SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) November 20, 1998
IMN FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 022-72849 112558192
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
520 Broadhollow Road
Melville, NY 11747
(Address of principal executive offices, including zip code)
(516) 844-9805
(Registrant's telephone number, including area code)
ITEM 5. OTHER EVENTS
On November 20, 1998, the Company agreed to a repurchase of its
Series A Convertible Preferred Stock. Pursuant to the Agreement, the holders of
such Preferred Stock agreed to convert the 946 shares of Preferred Stock into
946,000 shares of Common Stock (on the basis of $1.00 per share) and the
Company agreed to purchase the 946,000 shares for $1,212,820. The Series A
Stockholder also agreed to return for cancellation 55,000 warrants to purchase
shares of the Company's common stock.
ITEM 7. EXHIBITS
Agreement between the Company and the holder.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this Form 8-K to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: December 8, 1998
IMN FINANCIAL CORP.
By: /S/ EDWARD CAPUANO
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Edward Capuano
President
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INDEX TO EXHIBITS
99.1 Agreement between the Company and the holder.
AGREEMENT
AGREEMENT dated November 20, 1998, by and among IMN Financial Corp.
(the "Company"), Precision Capital Investors Limited Partnership I (the
"Shareholder") and Gersten, Savage, Kaplowitz & Fredericks, LLP, as Escrow Agent
(the "Escrow Agent").
WHEREAS, the Company issued 1,100 shares of the Company's Series A
Preferred Stock (the "Preferred Stock") to the Shareholder in December 1997,
which Preferred Stock is convertible into shares of the Company's Common Stock,
par value $.001 per share (the "Common Stock") and warrants to purchase up to
55,000 shares of the Company's Common Stock ("Warrants"); and
WHEREAS, after certain conversions made prior to the date hereof, 946
shares of the Preferred Stock (the "Outstanding Shares") are currently
outstanding; and
WHEREAS, subject to and in accordance with the terms provided below,
the Shareholder and the Company desire that the Shareholder convert the
Outstanding Shares into the Conversion Shares (as defined below) and that the
Company redeem the Conversion Shares from the Shareholder and the Shareholder
shall return to the Company the Warrants for cancellation;
NOW, THEREFORE, in consideration of the mutual promises herein provided
and for other good and valuable consideration, the receipt of which is
acknowledged by each of the Company and the Shareholder, the Company and the
Shareholder do agree as follows:
1. Upon execution of this Agreement, the Company shall pay to the
Shareholder a $25,000 non-refundable payment as consideration for the
Shareholder entering into this Agreement ("Inducement Payment").
2. (a) As promptly as practicable after execution of this Agreement,
the Shareholder shall deliver to the Escrow Agent (i) a notice of conversion
(the "Conversion Notice") converting all of the Outstanding Shares into 946,000
shares of Common Stock (the "Conversion Shares"), at a conversion price of $1
per share; (ii) one or more certificates representing the Outstanding Shares
(the "Certificate"), duly endorsed or accompanied by a duly endorsed stock
power; and (iii) warrant certificates representing the Warrants ("Warrant
Certificates") issued to Shareholder in connection with Shareholders purchase of
the Preferred Stock . The shares of Common Stock will contain a Standard 1933
Act legend and a legend relating to this Agreement.
(b) The Company acknowledges the validity of the Conversion Notice
and agrees to honor the conversion contemplated thereby.
(c) Notwithstanding the foregoing provisions of this Section 2, the
Conversion Notice, the Certificate and the Warrant Certificates (collectively,
the "Escrow Documents") shall be held in escrow by the Escrow Agent pursuant to
the terms of this Agreement and shall be released to the Company only on the
conditions provided herein.
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3. (a) On or before December 18, 1998, or such later date as the
Shareholder may consent to in writing delivered to the Escrow Agent (the
"Payment Date"), the Company shall deliver to an escrow account maintained by
the Escrow Agent and designated by the Escrow Agent to the Company immediately
available funds equal to the sum (the "Payment Amount") of (i) accrued but
unpaid dividends on the Outstanding Shares through and including the Payment
Date (calculated as if the Payment Date were a date on which such dividends were
due and payable; the "Dividends") and (ii) One Million Two Hundred Twelve
Thousand Eight Hundred Twenty Dollars (US$1,212,820). The Inducement Payment
shall be applied towards the Payment Amount, and the Payment Amount less the
Inducement Payment shall be the Net Payment Amount ("Net Payment Amount").
(b) The Escrow Agent acknowledges and agrees that, provided it has
received the Escrow Documents prior to the Fulfillment Date, as defined below,
it is receiving the Net Payment Amount on behalf of the Shareholder.
(c) If the Escrow Agent receives the Net Payment Amount prior to the
Escrow Agent's receipt of the Escrow Documents, the Escrow Agent shall notify
the Shareholder of such fact. Under such circumstances, the Shareholder shall
only be entitled to the Dividend through the date the Net Payment Amount was
available in the Escrow Agent's account and not to any additional dividends
accruing thereafter. If the Shareholder does not deliver the Escrow Documents to
the Escrow Agent within five (5) business days after such notice is given by the
Escrow Agent, the Escrow Agent shall release the Net Payment Amount to the
Company after such fifth business day and the Escrow Agent will return to the
Shareholder any Escrow Documents (including any Escrow Documents received
thereafter). If the Shareholder delivers the Escrow Documents to the Escrow
Agent by such fifth business day (the date of such delivery, the "Delivery
Date"), the provisions of Section 4(a) shall apply.
4. (a) If the Escrow Documents and the Net Payment Amount are received
by the Escrow Agent by the Payment Date or by the Delivery Date, whichever is
later (the applicable date, the "Fulfillment Date"), the Escrow Agent shall pay
over the Net Payment Amount to the Shareholder by wire transfer (in accordance
with written instructions provided separately by the Shareholder to the Escrow
Agent), if possible, on the Fulfillment Date and, if not so possible, on the
next business day after the Fulfillment Date. After obtaining a wire
confirmation number reflecting the wire transfer of the Net Payment Amount to
the Shareholder, the Escrow Agent may release the Escrow Documents to the
Company. In such event, in consideration of the Shareholder's receipt of the Net
Payment Amount, the Company shall not be required to deliver the Conversion
Shares to the Shareholder and the Shareholder shall not be deemed to be a holder
of the Conversion Shares for any purpose whatsoever.
(b) If the Net Payment Amount is not received by the Escrow Agent by
the Fulfillment Date, the Escrow Agent shall promptly return the Escrow
Documents to the Shareholder no later than the business day after the
Fulfillment Date. Such return shall be effected by delivering the Escrow
Documents by hand delivery to the Shareholder's counsel, Krieger & Prager, 319
Fifth Avenue, Third Floor, New York, New York 10016, Attention: Samuel Krieger,
Esq. or Ronald Nussbaum, Esq. The Shareholder will then have the option, in its
sole discretion, of considering the Conversion Notice null and void or
resubmitting the Conversion Notice on the terms (including conversion price) set
forth therein to the Company for all or any portion of the Outstanding Shares.
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5. The Company hereby represents and warrants to the Shareholder as
follows:
(i) The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and has the
requisite corporate power to own its properties and to carry on its business as
now being conducted.
(ii) This Agreement and the transactions contemplated hereby, have
been duly and validly authorized by the Company. This Agreement has been duly
executed and delivered by the Company.
(iii) This Agreement is the valid and binding agreement of the
Company enforceable in accordance with its terms, subject as to enforceability
to general principles of equity and to bankruptcy, insolvency, moratorium, and
other similar laws affecting the enforcement of creditors' rights generally.
(iv) The execution and delivery of this Agreement by the Company,
the issuance of the Conversion Shares, and the consummation by the Company of
the other transactions contemplated by this Agreement do not and will not
conflict with or result in a breach by the Company of any of the terms or
provisions of, or constitute a default under (i) the certificate of
incorporation or by-laws of the Company, each as currently in effect, (ii) any
indenture, mortgage, deed of trust, or other material agreement or instrument to
which the Company is a party or by which it or any of its properties or assets
are bound, (iii) to its knowledge, any existing applicable law, rule, or
regulation or any applicable decree, judgment, or order of any court, United
States federal or state regulatory body, administrative agency, or other
governmental body having jurisdiction over the Company or any of its properties
or assets.
(v) No authorization, approval or consent of any court, governmental
body, regulatory agency, self-regulatory organization, or stock exchange or
market or the stockholders of the Company is required to be obtained by the
Company for the consummation of the transactions contemplated by this Agreement.
(vi) Upon their issuance, the Conversion Shares would represent less
than five percent (5%) of the outstanding shares of Common Stock of the Company.
6. The Shareholder hereby represents and warrants to the Company as
follows:
(i) The Shareholder is a limited partnership duly organized and
validly existing under the laws of Ontario and has the requisite power to own
its properties and to carry on its business as now being conducted.
(ii) This Agreement and the transactions contemplated hereby, have
been duly and validly authorized by the Shareholder. This Agreement has been
duly executed and delivered by the Shareholder.
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(iii) This Agreement is the valid and binding agreement of the
Shareholder enforceable in accordance with its terms, subject as to
enforceability to general principles of equity and to bankruptcy, insolvency,
moratorium, and other similar laws affecting the enforcement of creditors'
rights generally.
(iv) The execution and delivery of this Agreement by the
Shareholder, the issuance of the Conversion Shares, and the consummation by the
Shareholder of the other transactions contemplated by this Agreement do not and
will not conflict with or result in a breach by the Shareholder of any of the
terms or provisions of, or constitute a default under (i) the partnership
agreement of the Shareholder, as currently in effect, (ii) any indenture,
mortgage, deed of trust, or other material agreement or instrument to which the
Shareholder is a party or by which it or any of its properties or assets are
bound, (iii) to its knowledge, any existing applicable law, rule, or regulation
or any applicable decree, judgment, or order of any court, United States federal
or state regulatory body, administrative agency, or other governmental body
having jurisdiction over the Shareholder or any of its properties or assets.
(v) No authorization, approval or consent of any court, governmental
body, regulatory agency, self-regulatory organization, or stock exchange or
market or the stockholders of the Shareholder is required to be obtained by the
Shareholder for the consummation of the transactions contemplated by this
Agreement.
7. The Escrow Agent agrees to act as escrow agent and to carry out the
actions contemplated hereby. The Company and the Shareholder agree that the
Escrow Agent shall have no liability hereunder except in the case of gross
negligence or malfeasance on its part.
8. Any notice required or permitted hereunder shall be given in writing
(unless otherwise specified herein) and shall be deemed effectively given on the
earliest of,
(a) the date delivered, if delivered by personal delivery as against
written receipt therefor or by confirmed facsimile transmission;
(b) the fourth business day after deposit, postage prepaid, in the
United States or Canadian Postal Service by registered or
certified mail; or
(c) the third business day after mailing by international express
courier, with delivery costs and fees prepaid,
in each case, addressed to each of the other parties thereunto entitled at the
following addresses (or at such other addresses as such party may designate by
ten (10) days' advance written notice similarly given to each of the other
parties hereto.
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COMPANY: IMN Financial Corp.
520 Broadhollow Road
Melville, New York 11746
Attention: President
Telephone No.: (516) 844-9805
Telecopier No.: (516) 844-9838
SHAREHOLDER: Precision Capital Investors Limited Partnership I
3485 Bathurst Street, Suite 202
Toronto, Ontario, Canada M3H 3N2
Telephone No.: (416) 630-5555
Telecopier No.: (416) 630-4626
WITH A COPY TO: Krieger & Prager, Esqs.
319 Fifth Avenue
New York, New York 10016
Attention: Samuel Krieger, Esq.
Telephone No.: (212) 689-3322
Telecopier No.: (212) 213-2077
ESCROW AGENT: Gersten, Savage, Kaplowitz & Fredericks, LLP
101 East 52nd Street, 9th Floor
New York, New York 10022
Attention: Arthur S. Marcus, Esq.
Telephone No.: (212) 752-9700
Telecopier No.: (212) 752-9713
9. (a) This Agreement shall be governed by and interpreted in
accordance with the laws of the State of Delaware for contracts to be wholly
performed in such state and without giving effect to the principles thereof
regarding the conflict of laws. Each of the parties consents to the jurisdiction
of the federal courts whose districts encompass any part of the City of
Wilmington or the state courts of the State of Delaware sitting in the City of
Wilmington in connection with any dispute arising under this Agreement and
hereby waives, to the maximum extent permitted by law, any objection, including
any objection based on FORUM NON CONVENIENS, to the bringing of such proceeding
in such jurisdictions. To the extent determined by such court, the Company shall
reimburse the Shareholder for any reasonable legal fees and disbursements
incurred by the Shareholder in enforcement of or protection of any of its rights
under this Agreement.
(b) Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.
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(c) This Agreement shall inure to the benefit of and be binding upon
the successors and assigns of each of the parties hereto.
(d) All pronouns and any variations thereof refer to the masculine,
feminine or neuter, singular or plural, as the context may require.
(e) A facsimile transmission of this signed Agreement shall be legal
and binding on all parties thereto.
(f) This Agreement may be signed in one or more counterparts, each
of which shall be deemed an original.
(g) If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or enforceability shall not
affect the validity or enforceability of the remainder of this Agreement or the
validity or enforceability of this Agreement in any other jurisdiction.
(h) This Agreement may be amended only by an instrument in writing
signed by the party to be charged with enforcement thereof.
(i) This Agreement supersedes all prior agreements and
understandings among the parties hereto with respect to the subject matter
hereof.
[SIGNATURES ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, each of the undersigned has caused this
Agreement to be executed by its duly authorized signatory as of the date first
above written.
IMN FINANCIAL CORP.
By: /S/ EDWARD R. CAPUANO
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Edward R. Capuano, President
PRECISION CAPITAL INVESTORS
LIMITED PARTNERSHIP I
By: /S/ PAUL JACOBS
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GERSTEN, SAVAGE, KAPLOWITZ &
FREDERICKS, LLP, AS ESCROW AGENT
By:/S/ GERSTEN, SAVAGE, KAPLOWITZ & FREDERICKS, LLP
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