to registration rights with respect
to the Shares, as a separate block of registerable securities not contingent on
the conversion of the HFS Senior Convertible Preferred Stock, to the same
extent as set forth in Section 10 of that certain Stock Purchase Agreement,
dated as of the date hereof, between the Company and HFS Incorporated, except
that the demand and incidental registration rights shall be exercisable for
five years from the date hereof and that Optionee shall pay all expenses of any
such registration applicable to the Shares, but not the fees and expenses of
Company counsel or auditors.
ARTICLE III. MISCELLANEOUS
3.1 DEATH. In the event of the death of the Optionee, the
personal representatives, heirs, legatees or distributees of the Optionee, as
appropriate, shall have the right at any time or times during the term of the
Option to exercise the Option to the extent that the Option had not been
exercised.
3.2 NONTRANSFERABILITY OF OPTION. The Option shall not be
transferable by the Optionee otherwise than by will or the laws of descent and
distribution or a transfer to the Optionee's immediate family or a transfer
with the prior consent of the Company, which consent shall not be unreasonably
withheld. During the lifetime of the Optionee, the Option shall be exercisable
only by the Optionee. Any attempted assignment, transfer, pledge,
hypothecation or other disposition of the option, or the levy of an execution,
attachment or similar process upon the Option, shall be null and void and
without effect.
3.3 CHANGES IN CAPITAL STRUCTURE. In the event that the number of
shares of common stock of the Company shall be changed by reason of stock
splits, combinations of shares, recapitalizations, mergers, consolidations or
stock dividends, the number of Shares then subject to the Option shall be
proportionately adjusted so as to reflect such change; and, in such event, the
Exercise Price shall be proportionately increased or decreased, as the case may
be, all to prevent dilution or enlargement of the rights of the Optionee. No
adjustment provided for in this Paragraph 3.3 shall require the issuance of any
fractional shares.
3
20
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
AMRE, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
OPTIONEE:
---------------------------------------
Xxxxx Xxxxx
4
21
EXHIBIT C
TO LETTER
AGREEMENT
FORM OF AMRE, INC.
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT is made as of the 17th day of October,
1995, between AMRE, Inc., a Delaware corporation (the "COMPANY"), and Xxxxx
Xxxxx, an individual resident of New York, New York (the "OPTIONEE").
Pursuant to the participation by Optionee in the transactions referred
to by the Board of Directors of the Company as "Project Blackjack" and in
consideration of the benefit received by the Company therefor, the Company
desires to grant to Optionee the Option (as defined herein) and Optionee
desires to accept the Option.
Therefore, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
ARTICLE X. XXXXX AND EXERCISE OF OPTION
1.1 Grant of Option. The Company has granted to the Optionee an
option (the "OPTION") to purchase an aggregate of 200,000 shares (the "SHARES")
of common stock, $0.01 par value, of the Company (the "COMMON STOCK") at a
price of $5.00 per share (the "EXERCISE PRICE"), subject to the terms and
conditions hereinafter set forth. The Option is a non-qualified option and is
not intended to constitute an incentive stock option within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended. The Option shall
be irrevocable.
1.2 Vesting to Option. All or any part of the Shares may be
purchased at any time during the term of the Option.
1.3 Term of Option. The term of the Option is five years from
the date hereof.
1.4 Exercise of Option. The Option may be exercised by giving
written notice to the Company, addressed to its corporate headquarters,
attention of the Secretary, specifying the number of shares to be purchased,
accompanied by payment in full of the Exercise Price, either in cash or by
check, bank draft or money order; provided, however, that in lieu of cash the
Optionee may exercise the Option by instructing the Company to withhold from
the Shares otherwise issuable upon the exercise of the Option that number of
Shares having a fair market value equal to the Exercise Price of the Shares
being purchased. For this purpose, the per share value of the Shares shall be
the fair market value on the date of exercise (or, if the date of exercise is
not a trading date, on the first trading date immediately preceding the date of
exercise), which shall be the average of the highest and lowest sales prices of
shares of Common Stock listed on the New York Stock Exchange, Inc. (or, if the
Common Stock is not listed
22
thereon, on the principal national stock exchange on which such shares are
listed) as reported in The Wall Street Journal--Southwest Edition, on such
date.
1.5 Restrictions on Exercise. Any exercise of the Option by the
Optionee is subject to the representation by the Optionee that he is acquiring
the Shares solely for his own account for investment and not with a view to, or
for offer or sale in connection with, the distribution of all or any part of
the Shares within the meaning of the Securities Act of 1933, as amended (the
"ACT"), and it is understood that a legend to the following effect will be
placed on any certificates representing the Shares:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, MAY NOT BE OFFERED, SOLD
OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL
SUCH SHARES ARE REGISTERED UNDER SUCH ACT OR AN OPINION OF COUNSEL IS
OBTAINED SATISFACTORY TO AMRE, INC. TO THE EFFECT THAT SUCH
REGISTRATION IS NOT REQUIRED.
The Optionee understands and agrees that the Shares may not be sold, pledged,
hypothecated or otherwise transferred unless they are registered under the Act
and applicable state securities laws or an opinion of counsel is obtained
satisfactory to the Company to the effect that said registration is not
required. The Optionee further understands that stop transfer instructions
will be placed with the Transfer Agent of the Shares so as to restrict resale,
pledge, hypothecation or other transfer thereof subject to the provisions
hereof, including the provisions of the legend referred to above. The Optionee
understands and agrees that he shall have no registration rights of any kind or
character with respect to the Shares.
1.6 LIMITATIONS ON EXERCISE. The provisions of Paragraph 3.1
hereof notwithstanding, the Option shall not be exercisable following
expiration of the term of the Option as set forth in Paragraph 1.3 hereof.
ARTICLE II. REPRESENTATIONS, WARRANTIES AND AGREEMENTS
The Company represents, warrants and agrees as follows:
2.1 The shares to be issued under the Option will be validly
issued, fully paid and non-assessable and will be free of any liens and
encumbrances. The shares subject to the Option are not subject to any
pre-emptive rights.
2.2 Upon the occurrence of any event requiring an adjustment
pursuant to Section 3.3 hereto, the Company shall give written notice to
Optionee of any adjustment thereunder and shall set forth the calculations and
basis therefor. Optionee shall have ten days within receipt of such notice to
object to the proposed adjustment. In the event Optionee objects to such
adjustment, the dispute shall be resolved by an independent accountant mutually
agreed to, and whose expenses shall be shared equally by, the Company and
Optionee.
23
2.3 Within 60 days of the date hereof, Company shall file a
listing application for the shares subject to the Option with the New York
Stock Exchange, Inc.
2.4 Optionee shall be entitled to registration rights with respect
to the Shares, as a separate block of registerable securities not contingent on
the conversion of the HFS Senior Convertible Preferred Stock, to the same
extent as set forth in Section 10 of that certain Stock Purchase Agreement,
dated as of the date hereof, between the Company and HFS Incorporated, except
that the demand and incidental registration rights shall be exercisable for
five years from the date hereof and that Optionee shall pay all expenses of any
such registration applicable to the Shares, but not the fees and expenses of
Company counsel and auditors.
ARTICLE III. MISCELLANEOUS
3.1 Death. In the event of the death of the Optionee, the
personal representatives, heirs, legatees or distributees of the Optionee, as
appropriate, shall have the right at any time or times during the term of the
Option to exercise the Option to the extent that the Option had not been
exercised.
3.2 Nontransferability of Option. The Option shall not be
transferable by the Optionee otherwise than by will or the laws of descent and
distribution or a transfer to Optionee's immediate family or a transfer with
the prior consent of the Company, which consent shall not be unreasonably
withheld. During the lifetime of the Optionee, the Option shall be exercisable
only by the Optionee. Any attempted assignment, transfer, pledge,
hypothecation or other disposition of the Option, or the levy of any execution,
attachment or similar process upon the Option, shall be null and void and
without effect.
3.3 Changes in Capital Stock Structure. In the event that the
number of shares of common stock of the Company shall be changed by reason of
stock splits, combinations of shares, recapitalizations, mergers,
consolidations or stock dividends, the number of shares then subject to the
Option shall be proportionately adjusted so as to reflect such change; and, in
such event, the Exercise Price shall be proportionately increased or decreased,
as the case may be, all to prevent dilution or enlargement of the rights of the
Optionee. No adjustment provided for in this Section 3.3 shall require the
issuance of any fractional shares.
24
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
AMRE, INC.
By:
-------------------------------------
Xxxxxx X. Xxxxxx
President
OPTIONEE:
----------------------------------------
Xxxxx Xxxxx
25
EXHIBIT D
TO LETTER
AGREEMENT
TERM SHEET FOR SUB-LICENSE AGREEMENT
A Sub-License Agreement between AMRE, Inc. (Sub-Licensor) and Garden State
Exterior Remodeling, Inc. (Sub-Licensee) shall be executed on or before
November 15, 1995 which shall substantially parallel AMRE/Century 21 License
Agreement (the "License") containing among other things the following terms:
1. SUBJECT
License shall be for use of the Trade Xxxx as defined in the License.
2. PRODUCTS
1. Siding and related products, which related products
include, but are not limited to, overhang and trim.
2. Continuous guttering.
3. Windows and related products, which related products
include, but are not limited to, storm windows (interior and
exterior), shutters, awnings, screens and skylights.
4. Exterior coating.
5. Brick, stucco and decorative stone facing.
6. Doors, including, but not limited to, entry doors and
patio doors.
3. XXXXXXXXXX XXXX (XXX XXXX XXXXXXXXXXXX XXXX)
Zone 1: (All Products) New York-Westchester, Rockland, Xxxxxx, Nassau
and Suffolk counties, New York City; New Jersey-Sussex, Passaic,
Bergen, Morris, Essex, Warren, Somerset, Hunterdon, Monmouth, Ocean,
Union and Xxxxxx counties.
Zone 2: (Brickface, Stucco, decorative Stone Facing and Exterior
Coating only). New Jersey-Atlantic, Cumberland, Cape May, Salem,
Gloucester, Camden, Middlesex, Xxxxxx counties;
Pennsylvania-Philadelphia, Delaware, Chester, Montgomery, Bucks,
Lehigh and Xxxxxx counties; Delaware-New Castle county. New
York-Orange, Dutchess counties; Connecticut-Fairfield county.
-1-
26
4. TERM
Commencing January 1, 1996 and ending December 31, 1996.
5. FEE
3% of installation revenue (defining installation revenue in a manner
consistent with the license agreement between AMRE, Inc. and Century
21.)
6. EXCLUSIVE
For the products listed in the territories for the term of the
agreement.
7. MARKETING SUPPORT
Customer lists, access to Century 21 brokers, joint marketing efforts
and other similar marketing support will be available from both
Century 21 and AMRE, Inc. (Century 21 support subject to Century 21
approval.) All other marketing support similar to that described in
the AMRE, Inc./Century 21 license agreement will be made available to
Garden State Exterior Remodeling, Inc. as is practical. Also, AMRE,
Inc. and Garden State Exterior Remodeling, Inc. will establish a
program to either trade leads or sell and buy leads that are generated
in each others territories, consistent with AMRE, Inc.'s current
practices.
-2-
