-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UVOZfOl95UnN9oIAsRNNNdBPvf3ReWeOIn/zIbGSEvQ9KptqiJ52wo9nwohgDFgh zwb4uUtnAf/+7HR/S2hPXw== 0001012410-00-000146.txt : 20010101 0001012410-00-000146.hdr.sgml : 20010101 ACCESSION NUMBER: 0001012410-00-000146 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20001213 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20001229 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ICHOR CORP CENTRAL INDEX KEY: 0000927761 STANDARD INDUSTRIAL CLASSIFICATION: HAZARDOUS WASTE MANAGEMENT [4955] IRS NUMBER: 251741849 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-25132 FILM NUMBER: 798600 BUSINESS ADDRESS: STREET 1: 400 BURRARD STREET SUITE 1250 CITY: VANCOUVER BRITISH CO STATE: A1 ZIP: 15146 BUSINESS PHONE: 6046835767 MAIL ADDRESS: STREET 1: 300 OXFORD DR CITY: 400 BURRARD STREET S STATE: A1 ZIP: 15146 FORMER COMPANY: FORMER CONFORMED NAME: PDG REMEDIATION INC DATE OF NAME CHANGE: 19940801 8-K 1 0001.txt FORM 8-K OF ICHOR CORPORATION 1 ========================================================================== UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington D.C. 20549 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): December 13, 2000 ICHOR CORPORATION (Exact name of Registrant as specified in its charter) Delaware (State of Incorporation) 000-25132 25-1741849 (Commission File Number) (I.R.S. Employer Identification No.) 17 Dame Street, Dublin 2, Ireland (Address of principal executive offices, including postal code) (3531) 679 1688 (Registrant's telephone number, including area code) ========================================================================== 2 - 2 - ITEM 5. OTHER EVENTS. Effective December 13, 2000, ICHOR Corporation ("ICHOR") entered into two share exchange agreements to, directly and indirectly, acquire approximately 99.9% of the outstanding shares of Hippocampe S.A. ("Hippocampe") of Lyon, France in consideration of an aggregate of approximately 33,311,398 shares of common stock and securities convertible into shares of common stock of ICHOR (the "Transaction"). ICHOR currently has issued 4,918,770 shares of common stock. The Transaction was announced by a press release dated December 14, 2000 issued by ICHOR. Description of the Transaction - ------------------------------ ICHOR has entered into a share exchange agreement ("Agreement A") with shareholders owning approximately 50.7% of the issued and outstanding shares of Hippocampe. Pursuant to Agreement A, such Hippocampe shareholders will, on the closing (the "Closing") of the Transaction, transfer their Hippocampe shares to ICHOR in consideration of ICHOR issuing to them shares of common stock of ICHOR. ICHOR has also entered into a separate share exchange agreement ("Agreement B") with shareholders owning approximately 49.2% of the issued and outstanding shares of Hippocampe. Pursuant to Agreement B, such Hippocampe shareholders will, on Closing, transfer their shares of Hippocampe to a new wholly-owned subsidiary to be established by ICHOR under the laws of Luxembourg ("LuxCo"). In exchange for their Hippocampe shares, such Hippocampe shareholders will be issued preferred shares of LuxCo (the "LuxCo Preferred Shares") which are convertible into shares of common stock of ICHOR at the option of the holder. In all material respects, the LuxCo Preferred Shares will have similar rights and restrictions as shares of common stock of ICHOR, including the right to receive dividends and the right to vote at shareholder meetings of ICHOR. The rights and restrictions attaching to the LuxCo Preferred Shares will be given effect, in part, by certain agreements to be entered at Closing including: (i) a support agreement between ICHOR and LuxCo providing for the support by ICHOR of the rights attaching to the LuxCo Preferred Shares; (ii) a voting and exchange trust agreement among ICHOR, LuxCo and a trustee providing for the voting rights of the LuxCo Preferred Shares in ICHOR; and (iii) a shareholder agreement between ICHOR and the holders of the LuxCo Preferred Shares providing for the support by ICHOR of the rights attaching to the LuxCo Preferred Shares. Upon Closing, ICHOR will contribute and transfer to LuxCo the Hippocampe shares that ICHOR receives from Hippocampe shareholders under Agreement A in consideration for the issuance to ICHOR by LuxCo of additional common shares of LuxCo. The aggregate number of shares of common stock of ICHOR issuable upon Closing and assuming the full conversion of LuxCo Preferred Shares is approximately 33,311,398 shares. 3 - 3 - Prior to Closing, all of the currently outstanding shares of preferred stock of ICHOR will be redeemed for cash and/or converted into shares of common stock of ICHOR (the "Preferred Stock Reorganization"). ICHOR expects that approximately 3,247,060 shares of common stock of ICHOR will be issued pursuant to the Preferred Stock Reorganization. The Transaction is subject to certain conditions customary for transactions of this nature including, among other things, that: (i) ICHOR receives shareholder approval to increase its authorized share capital to a level necessary to complete the Transaction; and (ii) certain agreements (the "Bank Agreements") made between Hippocampe and MFC Merchant Bank S.A. ("MFC Bank"), a licensed Swiss bank of Geneva, Switzerland, including an underwriting agreement relating to MFC Bank's services as an advisor in the Transaction and to raise capital for Hippocampe and a loan agreement relating to a credit facility provided by MFC Bank to Hippocampe being duly and validly assigned and transferred to ICHOR. After giving effect to the Transaction and the Preferred Stock Reorganization but prior to giving effect to any shares of common stock or securities convertible into shares of common stock of ICHOR to be issued pursuant to the Bank Agreements to MFC Bank, Hippocampe shareholders will own approximately 80% of the issued and outstanding shares of common stock of ICHOR. Pursuant to the Bank Agreements, MFC Bank acted as an advisor in the Transaction and will receive certain compensation in respect thereof, including 2,017,854 shares of common stock of ICHOR to be issued upon the Closing. In addition, MFC Bank provided a credit facility to Hippocampe in connection with which MFC Bank has received certain fees as well as share purchase warrants which, upon the Closing, will entitle MFC Bank to purchase up to approximately 6,730,598 shares of common stock of ICHOR, subject to final adjustment, for a period expiring on July 31, 2003. MFC Bank is a wholly-owned subsidiary of MFC Bancorp Ltd., which currently, directly and indirectly, owns approximately 43.7% of the currently outstanding shares of common stock of ICHOR. All of the shares of common stock and securities convertible into shares of common stock of ICHOR acquired by the shareholders of Hippocampe pursuant to the Transaction will be subject to resale restrictions in accordance with United States federal and state securities laws. Description of Hippocampe S.A. - ------------------------------ Hippocampe is a research and development company founded in 1990 under the laws of France. The key principal of Hippocampe is Dr. Pierre-Francois Serres, who holds several degrees in biology and human biology and one in management. Dr. Serres began his career as a professor at the medical faculty of the University of Lyon in France. From 1975 and prior to starting Hippocampe, he held various teaching and research positions at French medical universities and biomedical institutes, among them the Institut Pasteur in Lyon, France. 4 - 4 - Hippocampe is devoted to fundamental and applied research in the area of human and veterinary biology and medicine, with a particular emphasis on humanitarian aspects (i.e., retroviral pathogenesis, such as AIDS, oncogenesis and transplantation). Hippocampe's current objectives are to develop vaccines, therapeutic molecules and specific therapies for certain retroviral diseases or diseases with a viral autoimmune content. The first targeted products and applications concern AIDS and multiple sclerosis. Hippocampe has a limited operating history and its products are in an early stage of development. However, Hippocampe believes it has made a major discovery with a new and precise molecular mimicry between a conserved part of GP41 (an HIV transmembrane protein) in a trimeric form and Interleukine 2 ("IL-2"), the immune system's conductor protein. This discovery may explain that an HIV infection can trigger an immune response that turns against the immune system itself. Hippocampe has further found that the above mimicry exists in three species affected by AIDS (i.e. human, monkey and feline). This research indicates potential for a major link that may have a significant impact in developing animal and human AIDS vaccines and therapeutic molecules in the field of HIV and FIV infection. A portion of the research of Dr. Serres was recently published by the French Academy of Sciences in a paper entitled "Molecular mimicry between the trimeric ectodomain of the transmembrane protein of immunosuppressive lentiviruses (HIV-SIV-FIV) and interleukin 2." This paper was communicated by Dr. Luc Montagnier, an internationally recognized expert in the AIDS research field. The findings of Dr. Serres were presented at the Foundation Marcel Merieux International Symposium on Autoimmunity Induced by Infection or Immunization. The basic operational strategy of Hippocampe has been to focus its research program into modules, each with its own scientific interest, based on novel ideas developed by Hippocampe. These modules are outsourced to specialized and complementary, public and private laboratories. Hippocampe organizes the schedule and progress of the individual research teams to facilitate the overall development of its research goals. The research teams are authorized to publish their results in due time and in agreement with Hippocampe. However, Hippocampe retains all intellectual property rights in the research results and applies for patent protection of combined research results whenever such protection is justified. Hippocampe's policy has been to protect its technology by obtaining base patents followed by application patents. To date, Hippocampe has registered two patents in France, each of which has subsequently been registered pursuant to the Patent Cooperation Treaty (PCT). Acquired immunodeficiency syndrome (AIDS) is a potentially fatal epidemic disease caused by an infection by the human immunodeficiency virus (HIV). According to the UNAIDS Report on the Global HIV/AIDS Epidemic published in June 2000, the estimated number of persons living with HIV/AIDS at the end of 1999 was approximately 34 million. This number is expected to increase significantly in the coming years. The majority of HIV/AIDS cases are in third world countries. 5 - 5 - Accordingly, Hippocampe believes that there is a significant existing and future market for animal and human AIDS therapeutic and preventative vaccines and for therapeutic agents to treat AIDS. However, Hippocampe faces significant competition for both its therapeutics molecules and its preventative vaccines. The biopharmaceutical and biotechnology industries, especially as they relate to the treatment and prevention of AIDS, are competitive and rapidly evolving industries. If Hippocampe is successful in developing and approving its therapeutic molecules, it will compete with existing developed and approved therapies. The U.S. Department of Health and Human Services Food and Drug Administration (FDA) has already approved a number of antiviral drugs to treat HIV and AIDS, many of which have been developed by multinational companies. The field of preventative vaccines is less highly developed. Risk Factors - ------------ The Transaction, the business of Hippocampe and any investment in the shares of common stock of ICHOR are subject to a number of risk factors. After completion of the Transaction, risk factors applicable to the business of Hippocampe shall be equally applicable to ICHOR. Such risk factors include but are not limited to the following: The Transaction may not close. The Transaction is subject to certain conditions customary for transactions of this nature, including but not limited to ICHOR receiving shareholder approval to increase its authorized share capital to a level necessary to complete the Transaction. There can be no assurance that these conditions, including ICHOR receiving such shareholder approval, will be satisfied or that the Transaction will be completed without significant delays or at all. If ICHOR and the shareholders of Hippocampe do not complete the Transaction for any reason, ICHOR may subject itself to a number of material risks, including but not limited to the following: (i) the price of the shares of common stock of ICHOR may decline to the extent that the current market price of shares of common stock of ICHOR reflects a market assumption that each party will complete the Transaction; and (ii) ICHOR must pay costs related to the Transaction even if the Transaction is not completed. In addition, there can be no assurance that, if the Transaction is completed, the operations of ICHOR and Hippocampe will be successfully integrated. The costs of the Transaction are substantial. The costs to complete the Transaction are substantial and include, among other things, fees for investment bankers, attorneys and accountants. As a result of the Transaction, current holders of shares of common stock of ICHOR will experience immediate and substantial dilution. The issuance of securities of ICHOR and securities convertible into securities of ICHOR in connection with the Transaction will reduce existing shareholders' percentage ownership and voting 6 - 6 - power in ICHOR. The issuance of securities, by reducing the percentage of equity of ICHOR owned by present shareholders, will reduce such present shareholders' ability to influence the election of directors or any other action taken by the holders of shares of common stock of ICHOR and may reduce per share dividends, if any. In addition, holders of shares of common stock of ICHOR will experience an immediate and substantial dilution in net tangible book value per share and other per share financial information as a result of the Transaction. Hippocampe has a limited operating history and is expected to continue to generate losses. To date, Hippocampe has engaged primarily in research, development and limited clinical testing and had an accumulated deficit and sustained net losses in 1997, 1998, 1999 and in the nine months ended September 30, 2000. There can be no assurance that Hippocampe will generate profits in the foreseeable future, if at all. Hippocampe's products are in an early stage of development. All of Hippocampe's products are at an early stage of development. The successful commercialization of its products will require significant further research, development, testing and regulatory approvals and additional investment. If Hippocampe cannot advance its products beyond the early stages of product development or demonstrate clinical efficacy, it may never commercialize a product. There can be no assurance that any of Hippocampe's products in the research or pre-clinical development stage will yield results that would permit or justify clinical testing or that products that advance to clinical testing will receive regulatory approval or be commercialized. In addition, the process of obtaining regulatory approval is costly, time consuming, uncertain and subject to unanticipated delays. If Hippocampe is unable to commercialize the current research, or if it is unable to commercialize the current research without significant delay, it does not have other products from which to derive revenue. Hippocampe's products may not achieve market acceptance. There can be no assurance that any products Hippocampe successfully develops, if approved for marketing, will achieve market acceptance. Technological change and competition may render Hippocampe's potential products obsolete. The biopharmaceutical and biotechnology industries continue to undergo rapid change and competition is intense and is expected to increase. Competitors may succeed in developing technologies and products that are more effective or affordable than any being developed by Hippocampe or that would render Hippocampe's technology and products obsolete and noncompetitive. Many of Hippocampe's competitors have substantially greater experience, financial and technical resources and production, marketing and development capabilities than Hippocampe. 7 - 7 - Political or social factors may delay or impair Hippocampe's ability to market its products. Products developed for use in addressing the HIV/AIDS epidemic have been and will continue to be subject to competing and changing political and social pressures. The political and social response to the HIV/AIDS epidemic has been highly charged and unpredictable. These pressures can transcend national barriers. They may delay or cause resistance to bringing Hippocampe's products to market or limit the pricing of such products. Hippocampe may be dependent on third parties for manufacturing, marketing and sales. As Hippocampe has no manufacturing facilities, it may be entirely dependent on third parties to produce its products. In addition, as Hippocampe has no marketing or sales capabilities, it may be entirely dependent on third parties to market and sell its products. There can be no assurance that Hippocampe will be able to locate third parties to manufacture, market and sell its products, to enter into agreements on satisfactory terms or to have its products manufactured, marketed and sold at a sufficiently low cost and in a sufficiently timely manner. Hippocampe will need additional funds in the future to continue its operations. Hippocampe will require substantial future capital in order to continue to conduct the time consuming research and development, clinical studies and regulatory activities necessary to bring its potential products to market and to establish production, marketing and sales capabilities. There can be no assurance that the cash reserves of Hippocampe or the combined cash reserves of Hippocampe and ICHOR together with any funding subsequently received will satisfy capital requirements. In addition, there can be no assurance that additional funding will be received or on reasonable terms. Additional funding may significantly dilute shareholders of ICHOR or may limit Hippocampe's rights to its currently developing technology. If adequate funds cannot be obtained, Hippocampe may need to curtail significantly its product development programs and/or relinquish rights to its technologies or product candidates. Hippocampe may become subject to product liability claims. Hippocampe faces an inherent risk of exposure to product liability suits in connection with vaccines being tested in human clinical trials and products that may be sold commercially. Hippocampe may become subject to a product liability suit if its products cause injury or if vaccinated individuals subsequently become infected with HIV. Regardless of merit or eventual outcome, product liability claims may result in decreased demand for a vaccine, injury to the reputation of Hippocampe, withdrawal of clinical trial volunteers and loss of revenues. 8 - 8 - Hippocampe may face difficulties in the conduct of its proprietary research programs. Hippocampe conducts a significant portion of its research and development activities through proprietary research programs. Any conflict with its collaborators could reduce its ability to obtain future collaboration agreements and could negatively influence its relationship with existing collaborators. Further, disagreements with Hippocampe's collaborators could develop over rights to Hippocampe's intellectual property. Certain collaborators could also become competitors in the future. Hippocampe faces uncertainties related to patents and proprietary technology. Hippocampe's success will depend in part on its ability to: (i) obtain patent protection for its products; (ii) preserve trade secrets; (iii) prevent third parties from infringing on its patents; and (iv) refrain from infringing on the patents of other parties, both domestically and internationally. Hippocampe's present patent positions are highly uncertain and any future patents it receives for potential products may be subject to the same uncertainty. In addition, there can be no assurance that certain claims in the patent application process will not fail or that they receive such limited approval that the value of any patents could diminish. Any patents that Hippocampe procures may require cooperation with other parties holding related patents. Hippocampe may have difficulty forming a successful relationship with such other parties. There can be no assurance that Hippocampe's patents or future patents will be enforceable and afford adequate protection against competitors. In addition, there can be no assurance that third parties will not claim that Hippocampe's technology, current or future products or manufacturing processes infringe their proprietary rights. Hippocampe may have to undertake costly litigation to enforce any patents issued or licensed to it or to determine the scope and validity of another party's proprietary rights. There can be no assurance that a court of competent jurisdiction would validate Hippocampe's issued or licensed patents. An adverse outcome in litigation or an interference or other proceeding in a court or patent office could subject Hippocampe to significant liabilities to other parties, require Hippocampe to license disputed rights from other parties or require Hippocampe to cease using such technology. Hippocampe is dependent on certain key employees. Hippocampe is highly dependent on its senior scientific staff, particularly Dr. Pierre-Francois Serres. Dr. Serres has played a critical role in the development of Hippocampe and Hippocampe's research and development activities. The loss of his services may prevent Hippocampe from achieving its scientific objectives. 9 - 9 - The price of shares of common stock of ICHOR may fluctuate significantly. In connection with the Transaction, the shares of common stock of ICHOR may experience significant volatility. Stock markets, in general, have experienced significant volatility with respect to biopharmaceutical and biotechnology based stocks. The volatility of biopharmaceutical and biotechnology based stocks often does not relate to the operating performance of the companies represented by the stock. Factors such as announcements of the introduction of new products or services by Hippocampe or its competitors, market conditions in the biopharmaceutical and biotechnology sectors, rumors relating to Hippocampe or its competitors and litigation or public concern as to safety of Hippocampe's potential products may have a significant impact on the market price of the shares of common stock of ICHOR. Forward Looking Statements - -------------------------- Certain statements included herein are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. These statements appear in a number of places in this report and can be identified by words such as "estimates", "projects", "expects", "intends", "believes", "plans", or their negatives or other comparable words. Forward-looking statements are not guarantees and may involve risks and uncertainties. Actual results could differ materially from those expressed or implied in the forward-looking statements. Actual results may differ materially from those expressed in the forward-looking statements due to risks facing operations or due to actual facts differing from the assumptions underlying certain predictions. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (a) Financial statements of businesses acquired. To be filed by amendment. (b) Pro forma financial information. To be filed by amendment. (c) Exhibits. Exhibit No. Description ----------- ----------- 10.1 Share Exchange Agreement dated for reference December 13, 2000 between ICHOR Corporation and certain shareholders of Hippocampe S.A. 10 - 10 - 10.2 Share Exchange Agreement dated for reference December 13, 2000 between ICHOR Corporation and certain shareholders of Hippocampe S.A. 99.1 Press release dated December 14, 2000 of ICHOR Corporation. 11 - 11 - SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ICHOR CORPORATION By: /s/ Jin-Soo Choi --------------------- Jin-Soo Choi President Date: December 27, 2000 12 ICHOR CORPORATION FORM 8-K EXHIBIT INDEX Exhibit Number Description - -------------- ----------- 10.1 Share Exchange Agreement dated for reference December 13, 2000 between ICHOR Corporation and certain shareholders of Hippocampe S.A. 10.2 Share Exchange Agreement dated for reference December 13, 2000 between ICHOR Corporation and certain shareholders of Hippocampe S.A. 99.1 Press release dated December 14, 2000 of ICHOR Corporation. EX-10.1 2 0002.txt 1 SHARE EXCHANGE AGREEMENT This Agreement dated for reference the 13th day of December, 2000. BETWEEN: The undersigned SHAREHOLDERS of Hippocampe, more particularly described on the signature pages hereto (collectively, the "Shareholders") AND: ICHOR CORPORATION, a corporation organized under the laws of Delaware in the United States, with an address at 17, Dame Street, Dublin 2, Ireland ("ParentCo") WHEREAS: A. Each Shareholder owns the Hippocampe Common Shares as set forth beside his name on the signature pages hereto; B. ParentCo proposes to establish LuxCo as a wholly-owned subsidiary; and C. The Shareholders propose to contribute to LuxCo their Hippocampe Common Shares in consideration for LuxCo Exchangeable Preferred Shares, upon the terms and conditions set forth herein. NOW THEREFORE, the parties hereto agree as follows: 1. DEFINITIONS For the purposes of this Agreement, including the recitals, and any amendments hereto, unless the context otherwise requires, the following words and phrases shall have the following meanings, respectively: 1.1 "Agreement" means this share exchange agreement and any Schedules hereto, as amended, supplemented or restated from time to time; 1.2 "Bank Agreements" means the underwriting agreement (the "Underwriting Agreement") between Hippocampe and MFC Merchant Bank S.A. dated for reference July 24, 2000, as amended, supplemented or restated from time to time, the credit facility agreement (the "Credit Facility Agreement") between Hippocampe and MFC Merchant Bank S.A. dated for reference July 27, 2000, as amended, supplemented or restated from time to time, the Acte de Nantissement between Hippocampe and MFC Merchant Bank S.A. dated for reference July 27, 2000, the Contrat de Gage between Hippocampe and MFC Merchant Bank S.A. dated August 18, 2000 and any other documents and agreements entered into pursuant to, provided for or contemplated by either the Underwriting Agreement or the Credit Facility Agreement; 2 1.3 "Hippocampe" means Hippocampe S.A., a societe anonyme organized under the laws of France, with an address at 52, avenue Chanoine Cartellier, F-69230 Saint-Genis-Lavel, France; 1.4 "Hippocampe Common Shares" means the common shares in the capital of Hippocampe; 1.5 "Losses", in respect of any matter, means all claims, demands, proceedings, losses, damages, liabilities, deficiencies, costs and expenses (including, without limitation, all legal and other professional fees and disbursements, interest, penalties and amounts paid in settlement) arising directly or indirectly as a consequence of such matter; 1.6 "LuxCo" means a corporation to be organized under the laws of Luxembourg as a wholly-owned subsidiary of ParentCo; 1.7 "LuxCo Common Shares" means the common shares in the capital of LuxCo; 1.8 "LuxCo Exchangeable Preferred Shares" means the shares in the capital of LuxCo which will be exchangeable at the option of the holder into ParentCo Common Shares on a 1,066.44-for-one basis pursuant to the Shareholder Agreement, such shares with substantially the rights, privileges, restrictions and conditions described in Schedule "C" hereto; 1.9 "ParentCo Common Shares" means the common shares in the capital of ParentCo; 1.10 "ParentCo Share Exchange Agreement" means a share exchange agreement between ParentCo and certain shareholders of Hippocampe entered into concurrently with this Agreement, as amended, supplemented or restated from time to time; 1.11 "ParentCo Special Voting Preferred Share" means the one share of special voting preferred stock of ParentCo, with substantially the rights, privileges, restrictions and conditions described in the Voting and Exchange Trust Agreement; 1.12 "Shareholder Agreement" means a shareholder agreement to be made among the Shareholders, ParentCo and LuxCo relating to the LuxCo Exchangeable Preferred Shares, with terms substantially as described in Schedule "C" hereto; 1.13 "Support Agreement" means the support agreement to be made between ParentCo and LuxCo relating to the LuxCo Exchangeable Preferred Shares, with terms substantially as described in Schedule "C" hereto; 1.14 "Trustee" means MFC Merchant Bank S.A., the trustee to be appointed under the Voting and Exchange Trust Agreement, and any successor thereto; and 1.15 "Voting and Exchange Trust Agreement" means an agreement to be made between ParentCo, LuxCo and the Trustee relating to the LuxCo Exchangeable Preferred Shares and the ParentCo Special Voting Preferred Share, with terms substantially as described in Schedule "C" hereto. - 2 - 3 2. EXCHANGE OF SHARES 2.1 Subject to the terms and conditions hereof, each of the Shareholders shall contribute to LuxCo the Hippocampe Common Shares as set forth beside his name on the signature pages hereto and ParentCo shall cause LuxCo to issue to each Shareholder four LuxCo Exchangeable Preferred Shares, with substantially the rights, privileges, restrictions and conditions described in Schedule "C" hereto, for each Hippocampe Share set forth beside such Shareholder's name on the signature pages hereto. 2.2 Subject to the terms and conditions hereof, the securities to be contributed or issued hereunder shall be delivered to the respective parties as each in writing shall direct. 3. REPRESENTATIONS AND WARRANTIES OF PARENTCO 3.1 ParentCo, by its acceptance hereof, represents and warrants to the Shareholders that the statements contained in Schedule "A" hereto are correct and complete as of the date of this Agreement and shall be correct and complete as of the Closing Date (as though made then) and acknowledges and confirms that the Shareholders are relying upon such representations and warranties in connection with the transactions contemplated herein. 3.2 Notwithstanding the representations and warranties of ParentCo contained in Section 3.1 hereof and the covenants of ParentCo contained in Section 5.1 hereof, the Shareholders represent, warrant, acknowledge and agree that ParentCo may prior to the Time of Closing raise up to U.S.$2 million in equity for working capital purposes. 4. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS 4.1 The Shareholders severally represent and warrant to ParentCo that the statements contained in this Section 4.1 are correct and complete as of the date of this Agreement and shall be correct and complete as of the Closing Date (as though made then) and hereby acknowledge and confirm that ParentCo is relying upon such representations and warranties in connection with the transactions contemplated herein: (a) each Shareholder has all necessary power and authority to execute and deliver this Agreement and to perform its obligations hereunder; (b) this Agreement has been duly executed and delivered by and on behalf of each Shareholder and constitutes legal, valid and binding obligations of each Shareholder enforceable against such Shareholder in accordance with its terms; (c) the Hippocampe Common Shares owned by each Shareholder are owned by such Shareholder as the sole legal and beneficial owner of record with good, full and marketable title thereto, free and clear of any mortgages, liens, charges, restrictions, security interests, adverse claims, pledges, encumbrances or demands whatsoever, and are issued and outstanding as fully paid and non-assessable; (d) no person, firm or corporation has any agreement or option, or any right or privilege (whether by law, pre-emptive or contractual) capable of becoming an agreement or option for the purchase, acquisition, transfer or contribution from any Shareholder of any of the Hippocampe Common Shares or any interest therein or right thereto owned by such Shareholder, other than pursuant hereto; and - 3 - 4 (e) there is no legal or regulatory action or proceeding pending or threatened by any person to enjoin, restrict or prohibit the contribution of the Hippocampe Common Shares by each Shareholder as contemplated herein. 4.2 In addition to the representations and warranties made in Section 4.1 hereof, the Shareholders severally represent and warrant to ParentCo that the statements contained in Schedule "B" hereto are correct and complete as of the date of this Agreement and shall be correct and complete as of the Closing Date (as though made then) and hereby acknowledge and confirm that ParentCo is relying upon such representations and warranties in connection with the transactions contemplated herein. 5. COVENANTS OF PARENTCO 5.1 ParentCo covenants as follows: (a) ParentCo shall use all commercially reasonable efforts to take all action and do all things necessary, proper or advisable in order to consummate and make effective the transactions contemplated by this Agreement; (b) from the date hereof to the Time of Closing, ParentCo shall carry on its business, operations and affairs only in the ordinary and normal course consistent with past practice; (c) from the date hereof to the Time of Closing, ParentCo shall not create, incur, assume or suffer to exist: (i) any material lien on any of its property or assets now owned or hereafter acquired; or (ii) contingently or otherwise, any material debt; (d) from the date hereof to the Time of Closing, ParentCo shall not make or permit to exist any change, condition, event or occurrence in or with respect to the nature of its business which when taken individually with all other changes, conditions, events or occurrences could reasonably be expected to have a material adverse effect: (i) on the property or assets of ParentCo; (ii) on the condition or prospects, financial or otherwise, of ParentCo; (iii) on the ability of ParentCo to perform and comply with this Agreement; and (e) from the date hereof to the Time of Closing, ParentCo shall not enter into or agree to enter into any transaction or series of related transactions (whether by way of reconstruction, reorganization, consolidation, combination, amalgamation, merger, transfer, sale, lease, modification or otherwise), other than in connection with the transactions contemplated herein, whereby: (i) all or substantially all of the undertaking, property or assets of ParentCo will become the property of any other person or the continuing corporation resulting therefrom; or (ii) the corporate structure of ParentCo would be modified, changed, altered or amended in any manner which would have a material adverse effect on the ability of ParentCo to perform and comply with this Agreement. - 4 - 5 6. COVENANTS OF THE SHAREHOLDERS 6.1 The Shareholders severally covenant as follows: (a) the Shareholders shall use all commercially reasonable efforts to take all action and do all things necessary, proper or advisable in order to consummate and make effective the transactions contemplated by this Agreement; (b) from the date hereof to the Time of Closing, the Shareholders shall cause Hippocampe to carry on its business, operations and affairs only in the ordinary and normal course consistent with past practice; (c) from the date hereof to the Time of Closing, the Shareholders shall cause Hippocampe not to create, incur, assume or suffer to exist: (i) any material lien on any of its property or assets now owned or hereafter acquired; or (ii) contingently or otherwise, any material debt; (d) from the date hereof to the Time of Closing, the Shareholders shall cause Hippocampe not to make or permit to exist any change, condition, event or occurrence in or with respect to the nature of its business which when taken individually with all other changes, conditions, events or occurrences could reasonably be expected to have a material adverse effect: (i) on the property or assets of Hippocampe; (ii) on the condition or prospects, financial or otherwise, of Hippocampe; or (iii) on the ability of the Shareholders to perform and comply with this Agreement; and (e) from the date hereof to the Time of Closing, the Shareholders shall cause Hippocampe not to enter into or agree to enter into any transaction or series of related transactions (whether by way of reconstruction, reorganization, consolidation, combination, amalgamation, merger, transfer, sale, lease, modification or otherwise), other than in connection with the transactions contemplated herein, whereby: (i) all or substantially all of Hippocampe's undertaking, property or assets will become the property of any other person or the continuing corporation resulting therefrom; (ii) all or substantially all of the material patents of Hippocampe will become the property of any other person; or (iii) the corporate structure of Hippocampe would be modified, changed, altered or amended in any manner which would have a material adverse effect on the ability of the Shareholders to perform and comply with this Agreement. 7. CLOSING PROCEDURE 7.1 The closing of the transactions contemplated herein shall take place on the date to be determined in the sole discretion of ParentCo, such date not to be later than March 31, 2001, at the offices of MFC Merchant Bank S.A. at 6, Cours de Rive, 1211 Geneva 3, Switzerland, or at such other time or place as may be mutually agreed upon. The date of the closing of the transactions contemplated in this Agreement is referred to herein as the "Closing Date" and the time of closing on such date is referred to herein as the "Time of Closing". - 5 - 6 7.2 At the Time of Closing on the Closing Date, ParentCo shall: (a) cause to be delivered to each Shareholder four LuxCo Exchangeable Preferred Shares issued to such Shareholder for each Hippocampe Share currently held by such Shareholder; (b) cause to be executed and delivered to the Shareholders certified resolutions of the directors of LuxCo authorizing the issuance to the Shareholders of the LuxCo Exchangeable Preferred Shares to be issued by LuxCo hereunder; and (c) deliver or cause to be delivered such other documents as are required or contemplated to be delivered by ParentCo and LuxCo, as applicable, pursuant to this Agreement. 7.3 At the Time of Closing on the Closing Date, the Shareholders shall: (a) deliver or cause to be delivered to LuxCo transfer forms (i.e., ordres de mouvement) representing the Hippocampe Common Shares owned by each Shareholder duly executed for contribution to LuxCo; (b) cause to be executed and delivered to LuxCo certified resolutions of the directors of Hippocampe authorizing the contribution to LuxCo of the issued and outstanding Hippocampe Common Shares to be contributed by the Shareholders hereunder; and (c) deliver or cause to be delivered such other documents as are required or contemplated to be delivered by the Shareholders pursuant to this Agreement. 7.4 This Agreement shall take effect concurrently with the ParentCo Share Exchange Agreement. 8. CONDITIONS OF CLOSING 8.1 The obligation of ParentCo to complete the transactions contemplated herein shall be subject to the following conditions to be fulfilled and/or performed at or prior to the Time of Closing on the Closing Date: (a) ParentCo shall have received the requisite Shareholder approval to increase its authorized ParentCo Common Shares in sufficient amounts to meet its obligations hereunder and under the ParentCo Share Exchange Agreement; (b) the Bank Agreements and any share purchase warrants referred to therein shall have been duly and validly assigned by Hippocampe to ParentCo in a form satisfactory to ParentCo; (c) the representations and warranties of the Shareholders contained in this Agreement shall be true and correct in all material respects at the Time of Closing, with the same force and effect as if such representations and warranties were made at and as of such time; (d) the Shareholders shall have complied with all covenants and agreements herein agreed to be performed or caused to be performed by them; and - 6 - 7 (e) in aggregate, at least 90% of the issued and outstanding Hippocampe Common Shares shall have been contributed to ParentCo and/or LuxCo pursuant to this Agreement and the ParentCo Share Exchange Agreement. 8.2 In the event that the conditions referred to in Section 8.1 hereof shall not have been fulfilled at or prior to the Time of Closing to the satisfaction of ParentCo, acting reasonably, or waived by ParentCo, or in the event that the Closing Date has not occurred on or prior to March 31, 2001, this Agreement shall be rescinded and ParentCo shall be released from all obligations hereunder. 8.3 The obligation of the Shareholders to complete the transactions contemplated herein shall be subject to the following conditions to be fulfilled and/or performed at or prior to the Time of Closing on the Closing Date: (a) ParentCo shall have received an indemnity from MFC Bancorp Ltd. from and against all claims or actions arising out of the business and undertakings of ParentCo prior to the Time of Closing; (b) the representations and warranties of ParentCo contained in this Agreement shall be true and correct in all material respects at the Time of Closing, with the same force and effect as if such representations and warranties were made at and as of such time; (c) ParentCo shall have complied with all covenants and agreements herein agreed to be performed or caused to be performed by it; and (d) in aggregate, at least 90% of the issued and outstanding Hippocampe Common Shares shall have been contributed to ParentCo and/or LuxCo pursuant to this Agreement and the ParentCo Share Exchange Agreement. 8.4 In the event that the conditions referred to in Section 8.3 hereof shall not have been fulfilled at or prior to the Time of Closing to the satisfaction of the Shareholders, acting reasonably, or waived by the Shareholders, or in the event that the Closing Date has not occurred on or prior to March 31, 2001, this Agreement shall be rescinded and the Shareholders shall be released from all obligations hereunder. 9. COVENANTS RELATING TO THE LUXCO EXCHANGEABLE PREFERRED SHARES 9.1 ParentCo covenants in favour of the Shareholders that, at or prior to the Time of Closing and subject to the satisfaction or waiver of the other conditions herein contained in favour of each such party: (a) ParentCo shall execute and deliver and cause LuxCo to execute and deliver the Support Agreement, with terms substantially as described in Schedule "C" hereto; (b) ParentCo shall execute and deliver, cause LuxCo to execute and deliver and use all commercially reasonable efforts to cause the Trustee to execute and deliver the Voting and Exchange Trust Agreement, with terms substantially as described in Schedule "C" hereto; (c) ParentCo shall execute and deliver the Shareholder Agreement, with terms substantially as described in Schedule "C" hereto; and (d) ParentCo shall issue to the Trustee the Special Voting Share. - 7 - 8 10. INDEMNIFICATION 10.1 ParentCo agrees to indemnify and save harmless the Shareholders from all Losses suffered or incurred by the Shareholders as a result of or arising directly or indirectly out of or in connection with: (i) any breach by ParentCo of or any inaccuracy of any representation or warranty of ParentCo; or (ii) any breach or non-performance by ParentCo of any covenant to be performed by it that is contained in this Agreement or in any agreement, certificate or other document delivered pursuant hereto. 10.2 Each Shareholder severally agrees to indemnify and save harmless ParentCo from all Losses suffered or incurred by ParentCo as a result of or arising directly or indirectly out of or in connection with: (i) any breach by such Shareholder of or any inaccuracy of any representation or warranty of such Shareholder; or (ii) any breach or non-performance by such Shareholder of any covenant to be performed by it, that is contained in this Agreement or in any agreement, instrument, certificate or other document delivered pursuant hereto. 11. COSTS AND EXPENSES 11.1 All costs and expenses of or incidental to the transactions contemplated herein are to be assumed and paid by the party incurring such costs and expenses. 12. NOTICES 12.1 Any notice required or permitted to be given hereunder to ParentCo shall be given by notice in writing addressed to the President of ParentCo hand delivered or sent by registered mail to the address mentioned on the first page of this Agreement, or to any new address previously notified to the party giving the notice. Any notice required or permitted to be given hereunder to a Shareholder shall be given by notice in writing addressed to such Shareholder hand delivered or sent by registered mail to the respective address mentioned on the signature pages of this Agreement, or to any new address previously notified to the party giving the notice. Any such notices shall be deemed to have been given and received at the time of hand delivery or delivery by the relevant postal service, as the case may be. 13. SECTIONS AND HEADINGS 13.1 The division of this Agreement into Sections and the insertion of headings are for convenience of reference only and shall not affect the interpretation of this Agreement. Unless otherwise indicated, any reference in this Agreement to a Section or a Schedule refers to the specified Section of or Schedule to this Agreement. 14. NUMBER, GENDER AND PERSONS 14.1 In this Agreement, words importing the singular number only shall include the plural and vice versa, words importing gender shall include all genders and words importing persons shall include individuals, corporations, partnerships, associations, trusts, unincorporated organizations, governmental bodies and other legal or business entities. - 8 - 9 15. SUCCESSORS AND ASSIGNS 15.1 All the terms and provisions of this Agreement shall be binding upon and enure to the benefit of and be enforceable by the parties hereto and their respective successors and permitted assigns but shall not be assignable prior to the Time of Closing by a Shareholder without the written consent of ParentCo or by ParentCo without the written consent of the Shareholders. 16. SURVIVAL 16.1 It is understood and agreed that all warranties, representations, covenants, indemnities and agreements of the parties herein contained or contained in any certificates or documents submitted pursuant to or in connection with the transactions contemplated herein shall survive the completion of the transactions contemplated herein and the termination of this Agreement and shall continue in full force and effect for the benefit of the other parties for a period of two years following the Closing Date. 17. FURTHER ASSURANCES 17.1 Each party to this Agreement covenants and agrees that, from time to time subsequent to the Closing Date, it will, at the request and expense of the requesting party, execute and deliver all such documents and do all such other acts and things as any other party hereto, acting reasonably, may from time to time request be executed or done in order to better evidence or perfect or effectuate any provision of this Agreement or of any agreement or other document executed pursuant to this Agreement or any of the respective obligations intended to be created hereby or thereby. 18. AMENDMENTS 18.1 This Agreement may be amended or modified by an agreement in writing executed by the parties hereto. Except as aforesaid, no amendment, waiver or modification of this Agreement shall be effective. 19. SEVERABILITY 19.1 Should a provision of this Agreement be or become invalid, the validity of the remaining provisions of this Agreement shall not be affected. The parties hereto undertake to replace any such invalid provision without delay with a valid provision which as nearly as possible duplicates the economic intent of the invalid provision. 20. ENGLISH VERSION 20.1 The parties hereby represent, warrant, acknowledge and agree that: (i) they have agreed that this Agreement be drawn up in the English language; and (ii) the English version of this Agreement shall govern for all purposes. 21. GOVERNING LAW 21.1 This Agreement shall be construed and enforced in accordance with, and the rights and obligations of the parties shall be governed by, the laws of the State of New York in the United States. - 9 - 10 22. JURISDICTION 22.1 Each of the parties irrevocably attorns to the exclusive jurisdiction of the courts in the State of New York in the United States. 23. COUNTERPARTS 23.1 This Agreement may be executed in any number of counterparts, each of which when delivered, either in original or facsimile form, shall be deemed to be an original and all of which together shall constitute one and the same document. IN WITNESS WHEREOF the parties have executed this Agreement in counterparts, one for each party. ICHOR CORPORATION Per: ------------------------------ Authorized Signatory - 10 - 11 THE FOLLOWING SHAREHOLDERS OF HIPPOCAMPE S.A.: SIGNED, SEALED and DELIVERED by ) PIERRE-FRANCOIS SERRES ) in the presence of: ) ) ) - ------------------------------- ) ------------------------------- Signature ) PIERRE-FRANCOIS SERRES - ------------------------------- ) Name ) - ------------------------------- ) ------------------------------- Address ) Address - ------------------------------- ) ------------------------------- ) 2609 - ------------------------------- ) ------------------------------- Occupation Number of Hippocampe Common Shares Held SIGNED, SEALED and DELIVERED by ) BERTRAND FAVREAU ) in the presence of: ) ) ) - ------------------------------- ) ------------------------------- Signature ) BERTRAND FAVREAU - ------------------------------- ) Name ) - ------------------------------- ) ------------------------------- Address ) Address - ------------------------------- ) ------------------------------- ) 501 - ------------------------------- ) ------------------------------- Occupation Number of Hippocampe Common Shares Held SIGNED, SEALED and DELIVERED by ) PATRICE PACTOL ) in the presence of: ) ) ) - ------------------------------- ) ------------------------------- Signature ) PATRICE PACTOL - ------------------------------- ) Name ) - ------------------------------- ) ------------------------------- Address ) Address - ------------------------------- ) ------------------------------- ) 501 - ------------------------------- ) ------------------------------- Occupation Number of Hippocampe Common Shares Held - 11 - 12 SIGNED, SEALED and DELIVERED by ) DORIA TROIANI ) in the presence of: ) ) ) - ------------------------------- ) ------------------------------- Signature ) DORIA TROIANI - ------------------------------- ) Name ) - ------------------------------- ) ------------------------------- Address ) Address - ------------------------------- ) ------------------------------- ) 102 - ------------------------------- ) ------------------------------- Occupation Number of Hippocampe Common Shares Held SIGNED, SEALED and DELIVERED by ) YVES BUSH ) in the presence of: ) ) ) - ------------------------------- ) ------------------------------- Signature ) YVES BUSH - ------------------------------- ) Name ) - ------------------------------- ) ------------------------------- Address ) Address - ------------------------------- ) ------------------------------- ) 100 - ------------------------------- ) ------------------------------- Occupation Number of Hippocampe Common Shares Held SIGNED, SEALED and DELIVERED by ) MICHELE ROSSI ) in the presence of: ) ) ) - ------------------------------- ) ------------------------------- Signature ) MICHELE ROSSI - ------------------------------- ) Name ) - ------------------------------- ) ------------------------------- Address ) Address - ------------------------------- ) ------------------------------- ) 10 - ------------------------------- ) ------------------------------- Occupation Number of Hippocampe Common Shares Held - 12 - 13 SIGNED, SEALED and DELIVERED by ) ALESSANDRO ZUCCATO ) in the presence of: ) ) ) - ------------------------------- ) ------------------------------- Signature ) ALESSANDRO ZUCCATO - ------------------------------- ) Name ) - ------------------------------- ) ------------------------------- Address ) Address - ------------------------------- ) ------------------------------- ) 1 - ------------------------------- ) ------------------------------- Occupation Number of Hippocampe Common Shares Held - 13 - 14 SIGNED, SEALED and DELIVERED by ) BERNADETTE DAOUT ) in the presence of: ) ) ) - ------------------------------- ) ------------------------------- Signature ) BERNADETTE DAOUT - ------------------------------- ) Name ) - ------------------------------- ) ------------------------------- Address ) Address - ------------------------------- ) ------------------------------- ) 30 - ------------------------------- ) ------------------------------- Occupation Number of Hippocampe Common Shares Held - 14 - 15 SCHEDULE "A" REPRESENTATIONS AND WARRANTIES OF PARENTCO (a) ParentCo has been duly organized and is validly existing and in good standing under the laws of its jurisdiction of organization. ParentCo is duly authorized to conduct business and is in good standing under the laws of each jurisdiction where such qualification is required. ParentCo has full corporate power and authority to carry on the businesses in which it is engaged and to own and use the properties owned and used by it. (b) ParentCo has all necessary power and authority to execute and deliver this Agreement and to perform its obligations hereunder. This Agreement has been duly executed and delivered by and on behalf of ParentCo and constitutes legal, valid and binding obligations of ParentCo enforceable against ParentCo in accordance with its terms. (c) The authorized capital of ParentCo consists of 30 million ParentCo Common Shares (approximately 80 million ParentCo Shares at the Time of Closing) and five million shares of preferred stock, $0.01 par value per share, of which 4,918,770 ParentCo Common Shares and 564,706 shares of preferred stock, $0.01 par value per share are issued and outstanding as of the date of this Agreement and 8,165,830 ParentCo Common Shares shall be outstanding as of the Time of Closing. No person, firm or corporation has any agreement or option, or any right or privilege (whether by law, pre-emptive or contractual) capable of becoming an agreement or option that could require ParentCo to issue, sell, or otherwise cause to become outstanding any of its capital, other than: (i) pursuant hereto; (ii) pursuant to the ParentCo Share Exchange Agreement; (iii) pursuant to the Bank Agreements; and (iv) the holders of options to acquire ParentCo Common Shares previously granted pursuant to ParentCo's stock option plans. (d) The ParentCo Common Shares to be issued upon the exchange from time to time of the LuxCo Exchangeable Preferred Shares shall be duly and validly issued and outstanding as fully paid and non- assessable. (e) The ParentCo Special Voting Preferred Share to be issued to the Trustee pursuant to the Voting and Exchange Trust Agreement shall be duly and validly issued and outstanding as fully paid and non- assessable. (f) ParentCo has made all filings with the U.S. Securities and Exchange Commission that it has been required to make within the past two years under the U.S. Securities Act of 1933, as amended, and the U.S. Securities Exchange Act of 1934, as amended (collectively the "Public Reports"). Each of the Public Reports has complied with the U.S. Securities Act of 1933, as amended, and the U.S. Securities Exchange Act of 1934, as amended, in all material respects. None of the Public Reports, as of their respective dates, contained any untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. (g) ParentCo has filed quarterly reports on Form 10-Q for the fiscal quarters ended September 30, 2000 (the "Most Recent Fiscal Quarter End"), June 30, 2000 and March 31, 2000 and an annual report on Form 10-K for the fiscal year ended December 31, 1999. The financial statements of ParentCo included in or incorporated by reference into these Public Reports (including the related notes and schedules) have been prepared in accordance with U.S. generally 16 accepted accounting principles applied on a consistent basis throughout the periods covered thereby, present fairly the financial condition of ParentCo as of the indicated dates and the results of operations of ParentCo for the indicated periods, and are correct and complete in all respects, and are consistent with the books and records of ParentCo; provided, however, that the interim statements are subject to normal year-end adjustments. (h) Since the Most Recent Fiscal Quarter End, there has not been any material adverse change in the financial condition of ParentCo. (i) ParentCo does not have any liability (whether known or unknown, whether asserted or unasserted, whether absolute or contingent, whether accrued or unaccrued, whether liquidated or unliquidated, and whether due or to become due), including any liability for taxes, except for: (i) liabilities set forth on the face of the balance sheet dated as of the Most Recent Fiscal Quarter End; and (ii) liabilities which have arisen after the Most Recent Fiscal Quarter End in the ordinary course of business or which it assumes under the Bank Agreements. (j) At the Time of Closing, LuxCo shall be duly organized and validly existing and in good standing under the laws of its jurisdiction of organization. At the Time of Closing, LuxCo shall be duly authorized to conduct business and be in good standing under the laws of each jurisdiction where such qualification is required. At the Time of Closing, LuxCo shall have full corporate power and authority to carry on the businesses in which it is engaged and to own and use the properties owned and used by it. (k) At the Time of Closing, the authorized capital of LuxCo shall consist of LuxCo Common Shares held by ParentCo and LuxCo Exchangeable Preferred Shares issued hereunder. (l) At the Time of Closing, all but not less than all of the issued and outstanding LuxCo Common Shares shall be owned by ParentCo as the sole legal and beneficial owner of record with good and marketable title thereto, free and clear of any mortgages, liens, charges, restrictions, security interests, adverse claims, pledges, encumbrances or demands whatsoever. At the Time of Closing, no person, firm or corporation shall have any agreement or option, or any right or privilege (whether by law, pre-emptive or contractual) capable of becoming an agreement or option for the purchase, acquisition, transfer or contribution from ParentCo of any LuxCo Common Shares. (m) At the Time of Closing, there shall not be any issued or outstanding LuxCo Exchangeable Preferred Shares, and no person, firm or corporation shall have any agreement or option, or any right or privilege (whether by law, pre-emptive or contractual) capable of becoming an agreement or option for the purchase, acquisition, transfer, contribution or issuance of any LuxCo Exchangeable Preferred Shares, other than pursuant hereto. (n) The LuxCo Exchangeable Preferred Shares to be issued at the Time of Closing shall be duly and validly issued and outstanding as fully paid and non-assessable. (o) Other than with respect to the nominal capital contribution made by ParentCo to LuxCo in conjunction with the organization of LuxCo in Luxembourg, LuxCo shall not have any assets or liabilities (absolute, accrued, contingent or otherwise) at the Time of Closing. A-2 17 SCHEDULE "B" REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS (a) No person, firm or corporation has any agreement or option, or any right or privilege (whether by law, pre-emptive or contractual) capable of becoming an agreement or option for the purchase, acquisition, contribution or issuance of any Hippocampe Common Shares or any interest therein or right thereto, other than pursuant hereto and the ParentCo Share Exchange Agreement or MFC Merchant Bank S.A. pursuant to the Underwriting Agreement. (b) The authorized capital of Hippocampe is in the amount of FF 782,000 divided into 7,820 Hippocampe Common Shares of FF 100 each. (c) Hippocampe has been duly organized and is validly existing and in good standing under the laws of its jurisdiction of organization and has all requisite power and authority to carry on its business as now conducted and as presently proposed to be conducted and to own, lease and operate its properties and assets. (d) There is no action, proceeding or investigation pending or, to the knowledge of the Shareholders, after due inquiry, threatened, against or affecting Hippocampe, at law or in equity or before or by any federal, state, local or other governmental department, commission, board or agency, domestic or foreign, which could in any way materially adversely affect Hippocampe or the condition (financial or otherwise) of Hippocampe. (e) The descriptions of the assets and the liabilities of Hippocampe set out in the balance sheets of Hippocampe as at December 31, 1998 and December 31, 1999, including the notes thereto, are true and correct, accurately and fairly present the financial position and condition of Hippocampe as at the respective dates thereof, reflect all liabilities (absolute, accrued, contingent or otherwise, as applicable) of Hippocampe as at the respective dates thereof, and have been prepared in accordance with French generally accepted accounting principles applied on a consistent basis. (f) The statements of earnings, retained earnings and changes in financial position of Hippocampe, as applicable, for the years ended December 31, 1997, December 31, 1998 and December 31, 1999, including the notes thereto, in each case accurately and fairly present the results of the operations of Hippocampe for the respective periods covered thereby and have been prepared in accordance with French generally accepted accounting principles applied on a consistent basis throughout such period. (g) There is not, in the constating documents or by-laws of Hippocampe, any restriction upon or impediment to the payment of dividends by Hippocampe to the holders of the Hippocampe Common Shares. (h) There is no person, firm or corporation acting or purporting to act for Hippocampe entitled to any brokerage or finder's fee in connection with this Agreement or any of the transactions contemplated hereunder, other than pursuant to the Bank Agreements. (i) Hippocampe has conducted, and at the Time of Closing shall be conducting, its business in compliance in all material respects with all applicable laws, rules and regulations of its jurisdiction in which its business is carried on and is duly licensed, registered or qualified in all jurisdictions in 18 which it owns, leases or operates its property or carries on business to enable its business to be carried on as now conducted and its property and assets to be owned, leased and operated, and all such licenses, registrations and qualifications are valid and subsisting and in good standing and none of the same contains any burdensome term, provision, condition or limitation which has an adverse effect on the operation of its business as now carried on. (j) Hippocampe has conducted, and at the Time of Closing shall be conducting, its business in compliance in all material respects with all applicable licensing and anti-pollution legislation, regulations or by-laws, environmental protection legislation, regulations or by-laws or other similar legislation, regulations or by-laws or other lawful requirements of any governmental or regulatory bodies which are applicable to Hippocampe. (k) Hippocampe is not in default or breach of, and the execution and delivery of this Agreement by the Shareholders and the performance and compliance with the terms of this Agreement will not result in any breach of, or be in conflict with or constitute a default under, or create a state of facts which after notice or lapse of time, or both, would constitute a default under, any term or provision of the constating documents or by-laws of Hippocampe, any resolutions passed or consented to by the directors or shareholders of Hippocampe or any mortgage, note, indenture, contract, agreement (written or oral), instrument, lease or other document to which Hippocampe is a party or any judgement, decree, order, statute, rule or regulation applicable to Hippocampe, and no terms or provision thereof materially adversely affects the business, operations or condition (financial or otherwise) of Hippocampe or its properties or assets. (l) Hippocampe has duly and on a timely basis filed all tax returns to be filed by it, has paid all taxes due and payable by it and has paid all assessments and re-assessments and all other taxes, governmental charges, penalties, interest and other fines due and payable by it and which are claimed by any governmental authority to be due and owing and adequate provision has been made for taxes payable for any fiscal period ended for which tax returns are not yet required to be filed, if required; there are no agreements, waivers or other arrangements providing for an extension of time with respect to the filing of any tax return or payment of any tax, governmental charge or deficiency by Hippocampe; there are no actions, suits, proceedings, investigations or claims threatened or pending against Hippocampe in respect of taxes, governmental charges or assessments or any matters under discussion with any governmental authority relating to taxes, governmental charges or assessments asserted by any such authority. (m) All of the material agreements of Hippocampe have been duly authorized, executed and delivered by each of the parties thereto and are legal, valid and binding obligations of the parties thereto enforceable in accordance with their respective terms against each of the parties thereto. (n) All necessary patent applications in respect of its material patents have been duly filed and Hippocampe has good and valid title to such patents, and Hippocampe did not disclose to the public the existence of the subject matter of any of the patents prior to the date of filing of each of the patents. (o) Since December 31, 1999, Hippocampe has not made any payment on account of a redemption or a distribution or return of capital (including, without limitation, cash dividends or any repayment of shareholder loans or distributions) to any shareholder or holder of securities. (p) Since December 31, 1999, Hippocampe has carried on its business, operations and affairs only in the ordinary and normal course consistent with past practice. B-2 19 (q) Each Shareholder acknowledges that the LuxCo Exchangeable Preferred Shares issued pursuant hereto and any ParentCo Common Shares to be issued from time to time upon the exchange of LuxCo Exchangeable Preferred Shares have not been registered under the U.S. Securities Act of 1933, as amended, and may be offered, sold or otherwise transferred only: (i) to ParentCo or LuxCo, as applicable; (ii) outside the U.S. in accordance with Rule 904 of Regulation S under the U.S. Securities Act of 1933, as amended; or (iii) inside the U.S. in accordance with: (A) Rule 144A under the U.S. Securities Act of 1933, as amended; (B) Rule 144 under the U.S. Securities Act of 1933, as amended, if applicable; or (C) with the prior written consent of ParentCo or LuxCo, as applicable, another exemption from registration under the U.S. Securities Act of 1933. B-3 20 SCHEDULE "C" TERMS AND ANCILLARY AGREEMENTS RELATING TO THE LUXCO EXCHANGEABLE PREFERRED SHARES LuxCo Exchangeable Preferred Share Provisions - --------------------------------------------- The LuxCo Exchangeable Preferred Shares have the following rights, privileges, restrictions and conditions: Ranking The LuxCo Exchangeable Preferred Shares rank senior to LuxCo Common Shares with respect to dividends and liquidating distributions. Voting Rights The LuxCo Exchangeable Preferred Shares are non-voting in LuxCo. All votes in respect of LuxCo are exercised by ParentCo as the holder of all of the voting rights in LuxCo Common Shares. Notwithstanding that the LuxCo Exchangeable Preferred Shares are non-voting, the holders of LuxCo Exchangeable Preferred Shares are permitted to vote as a class with respect to certain matters involving LuxCo. Shareholder Agreement - --------------------- The Shareholder Agreement provides for the following principal terms: Dividends Holders of LuxCo Exchangeable Preferred Shares are entitled to receive dividends equivalent to dividends paid on the number of ParentCo Common Shares into which such LuxCo Exchangeable Preferred Shares may be exchanged. Exchange by the Holder A holder of LuxCo Exchangeable Preferred Shares has the right, at any time at its option, to require LuxCo to exchange its LuxCo Exchangeable Preferred Shares for ParentCo Common Shares. The exchange ratio is set at 1,066.44-for-one (the "Exchange Ratio"), so that each LuxCo Exchangeable Preferred Share is exchangeable for 1,066.44 ParentCo Common Shares. Liquidation Distribution On the liquidation of LuxCo, holders of the LuxCo Exchangeable Preferred Shares are entitled to exchange their LuxCo Exchangeable Preferred Shares for ParentCo Common Shares at the Exchange Ratio. 21 Redemption by LuxCo LuxCo Exchangeable Preferred Shares are automatically exchanged by LuxCo for ParentCo Common Shares at the Exchange Ratio, on December 31, 2011, which automatic redemption date is accelerated in certain circumstances, including: (a) if the number of outstanding LuxCo Exchangeable Preferred Shares falls below 5% of the LuxCo Exchangeable Preferred Shares outstanding immediately following the completion of the transactions contemplated in this Agreement (i.e., the share exchange agreement); or (b) upon the occurrence of a change of control of ParentCo. Anti-Dilution Provisions Since each LuxCo Exchangeable Preferred Share is intended to be economically equivalent to the number of ParentCo Common Shares into which it may be exchanged, the exchange ratio is adjusted in the event that ParentCo undertakes a stock split or consolidation, issues stock dividends or otherwise changes its share capital. Support Agreement - ----------------- The Support Agreement includes covenants of ParentCo: (a) that it will not declare or pay a dividend on ParentCo Common Shares unless LuxCo can simultaneously pay the same dividend on the LuxCo Exchangeable Preferred Shares, and that it will cause LuxCo to declare and pay such equivalent dividend; (b) that it will ensure that LuxCo will have a sufficient number of ParentCo Common Shares in the event of a liquidation of LuxCo; (c) that it will satisfy all exchange requests or redemptions of LuxCo Exchangeable Preferred Shares that will not cause LuxCo to be liquidated or dissolved; (d) that it will not undertake a stock split or consolidation, issue stock dividends or otherwise change its share capital without adjusting the exchange ratio with respect to the number of ParentCo Common Shares into which LuxCo Exchangeable Preferred Shares may be exchanged; and (e) that, so long as there are any outstanding LuxCo Exchangeable Preferred Shares owned by a person other than ParentCo or its affiliates, ParentCo will remain the direct or indirect beneficial owner of all issued and outstanding voting shares in the capital of LuxCo. Voting and Exchange Trust Agreement - ----------------------------------- The Voting and Exchange Trust Agreement provides for the following principal terms: C-2 22 ParentCo Special Voting Preferred Share ParentCo issues to the Trustee a single ParentCo Special Voting Preferred Share. The terms of the ParentCo Special Voting Preferred Share confer on the Trustee that number of votes with respect to matters on which holders of ParentCo Common Shares are entitled to vote, equal to the number of outstanding LuxCo Exchangeable Preferred Shares (multiplied by the exchange ratio), other than LuxCo Exchangeable Preferred Shares held by ParentCo or any affiliates. The Voting and Exchange Trust Agreement provides a mechanism under which holders of LuxCo Exchangeable Preferred Shares may instruct the Trustee how to vote the particular votes conferred by the ParentCo Special Voting Preferred Share relating to the holder's LuxCo Exchangeable Preferred Shares. By virtue of this voting trust mechanism, a holder of LuxCo Exchangeable Preferred Shares has a complete bundle of rights that collectively is equivalent to the rights the holder would have if the holder owned ParentCo Common Shares directly. As a beneficiary of the voting trust, the holder of LuxCo Exchangeable Preferred Shares has the same right to vote in respect of meetings of holders of ParentCo Common Shares as if the holder owned ParentCo Common Shares directly, and as a holder of LuxCo Exchangeable Preferred Shares, the holder has the right to dividends equivalent to those paid in respect of ParentCo Common Shares, and the indirect right to participate in a liquidating distribution of ParentCo by virtue of the right at any time to exchange the LuxCo Exchangeable Preferred Shares into ParentCo Common Shares. Insolvency Put Rights ParentCo grants certain "insolvency put rights" to the holders of LuxCo Exchangeable Preferred Shares. These put rights include: (a) an "automatic exchange right" that would be invoked by the commencement of the voluntary dissolution or liquidation of ParentCo, in which event the LuxCo Exchangeable Preferred Shares would automatically be acquired by ParentCo in exchange for the appropriate number of ParentCo Common Shares; and (b) an "optional exchange right" that would permit the holders of LuxCo Exchangeable Preferred Shares, at their option upon the occurrence of certain insolvency events with respect to LuxCo, to require ParentCo to purchase the LuxCo Exchangeable Preferred Shares directly from the holder, for a purchase price payable in the appropriate number of ParentCo Common Shares to the Trustee in respect of the voting trust, for the benefit of the holders of LuxCo Exchangeable Preferred Shares in the same manner as the voting rights. The insolvency put rights are granted by ParentCo to the Trustee in respect of the voting trust, for the benefit of the holders of LuxCo Exchangeable Preferred Shares in the same manner as voting rights. C-3 EX-10.2 3 0003.txt 1 SHARE EXCHANGE AGREEMENT This Agreement dated for reference the 13th day of December, 2000. BETWEEN: The undersigned SHAREHOLDERS of Hippocampe, more particularly described on the signature pages hereto (collectively, the "Shareholders") AND: ICHOR CORPORATION, a corporation organized under the laws of Delaware in the United States, with an address at 17, Dame Street, Dublin 2, Ireland ("ParentCo") WHEREAS: A. Each Shareholder owns the Hippocampe Common Shares as set forth beside his name on the signature pages hereto; and B. The Shareholders propose to contribute to ParentCo their Hippocampe Common Shares in consideration for ParentCo Shares, upon the terms and conditions set forth herein. NOW THEREFORE, the parties hereto agree as follows: 1. DEFINITIONS For the purposes of this Agreement, including the recitals, and any amendments hereto, unless the context otherwise requires, the following words and phrases shall have the following meanings, respectively: 1.1 "Agreement" means this share exchange agreement and any Schedules hereto, as amended, supplemented or restated from time to time; 1.2 "Bank Agreements" means the underwriting agreement (the "Underwriting Agreement") between Hippocampe and MFC Merchant Bank S.A. dated for reference July 24, 2000, as amended, supplemented or restated from time to time, the credit facility agreement (the "Credit Facility Agreement") between Hippocampe and MFC Merchant Bank S.A. dated for reference July 27, 2000, as amended, supplemented or restated from time to time, the Acte de Nantissement between Hippocampe and MFC Merchant Bank S.A. dated for reference July 27, 2000, the Contrat de Gage between Hippocampe and MFC Merchant Bank S.A. dated August 18, 2000 and any other documents and agreements entered into pursuant to, provided for or contemplated by either the Underwriting Agreement or the Credit Facility Agreement; and 1.3 "Hippocampe" means Hippocampe S.A., a societe anonyme organized under the laws of France, with an address at 52, avenue Chanoine Cartellier, F-69230 Saint-Genis-Lavel, France; 2 1.4 "Hippocampe Common Shares" means the common shares in the capital of Hippocampe; 1.5 "Losses", in respect of any matter, means all claims, demands, proceedings, losses, damages, liabilities, deficiencies, costs and expenses (including, without limitation, all legal and other professional fees and disbursements, interest, penalties and amounts paid in settlement) arising directly or indirectly as a consequence of such matter; 1.6 "LuxCo" means a corporation to be organized under the laws of Luxembourg as a wholly-owned subsidiary of ParentCo; 1.7 "LuxCo Share Exchange Agreement" means a share exchange agreement between ParentCo and certain shareholders of Hippocampe entered into concurrently with this Agreement, as amended, supplemented or restated from time to time; 1.8 "ParentCo Common Shares" means the common shares in the capital of ParentCo. 2. EXCHANGE OF SHARES 2.1 Subject to the terms and conditions hereof, each of the Shareholders shall contribute to ParentCo the Hippocampe Common Shares as set forth beside his name on the signature pages hereto and ParentCo shall issue to each Shareholder 4,265.77 ParentCo Common Shares for each Hippocampe Share set forth beside such Shareholder's name on the signature pages hereto. 2.2 Subject to the terms and conditions hereof, the securities to be contributed or issued hereunder shall be delivered to the respective parties as each in writing shall direct. 3. REPRESENTATIONS AND WARRANTIES OF PARENTCO 3.1 ParentCo, by its acceptance hereof, represents and warrants to the Shareholders that the statements contained in Schedule "A" hereto are correct and complete as of the date of this Agreement and shall be correct and complete as of the Closing Date (as though made then) and acknowledges and confirms that the Shareholders are relying upon such representations and warranties in connection with the transactions contemplated herein. 3.2 Notwithstanding the representations and warranties of ParentCo contained in Section 3.1 hereof and the covenants of ParentCo contained in Section 5.1 hereof, the Shareholders represent, warrant, acknowledge and agree that ParentCo may prior to the Time of Closing raise up to U.S.$2 million in equity for working capital purposes. 4. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS 4.1 The Shareholders severally represent and warrant to ParentCo that the statements contained in this Section 4.1 are correct and complete as of the date of this Agreement and shall be correct and complete as of the Closing Date (as though made then) and hereby acknowledge and confirm that ParentCo is relying upon such representations and warranties in connection with the transactions contemplated herein: (a) each Shareholder has all necessary power and authority to execute and deliver this Agreement and to perform its obligations hereunder; - 2 - 3 (b) this Agreement has been duly executed and delivered by and on behalf of each Shareholder and constitutes legal, valid and binding obligations of each Shareholder enforceable against such Shareholder in accordance with its terms; (c) the Hippocampe Common Shares owned by each Shareholder are owned by such Shareholder as the sole legal and beneficial owner of record with good, full and marketable title thereto, free and clear of any mortgages, liens, charges, restrictions, security interests, adverse claims, pledges, encumbrances or demands whatsoever, and are issued and outstanding as fully paid and non-assessable, other than certain shares of by Ms. Martine Reindle held in usufrucht by Pierre-Francois Serres; (d) no person, firm or corporation has any agreement or option, or any right or privilege (whether by law, pre-emptive or contractual) capable of becoming an agreement or option for the purchase, acquisition, transfer or contribution from any Shareholder of any of the Hippocampe Common Shares or any interest therein or right thereto owned by such Shareholder, other than pursuant hereto; and (e) there is no legal or regulatory action or proceeding pending or threatened by any person to enjoin, restrict or prohibit the contribution of the Hippocampe Common Shares by each Shareholder as contemplated herein. 4.2 In addition to the representations and warranties made in Section 4.1 hereof, the Shareholders severally represent and warrant to ParentCo that the statements contained in Schedule "B" hereto are correct and complete as of the date of this Agreement and shall be correct and complete as of the Closing Date (as though made then) and hereby acknowledge and confirm that ParentCo is relying upon such representations and warranties in connection with the transactions contemplated herein. 5. COVENANTS OF PARENTCO 5.1 ParentCo covenants as follows: (a) ParentCo shall use all commercially reasonable efforts to take all action and do all things necessary, proper or advisable in order to consummate and make effective the transactions contemplated by this Agreement; (b) from the date hereof to the Time of Closing, ParentCo shall carry on its business, operations and affairs only in the ordinary and normal course consistent with past practice; (c) from the date hereof to the Time of Closing, ParentCo shall not create, incur, assume or suffer to exist: (i) any material lien on any of its property or assets now owned or hereafter acquired; or (ii) contingently or otherwise, any material debt; (d) from the date hereof to the Time of Closing, ParentCo shall not make or permit to exist any change, condition, event or occurrence in or with respect to the nature of its business which when taken individually with all other changes, conditions, events or occurrences could reasonably be expected to have a material adverse effect: (i) on the property or assets of ParentCo; (ii) on the condition or prospects, financial or otherwise, of ParentCo; (iii) on the ability of ParentCo to perform and comply with this Agreement; and - 3 - 4 (e) from the date hereof to the Time of Closing, ParentCo shall not enter into or agree to enter into any transaction or series of related transactions (whether by way of reconstruction, reorganization, consolidation, combination, amalgamation, merger, transfer, sale, lease, modification or otherwise), other than in connection with the transactions contemplated herein, whereby: (i) all or substantially all of the undertaking, property or assets of ParentCo will become the property of any other person or the continuing corporation resulting therefrom; or (ii) the corporate structure of ParentCo would be modified, changed, altered or amended in any manner which would have a material adverse effect on the ability of ParentCo to perform and comply with this Agreement. 6. COVENANTS OF THE SHAREHOLDERS 6.1 The Shareholders severally covenant as follows: (a) the Shareholders shall use all commercially reasonable efforts to take all action and do all things necessary, proper or advisable in order to consummate and make effective the transactions contemplated by this Agreement; (b) from the date hereof to the Time of Closing, the Shareholders shall cause Hippocampe to carry on its business, operations and affairs only in the ordinary and normal course consistent with past practice; (c) from the date hereof to the Time of Closing, the Shareholders shall cause Hippocampe not to create, incur, assume or suffer to exist: (i) any material lien on any of its property or assets now owned or hereafter acquired; or (ii) contingently or otherwise, any material debt; (d) from the date hereof to the Time of Closing, the Shareholders shall cause Hippocampe not to make or permit to exist any change, condition, event or occurrence in or with respect to the nature of its business which when taken individually with all other changes, conditions, events or occurrences could reasonably be expected to have a material adverse effect: (i) on the property or assets of Hippocampe; (ii) on the condition or prospects, financial or otherwise, of Hippocampe; or (iii) on the ability of the Shareholders to perform and comply with this Agreement; and (e) from the date hereof to the Time of Closing, the Shareholders shall cause Hippocampe not to enter into or agree to enter into any transaction or series of related transactions (whether by way of reconstruction, reorganization, consolidation, combination, amalgamation, merger, transfer, sale, lease, modification or otherwise), other than in connection with the transactions contemplated herein, whereby: (i) all or substantially all of Hippocampe's undertaking, property or assets will become the property of any other person or the continuing corporation resulting therefrom; - 4 - 5 (ii) all or substantially all of the material patents of Hippocampe will become the property of any other person; or (iii) the corporate structure of Hippocampe would be modified, changed, altered or amended in any manner which would have a material adverse effect on the ability of the Shareholders to perform and comply with this Agreement. 7. CLOSING PROCEDURE 7.1 The closing of the transactions contemplated herein shall take place on the date to be determined in the sole discretion of ParentCo, such date not to be later than March 31, 2001, at the offices of MFC Merchant Bank S.A. at 6, Cours de Rive, 1211 Geneva 3, Switzerland, or at such other time or place as may be mutually agreed upon. The date of the closing of the transactions contemplated in this Agreement is referred to herein as the "Closing Date" and the time of closing on such date is referred to herein as the "Time of Closing". 7.2 At the Time of Closing on the Closing Date, ParentCo shall: (a) deliver to each Shareholder 4,265.77 ParentCo Common Shares issued to such Shareholder for each Hippocampe Share currently held by such Shareholder; (b) deliver to the Shareholders certified resolutions of the directors of ParentCo authorizing the issuance to the Shareholders of the ParentCo Common Shares to be issued by ParentCo hereunder; and (c) deliver or cause to be delivered such other documents as are required or contemplated to be delivered by ParentCo pursuant to this Agreement. 7.3 At the Time of Closing on the Closing Date, the Shareholders shall: (a) deliver or cause to be delivered to ParentCo transfer forms (i.e., ordres de mouvement) representing the Hippocampe Common Shares owned by each Shareholder duly executed for contribution to ParentCo; (b) cause to be executed and delivered to ParentCo certified resolutions of the directors of Hippocampe authorizing the contribution to ParentCo of the issued and outstanding Hippocampe Common Shares to be contributed by the Shareholders hereunder; and (c) deliver or cause to be delivered such other documents as are required or contemplated to be delivered by the Shareholders pursuant to this Agreement. 7.4 This Agreement shall take effect concurrently with the LuxCo Share Exchange Agreement. 8. CONDITIONS OF CLOSING 8.1 The obligation of ParentCo to complete the transactions contemplated herein shall be subject to the following conditions to be fulfilled and/or performed at or prior to the Time of Closing on the Closing Date: - 5 - 6 (a) ParentCo shall have received the requisite Shareholder approval to increase its authorized ParentCo Common Shares in sufficient amounts to meet its obligations hereunder and under the LuxCo Share Exchange Agreement; (b) the Bank Agreements and any share purchase warrants referred to therein shall have been duly and validly assigned by Hippocampe to ParentCo in a form satisfactory to ParentCo; (c) the representations and warranties of the Shareholders contained in this Agreement shall be true and correct in all material respects at the Time of Closing, with the same force and effect as if such representations and warranties were made at and as of such time; (d) the Shareholders shall have complied with all covenants and agreements herein agreed to be performed or caused to be performed by them; and (e) in aggregate, at least 90% of the issued and outstanding Hippocampe Common Shares shall have been contributed to ParentCo and/or LuxCo pursuant to this Agreement and the LuxCo Share Exchange Agreement. 8.2 In the event that the conditions referred to in Section 8.1 hereof shall not have been fulfilled at or prior to the Time of Closing to the satisfaction of ParentCo, acting reasonably, or waived by ParentCo, or in the event that the Closing Date has not occurred on or prior to March 31, 2001, this Agreement shall be rescinded and ParentCo shall be released from all obligations hereunder. 8.3 The obligation of the Shareholders to complete the transactions contemplated herein shall be subject to the following conditions to be fulfilled and/or performed at or prior to the Time of Closing on the Closing Date: (a) ParentCo shall have received an indemnity from MFC Bancorp Ltd. from and against all claims or actions arising out of the business and undertakings of ParentCo prior to the Time of Closing; (b) the representations and warranties of ParentCo contained in this Agreement shall be true and correct in all material respects at the Time of Closing, with the same force and effect as if such representations and warranties were made at and as of such time; (c) ParentCo shall have complied with all covenants and agreements herein agreed to be performed or caused to be performed by it; and (d) in aggregate, at least 90% of the issued and outstanding Hippocampe Common Shares shall have been contributed to ParentCo and/or LuxCo pursuant to this Agreement and the LuxCo Share Exchange Agreement. 8.4 In the event that the conditions referred to in Section 8.3 hereof shall not have been fulfilled at or prior to the Time of Closing to the satisfaction of the Shareholders, acting reasonably, or waived by the Shareholders, or in the event that the Closing Date has not occurred on or prior to March 31, 2001, this Agreement shall be rescinded and the Shareholders shall be released from all obligations hereunder. - 6 - 7 9. INDEMNIFICATION 9.1 ParentCo agrees to indemnify and save harmless the Shareholders from all Losses suffered or incurred by the Shareholders as a result of or arising directly or indirectly out of or in connection with: (i) any breach by ParentCo of or any inaccuracy of any representation or warranty of ParentCo; or (ii) any breach or non-performance by ParentCo of any covenant to be performed by it that is contained in this Agreement or in any agreement, certificate or other document delivered pursuant hereto. 9.2 Each Shareholder severally agrees to indemnify and save harmless ParentCo from all Losses suffered or incurred by ParentCo as a result of or arising directly or indirectly out of or in connection with: (i) any breach by such Shareholder of or any inaccuracy of any representation or warranty of such Shareholder; or (ii) any breach or non-performance by such Shareholder of any covenant to be performed by it, that is contained in this Agreement or in any agreement, instrument, certificate or other document delivered pursuant hereto. 10. COSTS AND EXPENSES 10.1 All costs and expenses of or incidental to the transactions contemplated herein are to be assumed and paid by the party incurring such costs and expenses. 11. NOTICES 11.1 Any notice required or permitted to be given hereunder to ParentCo shall be given by notice in writing addressed to the President of ParentCo hand delivered or sent by registered mail to the address mentioned on the first page of this Agreement, or to any new address previously notified to the party giving the notice. Any notice required or permitted to be given hereunder to a Shareholder shall be given by notice in writing addressed to such Shareholder hand delivered or sent by registered mail to the respective address mentioned on the signature pages of this Agreement, or to any new address previously notified to the party giving the notice. Any such notices shall be deemed to have been given and received at the time of hand delivery or delivery by the relevant postal service, as the case may be. 12. SECTIONS AND HEADINGS 12.1 The division of this Agreement into Sections and the insertion of headings are for convenience of reference only and shall not affect the interpretation of this Agreement. Unless otherwise indicated, any reference in this Agreement to a Section or a Schedule refers to the specified Section of or Schedule to this Agreement. 13. NUMBER, GENDER AND PERSONS 13.1 In this Agreement, words importing the singular number only shall include the plural and vice versa, words importing gender shall include all genders and words importing persons shall include individuals, corporations, partnerships, associations, trusts, unincorporated organizations, governmental bodies and other legal or business entities. - 7 - 8 14. SUCCESSORS AND ASSIGNS 14.1 All the terms and provisions of this Agreement shall be binding upon and enure to the benefit of and be enforceable by the parties hereto and their respective successors and permitted assigns but shall not be assignable prior to the Time of Closing by a Shareholder without the written consent of ParentCo or by ParentCo without the written consent of the Shareholders. 15. SURVIVAL 15.1 It is understood and agreed that all warranties, representations, covenants, indemnities and agreements of the parties herein contained or contained in any certificates or documents submitted pursuant to or in connection with the transactions contemplated herein shall survive the completion of the transactions contemplated herein and the termination of this Agreement and shall continue in full force and effect for the benefit of the other parties for a period of two years following the Closing Date. 16. FURTHER ASSURANCES 16.1 Each party to this Agreement covenants and agrees that, from time to time subsequent to the Closing Date, it will, at the request and expense of the requesting party, execute and deliver all such documents and do all such other acts and things as any other party hereto, acting reasonably, may from time to time request be executed or done in order to better evidence or perfect or effectuate any provision of this Agreement or of any agreement or other document executed pursuant to this Agreement or any of the respective obligations intended to be created hereby or thereby. 17. AMENDMENTS 17.1 This Agreement may be amended or modified by an agreement in writing executed by the parties hereto. Except as aforesaid, no amendment, waiver or modification of this Agreement shall be effective. 18. SEVERABILITY 18.1 Should a provision of this Agreement be or become invalid, the validity of the remaining provisions of this Agreement shall not be affected. The parties hereto undertake to replace any such invalid provision without delay with a valid provision which as nearly as possible duplicates the economic intent of the invalid provision. 19. ENGLISH VERSION 19.1 The parties hereby represent, warrant, acknowledge and agree that: (i) they have agreed that this Agreement be drawn up in the English language; and (ii) the English version of this Agreement shall govern for all purposes. 20. GOVERNING LAW 20.1 This Agreement shall be construed and enforced in accordance with, and the rights and obligations of the parties shall be governed by, the laws of the State of New York in the United States. - 8 - 9 21. JURISDICTION 21.1 Each of the parties irrevocably attorns to the exclusive jurisdiction of the courts in the State of New York in the United States. 22. COUNTERPARTS 22.1 This Agreement may be executed in any number of counterparts, each of which when delivered, either in original or facsimile form, shall be deemed to be an original and all of which together shall constitute one and the same document. IN WITNESS WHEREOF the parties have executed this Agreement in counterparts, one for each party. ICHOR CORPORATION Per: ------------------------------ Authorized Signatory - 9 - 10 THE FOLLOWING SHAREHOLDERS OF HIPPOCAMPE S.A.: SIGNED, SEALED and DELIVERED by ) ARALIS PARTICIPATION S.A. ) in the presence of: ) ) ARALIS PARTICIPATION S.A. ) - ------------------------------- ) Per: ------------------------- Signature ) (Authorized Signatory) - ------------------------------- ) Name ) - ------------------------------- ) ------------------------------- Address ) Address of Aralis Participation S.A. - ------------------------------- ) ------------------------------- ) 2139 - ------------------------------- ) ------------------------------- Occupation Number of Hippocampe Common Shares Held SIGNED, SEALED and DELIVERED by ) MARTIN REINDLE ) in the presence of: ) ) ) - ------------------------------- ) ------------------------------- Signature ) MARTIN REINDLE - ------------------------------- ) Name ) - ------------------------------- ) ------------------------------- Address ) Address - ------------------------------- ) ------------------------------- ) 1006 - ------------------------------- ) ------------------------------- Occupation Number of Hippocampe Common Shares Held SIGNED, SEALED and DELIVERED by ) ERNST LUBKE ) in the presence of: ) ) ) - ------------------------------- ) ------------------------------- Signature ) ERNST LUBKE - ------------------------------- ) Name ) - ------------------------------- ) ------------------------------- Address ) Address - ------------------------------- ) ------------------------------- ) 293 - ------------------------------- ) ------------------------------- Occupation Number of Hippocampe Common Shares Held - 10 - 11 SIGNED, SEALED and DELIVERED by ) CHRISTIAN ROCHET ) in the presence of: ) ) ) - ------------------------------- ) ------------------------------- Signature ) CHRISTIAN ROCHET - ------------------------------- ) Name ) - ------------------------------- ) ------------------------------- Address ) Address - ------------------------------- ) ------------------------------- ) 293 - ------------------------------- ) ------------------------------- Occupation Number of Hippocampe Common Shares Held SIGNED, SEALED and DELIVERED by ) MARCUARD COOK & CIE SA ) in the presence of: ) ) MARCUARD COOK & CIE SA ) - ------------------------------- ) Per: --------------------------- Signature ) (Authorized Signatory) - ------------------------------- ) Name ) - ------------------------------- ) ------------------------------- Address ) Address of Marcuard Cook & Cie - ------------------------------- ) ------------------------------- ) 235 - ------------------------------- ) ------------------------------- Occupation Number of Hippocampe Common Shares Held - 11 - 12 SCHEDULE "A" REPRESENTATIONS AND WARRANTIES OF PARENTCO (a) ParentCo has been duly organized and is validly existing and in good standing under the laws of its jurisdiction of organization. ParentCo is duly authorized to conduct business and is in good standing under the laws of each jurisdiction where such qualification is required. ParentCo has full corporate power and authority to carry on the businesses in which it is engaged and to own and use the properties owned and used by it. (b) ParentCo has all necessary power and authority to execute and deliver this Agreement and to perform its obligations hereunder. This Agreement has been duly executed and delivered by and on behalf of ParentCo and constitutes legal, valid and binding obligations of ParentCo enforceable against ParentCo in accordance with its terms. (c) The authorized capital of ParentCo consists of 30 million ParentCo Common Shares (approximately 80 million ParentCo Shares at the Time of Closing) and five million shares of preferred stock, $0.01 par value per share, of which 4,918,770 ParentCo Common Shares and 564,706 shares of preferred stock, $0.01 par value per share are issued and outstanding as of the date of this Agreement and 8,165,580 ParentCo Common Shares shall be outstanding as of the Time of Closing. No person, firm or corporation has any agreement or option, or any right or privilege (whether by law, pre-emptive or contractual) capable of becoming an agreement or option that could require ParentCo to issue, sell, or otherwise cause to become outstanding any of its capital, other than: (i) pursuant hereto; (ii) pursuant to the LuxCo Share Exchange Agreement; (iii) pursuant to the Bank Agreements; and (iv) the holders of options to acquire ParentCo Common Shares previously granted pursuant to ParentCo's stock option plans. (d) ParentCo has made all filings with the U.S. Securities and Exchange Commission that it has been required to make within the past two years under the U.S. Securities Act of 1933, as amended, and the U.S. Securities Exchange Act of 1934, as amended (collectively the "Public Reports"). Each of the Public Reports has complied with the U.S. Securities Act of 1933, as amended, and the U.S. Securities Exchange Act of 1934, as amended, in all material respects. None of the Public Reports, as of their respective dates, contained any untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. (e) ParentCo has filed quarterly reports on Form 10-Q for the fiscal quarters ended September 30, 2000 (the "Most Recent Fiscal Quarter End"), June 30, 2000 and March 31, 2000 and an annual report on Form 10-K for the fiscal year ended December 31, 1999. The financial statements of ParentCo included in or incorporated by reference into these Public Reports (including the related notes and schedules) have been prepared in accordance with U.S. generally accepted accounting principles applied on a consistent basis throughout the periods covered thereby, present fairly the financial condition of ParentCo as of the indicated dates and the results of operations of ParentCo for the indicated periods, and are correct and complete in all respects, and are consistent with the books and records of ParentCo; provided, however, that the interim statements are subject to normal year-end adjustments. (f) Since the Most Recent Fiscal Quarter End, there has not been any material adverse change in the financial condition of ParentCo. 13 (g) ParentCo does not have any liability (whether known or unknown, whether asserted or unasserted, whether absolute or contingent, whether accrued or unaccrued, whether liquidated or unliquidated, and whether due or to become due), including any liability for taxes, except for: (i) liabilities set forth on the face of the balance sheet dated as of the Most Recent Fiscal Quarter End; and (ii) liabilities which have arisen after the Most Recent Fiscal Quarter End in the ordinary course of business or which it assumes under the Bank Agreements. A-2 14 SCHEDULE "B" REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS (a) No person, firm or corporation has any agreement or option, or any right or privilege (whether by law, pre-emptive or contractual) capable of becoming an agreement or option for the purchase, acquisition, contribution or issuance of any Hippocampe Common Shares or any interest therein or right thereto, other than pursuant hereto and the LuxCo Share Exchange Agreement or MFC Merchant Bank S.A. pursuant to the Underwriting Agreement. (b) The authorized capital of Hippocampe is in the amount of FF 782,000 divided into 7,820 Hippocampe Common Shares of FF 100 each. (c) Hippocampe has been duly organized and is validly existing and in good standing under the laws of its jurisdiction of organization and has all requisite power and authority to carry on its business as now conducted and as presently proposed to be conducted and to own, lease and operate its properties and assets. (d) There is no action, proceeding or investigation pending or, to the knowledge of the Shareholders, after due inquiry, threatened, against or affecting Hippocampe, at law or in equity or before or by any federal, state, local or other governmental department, commission, board or agency, domestic or foreign, which could in any way materially adversely affect Hippocampe or the condition (financial or otherwise) of Hippocampe. (e) The descriptions of the assets and the liabilities of Hippocampe set out in the balance sheets of Hippocampe as at December 31, 1998 and December 31, 1999, including the notes thereto, are true and correct, accurately and fairly present the financial position and condition of Hippocampe as at the respective dates thereof, reflect all liabilities (absolute, accrued, contingent or otherwise, as applicable) of Hippocampe as at the respective dates thereof, and have been prepared in accordance with French generally accepted accounting principles applied on a consistent basis. (f) The statements of earnings, retained earnings and changes in financial position of Hippocampe, as applicable, for the years ended December 31, 1997, December 31, 1998 and December 31, 1999, including the notes thereto, in each case accurately and fairly present the results of the operations of Hippocampe for the respective periods covered thereby and have been prepared in accordance with French generally accepted accounting principles applied on a consistent basis throughout such period. (g) There is not, in the constating documents or by-laws of Hippocampe, any restriction upon or impediment to the payment of dividends by Hippocampe to the holders of the Hippocampe Common Shares. (h) There is no person, firm or corporation acting or purporting to act for Hippocampe entitled to any brokerage or finder's fee in connection with this Agreement or any of the transactions contemplated hereunder, other than pursuant to the Bank Agreements. (i) Hippocampe has conducted, and at the Time of Closing shall be conducting, its business in compliance in all material respects with all applicable laws, rules and regulations of its jurisdiction in which its business is carried on and is duly licensed, registered or qualified in all jurisdictions in 15 which it owns, leases or operates its property or carries on business to enable its business to be carried on as now conducted and its property and assets to be owned, leased and operated, and all such licenses, registrations and qualifications are valid and subsisting and in good standing and none of the same contains any burdensome term, provision, condition or limitation which has an adverse effect on the operation of its business as now carried on. (j) Hippocampe has conducted, and at the Time of Closing shall be conducting, its business in compliance in all material respects with all applicable licensing and anti-pollution legislation, regulations or by-laws, environmental protection legislation, regulations or by-laws or other similar legislation, regulations or by-laws or other lawful requirements of any governmental or regulatory bodies which are applicable to Hippocampe. (k) Hippocampe is not in default or breach of, and the execution and delivery of this Agreement by the Shareholders and the performance and compliance with the terms of this Agreement will not result in any breach of, or be in conflict with or constitute a default under, or create a state of facts which after notice or lapse of time, or both, would constitute a default under, any term or provision of the constating documents or by-laws of Hippocampe, any resolutions passed or consented to by the directors or shareholders of Hippocampe or any mortgage, note, indenture, contract, agreement (written or oral), instrument, lease or other document to which Hippocampe is a party or any judgement, decree, order, statute, rule or regulation applicable to Hippocampe, and no terms or provision thereof materially adversely affects the business, operations or condition (financial or otherwise) of Hippocampe or its properties or assets. (l) Hippocampe has duly and on a timely basis filed all tax returns to be filed by it, has paid all taxes due and payable by it and has paid all assessments and re-assessments and all other taxes, governmental charges, penalties, interest and other fines due and payable by it and which are claimed by any governmental authority to be due and owing and adequate provision has been made for taxes payable for any fiscal period ended for which tax returns are not yet required to be filed, if required; there are no agreements, waivers or other arrangements providing for an extension of time with respect to the filing of any tax return or payment of any tax, governmental charge or deficiency by Hippocampe; there are no actions, suits, proceedings, investigations or claims threatened or pending against Hippocampe in respect of taxes, governmental charges or assessments or any matters under discussion with any governmental authority relating to taxes, governmental charges or assessments asserted by any such authority. (m) All of the material agreements of Hippocampe have been duly authorized, executed and delivered by each of the parties thereto and are legal, valid and binding obligations of the parties thereto enforceable in accordance with their respective terms against each of the parties thereto. (n) All necessary patent applications in respect of its material patents have been duly filed and Hippocampe has good and valid title to such patents, and Hippocampe did not disclose to the public the existence of the subject matter of any of the patents prior to the date of filing of each of the patents. (o) Since December 31, 1999, Hippocampe has not made any payment on account of a redemption or a distribution or return of capital (including, without limitation, cash dividends or any repayment of shareholder loans or distributions) to any shareholder or holder of securities. (p) Since December 31, 1999, Hippocampe has carried on its business, operations and affairs only in the ordinary and normal course consistent with past practice. B-2 16 (q) Each Shareholder acknowledges that the ParentCo Common Shares issued pursuant hereto have not been registered under the U.S. Securities Act of 1933, as amended, and may be offered, sold or otherwise transferred only: (i) to ParentCo; (ii) outside the U.S. in accordance with Rule 904 of Regulation S under the U.S. Securities Act of 1933, as amended; or (iii) inside the U.S. in accordance with: (A) Rule 144A under the U.S. Securities Act of 1933, as amended; (B) Rule 144 under the U.S. Securities Act of 1933, as amended, if applicable; or (C) with the prior written consent of ParentCo, another exemption from registration under the U.S. Securities Act of 1933. B-3 EX-99.1 4 0004.txt 1 ICHOR Corporation - -------------------------------------------------------------------------- 17 Dame Street, Dublin 2 Ireland For Immediate Release Company Contact: Eric Turcotte (604) 687-1124 ICHOR CORPORATION ANNOUNCES SHARE EXCHANGE AGREEMENT WITH HIPPOCAMPE S.A. DUBLIN, Ireland, December 14, 2000 - ICHOR Corporation (OTC BB: ICHR.OB) announces that it has entered into Share Exchange Agreements to, directly and indirectly, acquire in excess of 94% of the outstanding shares of Hippocampe S.A. of Lyon, France in consideration of an aggregate of approximately 33,558,320 common shares and securities convertible into common shares of ICHOR (the "Transaction"). Concurrent with the closing of the Transaction, all of the currently outstanding shares of preferred stock of ICHOR will be redeemed or converted into shares of common stock of ICHOR. ICHOR anticipates that approximately 3,247,060 shares of ICHOR common stock will be issued on such redemption. After giving effect to the Transaction and the preferred stock redemption, the shareholders of Hippocampe will own approximately 80% of the fully diluted issued and outstanding common shares of common stock of ICHOR. The Transaction is subject to certain conditions customary for transactions of this nature including, among other things, ICHOR receiving shareholder approval to increase its authorized share capital to a level necessary to complete the Transaction. Hippocampe S.A. is a biotechnology company founded in 1990 by an experienced biologist, Dr. Pierre-Francois Serres. A French national holding several degrees in biology and one in management, Dr. Serres began his career as professor at the Medical faculty of the University of Lyon. From 1975 and prior to starting Hippocampe, he held various teaching and research positions at prestigious French universities and biomedical institutes, amongst them the well-known Institut Pasteur in Lyon. Hippocampe is devoted to fundamental and applied research in the area of human and veterinary biology and medicine, with a particular emphasis on the humanitarian aspects i.e., retroviral pathogenesis, such as AIDS, oncogenesis, transplantation. 2 2 Hippocampe's current objectives are to develop vaccine and therapeutic molecules and specific therapies for certain retroviral diseases or diseases with a viral autoimmune content. The first targeted products and applications concern AIDS. Hippocampe believes to have made a major discovery with a new and precise molecular mimicry between a conserved part of GP41 in a trimeric form, a major HIV transmembrane protein, and Interleukine 2 or IL-2, the immune system's "conductor" protein. This major discovery explains and demonstrates that an HIV infection triggers an immune response that turns against the immune system itself. Hippocampe has further found that the above mimicry exists in all four-mammal species known to be "AIDS prone" (i.e. human, monkeys, felines and bovines). This research indicates potential for a major link that may have significant impact in developing an AIDS vaccine. A portion of Dr. Serres research was recently published by the French Academy of Sciences in a paper entitled "Molecular Mimicry Between the Trimeric Ectodomain of the Transmembrane Protein of Immunosuppresive Lentiviruses (HIV-SIV-FIV) and Interleukin 2". This paper was communicated by Dr. Luc Montagnier, an internationally recognized expert in the AIDS research field. Dr. Serres findings were presented at the Foundation Marcel Merieux International Symposium on Autoimmunity Induced by Infection or Immunization. Hippocampe's policy has been to thoroughly protect its technology by obtaining base patents followed by application patents. To date Hippocampe has four patents. Commenting on this event, Mr. Jin Soo Choi, President of ICHOR stated "This Transaction, through which Hippocampe becomes a subsidiary of ICHOR, propels ICHOR into the exciting biotech industry and more specifically, into the viral fusion arena. Upon the closing of the Transaction, ICHOR will undergo major changes at the Board level, in management and in its shareholder base to better serve this new focus". MFC Merchant Bank S.A. of Geneva, Switzerland has acted as an advisor in this transaction. Certain statements included herein are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Management of ICHOR cautions that forward-looking statements are not guarantees and that actual results could differ materially from those expressed or implied in the forward-looking statements. Important factors that could cause the actual results of operations or financial condition of ICHOR to differ include, but are not necessarily limited to, the risks and uncertainties discussed in documents filed by ICHOR with the Securities and Exchange Commission. -----END PRIVACY-ENHANCED MESSAGE-----