SHARE PURCHASE AGREEMENT
SHARE PURCHASE AGREEMENT, dated as of July 22, 1997,
by and between TRADELINK INTERNATIONAL LIMITED, a Bahamian
corporation (the "Buyer"), on the one hand, and VECTOR
AEROMOTIVE CORPORATION, a Nevada corporation ("Vector") on
the other.
W I T N E S S E T H:
WHEREAS, the Buyer and Vector have entered into a
letter of intent dated January 10, 1997 ("Letter I"), which
described the general terms on which Vector would sell to
Buyer 60,000,000 Common Shares, par value $.01 per share,
of Vector Common Stock and an option to purchase an
additional 106,000,000 shares of Vector Common Stock,
together with certain other rights to be vested in the
Buyer; and
WHEREAS, the Buyer and Vector have entered into a
amended and restated letter of intent dated May 23, 1997
(the "Letter"), which supersedes Letter I and describes
revised general terms on which Vector would sell to Buyer
60,000,000 Common Shares, par value $.01 per share, of
Vector Common Stock and Buyer would loan to Vector an
aggregate amount of $3,750,000; and
WHEREAS, the Letter contemplates that the parties
will enter into a definitive agreement and prepare such
other documentation as the parties and their respective
legal counsel determine is appropriate; and
WHEREAS, the parties intend that this Share Purchase
Agreement (the "Agreement"), together with the schedules,
exhibits and other documents attached to this Agreement,
serve as the definitive agreement between the parties with
respect to the transactions described in the Letter;
NOW, THEREFORE, in consideration of the covenants,
representations, warranties and mutual agreements herein
set forth, the Buyer and Vector hereby agree as follows:
ARTICLE I
The Option to Purchase, Loan and Ancillary Agreements
1.1 Option to Purchase the Shares.
(a) Subject to and upon the terms and conditions
hereof and the representations, warranties and covenants
contained in this Agreement, on the Closing Date (as
defined below) Vector shall sell, transfer, assign and
deliver certificate(s) representing 60,000,000 Common
Shares of Vector, par value $.01 per share (the "Shares")
to the Buyer, and the Buyer shall purchase the Shares from
Vector, free and clear of all liens, claims and
encumbrances thereon. The obligations of Vector and Buyer
shall be further defined in an option agreement (the
"Option Agreement") in the form attached to this Agreement
as Annex I and incorporated by reference in this Agreement.
(b) Contemporaneously with the execution of this
Agreement, Vector shall execute and deliver to Buyer the
Option Agreement. As set forth in the Option Agreement,
Vector will grant to Buyer or its transferee(s), if any,
the right to purchase (the "Option") the Shares, all as
more fully set forth in the Option Agreement.
1.2 Purchase Price for the Shares.
(a) Upon the terms and subject to the conditions
set forth in this Agreement and the Option Agreement,
Vector and the Buyer agree that on the Closing Date Vector
shall sell to the Buyer, and the Buyer shall purchase from
Vector, the Shares for aggregate cash consideration of
$1,250,000 payable in United States currency (the "Purchase
Price").
(b) At the Closing, Vector shall deliver to the
Buyer one or more certificates representing the Shares
against delivery by the Buyer to Vector of the Purchase
Price. Certificates for the securities comprising the
Shares shall be registered in such name or names and in
such authorized denominations as the Buyer may request in
writing at least five full business days prior to the
Closing Date.
1.3 Registration Rights for the Shares. On the
Closing Date (as defined below), the parties shall execute
a registration rights agreement (the "Registration Rights
Agreement"), a copy of which is attached to this Agreement
as Annex II and incorporated by reference in this
Agreement. The Registration Rights Agreement shall extend
to the Buyer the right, on or after the Closing Date, to
demand that Vector cause to be filed and become effective
under the Securities Act of 1933 (the "1933 Act"), as
amended, a registration statement covering any or all of
the Shares.
1.4 The Loan. The Buyer will loan or make available
the following credit facility (the "Facility") for Vector.
The Facility is subject to the following terms and
conditions:
(a) The Facility. A discretionary line of credit
will be made available to Vector in the amount of up to
$1,250,000, which will be converted to a ten (10) year term
loan ("Line of Credit I") and a discretionary line of
credit will be made available to Vector in the amount or up
to $2,500,000. The facility is more fully described in a
loan and security agreement (the "Loan Agreement") in the
form attached to this Agreement as Annex VI and
incorporated by reference in this Agreement
(b) Interest. Advances under the lines of credit
shall bear interest at the rate of two percent (2%) per
annum in excess of the prime rate, floating. The interest
rate on Line of Credit I after it converts to a ten year
term loan will be ten percent (10%). Interest will be
calculated on the basis of a 360-day year and will be
payable monthly. Interest after maturity or default will
accrue at 5% per annum in excess of the regular rate.
(c) Maturity. All loans and advances under this
Facility will be due and payable on demand, except that
Line of Credit I will be converted to a ten year term loan
on the Conversion Date (as defined in the Loan Agreement).
No advances will be made after the date that a majority of
the Board of Directors of Vector fail to be persons
nominated by the Buyer unless the Buyer agrees in writing
to an extension of such date.
(d) Security. All loans and advances will be
secured by a valid, perfected security interest in each of
the following assets which, unless otherwise specifically
stated to the contrary, will be superior in priority to all
other liens and security interests in such assets:
(i) All of Vector's accounts receivables;
(ii) All of Vector's inventory;
(iii)All of Vector's general intangibles and
chattel paper, if any;
(iv) All of Vector's furniture, fixtures and
equipment; and
(v) All other Vector assets.
(e) Use of Proceeds. The proceeds of the Facility
will be used only for working capital to be used in the
operation of Vector's business.
(f) Conditions and Covenants. Contemporaneously
with the execution of this Agreement, Vector will execute
the Loan Agreement, Note I (as definied in the Loan
Agreement), Note II (as definied in the Loan Agreement) and
other documents and instruments required in the Loan
Agreement or reasonably requested in the form generally
used by an independent lender in the community for
customers with good credit.
(g) Financial Statements. Vector will provide
audited financial statements annually to the lender no
later than 90 days following the end of Vector's fiscal
year and will provide unaudited, internally prepared
financial statements no later than 30 days following the
end of each month, in each case together with a certificate
that Vector is not in default under its obligations with
respect to the loan contemplated in this Section.
(h) Conditions Precedent. The obligations to
extend credit under the Facility described in this
Agreement are subject to the following conditions precedent
being satisfied:
(i) Documents. All documents in connection with
the Facility described in this Agreement and the Loan
Agreement will be acceptable in form and substance to
the lender.
(ii) Covenants and Representations. All
representations and warranties made by Vector in this
Agreement, the Loan Agreement and any other instrument
or document executed in connection with this Agreement
or the Loan Agreement shall be true and correct, and
Vector shall have fulfilled and complied with all
covenants and agreements contained in this Agreement,
the Loan Agreement and all instruments and documents
executed in connection with this Agreement or the Loan
Agreement.
(iii) Collateral. The lender will have received
satisfactory evidence of title to collateral, absence of
conflicting liens, perfection and priority of its
security interests and similar matters.
(iv) Insurance. The lender will have received
evidence of satisfactory insurance on Vector's assets
naming the lender as loss payee/secured party as to all
tangible collateral, and evidence of such other
insurance as the lender may require.
(v) Resignations. The Buyer shall have received
resignations from a majority of the members of the Board
of Directors of Vector and minutes or other evidence of
action by the Board of Directors satisfactory to the
Buyer in its sole discretion showing that (i) persons
designated by the Buyer have been elected or appointed
as a majority of the authorized directors and (ii)
persons designated by the Buyer have been elected to the
offices designated by the Buyer.
(vi) Opinion of Counsel. The opinion of counsel
for Vector as provided in Article VIII below.
(vii) Other Items. Such other documents,
instruments and certificates of the officers of Vector
as are described in Article XIII or as otherwise may be
reasonably requested by the Buyer.
(i) Expenses. Vector will reimburse the lender on
the demand for all out-of-pocket expenses (excluding
attorney's fees) incurred by such lender in connection with
the preparation, administration and enforcement of the
documents relating to the Facility. Vector will pay all
documentary stamp taxes, intangible taxes and other taxes
and expenses relating to the Facility.
ARTICLE II
Closing
2.1 The Closing. The closing of the sale of
Shares contemplated by this Agreement(the "Closing") shall
take place at a date and time to be specified by the Buyer
and Vector within thirty (30) days after the Conversion
Date (as defined in the Loan Agreement)(the "Closing Date")
and following satisfaction or waiver of all conditions
precedent to Closing as described in Articles VI, VII and
VIII hereof. The Closing shall take place at the offices
of Vector in Jacksonville, Florida, or any other place
mutually agreeable to the parties, subject to the right of
the parties to close by exchange of executed counterpart
documents on the Closing Date.
2.2 Deliveries by Vector. At the Closing, Vector
shall deliver to the Buyer or cause to be delivered to the
Buyer the following instruments and documents:
(a) A certificate or certificates representing the
Shares registered in the name of the Buyer or in such name
as may be designated by the Buyer. Any sales, stock
transfer or other taxes payable in connection with the sale
to the Buyer by Vector of the Shares shall be paid by
Vector;
(b) The opinion of counsel for Vector as provided
in Article VIII below; and
(c) Such other documents, instruments and
certificates of the officers of Vector as are described in
Article XIII or as may be reasonably requested by the
Buyer.
2.3 Deliveries by the Buyer. At the Closing, the
Buyer shall deliver to Vector or cause to be delivered to
Vector the following instruments and documents:
(a) The Purchase Price as provided in Section
1.2(a) hereof; and
(b) Such other documents, instruments and
certificates of the officers of the Buyer as may be
reasonably requested by Vector.
2.4 Further Assurances. Vector shall execute and
deliver on the Closing Date or thereafter any and all such
other instruments, and take or cause to be taken all such
further action as may be necessary or appropriate to vest
fully and confirm to the Buyer title to and possession of
the Shares.
ARTICLE III
Representations and Warranties of Vector
3.1 Representations and Warranties of Vector. As
a material inducement to the Buyer to (i) enter into this
Agreement,(ii) purchase and acquire the Shares and (iii)
make or arrange the Facility, Vector represents and
warrants to the Buyer, except as disclosed in the Exhibits
to this Agreement, as of the date of this Agreement and the
Closing Date, that:
(a) Vector is a corporation duly organized,
validly existing and in good standing under the laws of the
State of Nevada. Vector is duly authorized to conduct
business in the State of Florida as a foreign corporation,
and is in good standing in each state in which the
ownership of its property or the conduct of its business
renders such qualification necessary, and has all corporate
power and authority necessary to engage in the business in
which it is presently engaged. FROM JANUARY 1, 1990
THROUGH THE DATE HEREOF, VECTOR HAS NOT DONE ANY BUSINESS
IN THE STATE OF NEVADA EITHER DIRECTLY OR THROUGH AN
AFFILIATED CORPORATION, AND THEREFORE THE PROVISIONS OF NRS
78.378 TO NRS 78.3793 OF THE NEVADA BUSINESS CORPORATION
ACT (THE "NEVADA LAW") DO NOT APPLY TO VECTOR BY VIRTUE OF
NRS 78.3788 OF THE NEVADA LAW.
(b) Vector does not own or control, directly or
indirectly, any interest in any other corporation, joint
venture, partnership, association or other business entity.
(c) Vector has furnished to the Buyer, or will
furnish to the Buyer prior to the Closing Date, copies of
the audited financial statements of Vector for the years
ended September 30, 1995 and 1994, and financial statements
contained in Vector's Form 10-Q filed with the Securities
ands Exchange Commission for the period ended September 30,
1996 (hereinafter, collectively referred to as the "Vector
Financial Statements"). Vector Financial Statements
include a balance sheet and related statements of net
income (loss), shareholders' equity and cash flows for the
year ended on such date audited by Vector's certified
public accountants.
Vector Financial Statements fairly present the
financial position, results of operations and other
information purported to be shown therein at the respective
dates and for the respective periods to which they apply.
Vector Financial Statements have been prepared in
accordance with generally accepted accounting principles
(except to the extent that certain footnote disclosures
regarding any stub period may have been omitted in
accordance with the applicable rules of the Securities and
Exchange Commission (the "Commission") under the Securities
Exchange Act of 1934, as amended (the "1934 Act"),
consistently applied throughout the periods involved, are
correct and complete, and are in accordance with the books
and records of Vector. The accountants whose report on the
audited financial statements is filed with the Commission
are, and during the periods covered by the reports included
in filings made with the Commission were, independent
certified public accountants with respect to Vector within
the meaning of the 1934 Act.
(d) Vector is not a party to any employment
agreement with any of its officers, directors or
shareholders, or to any lease, agreement or other
commitment, nor except as disclosed in Exhibit A to this
Agreement, to any pension, insurance, profit sharing or
bonus plan. Except as disclosed in Exhibit A to this
Agreement, none of Vector's officers or directors nor any
associate (i.e., any relative or spouse of any of the
officers or directors or any firm, corporation, association
or business enterprise in which any of the officers or
directors or any such relative or spouse participates as a
director, officer, employee, agent, representative,
shareholder, partner or joint venturer or has any direct or
indirect financial interest, including, without limitation,
the interest of a creditor in any form) or any of the
officers or directors has any direct or indirect interest,
in any firm, corporation, association or business
enterprise which competes with, is a supplier, customer or
sales agent of, or is engaged in any business of the kind
being conducted by Vector, and none of Vector's officers or
directors nor any associate of any of the officers or
directors has any interest, directly or indirectly, and any
contract with, commitment or obligation of or to, or claim
against, Vector.
(e) Except as otherwise disclosed on Exhibit B to
this Agreement, Vector is not a party to any litigation,
pending or threatened nor has any claim been made or, to
the best knowledge of Vector's executive officers, asserted
against Vector nor are there any proceedings threatened or
pending before any federal, state or municipal government,
or any department, board, body or agency thereof, involving
Vector.
(f) Vector is not in violation or default of any
provision of its Articles of Incorporation or Bylaws or of
any provision of any instrument or contract to which it is
party, or by which it is bound or, to the best knowledge of
its executive officers, of any provision of any federal,
state or local judgment, writ, decree, order, law, statute,
rule or government regulation, applicable to it. The
execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby
will not result in any such violation or be in conflict
with or constitute, with or without the passage of time and
giving of notice, either a violation or default under any
such provision or an event which results in the creation of
any lien, charge or encumbrance upon any asset of Vector.
Vector has all requisite power and authority to execute,
deliver and perform each of (a) this Agreement (b) the
Option Agreement,(c) the Registration Rights Agreement, and
(d) the Loan Agreement and other documents evidencing the
Facility, and has all requisite power and authority to
execute and deliver the certificates representing the
Shares. All necessary corporate proceedings of Vector have
been duly taken to authorize the execution, delivery and
performance by Vector of this Agreement, the Loan
Agreement, the Option Agreement and the Registration Rights
Agreement. This Agreement, the Loan Agreement, the Option
Agreement and the Registration Rights Agreement have been
duly authorized, executed and delivered by Vector, each is
the legal, valid and binding obligation of Vector, and is
enforceable as to Vector in accordance with its terms. No
consent, authorization, approval, order, license,
certificate, or permit of or from, or declaration or filing
with, any federal, state, local or other governmental
authority or any court or other tribunal is required by
Vector for the execution, delivery or performance by Vector
of this Agreement, the Loan Agreement, the Option Agreement
or the Registration Rights Agreement. No consent of any
party to any contract, agreement, instrument, lease,
license, arrangement or understanding to which Vector is a
party, or to which any of its properties or assets are
subject, is required for the execution, delivery or
performance of this Agreement, the Loan Agreement, the
Option Agreement or the Registration Rights Agreement.
(g) Since September 30, 1996, Vector has not,
except as disclosed in Exhibit C to this Agreement, and
prior to the Closing, Vector will not have (i) paid or
declared any dividends on or made any distributions in
respect of, or purchased or redeemed, any of the
outstanding shares of its capital stock or issued any
additional shares of its capital stock; or (ii) made or
authorized any amendments to its Articles of Incorporation,
or to its By-Laws except an amendment to Vector's Articles
of Incorporation to increase to 600,000,000 Vector's
authorized common shares; or (iii) mortgaged or pledged or
subjected to any lien, charge or other encumbrance, any of
its assets, tangible or intangible; or (iv) sold, leased,
transferred or contracted to sell, lease
or transfer any material assets, tangible or intangible, or
entered into any other transactions outside of the ordinary
course of business; (v) made any loan or advance to or
become obligated as guarantor or otherwise on behalf of any
officer, director or shareholder of Vector or to any other
person, firm or corporation; (vi) paid any compensation to
any officer or director (in their capacities as such) other
than in the ordinary course of business; (vii) suffered any
labor trouble; (viii) made or become a party to any
contract or commitment or renewed, extended, amended or
modified any contract or commitment which in any case
involved an amount in excess of $50,000 or term in excess
of 90 days, except in the ordinary course of business; (ix)
become bound or entered into any contract, commitment or
transaction other than in the ordinary course of business
or except as otherwise contemplated by this Agreement; or
(x) waived any rights which alone or in the aggregate are
material to Vector.
(h) The authorized capitalization of Vector
consists of 600,000,000 Common Shares, par value $.01 per
share (the "Common Shares") and 5,000,000 Preferred Shares,
par value $.10 per share (the "Preferred Stock"). As of
the date hereof, 53,609,387 Common Shares have been duly
authorized and validly issued and are outstanding, fully
paid and nonassessable, and no Preferred Stock are issued
or outstanding. The Shares, when issued in accordance with
the terms and conditions of this Agreement and the Option
Agreement, will be duly authorized, validly issued, fully
paid and nonassessable. Except as described in Exhibit D
to this Agreement or as may be contemplated by this
Agreement, Vector has no commitments or obligations of any
nature whatsoever to issue, deliver or sell under any
preemptive rights, offer, stock option agreement, bonus
agreement or purchase plan, stock incentive compensation
plan, conversion right, contingent share agreement or
otherwise, any Common Shares or Preferred Stock.
(i) Except as set forth in Exhibit E to this
Agreement, to the best knowledge of Vector's executive
officers after reasonable investigation, Vector has not
infringed, and is not now infringing, upon, any trademark,
trade name, service xxxx, or copyright belonging to any
other person, firm or corporation. Vector is not a party
to any license agreement, or any other agreement with
respect to any trademark, service xxxx, trade names or
applications for same or any copyrights except as disclosed
in Exhibit E to this Agreement. To the best of its
knowledge after reasonable inquiry, and except as disclosed
on Exhibit E to this Agreement, Vector owns or holds
adequate licenses or rights to use all trademarks, service
marks, trade names, or copyrights used in the business as
now conducted by it and such use does not and will not,
infringe upon or otherwise violate the rights of others in
a manner which might have a material adverse effect on
Vector. "Vector" is a trademark used by Vector to identify
its products, and such trademark is protected by
registration in the name of Xxxxxx Xxxxxxx, as assignor to
Vector, on the principal register of the United States
Patent and Trademark Office. There is no right to any
intangible property, except as now possessed subject to the
claims of Xxxxxx Xxxxxxx as described in Exhibit E,
necessary to the business of Vector as presently conducted.
(j) Except as set forth in Exhibit F:
(i) Vector has obtained all permits, licenses and
other authorizations which are required under the
Environmental Laws for the ownership, use and operation
of each location operated or leased by Vector (the
"Property"), all such permits, licenses and
authorizations are in effect, no appeal nor any other
action is pending to revoke any such permit, license or
authorization, and Vector is in full compliance with all
terms and conditions of all such permits, licenses and
authorizations.
(ii) Vector and the Property are in compliance with
all Environmental Laws, including, without limitation,
all restrictions, conditions, standards, limitations,
prohibitions, requirements, obligations, schedules and
timetables contained in the Environmental Laws or
contained in any regulation, code, plan, order, decree,
judgment, injunction, notice or demand letter issued,
entered, promulgated or approved thereunder.
(iii) Vector has not and to the best knowledge of
Vector's executive officers, no other person has,
Released, placed, stored, buried or dumped any Hazardous
Substances, Oils, Pollutants or Contaminants or any
other wastes produced by, or resulting from, any
business, commercial, or industrial activities,
operations, or processes, on, beneath, or adjacent to
the Property or any property formerly owned, operated or
leased by Vector except for inventories of such
substances to be used, and wastes generated therefrom,
in the ordinary course of business of Vector (which
inventories and wastes, if any, were and are stored or
disposed of in accordance with applicable laws and
regulations and in a manner such that there has been no
release of any such substances into the environment).
(iv) Except as provided to the Buyer, there exists
no written or tangible report, synopsis or summary of
any asbestos, toxic waste or Hazardous Substances, Oils,
Pollutants or Contaminants investigation made with
respect to all or any portion of the assets of Vector
(whether or not prepared by experts and whether or not
in the possession of the executive officers of Vector).
(v) Definitions: As used in this Agreement:
(a) Environmental Laws - means all federal,
state and local laws, regulations, rules and
ordinances relating to pollution or protection of
the environment, including, without limitation,
laws relating to Releases or threatened Releases of
Hazardous Substances, Oils, Pollutants or
Contaminants into the indoor or outdoor environment
(including, without limitation, ambient air,
surface water, groundwater, land, surface and
subsurface strata) or otherwise relating to the
manufacture, processing, distribution, use,
treatment, storage, Release, transport or handling
of Hazardous Substances, Oils, Pollutants or
Contaminants.
(b) Hazardous Substances, Oils, Pollutants or
Contaminants - means all substances defined as such
in the National Oil and Hazardous Substances
Pollutant Contingency Plan, 40 C.F.R. Section
300.6, or defined as such under any Environmental
Law.
(c) Release - means any release, spill,
emission, discharge, leaking, pumping, injection,
deposit, disposal, discharge, dispersal, leaching
or migration into the indoor or outdoor environment
(including, without limitation, ambient air,
surface water, groundwater, and surface or
subsurface strata) or into or out of any property,
including the movement of Hazardous Substances,
Oils, Pollutants or Contaminants through or in the
air, soil, surface water, groundwater or any
property.
(k) To the best knowledge of Vector's executive
officers, after reasonable investigation, no instrument of
record, easement, license, grant, applicable zoning or
building law, ordinance or administrative regulation or
urban redevelopment law or other impediment of any kind
prohibits or interferes with, limits or impairs, or would
if not permitted by any prior nonconforming use, prohibit
or interfere with, or limit or impair, the use, operation,
maintenance of or access to, or affect the value of, the
real or personal property owned of record or beneficially
or leased by Vector, or any item thereof, as now used,
operated or maintained by Vector. No notice of any
violation of any applicable zoning or building law or
ordinance or administrative regulation has been received by
Vector, nor to the knowledge of Vector's executive officers
is such a notice threatened. No condemnation proceedings
have been instituted in respect of any real estate owned or
leased by Vector nor to the knowledge of any of Vector's
executive officers are such proceedings threatened.
(l) Exhibit G lists all leases of Equipment used
by Vector.
(m) Except as set forth in Exhibit H, to the best
knowledge of Vector's executive officers, after reasonable
investigation, there is no pending or threatened labor
trouble with any of the employees of Vector or any unfair
labor practices alleged, as such term is defined in the
National Labor Relations Act, as amended.
(n) Exhibit I to this Agreement contains (i) the
names of all incumbent directors and officers of Vector,
(ii) the names and job designations of all employees whose
total compensation from Vector for the year ended
September 30, 1996, equaled or exceeded $60,000, together
with a statement of the full amount paid, or payable to
each such person in respect of such year and a summary of
the basis on which each such person is compensated if such
basis is other than a fixed salary rate, (iii) the names of
all persons holding powers of attorney from Vector and
copies thereof.
(o) Vector has provided the Buyer with full and
complete access to information concerning all material
aspects of, and material information with respect to,
Vector. All information which has been communicated by
Vector to the Buyer with respect to the assets,
liabilities, business, operations, financial condition and
business prospects of Vector are true, correct and complete
in all material respects.
(p) The minute books of Vector accurately reflect
all meetings, actions, proceedings, and other matters
properly includable therein.
(q) Except as disclosed in Exhibit J to this
Agreement, neither the Commission nor any "Blue Sky" or
securities authority of any jurisdiction (collectively, the
"Securities Authorities") have issued an order (a "Stop
Order") suspending the effectiveness of a registration
statement filed by Vector with the Securities Authorities,
preventing or suspending the use of any preliminary
prospectus, definitive prospectus, registration statement
or any amendment or supplement thereto, or suspending the
registration or qualification of any of the securities
issued by Vector, nor have the Securities Authorities
instituted or threatened to institute any proceedings with
respect to a Stop Order.
(r) To the best knowledge of Vector's executive
officers, neither Vector nor any director, officer, agent,
employee or other person associated with or acting on
behalf of Vector has, directly or indirectly: used any
corporate funds for unlawful contributions, gifts,
entertainment or other unlawful expenses relating to
political activities, made any unlawful payment to foreign
or domestic government officials or employees or to foreign
or domestic political parties or campaigns from corporate
funds; violated any provision of the Foreign Corrupt
Practices Act of 1977, as amended; or made any bribe,
rebate, pay-off, influence payment, kickback, or any other
unlawful payment.
(s) Board and Special Committee Recommendations.
The Board of Directors of Vector has, by resolutions duly
adopted on July ___, 1997, at a meeting duly held at which
a quorum was present, approved and adopted this Agreement
and the other transactions contemplated in this Agreement
and the terms and conditions set forth in this Agreement as
being in the best interests of Vector and its shareholders.
ARTICLE IV
Representations and Warranties of the Buyer
4.1 Representations and Warranties of the Buyer.
As a material inducement to Vector to enter into this
Agreement, the Option Agreement and the Registration Rights
Agreement and issue the Shares, the Buyer represents and
warrants to Vector that:
(a) The Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the
Bahamas, and is qualified to transact business as a foreign
corporation in all other jurisdictions in which the
character of its business requires the Buyer to be so
qualified; and has all corporate power necessary to engage
in the business in which it is presently engaged.
(b) Neither the execution and delivery of this
Agreement nor the consummation of the transactions herein
contemplated, will conflict with or result in the breach
of, or accelerate the performance required by, any terms of
any agreement, or result in the creation of any lien,
charge or encumbrance upon any of the properties or assets
of the Buyer under the terms of any such agreement.
(c) The Buyer has all requisite power and
authority to execute, deliver and perform each of (a) this
Agreement, (b) the Option Agreement and (c) the
Registration Rights Agreement and (d) the Loan Agreement,
and has all requisite power and authority to purchase and
own the Shares and the Option Agreement. All necessary
corporate proceedings of the Buyer have been duly taken to
authorize the execution, delivery and performance by the
Buyer of this Agreement, the Option Agreement and the
Registration Rights Agreement. This Agreement has been
duly authorized, executed and delivered by the Buyer, and
is enforceable as to the Buyer in accordance with its
terms. No consent, authorization, approval, order,
license, certificate or permit of or from, or declaration
or filing with, any federal, state, local or other
governmental authority or any court or other tribunal is
required by the Buyer for the execution, delivery or
performance by the Buyer of this Agreement, the Option
Agreement and the Registration Rights Agreement. No
consent of any party to any contract, agreement,
instrument, lease, license, arrangement or understanding to
which the Buyer is a party, or to which any of its
properties or assets are subject, is required for the
execution, delivery or performance of this Agreement, the
Option Agreement and the Registration Rights Agreement.
(d) The Buyer is acquiring the Shares and the
Option Agreement, upon payment for and delivery thereof,
not with a view to the distribution or public resale
thereof within the meaning of the 1933 Act. The Buyer
further agrees that Vector may cause to be set forth on the
certificates for the Shares to be delivered to the Buyer
hereunder and pursuant to the Option Agreement, a legend in
substantially the following form:
These securities have not been registered
under the Securities Act of 1933, as amended,
and may be offered and sold only if registered
pursuant to the provisions of that Act or if,
in the opinion of counsel to the seller an
exemption from registration thereunder is
available, the availability of which must be
established to the satisfaction of Vector.
Vector shall not be obligated to recognize any
purported transfer by the Buyer of the Shares and the
Option Agreement unless accompanied by an opinion of the
Buyer's counsel in form and substance satisfactory to
counsel for Vector to the effect that such transfer is not
in violation of the 1933 Act.
ARTICLE V
Covenants of Vector
5.1 Conduct of Business. From the date of Letter
I until the Closing, except as permitted by this Agreement,
reflected in the Exhibits to this Agreement or as otherwise
consented to by the Buyer in writing, which consent shall
not be unreasonably withheld, Vector has or shall:
(a) Carry on its business only in the ordinary
course, in substantially the same manner in which it
previously has been conducted;
(b) Maintain its real and personal property in as
good condition and repair as of the date of Letter I,
except for ordinary wear and tear;
(c) Perform in all material respects all of its
material obligations under all contracts to which Vector is
a party;
(d) Not amend its charter or By-Laws;
(e) Not take any action or engage in any
transaction which would cause any of the representations
made by Vector in this Agreement to be untrue as of the
Closing Date or would cause Vector to be in breach of the
terms and conditions of this Agreement;
(f) Maintain its books of account in its usual
regular and ordinary manner;
(g) Comply with all registration, filing and
reporting requirements of the 1934 Act;
(h) Use its best efforts to reestablish the
listing of the Common Shares on the National Association of
Securities Dealers Automated Quotation System;
(i) Not declare or pay any dividend or other
distribution with respect to any class or series of its
capital stock;
(j) Not issue any share of its capital stock,
except upon the exercise of any currently outstanding
option, warrant, convertible security or similar right
which is described in Exhibit D to this Agreement;
(k) Not increase, decrease, or exchange any of its
outstanding Common Shares or Preferred Stock for a
different number or class of securities through
reorganization, reclassification, share dividend, share
split, or similar change in the capitalization of Vector;
or
(l) Not issue any option, warrant, convertible
security or similar right.
5.2 Access and Information. Vector shall give to
the Buyer and its representatives full access at all
reasonable times prior to the Closing to the properties,
books and records of Vector and to furnish such information
and documents in its possession relating to Vector as the
Buyer may reasonably request.
5.3 Information Following Closing. For a period
of five years after the Closing, Vector shall furnish
Buyer, without charge, such of the following documents as
may be requested by Buyer:
(i) Within 90 days after the end of each fiscal
year, three copies of financial statements certified by
independent certified public accountants, including a
balance sheet, statement of operations, statement of
shareholders' equity and statement of cash flows of
Vector, with supporting schedules, prepared in
accordance with generally accepted accounting
principles, as and at the end of such fiscal year and
for the 12 months then ended;
(ii) As soon as practicable after they have been
filed with the Commission, three copies of each annual
and interim financial and other report or communication
filed with the Commission;
(iii) Two copies of each press release and every
material news item prepared by Vector or which is
released by Vector; and
(iv) Such additional documents and information
with respect to Vector and its affairs as the Buyer may
from time to time reasonably request.
ARTICLE VI
Conditions to Each Party's Obligation to Close
6.1 Conditions to Each Party's Obligation to
Close. In addition to those specific conditions set forth
in Articles VII and VIII below, the obligations of the
Buyer and Vector to consummate the transactions described
in this Agreement shall be subject to the following:
(a) No government regulatory body or agency shall
have instituted court action or legal proceedings seeking
preliminary or permanent injunctive relief prohibiting sale
or purchase of the Shares, the Preferred Stock to be issued
to Automobili Lamborghini, S.p.A. and Automobili
Lamborghini U.S.A., Inc.,or the Option Agreement.
(b) The performance of all conditions precedent to
Closing set forth in Articles VII and VIII below.
(c) From the date of the Letter to the Closing
Dare, there shall have been no material adverse change (i)
in the business or properties of Vector, or (ii) in the
financial condition of Vector, and the property, business
and operations of Vector shall have not been materially and
adversely affected due to any fire, accident or other
casualty or by any act of God, whether or nor insured.
ARTICLE VII
Conditions to Vector's Obligation to Close
7.1 Conditions to Vector's Obligation to Close.
Vector's obligation to complete the transactions provided
for in this Agreement shall be subject to the performance
by the Buyer of all its agreements to be performed
hereunder on or before the Closing, and to the further
conditions that:
(a) The representations and warranties of the
Buyer contained in Article IV hereof are true and correct
in all material respects as of the Closing with the same
effect as if made on and as of such date and the officers
of the Buyer shall so certify thereto.
(b) At the Closing, the Buyer shall furnish an
officer's certificate in favor of Vector which shall
provide (i) that the Buyer is an existing corporation under
the laws of the Bahamas and is in good standing as a
corporation organized in the Bahamas, (ii) that the
execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have
been authorized by all necessary action, corporate or
otherwise, by the Buyer, and (iii) that the consummation of
the transactions contemplated by this Agreement do not
conflict with or result in a breach of any terms, condition
or provision of the Memorandum and Articles of Association
of the Buyer or any note, indenture, mortgage, deed of
trust or other agreement or instrument known to such
officer to which the Buyer is a party or by which the Buyer
or any of its property is bound.
7.2 Waiver of Conditions. The conditions to
Vector's obligations to close as set forth in Section 7.1
of this Agreement are for the sole benefit of Vector and
may be waived by Vector in whole or in part at any time in
Vector's sole discretion.
ARTICLE VIII
Conditions to Buyer's Obligation to Close
8.1 Conditions to Buyer's Obligation to Close.
The Buyer's obligation to enter into this Agreement and
complete the transactions provided for in this Agreement
shall be subject to the performance by Vector of all
agreements to be performed hereunder on or before the
Closing, and to the further conditions that:
(a) The representations and warranties of Vector
contained in Article III and the covenants of Vector
contained in Article V hereof are true and correct and have
been performed or satisfied in all material respects as of
the Closing with the same effect as if made or performed on
and as of such date and Vector shall so certify to the
Buyer.
(b) There shall have been no material adverse
change in the operating results, financial condition or
business of Vector since September 30, 1996, except as
described in written schedules or exhibits which are
attached to this Agreement and are satisfactory to Buyer,
and Vector shall so certify in writing to the Buyer.
(c) The Buyer shall have received from Vector's
counsel, an opinion dated the Closing Date, in form and
substance satisfactory to the Buyer and its counsel.
(d) Vector shall have performed and complied with
all the terms and conditions required by this Agreement to
be performed or complied with by it on or before the
Closing.
(e) The Buyer shall have received resolutions of
the Board of Directors of Vector, certified by Vector's
secretary or any assistant secretary, approving the
execution, delivery and performance of this Agreement, the
Loan Agreement, the Registration Rights Agreement and the
Option Agreement.
(f) Vector shall have elected or appointed persons
designated by the Buyer as a majority of the authorized
number of its Board of Directors and elected as the
officers specified by the Buyer persons designated by the
Buyer for those offices.
(g) The Buyer shall have received an executed
original of a Shareholders Agreement in substantially the
form attached to this Agreement as Annex III, validly
authorized and executed by V'Power Corporation.
(h) Automobili Lamborghini, S.p.A. and Automobili
Lamborghini U.S.A., Inc., shall have converted all their
accounts receivable, notes, credit, debt, damages, claims
and all other obligations of Vector to pay money or deliver
goods or property to Preferred Stock in the stated amount
of $992,400, with substantially the same terms as contained
in the Debt Conversion and Preferred Stock Agreements and
the Lamborghini Preferred Shares attached to this Agreement
as Annex IV.
(i) The Buyer shall have received an executed
original of a Debt Forgiveness and Technology Agreement in
substantially the form attached to this Agreement as Annex
V, validly authorized and executed by V'Power Corporation
in exchange for all accounts receivable, notes, credit,
debt, damages, claims and all other obligations of Vector
to pay money or deliver goods or property to V'Power
Corporation.
(j) Automobili Lamborghini, S.p.A., shall have
extended for a minimum of one year from the Closing Date
its existing agreement with Vector to supply appropriate
model year V12 engines and other Lamborghini components to
be used in the Vector M12 model. The volume of engines to
be purchased by Vector in the 12 month contract term will
be 15 engines.
(k) V'Power Corporation and its affiliates (the
term "affiliate" shall mean a person that directly or
indirectly, through one or more intermediaries, controls,
is controlled by or is under common control with V'Power
Corporation and any officer, director, employee, agent,
trustee with V'Power Corporation or its affiliates as
beneficiary of the trust, spouse, relative [first cousin or
closer], including specifically without limitation
Automobili Lamborghini, S.p.A. and Automobili Lamborghini
U.S.A., Inc.] shall own the amount of Common Shares and
Preferred Stock and rights to purchase Common Shares and
Preferred Stock as shown on Exhibit D attached to this
Agreement.
(l) V'Power Corporation and its affiliates shall
have returned to Vector (i) all loan payments or repayments
after October 30, 1996, relating to Vector indebtedness to
V'Power Corporation or its affiliates, if any, and (ii) all
assets owned by Vector on November 24, 1996, including
collateral for loans or advances to Vector, removed or
taken by V'Power Corporation or its affiliates or under the
control of V'Power Corporation or its affiliates, if any,
including without limitation retransfer of one 1996 M12
coupe, Vehicle Indentification Number 0X0XX0000X0000000.
(m) V'Power Corporation and its affiliates shall
have released any security interest or other lien on the
assets of Vector held by V'Power Corporation or its
affiliates.
(n) Vector shall not have made since November 24,
1996, any payment to an affiliate, including any director
or any affiliate of any director.
(o) Vector shall not have made any expenditure or
sold, transferred or encumbered any asset after December
30, 1996.
(p) No proceedings shall have beeen initiated or
threatened by any governmental department, commission,
board, bureau, agency or instrumentality, or any other
person (other than Vector, V'Power or their affiliates)
seeking to enjoin or otherwise restrain the consumation of
the tractions contemplated by this Agreement.
(q) The litigation between Borrower and Xxxxxx X.
Xxxxxxx shall have been concluded to the satisfaction of
Lender and the settlement proceeds from the litigation
between Tokai Bank and Borrower shall have been disbursed
in a manner satisfactory to Lender, in both cases in
Lender's sole discretion.
8.2 Waiver of Conditions. The conditions to
Buyer's obligations to close as set forth in Section 8.1 of
this Agreement are for the sole benefit of Buyer and may be
waived by Buyer in whole or in part at any time in Buyer's
sole discretion.
ARTICLE IX
Termination, Amendment and Waiver
9.1 Termination. This Agreement and each
agreement contemplated hereby may be terminated at any time
prior to the Closing:
(a) Mutual Consent. By the mutual written consent
of the Buyer and Vector.
(b) Breach. By Vector if there has been a
material breach of any representation, warranty or
agreement on the part of the Buyer set forth in this
Agreement, or by the Buyer if there has been a material
breach of any representation, warranty, covenant or
agreement on the part of Vector set forth in this
Agreement.
(c) Litigation. By the Buyer if any litigation or
proceeding has been instituted with a view of restraining
or prohibiting consummation of the transaction contemplated
by this Agreement.
9.2 Effect of Termination. In the event of
termination of this Agreement or any agreement contemplated
hereby, this Agreement or any such other agreement shall
forthwith become void and there shall be no ability or
obligation hereunder or thereunder on the part of any party
to this Agreement.
9.3 Amendment. This Agreement may be amended by
the parties to this Agreement at any time before or after
approval hereof. This Agreement or any agreement
contemplated hereby may not be amended except by an
instrument in writing signed on behalf of each of the
parties thereto.
ARTICLE X
Investment Banking Fees
10.1 Investment Banking Fees. Vector and the Buyer
each represent that, except as described in this Article X
and Article XV, neither has employed any broker or agent or
entered into any agreement for the payment of any fees or
compensation to any other person, firm or corporation in
connection with this transaction.
ARTICLE XI
Indemnification and Contribution
11.1 Indemnity. Subject to the conditions set
forth below, Vector agrees to indemnify and hold harmless
the Buyer, its officers, directors, partners, employees,
agents, and counsel, and each person, if any, who controls
the Buyer within the meaning of Section 15 of the 1933 Act
or Section 20(a) of the 1934 Act, against any and all loss,
liability, claim, damage, and expense whatsoever (which
shall include, for all purposes of this Article XI, but not
be limited to, attorneys' fees and any and all expense
whatsoever incurred in investigating, preparing, or
defending against any litigation, commenced or threatened,
or any claim whatsoever and any and all amounts paid in
settlement of any claim or litigation) as and when
incurred, arising out of, resulting from, based upon, or in
connection with any breach of any representation, warranty,
covenant, or agreement of Vector contained in this
Agreement. The foregoing agreement to indemnify shall be
in addition to any liability Vector may otherwise have,
including liabilities arising under this Agreement and any
Annex to this Agreement. The Buyer agrees to indemnify and
hold harmless Vector, its officers, directors, partners,
employees, agents, and counsel and each person, if any, who
controls Vector within the meaning of Section 15 of the
1933 Act or Section 20(a) of the 1934 Act against any and
all loss, liability, claim, damage, and expense whatsoever
(which shall include, for all purposes of this Article XI,
but not be limited to, attorneys' fees and any and all
expense whatsoever incurred in investigating, preparing, or
defending against any litigation, commenced or threatened,
or any claim whatsoever and any and all amounts paid in
settlement of any claim or litigation) as and when
incurred, arising out of, resulting from, based upon, or in
connection with any breach of any representation, warranty,
covenant, or agreement of Buyer contained in this Agreement
and any Annex to this Agreement.
Except as otherwise agreed by the parties in
Article X hereof, (i) Vector shall indemnify the Buyer for
any broker's or finder's fees which may become payable as a
result of any promise or contract which may have been made
by Vector to or with any such broker or finder and (ii) the
Buyer shall indemnify Vector for any broker's or finder's
fees which may become payable as a result of any promise or
contract which may have been made by the Buyer to or with
any such broker or finder.
11.2 Notice of Proceeding. If any action is
brought against Vector, the Buyer or any of their officers,
directors, employees, agents or counsel, of any controlling
persons (an "Indemnified Party" or, collectively,
"Indemnified Parties"), in respect of which indemnity may
be sought against the other party (the "Indemnifying
Party") pursuant to the foregoing paragraph, such
Indemnified Party or Parties shall promptly notify the
Indemnifying Party in writing of the institution of such
action (but the failure so to notify shall not relieve the
Indemnifying Party from any liability it may have) and the
Indemnifying Party shall promptly assume the defense of
such action including the employment of counsel
satisfactory to such Indemnified Party or Parties and
payment of expenses. Such Indemnified Party or Parties
shall have the right to employ its or their own counsel in
any such case, but the fees and expenses of such counsel
shall be at the expense of such Indemnified Party or
Parties, unless the employment of such counsel shall have
been authorized in writing by the Indemnifying Party in
connection with the defense of such action or the
Indemnifying Party shall not have promptly employed counsel
satisfactory to the Indemnified Party or Parties to have
charge of the defense of such action or such Indemnified
Party or Parties shall have reasonably concluded that there
may be one or more legal defenses available to it or them
or other indemnified parties which are different from or
additional to those available to the Indemnifying Party, in
any of which events such fees and expenses shall be borne
by the Indemnifying Party and the Indemnifying Party shall
not have the right to direct the defense of such action on
behalf of the Indemnified Party or Parties. Anything in
this paragraph to the contrary notwithstanding, the
Indemnifying Party shall not be liable for any settlement
of any claim or action effected without its written
consent.
11.3 Contribution. To provide for just and
equitable contribution if (i) an Indemnified Party makes a
claim for indemnification pursuant to the language set
forth in Sections 11.1 and 11.2 above, but it is found in a
final judicial determination, not subject to further
appeal, that such indemnification may not be enforced in
such case, even though this Agreement expressly provides
for indemnification in such case, or (ii) any Indemnified
Parties seek contribution under the 1933 Act, the 1934 Act,
or otherwise, then the parties shall contribute to any and
all losses, liabilities, claims, damages and expenses
whatsoever to which any of them may be subject, in
accordance with the relative fault of the parties in
connection with the facts which result in such losses,
liabilities, claims, damages and expenses. No persons
guilty of a fraudulent misrepresentation within the meaning
of Section 11(f) of the 1933 Act shall be entitled to
contribution from any person who is not guilty of such
fraudulent misrepresentation.
ARTICLE XII
Notices
12.1 Notices. Any notice given under this
Agreement shall be deemed to have been given sufficiently
if in writing and sent by registered or certified mail,
return receipt requested and postage prepaid, by receipt
confirmed facsimile transmission, or by tested Telex,
telegram or cable addressed as follows:
If to Vector:
Vector Aeromotive Corporation
000 Xxxxxx Xxxxxx Xxxxx Xxxx Xxxxxxx, Xxxxxxx 00000
Attention: President
If to the Buyer:
Tradelink International Limited
c/o Xxxxxxx X. Xxxxxxxx,Xx., Esquire
Xxxxxxxx & Xxxxx
One Independent Drive, Suite 3131
Xxxxxxxxxxxx, Xxxxxxx 00000
Fax No. (000) 000-0000
or to any other address or addresses which may hereafter be
designated by any party by notice given in such manner.
All notices shall be deemed to have been given as of the
date of receipt.
ARTICLE XIII
Confidentiality
13.1 Confidentiality. In connection with this
Agreement, the Buyer acknowledges that it has received from
Vector certain proprietary information, trade secrets,
financial statements and supporting information, together
with statistics, analyses, compilations, studies and other
documents or records prepared by any person including the
Buyer, its agents, advisors, affiliates or representatives
(collectively, "Representatives") which contain or
otherwise reflect or are generated from such information
(collectively, the "Confidential Material"). The Buyer
agrees that the Confidential Material has not and will not
be used other than in connection with the purchase of the
Shares. The Buyer has and will make all necessary and
appropriate efforts to safeguard the Confidential Material
from disclosure to anyone other than as permitted hereby.
Without the prior written consent of Vector, the Buyer will
not, except as required by law, and will direct its
representatives not to, disclose to any person the fact
that the Confidential Material has been made available to
the Buyer or that the Buyer has inspected any portion of
the Confidential Material. The term "person" as used in
this Agreement shall be broadly interpreted to include
without limitations any corporation, company, partnership
and individual or group.
In the event that the Buyer or any of its
Representatives is requested or required (by oral question
or request for information of documents in legal
proceedings, interrogatories, subpoena, civil investigative
demand or similar process) to disclose any information
supplied to the Buyer in the course of its dealings with
Vector or its Representatives, it is agreed that the Buyer
will provide Vector with prompt notice of any request or
requirement so that either the Buyer or Vector or both of
them may seek an appropriate protective order and/or, by
mutual written agreement, waive the Buyer's compliance with
the provisions of this Agreement. It is further agreed
that if, in the absence of a protective order or receipt of
a waiver, the Buyer or any of its Representatives is
nonetheless, in the reasonable written opinion of its
counsel, compelled to disclose information concerning
Vector to any court or else stand liable for contempt or
suffer other censure, the Buyer or such Representative may
disclose such information to such court. In any event, the
Buyer will not oppose action by, and will cooperate with,
Vector to obtain an appropriate protective order or other
reliable assurance that confidential treatment will be
accorded to such information.
The term "Confidential Material" does not include
information (i) which was known to the Buyer or that the
Buyer had in its possession prior to the disclosure of
confidential information by Vector hereunder, (ii) which
becomes generally available to the public other than as a
result of a disclosure by the Buyer or its Representatives,
(iii) which becomes available to the Buyer on a non-confidential
basis from a source other than Vector or its
Representatives, provided that such source is not bound by
a confidentiality agreement with Vector or its
Representatives or otherwise prohibited from transmitting
the information to the Buyer by a contractual, legal or
fiduciary obligation, or (iv) which otherwise becomes known
to the Buyer in a manner which does not violate the
proprietary rights of Vector.
Any of the Confidential Material shall be the
property of Vector and, upon request of Vector, all such
Confidential Material shall be returned to Vector or
furnished to Vector without the Buyer retaining any copy
thereof.
It is further understood and agreed that money
damages would not be a sufficient remedy for any breach of
this Article XIII by the Buyer or its Representatives.
Vector shall be entitled to seek injunctive and any other
such relief as may be necessary to enforce the terms of
this Article XIII in the event of a breach by the Buyer or
its Representatives. Injunctive relief shall not be deemed
to be exclusive remedy for the Buyer's breach of this
Article XIII, but shall be in addition to all of the
remedies available at law or equity to Vector.
ARTICLE XIV
Counterparts
14.1 Counterparts. This Agreement may be executed
in any number of counterparts, each of which when executed
and delivered shall be an original, but all of such
counterparts shall constitute one and the same instrument.
ARTICLE XV
Merger Clause and Costs, Fees and Expenses
15.1 Merger Clause and Costs, Fees and Expenses.
This Agreement supersedes all prior agreements and
understandings between the parties, and may not be changed
or terminated orally, and no attempted change, termination
or waiver of any of the provisions hereof shall be binding
unless in writing and signed by the parties to this
Agreement. Vector and tradelink each shall pay its own
expenses and Buyer's expenses incident to the preparation,
execution and delivery of this Agreement and the
consummation of the transactions described in this
Agreement including, without limitation, all fees of
counsel, accountants and other professional fees and
expenses.
ARTICLE XVI
Severability
16.1 Severability. In the event that any provision
of this Agreement is determined to be partially or wholly
invalid, illegal or unenforceable, then such provision
shall be deemed to be modified or restricted to the extent
necessary to make such provision valid, binding and
enforceable or, if such a provision cannot be modified or
restricted in a manner so as to make such provision valid,
binding and enforceable, then such provision shall be
deemed to be excised from this Agreement and the validity,
binding effect and enforceability of the remaining
provisions of this Agreement shall not be affected or
impaired in any manner.
ARTICLE XVII
Benefit
17.1 Benefit. The terms and conditions of this
Agreement shall inure to the benefit of, and shall be
binding upon, the successors and assigns of the parties to
this Agreement, and the persons and entities referred to in
Article XI who are entitled to indemnification or
contribution and their respective successors, legal
representatives and assigns and no other person shall have
or be construed to have any legal or equitable right,
remedy or claim under or in respect of or by virtue of this
Agreement, the Loan Agreement, the Option Agreement or the
Registration Rights Agreement or any provision in this
Agreement or therein contained.
ARTICLE XVIII
Waiver
18.1 Waiver. The failure of any party to insist
upon the strict performance of any of the provisions of
this Agreement shall not be considered as a waiver of any
subsequent default of the same or similar nature. Time is
of the essence in this Agreement.
ARTICLE XIX
Headings
19.1 Headings. The headings for the sections of
this Agreement are inserted for convenience in reference
only and shall not constitute a part hereof.
ARTICLE XX
Survival; Effect of Knowledge
20.1 Survival; Effect of Knowledge. The respective
agreements, representations, warranties, covenants and
other statements of the Buyer and Vector set forth in this
Agreement shall survive and remain in full force and effect
for a period of one (1) year from the Closing, regardless
of any investigation or inspection made on behalf of the
Buyer or Vector. The right to indemnification, payment of
damages or other remedy based on representations,
warranties, covenants, agreements and obligations in this
Agreement or any Annex to this Agreement will not be
affected by any investigation conducted with respect to, or
any knowledge acquired (or capable of being acquired) at
any time, whether before or after the execution and
delivery of this Agreement or the Closing Date, with
respect to the accuracy or inaccuracy of or compliance
with, any such representation, warranty, covenant,
agreement or obligation. The waiver of any condition based
on the accuracy of any representation or warranty, or on
the performance of or compliance with any covenant,
agreement or obligation, will not affect the right to
indemnification, payment of damages, or other remedy based
on such representation, warranties, covenants, agreements
and obligations.
ARTICLE XXI
Governing Law
21.1 Governing Law. This Agreement shall be
governed by and construed according to the laws of the
State of Florida, without giving effect to conflict of
laws.
IN WITNESS WHEREOF, the parties to this Agreement
have caused this Agreement to be executed the day and year
first above written.
THE BUYER:
TRADELINK INTERNATIONAL LIMITED
By: /s/ X. X. Xxxxxxx
Name: X. X. Xxxxxxx
Title: President & General Manager
VECTOR:
VECTOR AEROMOTIVE CORPORATION
By: /s/ Xxxxx Xxxxx Xxxx
Name: Xxxxx Xxxxx Xxxx
Title: President
TABLE OF ATTACHMENTS
Annex
Section Reference
Article and Description
I
Section 1.1(a)
Option Agreement
II
Section 1.3(a)
Registration Rights Agreement
III
Section 8.1(g)
Shareholders Agreement
IV
Section 8.1(h)
Debt Conversion and Preferred
Stock Agreement Lamborghini
Preferred Shares (ALSPA)
Debt Conversion and Preferred
Stock Agreement Lamborghini
Preferred Shares (ALUSA)
V
Section 8.1(i)
Debt Forgiveness and Technology
Agreement
VI
Exhibit
Section 1.7 (a)
Section Reference
Loan and Security Agreement (with
Note I and Note II attached)
Article and Description
A
Section 3.1(d)
Material Agreements
B
Section 3.1(e)
Litigation
C
Section 3.1(g)
Dividends, Distributions,
Distributions and other material
changes of the Company
D
Section 3.1(h)
Commitments to issue Common
Shares or Preferred Stock;
Cancellation of Certain Common
Shares
E
Section 3.1(i)
Infringement Exceptions and
License Agreement
F
Section 3.1(j)
Environmental Liabilities
G
Section 3.1(l)
Equipment Leases
H
Section 3.1(m)
Labor Relations
I
Section 3.1(n)
Miscellaneous Company Information
J
Section 3.1(q)
Stop Orders
EXHIBIT A
Ref: Section 3.1(d)
MATERIAL AGREEMENTS
In addition, Vector has entered into the following
material agreements:
A. Commercial Sublease, by and between Vector, as
sublessee, and Lamborghini USA, Inc., as sublessor
B. Engine Development Program and Engine Purchase
Agreement, by and between Vector and Automobili Lamborghini
S.p.A.
C. Lease Agreement, by and between Vector and Clay County
Port. Inc.
D. Agreement for corporate relations services with
Corporate Relations Group, Inc.
E. Consulting Agreement with Broadleaf, Inc.
EXHIBIT B
Ref: Section 3.1(e)
LITIGATION
Termination of and Litigation against Xx. Xxxxxxx
The litigation with Xxxxxx Xxxxxxx
has been settled under terms of Settlement Agreement and
Trademark Agreement drafted by legal counsel.
Litigation By and Against Others
Vector Aeromotive Corporation v. Tokai Bank of California
(Case Number BC092534).
Vector Aeromotive Corporation v. Xxxxx Xxxxxx (Case Number
BC091267).
Vector Aeromotive Corporation x. Xxxxxx & Xxxx, et al.
(Case No. BC092390).
Vector Aeromotive Corporation v. Vector Car (Case Number
BC095298).
Xxxxx X. Xxxxxx v. Vector Aeromotive Corporation, Xxxxxx X.
Xxxxxxx, Xxxxxx X. Xxxxxxx d/b/a Vehicle Design Force and
Does 1-25, inclusive.
King & Associates and Xxxxxx X. Xxxx, Xx. v. Vector
Aeromotive Corporation, Xxxxxx X. Xxxxxxx and Does 1
through 40 inclusive.
Xxxxx X. Xxxxxx v. Vector Aeromotive Corporation, Case No.
0509919-016-236/628.
In June 1994, Xxxxxx X. Xxxx, an individual both in his
name and under his "dba," "King and Associates" (the
"Plaintiff"), filed a complaint against the Company in the
Los Angeles County Superior Court.
Clay County Port, Inc. v. Vector Aeromotive Corporation
(Case No. 95-2335-CA)
Xxxx-Xxxx of Florida, Inc. v. Vector Aeromotive
Corporation (Case No. 96-11499)
Paramount Xxxxxx Graphics, Inc. v. Vector Aeromotive Corporation
Xxx Xxxxxx Gran Turismo, Inc. v. Vector Aeromotive
Corporation (Case No. 9701-00160)
EXHIBIT C
Ref: Section 3.1(g)
DIVIDENDS, DISTRIBUTIONS, AND OTHER MATERIAL CHANGES
OF THE COMPANY SINCE SEPTEMBER 30, 1996
XXII. Dividends: NONE
XXIII. Changes to Articles or By-laws: NONE.
XXIV. Stock Issued:
V'Power Corporation 37,333,333 shares
Corporate Resolutions Group 290,000 shares
Abdo Corporation 150,000 shares
Xxxxxx XxXxxxxx 25,000 shares
XXV. Mortgage or Pledge of Assets: NONE
XXVI. Sale of Assets: NONE
XXVII. Loans, Advances, Guarantees: NONE
XXVIII. Compensation Paid by Officers and Directors
Outside of the Ordinary Course: NONE
XXIX. Labor trouble: NONE
XXX. Contracts in Excess of $50,000; NONE, other than the
agreements described in Exhibit B to the Share
Purchase Agreement and the Xxxxxxx settlement.
XXXI. Contracts Outside Ordinary Course of Business: NONE
XXXII. Waiver of Material Rights: NONE
EXHIBI D
Ref: Section 3.1(h)
COMMITMENTS TO ISSUE COMMON SHARES OR PREFERRED STOCK;
CANCELLATION OF CERTAIN COMMON SHARES
1990 "VCAR" warrants to purchase 400,000 shares
of Common Stock were issued in a public offering in
November of 1990.
A Warrant to purchase 80,000 shares of Common
Stock was issued to the underwriter of the 1990 offering.
A Warrant to purchase 1,000,000 Shares of Common
Stock was issued to Xxxxxx X. Xxxxxxx in 1990.
Warrants to purchase 5,750,000 shares of Common
Stock were issued in a public offering in August of 1991.
Warrants to purchase 1,000,000 shares of Common
Stock were issued to the underwriter of the 1991 offering.
Warrants to purchase 300,000 shares of Common
Stock were issued in 1992 pursuant to an investment banking
agreement.
Warrants to purchase an aggregate of 1,000,000
shares were issued to certain officers, directors and
employees of the Company during 1993.
Warrants to purchase an aggregate of 420,000
shares to persons currently unknown.
The Company is committed to issue 175,000 shares
of common stock to two unaffiliated parties as compensation
for services rendered during March through September 1993.
There are a total of 1,000,000 shares of Common
Stock reserved for issuance under the Company's 1994
Omnibus Stock Plan, of which options for 864,000 shares
have been granted. There are a total of 612,000 shares of
common stock reserved for issuance under the Company's
previously existing stock option plans, of which 268,000
shares have been granted.
There are a total of 100,000 shares of Common
Stock reserved for issuance under the Company's Directors
Stock Ownership Plan, 31,643 of which have been awarded
through the fiscal year ended September 30, 1993.
Options to purchase 500,000 shares of Common
Stock were issued in 1995 to Corporate Resolutions Group
Inc. and the Company is committed to issue 350,000 shares
of Common Stock to such firm in return for services.
EXHIBIT E
Ref: Section 3.1(i)
INFRINGEMENT EXCEPTIONS AND LICENSE AGREEMENT
The Company is engaged in disputes over use of
the "Vector" trademark in:
Korea (Xxxx Opel Vectra)
Benelux Countries (Xxxx Opel Vectra)
Australia (Nissan Vectra)
Xxxxxx X. Xxxxxxx claims in litigation with
Vector an ownership interest in the "Avtec" xxxx and the
"Vector" trademark, which claims the Company is contesting.
EXHIBIT F
Ref: Section 3.1(j)
ENVIRONMENTAL LIABILITIES
NONE
EXHIBIT G
Ref: Section 3.1(l)
MACHINERY AND EQUIPMENT LEASES
NONE
EXHIBIT H
Ref: Section 3.1(m)
LABOR RELATIONS
None, except as described in Exhibit C.
EXHIBIT I
Ref: Section 3.1(n)
MISCELLANEOUS COMPANY INFORMATION
I. Directors and Officers:
Directors:
Sudjaswin E. L.
Xxxxxxx X. Xxxxxxxxx
X. Xxxxx Xxxx
Officers:
D. Xxxxx Xxxx - President
None - Treasurer
None - Secretary
II. Compensation over $60,000 per year
D. Xxxxx Xxxx $130,000
III. Power of Attorney: NONE
EXHIBIT J
Ref: Article III(q)
STOP ORDERS
The Company was subject to a consent order issued
by the State of New Jersey in 1988.
ANNEX I
FORM OF OPTION AGREEMENT
THIS OPTION HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND
MAY BE OFFERED AND SOLD ONLY IF REGISTERED
PURSUANT TO THE PROVISIONS OF THAT ACT OR
IF, IN THE OPINION OF COUNSEL TO THE SELLER,
AN EXEMPTION FROM REGISTRATION THEREUNDER IS
AVAILABLE, THE AVAILABILITY OF WHICH MUST BE
ESTABLISHED TO THE SATISFACTION OF VECTOR.
OPTION AGREEMENT
OPTION AGREEMENT, dated as of July 22, 1997, by
and between TRADELINK INTERNATIONAL LIMITED, a Bahamian
corporation (the "Optionee"), on the one hand, and VECTOR
AEROMOTIVE CORPORATION, a Nevada corporation ("Vector") on
the other.
WHEREAS, effective as of July 22, 1997, the
Optionee and Vector entered into a Share Purchase Agreement
(the "Purchase Agreement") pursuant to which, among other
things, the Optionee is to receive the right (the "Option")
to purchase up to 60,000,000 Common Shares, par value $.01
per share (the "Option Shares") of Vector pursuant to the
terms of an option agreement; and
WHEREAS, this option agreement (the "Option
Agreement") constitutes the option agreement described in
the Purchase Agreement;
NOW, THEREFORE, in consideration of the
agreements set forth below, the parties here agrees as
follows:
IV. The Option. Subject to the terms and
conditions hereof, the Optionee is hereby granted the
Option, at any time or from time to time commencing on the
date of Option Agreement and at or before 5:00 P.M.,
Eastern Time, on or before thirty (30) days following the
Conversion Date, as defined in the Loan Agreement (as
defined in the Purchase Agreement) (such period hereinafter
the "Option Exercise Period"), but not thereafter, to
subscribe for and purchase the Option Shares for a purchase
price of One Million Two Hundred Fifty Thousand Dollars
($1,250,000). (the "Option Exercise Price"). If the rights
represented hereby shall not be exercised during the Option
Exercise Period, this Option shall become and be void
without further force or effect, and all rights represented
hereby shall cease and expire.
V. Exercise of Option. During the Option
Exercise Period, the Optionee may exercise this Option upon
presentation and surrender of this Option and upon payment
of the Option Exercise Price for the Option Shares to be
purchased to Vector at the principal office of Vector or to
any officer or director of Vector. Upon exercise of this
Option, the form of election hereinafter provided must be
duly executed and the instructions for registration of the
Option Shares acquired by such exercise must be completed
and so delivered with this Option to Vector. On exercise
of this Option, unless (i) Vector receives an opinion from
counsel satisfactory to it that such a legend is not
required in order to assure compliance with the Securities
Act of 1933, as amended (the "1933 Act"), or any applicable
state securities laws, or (ii) the Option Shares are
registered under the 1933 Act, each certificate for Option
Shares issued hereunder shall bear a legend reading
substantially as follows:
This option has not been registered under the
Securities Act of 1933, as amended, and may be
offered and sold only if registered pursuant to
the provisions of that Act or if, in the opinion
of counsel to the seller, an exemption from
registration thereunder is available, the
availability of which must be established to the
satisfaction of Vector.
The foregoing legend may be removed with respect to any
Option Shares sold upon registration or sold pursuant to an
exemption from registration including the exemption, for
sales made in accordance with Rule 144 promulgated under
the 1933 Act, provided Vector receives an opinion from
counsel satisfactory to it that such legend may be removed.
VI. Assignment. Subject to the terms contained
herein, this Option may be assigned by the Optionee in
whole or in part by execution by the Optionee of the form
of assignment attached to this Agreement. In the event of
any assignment, Vector, upon request and upon surrender of
this Option by the Optionee at the principal office of
Vector accompanied by payment of all transfer taxes, if
any, payable in connection therewith, shall transfer this
Option on the books of Vector. If the assignment is in
whole, Vector shall execute and deliver a new Option or
Options of like tenor to this Option to the appropriate
assignee expressly evidencing the right to purchase the
aggregate number of Option Shares purchasable hereunder;
and if the assignment is in part, Vector shall execute and
deliver to the appropriate assignee a new Option or Options
of like tenor expressly evidencing the right to purchase
the portion of the aggregate number of Option Shares as
shall be contemplated by any such assignment, and shall
concurrently execute and deliver to the Optionee a new
Option of like tenor to this Option evidencing the right to
purchase the remaining portion of the Option Shares
purchasable hereunder which have not been transferred to
the assignee.
VII. Transfer of Option. The Optionee, by
acceptance hereof, agrees that, before any transfer is made
of all or any portion of this Option, the Optionee shall
give written notice to Vector at least 15 days prior to the
date of such proposed transfer, which notice shall specify
the identity, address and affiliation, if any, of such
transferee. No such transfer shall be made unless and
until Vector has received an opinion of counsel for Vector
or for the Optionee stating that no registration under the
1933 Act or any state securities law is required with
respect to such disposition or a registration statement has
been filed by Vector and declared effective by the
Securities and Exchange Commission covering such proposed
transfer and the Option and/or the Option Shares have been
registered under appropriate state securities laws.
VIII. Share Dividends, Reclassification,
Reorganization Provisions.
(i) If, prior to the expiration of
this Option by exercise or by its terms, Vector shall issue
any of its Common Shares as a share dividend or subdivide
the number of outstanding Common Shares into a greater
number of shares then, in either of such cases, the Option
Exercise Price per share purchasable pursuant to this
Option in effect at the time of such action shall be
proportionately reduced and the number of Option Shares
purchasable pursuant to this Option shall be
proportionately increased; and conversely, if Vector shall
reduce the number of outstanding Common Shares by combining
such shares into a smaller number of shares then, in such
case, the Option Exercise Price per share purchasable
pursuant to this Option in effect at the time of such
action shall be proportionately increased and the number of
Option Shares at that time purchasable pursuant to this
Option shall be proportionately decreased. If Vector
shall, at any time during the life of this Option, declare
a dividend payable in cash on its Common Shares and shall
at substantially the same time offer to its shareholders a
right to purchase new Common Shares from the proceeds of
such dividend or for an amount substantially equal to the
dividend, all Common Shares so issued shall, for the
purpose of this Option, be deemed to have been issued as a
share dividend. Any dividend paid or distributed upon
Common Shares in shares of any other class of securities
convertible into Common Shares shall be treated as a
dividend paid in Common Shares to the extent that Common
Shares are issuable upon the conversion thereof.
(ii) If, prior to the expiration of
this Option by exercise or by its terms, Vector shall be
recapitalized by reclassifying its outstanding Common
Shares, or Vector or a successor corporation shall
consolidate or merge with or convey all or substantially
all of its or any successor corporation's property and
assets to any other corporation or corporations (any such
corporation being included within the meaning of the term
"successor corporation" used above in the event of any
consolidation or merger of any such corporations with, or
the sale of all or substantially all of the property of any
such corporation, to another corporation or corporations),
the Optionee shall thereafter have the right to purchase,
upon the basis and upon the terms and conditions and during
the time specified in this Option, in lieu of the Option
Shares theretofore purchasable upon the exercise of this
Option, such shares, securities or assets as may be issued
or payable with respect to, or in exchange for, the number
of Option shares theretofore purchasable upon the exercise
of this Option had such recapitalization, consolidation,
merger or conveyance not taken place and, in any such
event, the rights of the Optionee to an adjustment in the
number of Option shares purchasable upon the exercise upon
this Option as herein provided shall continue and be
preserved in respect of any shares, securities or assets
which the Optionee becomes entitled to purchase.
(iii) If, (i) Vector shall take a
record of holders of its Common Shares for the purpose of
entitling them to receive a dividend payable otherwise than
in cash, or any other distribution in respect of the Common
shares (including cash), pursuant to, without limitation,
any spin-off, split-off, or distribution of Vector's
assets; or (ii) Vector shall take a record of the holders
of its Common Shares for the purpose of entitling them to
subscribe for or purchase any shares of any class or to
receive any other rights; or (ii) in the event of any
classification, reclassification or other reorganization of
the securities which Vector is authorized to issue,
consolidation or merger by Vector with or into another
corporation, or conveyance of all or substantially all of
the assets of Vector; or (iv) in the event of any voluntary
or involuntary dissolution, liquidation or winding up of
Vector; then, and in any such case, Vector shall mail to
the Optionee, at least 30 days prior thereto, a notice
stating the date or expected date on which a record is to
be taken for the purpose of such dividend, distribution or
rights, or the date on which such classification,
reclassification, reorganization, consolidation, merger,
conveyance, dissolution, liquidation or winding up, as the
case may be, will be effected. Such notice shall also
specify the date or expected date, if any is to be fixed,
as to which holders of Common Shares of record shall be
entitled to participate in such dividend, distribution or
rights, or shall be entitled to exchange their Common
Shares or securities or other property deliverable upon
such classification, reclassification, reorganization,
consolidation, merger, conveyance, dissolution, liquidation
or winding up, as the case may be.
(iv) If Vector, at any time while this
Option shall remain unexpired and unexercised in whole or
in part, shall sell all or substantially all of its
property, dissolve, liquidate or wind up its affairs, the
Optionee may thereafter receive upon exercise hereof, in
lieu of each Option Share which it would have been entitled
to receive, the same kind and amount of any securities or
assets as may be issuable, distributable or payable upon
any such sale, dissolution, liquidation or winding up with
respect to each Common Shares of Vector purchased upon
exercise of this Option.
IX. Reservation of Shares Issuable on Exercise
of Option. At all times during the Option Exercise Period,
Vector will reserve and keep available out of its
authorized Common Shares, solely for issuance upon the
exercise of this Option, such number of Common Shares and
other securities as from time to time may be issuable upon
exercise of this Option.
X. Request to Transfer Agent. On exercise of
all or any portion of this Option, Vector shall, within ten
days of the receipt of good and clean funds for the
purchase of any or all of the Option Shares, advise its
Transfer Agent and Registrar of the required issuance of
the number of Option Shares and the names in which such
shares are to be registered pursuant to the exercise form
attached to this Agreement. Vector shall also execute and
deliver any and all such further documents as may be
requested by the Transfer Agent and Registrar for the
purpose of effecting the issuance of Option shares upon
payment therefor by the Optionee or any assignee.
XI. Loss, Theft, Destruction or Mutilation.
Upon receipt by Vector of evidence satisfactory to it (in
the exercise of its reasonable discretion) of the ownership
of and the loss, theft, destruction or mutilation of this
Option, and the purchase by the Optionee of a lost security
bond (or, if acceptable to Vector, the provision of a
satisfactory indemnity from the Optionee) in an amount
equal to or exceeding the total value of the Option Shares
to be purchased hereunder, Vector will execute and deliver,
in lieu thereof, a new Option of like tenor.
XII. Optionee Not a Shareholder. The Optionee or
any other holder of this Option shall, as such, not be
entitled by reason of ownership of this Option to any
rights whatsoever of a shareholder of Vector.
XIII. Transfer Taxes. The Optionee or its
assignee(s) will pay all taxes in respect of the issue or
transfer of this Option or the Option Shares issuable upon
exercise hereof.
XIV. Mailing of Notice. All notices and other
communications from Vector to the Optionee or from the
Optionee to Vector shall be mailed by first class,
certified mail, postage prepaid, or sent by receipt
confirmed facsimile transmission, to the address furnished
to each party in writing by the other party.
XV. Fractional Shares. No fractional shares or
scrip representing fractional shares shall be issued upon
exercise of this Option. With respect to any fraction of a
share called for upon the exercise hereof, Vector shall
issue to the Optionee at no extra cost another whole share
for any fraction which is one-half or greater, and the
Optionee shall forfeit the fractional share that is less
than one-half of a share.
XVI. Common Shares Defined. Whenever reference
is made in this Option to the issue or sale of Common
Shares, the term "Common Shares" shall mean the voting
Common Shares of Vector of the class authorized as of the
date hereof and any other class of stock ranking on a party
with such Common Shares.
XVII. Registration Rights. The Optionee and
Vector acknowledge their execution of a Registration Rights
Agreement between the parties which provides, among other
things, for certain registration rights which are for the
benefit of the Optionee and any assignee(s). Vector's
agreements with respect to the registration rights will
continue in effect regardless of the exercise or surrender
of this Option by either the Optionee or any assignee(s).
XVIII. Opinion of Legal Counsel. As a
condition to the payment by Optionee of the Purchase Price
specified in the Purchase Agreement, Vector shall deliver
to Optionee at the Closing an opinion of its legal counsel
in form and substance satisfactory to the Optionee and its
counsel.
XIX. Purchase Agreement. This Option is in
addition to the Purchase Agreement and the rights of the
Optionee under this Option and the Purchase Agreement are
cumulative.
XX. Governing Law. This Option shall be
governed by, and construed in accordance with, the laws of
the State of Florida.
IN WITNESS WHEREOF, the parties have executed
this Option Agreement on the day and year first above
written.
VECTOR:
VECTOR AEROMOTIVE CORPORATION
By:__________________________
Name:
Title:
OPTIONEE:
TRADELINK INTERNATIONAL LIMITED
By:_______________________________
Name:
Title:
FORM TO BE USED TO EXERCISE OPTION:
EXERCISE FORM
The undersigned hereby elects irrevocably to exercise
the within Option and to purchase ____________ Common Shares of
Vector Aeromotive Corporation, called for hereby, and hereby
makes payment of $________________ (at the rate of $. per
share) in payment of the Option Exercise Price pursuant hereto.
Please issue the shares as to which this Option is exercised in
accordance with the instructions given below.
___________________________________
Signature
Date:___________________
INSTRUCTIONS FOR REGISTRATION OF SHARES:
Register Shares in name of:_______________________________
(Print)
Address:__________________________________
FORM TO BE USED TO ASSIGN OPTION:
ASSIGNMENT
For value received, _____________________________ does hereby
sell, assign and transfer unto ___________________ the right to
purchase _____________ Common Shares of Vector Aeromotive
Corporation, evidenced by the within Option, and does hereby
irrevocably constitute and appoint Vector Aeromotive Corporation
and/or its Transfer Agent as attorney to transfer the same on
the books of Vector Aeromotive Corporation with full power of
substitution in the premises.
_________________________________
Signature
Signature Guaranteed
Date:___________________
NOTICE: The signature to the form to exercise or form to assign
must correspond with the name as written upon the face of the
within Option in every particular without alteration or
enlargement or any change whatsoever, and must be guaranteed by
a bank, other than a savings bank, or by a trust company or by
a firm having membership on a registered national securities
exchange.
ANNEX II
FORM OF REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT dated as of
July 22, 1997 between VECTOR AEROMOTIVE CORPORATION, a
Nevada corporation (the "Company"), and TRADELINK
INTERNATIONAL LIMITED, a Bahamian Company ("TIL").
The parties agree as follows:
Section 1. Definitions. For purposes of this
Agreement:
(a) The terms "register," "registered," and
"registration" refer to a registration effected by
preparing and filing a registration statement or similar
document in compliance with the Securities Act of 1933, as
amended (the "Securities Act"), and the declaration or
ordering of effectiveness of such registration statement or
document;
(b) The term "Registrable Securities" means (i)
the Shares, as defined under the Share Purchase Agreement,
dated as of July 22, 1997, between the Company and TIL (the
"Share Purchase Agreement")(the "Shares"), and (ii) any
Common Shares of the Company issued as (or issuable upon
the conversion or exercise of any warrant, right or other
security which is issued as) a dividend or other
distribution with respect to, or in exchange for or in
replacement of, the Shares, in each case held by any Holder
(as defined in clause (d) below);
(c) The number of shares of "Registrable
Securities then outstanding" shall be equal to the number
of Common Shares of the Company outstanding which are, and
the number of Common Shares of the Company issuable
pursuant to then exercisable or convertible securities
which upon issuance would be, Registrable Securities;
(d) The term "Holder" or "Holders" means TIL and
any of its successors or assigns which hold Registrable
Securities; and
(e) The term "Closing Date" is used herein as
defined in Article II of the Share Purchase Agreement.
Section 2. Demand Registration.
(a) If at any time on and after the Closing
Date, the Company shall receive a written request from
Holders of at least 25% of the Registrable Securities then
outstanding that the Company file a registration statement
under the Securities Act covering the registration of
Registrable Securities held by them, then the Company
shall, subject to the limitations of this Section 2, use
its best efforts to effect within 90 days of such request
or as soon as practicable thereafter, the registration
under the Securities Act of all Registrable Securities
which such Holders request to be registered, provided, that
the filing of any registration statement which does not
result in the effective registration of all of the
Registrable Securities for which a demand has been made and
the continuing effectiveness of such registration for an
uninterrupted period of six (6) months from the initial
effective date thereof, shall not be deemed to fulfill the
Company's obligations under this Section 2(a).
(b) In addition to, and not in limitation of the
foregoing, if the Company shall receive a written request
from any of the Holders aforementioned in Section 2(a) that
the Company file one or more post-effective amendments to
the registration statement referred to therein so as to
extend the effectiveness of such registration statement
beyond the six-month period referred to in Section 2(a),
then the Company shall use its best efforts to effect as
soon as practicable the filing of any such post-effective
amendment.
(c) In addition to, and not in limitation of the
foregoing Sections 2(a) and 2(b), if at any time on and
after the Closing Date and following the effective date of
the registration statement referred to in Section 2(a), the
Company shall receive a written request from Holders of at
least 25% of the Registrable Securities then outstanding
that the Company file a registration statement under the
Securities Act covering the registration of Registrable
Securities held by them, then the Company shall, subject to
the limitations of this Section 2, use its best efforts to
effect within 90 days of such request or as soon as
practicable thereafter, the registration under the
Securities Act of all Registrable Securities which such
Holders request to be registered,
and to file as soon as practicable any and all
post-effective amendments thereto which may be requested by the
aforementioned Holders.
(d) If the Holders intend to distribute the
Registrable Securities covered by their request by means of
an underwriting, they shall so advise the Company as a part
of their request made pursuant to this Section 2. The
Holders shall (together with the Company as provided in
Section 3) enter into an underwriting agreement in
customary form with a mutually acceptable underwriter or
underwriters. Notwithstanding any other provision of this
Section 2, if the managing underwriter advises the Holders
in writing that marketing factors require a limitation of
the number of shares to be underwritten, then the number of
shares of Registrable Securities of the Holders that may be
included in the underwriting shall be so limited pro rata.
(e) The Company shall be obligated to effect one
registration pursuant to Section 2(a) in accordance with
the terms thereof. The Company shall be obligated to file
as many post-effective amendments pursuant to Section 2(b)
and to effect as many registrations pursuant to Section
2(c) as may be requested by Holders in accordance
therewith.
Section 3. "Piggyback" Rights. For a period of
three years from the Closing Date, and if (but without any
obligation to do so) the Company proposes to register any
of its Common Shares under the Securities Act in connection
with the public offering of such Common Shares for cash
proceeds payable in whole or in part to the Company (other
than with respect to a Registration Statement filed on Form
S-8 or Form S-4 or such other similar form then in effect
under the Securities Act), the Company shall, at such time,
promptly give the Holders written notice of such
registration (at the respective addresses of the Holders
appearing in the Company's records). Upon the written
request of any Holder given within 20 days after giving of
such notice by the Company, the Company shall, subject to
the provisions of Section 7, cause to be registered under
the Securities Act all of the Registrable Securities that
such Holder has requested to be registered; provided,
however, if the managing underwriter of the public offering
of shares proposed to be registered by the Company advises
the Holders in writing that marketing factors require a
limitation of the number of shares to be underwritten, then
the number of shares of Registrable Securities of the
Holders that may be included in the underwriting shall be
so limited pro rata.
Section 4. Registration Procedure. Whenever
required under this Agreement to effect the registration of
any Registrable Securities, the Company shall, as
expeditiously as is reasonably possible:
(a) Prepare and file with the SEC a registration
statement with respect to such Registrable Securities and
use its best efforts to cause such registration statement
to become and remain effective and maintain the
qualifications referred to in Section 4(d) below for such
period as may be necessary for the selling Holders to
dispose of the Registrable Securities being offered for
sale.
(b) Prepare and file with the SEC such
amendments and supplements to such registration statement
and the prospectus used in connection with such
registration statement as may be necessary to comply with
the provisions of the Securities Act.
(c) Furnish to the Holders of the Registrable
Securities covered by such registration statement such
number of copies of a prospectus, including a preliminary
prospectus, in conformity with the requirements of the
Securities Act, and such other documents as they may
reasonably request in order to facilitate the disposition
of the Registrable Securities owned by them.
(d) Use its best efforts to register and qualify
the securities covered by such registration statement under
such jurisdictions as shall be reasonably requested by the
Holders, provided that the Company shall not be required in
connection therewith or as a condition thereto to qualify
to do business or to file a general consent to service of
process in any such jurisdiction but the Company may be
required to file a consent to service substantially in the
form of the Uniform Consent to Service of Process Form U-2.
(e) In the event of any underwritten public
offering, enter into and perform its obligations under an
underwriting agreement, in usual and customary form, with
the managing underwriter of such offering. Each selling
Holder participating in such underwriting shall also enter
into and perform its obligations under such an agreement.
(f) Notify each holder of Registrable Securities
covered by such registration statement, at any time when a
prospectus relating thereto covered by such registration
statement is required to be delivered under the Securities
Act, of the happening of any event as a result of which the
prospectus included in such registration statement, as then
in effect, includes an untrue statement of a material fact
or omits to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing.
(g) Furnish to each Holder requesting
registration of Registrable Securities pursuant to this
Agreement, on the date that such Registrable Securities are
delivered to the underwriters for sale in connection with a
registration pursuant to this Agreement, if such securities
are being sold through underwriters, or, if such securities
are not being sold through underwriters, on the date that
the registration statement with respect to such securities
becomes effective (i) an opinion, dated such date, of the
counsel representing the Company for the purposes of such
registration, in form and substance as is customarily given
to underwriters in an underwritten public offering
addressed to the underwriters, if any, and to the Holders
requesting registration of Registrable Securities and (ii)
a letter dated such date, from the independent certified
public accountants of the Company, in form and substance as
is customarily given by independent certified public
accountants to underwriters in an underwritten public
offering, addressed to the underwriters, if any, and to the
Holders requesting registration of Registrable Securities.
Section 5. Furnish Information. The selling
Holders shall promptly furnish to the Company in writing
such reasonable information regarding themselves, the
Registrable Securities held by them, and the intended
method of disposition of such securities as shall be
required to effect the registration of their Registrable
Securities.
Section 6. Expenses of Registration. All
expenses, other than underwriting discounts, relating to
Registrable Securities incurred in connection with
registration, filing or qualification pursuant to Section
2(a) and Section 3 of this Agreement, including (without
limitation) all registration, filing and qualification
fees, printers' bills, mailing and delivery expenses,
accounting fees, and the fees and disbursements of counsel
for the Company and the Holders shall be borne by the
Company. All of the foregoing expenses relating to the
Registrable Securities incurred in connection with
registration, filing or qualification pursuant to Section
2(b) or 2(c) of this Agreement shall be borne by the
Holders requesting the relevant post-effective amendment or
registration.
Section 7. Indemnification and Contribution. In
the event any Registrable Securities are included in a
registration statement under this Agreement:
(a) To the extent permitted by law, the Company
will indemnify and hold harmless each Holder, the officers
and directors of each Holder, any underwriter (as defined
in the Securities Act) for such holder, and each person, if
any, who controls such Holder or underwriter within the
meaning of the Securities Act or the Securities Exchange
Act of 1934 (the "Exchange Act"), against any losses,
claims, damages, or liabilities (joint or several) to which
they may become subject under the Securities Act, the
Exchange Act or other federal or state law, insofar as such
losses, claims, damages, or liabilities (or actions in
respect thereto) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact
contained in such registration statement, including any
preliminary prospectus or final prospectus contained
therein or any amendments or supplements thereto, or arise
out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated
therein or necessary to make the statements therein not
misleading; and the Company will reimburse each such
Holder, officer or director, underwriter or controlling
person for any legal or other expenses reasonably incurred
by them in connection with investigating or defending any
such loss, claim, damage, liability, or action; provided,
however, that the indemnity agreement contained in this
Section 7(a) shall not apply to amounts paid in settlement
of any such loss, claim, damage, liability, or action if
such settlement is effected without the consent of the
Company (which consent shall not be unreasonably withheld),
nor shall the Company be liable in any such case for any
such loss, claim, damage, liability, or action to the
extent that it arises out of or is based upon an untrue
statement or alleged untrue statement or omission or
alleged omission made in such registration statement,
preliminary prospectus or final prospectus or any amendment
or supplement thereto in reliance upon and in conformity
with written information furnished expressly for use in
connection with such registration by any such Holder,
underwriter or controlling person; provided, further,
however, that if any losses, claims, damages or liabilities
arise out of or are based upon any untrue statement,
alleged untrue statement, omission or alleged omission
contained in any preliminary prospectus, and made in
reliance upon and in conformity with written information
furnished by such Holder expressly for use therein, which
did not appear in the final prospectus, the Company shall
not have any such liability with respect thereto to such
Holder, any person who controls such Holder within the
meaning of the Securities Act, or any director of such
Holder, if such Holder delivered a copy of the preliminary
prospectus to the person alleging such losses, claims,
damages or liabilities and failed to deliver a copy of the
final prospectus, as amended or supplemented if it has been
amended or supplemented, to such person at or prior to the
written confirmation of the sale to such person, provided
that such Holder had an obligation to deliver a copy of the
final prospectus to such person; and
(b) To the extent permitted by law, each selling
Holder will indemnify and hold harmless the Company, each
of its directors, each of its officers who has signed the
registration statement, each person, if any, who controls
the Company within the meaning of the Securities Act, any
underwriter and any other Holder selling securities in such
registration statement or any of its directors or officers
or any person who controls such Holder or underwriter,
against any losses, claims, damages or liabilities (joint
or several) to which the Company or any such director,
officers, controlling person, or underwriter or controlling
person, or other such Holder or director, officer or
controlling person may become subject, under the Securities
Act, the Exchange Act or other federal or state law,
insofar as such losses, claims, damages or liabilities (or
actions in respect thereto) arise out of or are based upon
any untrue statement or alleged untrue statement of a
material fact contained in such registration statement,
including any preliminary prospectus or final prospectus
contained therein or any amendments or supplements thereto,
or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be
stated therein or necessary to make the statements therein
not misleading, if the untrue statement or omission or
alleged untrue statement or omission in respect of which
such loss, claim, damage or liability is asserted was made
in reliance upon and in conformity with written information
furnished by such Holder expressly for use in connection
with such registration; and each such Holder will reimburse
any legal or other expenses reasonably incurred by the
Company or any such director, officer, controlling person,
underwriter or controlling person, or other Holder,
officer, director, or controlling person in connection with
investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the indemnity
agreement contained in this Section 7(b) shall not apply to
amounts paid in settlement of any such loss, claim, damage,
liability or action, if such settlement is effected without
the consent of the Holder (which consent shall not be
unreasonably withheld); provided, further, that the maximum
liability of any selling Holder under this Section 7(b) in
regard to any registration statement shall in no event
exceed the amount of the net proceeds received by such
selling Holder from the sale of securities under such
registration statement; provided, further, however, that if
any losses, claims, damages or liabilities arise out of or
are based upon an untrue statement, alleged untrue
statement, omission or alleged omission contained in any
preliminary prospectus which did not appear in the final
prospectus, such seller shall not have any such liability
with respect thereto to the Company, any person who
controls the Company within the meaning of the Securities
Act, any officer of the Company who signed the registration
statement or any director of the Company, if the Company
delivered a copy of the preliminary prospectus to the
person alleging such losses, claims, damages or liabilities
and failed to deliver a copy of the final prospectus, as
amended or supplemented if it has been amended or
supplemented, to such person at or prior to the written
confirmation of the sale to such person, provided that the
Company had an obligation to deliver a copy of the final
prospectus to such person.
(c) Promptly after receipt by an indemnified
party under this Section 7 of notice of the commencement of
any action (including any governmental action), such
indemnified party will, if a claim in respect thereof is to
be made against any indemnifying party under this Section
7, deliver to the indemnifying party a written notice of
the commencement thereof, and the indemnifying party shall
have the right to participate in and, to the extent the
indemnifying party so desires, jointly with any other
indemnifying party similarly notified, to assume the
defense thereof with counsel mutually satisfactory to the
parties. An indemnified party shall have the right to
retain its own counsel, however, the fees and expenses of
such counsel shall be at the expense of the indemnified
party, unless (i) the employment of such counsel has been
specifically authorized in writing by the indemnifying
party, (ii) the indemnifying party has failed to assume the
defense and employ counsel, or (iii) the named parties to
any such action (including any impleaded parties) include
both the indemnified party and the indemnifying party, and
the indemnified party shall have been advised by such
counsel that there may be one or more legal defenses
available to it which are different from or additional to
those available to the indemnifying party (in which case
the indemnifying party shall not have the right to assume
the defense of such action on behalf of such indemnified
party, it being understood, however, that the indemnifying
party shall not, in connection with any one such action or
separate but substantially similar or related actions in
the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable
fees and expenses of more than one separate firm of
attorneys for all indemnified parties). The failure to
deliver written notice to the indemnifying party will not
relieve it of any liability that it may have to any
indemnified party under this Agreement.
(d) If the indemnification provided for in this
Section 7 is unavailable or insufficient to hold harmless
an indemnified party in respect of any losses, claims,
damages or liabilities or actions in respect thereof
referred to therein, then each indemnifying party shall in
lieu of indemnifying such indemnified party contribute to
the amount paid or payable by such indemnified party as a
result of such losses, claims, damages, liabilities or
actions in such proportion as is appropriate to reflect the
relative fault of the Company, on the one hand, and selling
Holders, on the other, in connection with the statements or
omissions which resulted in such losses, claims, damages,
liabilities or actions as well as any other relevant
equitable considerations, including the failure to give any
required notice. The relative fault shall be determined by
reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission
or alleged omission to state a material fact relates to
information supplied by the Company, on the one hand, or by
such selling Holders on the other, and the parties'
relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or
omission. The parties hereto acknowledge and agree that it
would not be just and equitable if contribution pursuant to
this subparagraph (d) were determined by pro rata
allocation (even if all of the selling Holders were treated
as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable
considerations referred to above in this subparagraph (d).
The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities or
actions in respect thereof referred to above in this
subparagraph (d) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any
such action or claim. Notwithstanding the provisions of
this subparagraph (d), the amount the selling Holders shall
be required to contribute shall not exceed the amount, if
any, by which the total price at which the securities sold
by each of them were offered to the public exceeds the
amount of any damages which they would have otherwise been
required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission, or other
violation of law. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from
any person who was not guilty of fraudulent
misrepresentation.
Section 8. Miscellaneous.
(a) Binding Effect. This Agreement shall be
binding upon and shall inure to the benefit of the original
parties to this Agreement and each person who becomes a
party to this Agreement, and their respective heirs,
personal representatives, successors and assigns.
(b) Notices. Except as otherwise provided
herein, any notice, consent or request to be given in
connection with any term or provision of this Agreement
shall be deemed to have been given sufficiently if sent by
hand, registered or certified mail, postage prepaid,
facsimile transmission or courier (next day delivery), to
the Company or to TIL at its address as designated in, or
from time to time pursuant to, Article XII of the Share
Purchase Agreement.
(c) Integration. This Agreement contains the
entire agreement between the parties with respect to the
transactions contemplated hereby and no party shall be
bound by, nor shall any party be deemed to have made, any
covenants, representations, warranties, undertakings or
agreements except those contained in such entire Agreement.
The section and paragraph headings contained in this
Agreement are for the reference purposes only and shall not
affect in any way the meaning or interpretation of this
Agreement.
(d) Counterparts. This Agreement may be
executed in one or more counterparts, each of which shall
be deemed to be an original but all of which together shall
constitute one and the same agreement.
(e) Amendment. This Agreement may be amended,
changed, waived or terminated only in writing by the
Company and TIL.
(f) Governing Law. This Agreement and the
rights and remedies of the parties to this Agreement shall
be governed by and construed in accordance with the laws of
the State of New York.
IN WITNESS WHEREOF, this Agreement has been
executed effective as of the date first above written.
VECTOR AEROMOTIVE CORPORATION
By: /s/ Xxxxx Xxxxx Xxxx
Name: Xxxxx Xxxxx Xxxx
Title: President
TRADELINK INTERNATIONAL LIMITED
By: /s/ X. X. Xxxxxxx
Name: X. X. Xxxxxxx
Title: President & General Manager
ANNEX III
FORM OF SHAREHOLDERS AGREEMENT
SHAREHOLDERS AGREEMENT AND OPTION
THIS SHAREHOLDERS AGREEMENT AND OPTION is made as of
the 22nd day of July, 1997, by and among VECTOR AEROMOTIVE
CORPORATION, a Nevada corporation (the "Corporation");
TRADELINK INTERNATIONAL LIMITED, a corporation organized
under the laws of The Bahamas ("Tradelink"); V'POWER
CORPORATION, a corporation organized under the laws of The
Bahamas ("V'Power"). The foregoing named corporations
shall sometimes hereinafter collectively be referred to as
the "Shareholders" or individually referred to as
"Shareholder".
WHEREAS, the Corporation is a corporation organized
under and by virtue of the laws of the State of Nevada,
with authorized capitalization of 600,000,000 shares of
Common Stock, $.01 par value (the "Common Stock"), and
5,000,000 shares of Preferred Stock, $.10 par value (the
"Preferred Stock");
WHEREAS, Tradelink and V'Power and their Affiliates
each own or have an option or agreement to acquire the
number of shares of Common Stock and Preferred Stock of the
Corporation set opposite its name:
Common Stock Preferred Stock
Name Number Shares Number Shares
Tradelink 60,000,000 None
Tradelink Affiliates None None
V'Power 37,333,333 None
V'Power Affiliates None 1 5686
2 4241
WHEREAS, 10,000,000 shares (and none others) of Common
Stock owned by V-Power have been registered with the
Securities and Exchange Commission;
WHEREAS, V'Power holds and owns one or more options to
purchase an aggregate of -0- shares of Common Stock (the
"V'Power Options"), and otherwise has no agreement or right
to acquire directly or indirectly (through an affiliate or
otherwise) other shares of Common Stock or the right to
vote other shares of Common Stock.
WHEREAS, Tradelink holds and owns one or more options
to purchase an aggregate of 60,000,000 shares of Common
Stock (the "Tradelink Options") and otherwise has no
agreement or right to acquire directly or indirectly
(through an affiliate or otherwise) shares of Common Stock
or the right to vote shares of Common Stock;
WHEREAS, the Corporation is a publicly held company
with a high concentration of shares of Common Stock held by
Tradelink and V'Power, the sale of the Common Stock of
Tradelink or V'Power in the public market could have a
detrimental financial affect on the Corporation and its
remaining shareholders, the Shareholders desire to
establish an effective, consistent and uniform system of
management for the Corporation for a definite period of
time, and the Shareholders desire to define the
relationship between the Shareholders for the best
interests of the Corporation and the Shareholders; and
WHEREAS, the Shareholders therefore desire to provide
for certain restrictive covenants on the Common Stock owned
by them and V'Power has agreed to provide Tradelink an
option to purchase its shares of Common Stock.
W I T N E S S E T H:
That for and in consideration of the sum of Ten and
no/100 Dollars ($10.00) paid by each of the parties to the
other receipt of which hereby is acknowledged, and the
mutual covenants contained in this Agreement, the parties
do hereby mutually agree as follows:
1. Status of the Parties. This Agreement is an
agreement among shareholders of the Corporation pursuant to
Section 78.365.3, Nevada Business Corporation Act.
2. Preamble. Each Shareholder represents and
warrants that the statements in the Preamble relating to
that Shareholder and to the Corporation are true and
correct. The Preamble is incorporated into this Agreement
by this reference.
3. Fulfillment of this Agreement. The Shareholders
shall vote their shares of the Common Stock of the
Corporation and take all other actions necessary for the
fulfillment of the terms and provisions of this Agreement.
4. Election of Directors. For a period of ten (10)
years after the date of this Agreement or, if Tradelink
elects not to exercise the Tradelink Options to acquire
60,000,000 shares of the Common Stock, for so long as any
credit is outstanding under the Loan and Security Agreement
dated the date hereof between Tradelink and Vector, the
Shareholders shall vote their shares in each and every
election of directors to elect persons designated by
Tradelink up to a majority of the number of authorized
directors of the Corporation. Until full exercise of the
Tradelink Options, V'Power will vote its shares against any
merger, consolidation, sale of substantially all Vector's
assets, liquidation or similar change in Vector's corporate
existence or business unless the action is recommended for
approval by the Board of Directors of Vector. The
agreements in this Paragraph 4 shall terminate if at any
time Tradelink uses its discretion under that certain Loan
and Security Agreement with Vector dated the date of this
Agreement to refrain from funding any Advance (as defined
in such Loan and Security Agreement). The agreements in
this Paragraph 4 shall apply to voting of all shares of
Common Stock, other than shares owned as set forth in this
Agreement.
5. Restrictions on the Right to Transfer Shares. No
Shareholder shall have the right or power to sell, assign,
transfer or otherwise dispose of any share or shares of the
Common Stock, with or without consideration, except under
the terms and conditions as set forth in this Paragraph 5.
(a) The restrictions contained in this
Paragraph 5 shall be absolute other than a bona fide pledge
of Common Stock in a loan transaction.
(b) The restrictions contained in this Paragraph
5 shall terminate as to 30,000,000 shares of Common Stock
owned by Tradelink one year from the date the shares are
acquired of this Agreement. The restrictions contained in
this Paragraph 5 shall terminate as to all other shares
of Common Stock owned by Tradelink four years from the date
the shares are acquired of this Agreement.
(c) The restrictions contained in this Paragraph
5 shall terminate as to all shares of Common Stock owned
by V'Power the earlier of the expiration of the Tradelink
Options unexerciesd or four years after the date of this
Agreement. In addition, the restrictions contained in this
Paragraph 5 shall not apply to any shares of common stock
owned by V'Power that are sold, assigned or transferred to
Tradelink or its assigns.
(d) The restrictions in this Paragraph 5 shall
not apply to any sale of Common Stock made in compliance
with Rule 144A, 17 C.F.R. Section 230.144A, or pursuant to
a Private Sale. For purposes of of this subparagraph, the
term "Private Sale" shall be the sale of Common Stock to
fewer than five purchasers in the aggregate all of whom are
accredited investors as the term is defined Rule 501, 17
C.F.R. Section 230.501, in a transaction relating to which
there is no general solicitation or advertising.
(e) The secretary of the Corporation shall in no
event issue or reissue shares of Common Stock, nor transfer
the ownership of shares of Common Stock on the register of
the Corporation, except after proof of compliance with the
terms and conditions of this Paragraph 5.
(f) The limitations and provisions of this
Paragraph 5 shall apply whether or not the person or
persons to whom any proposed sale or other disposition of
shares of the Common Stock is to be made are shareholders
of the Corporation at the time of such proposed sale or
other disposition.
(g) All stock certificates for the Common Stock
issued or to be issued to the Shareholders shall bear on
the face of such certificates the following restrictive
legend, in addition to any other legend required by law,
for as long as such Common Stock shall be subject to the
terms of this Agreement:
The encumbrance, pledge, assignment, sale,
transfer or disposition of all or a part of
these shares is restricted, and certain
aspects of the management of the Corporation
are governed or restricted, by the terms of
a Shareholders Agreement dated as of July
22, 1997, which may be examined in the
office of the Corporation. The Corporation
will furnish without charge a copy of that
Agreement to any shareholder upon request.
Each Shareholder will submit each certificate for Common
Stock owned by it to Vector for the placement of such
legend on such certificate within ten (10) days after the
date of this Agreement.
(h) Any owner of the Common Stock, by acceptance
of such share of the Common Stock automatically shall be
bound and subject to all the terms and provisions of this
Agreement. Any such owner of the Common Stock shall be
deemed to be a Shareholder under the terms of this
Agreement for all purposes, except such owner shall be
entitled to notices and to the rights under this Agreement
only if such owner joins in this Agreement and provides a
proper address for notices.
(i) For purposes of this Paragraph 5, the term
"owner" and the concept of ownership shall mean both
beneficial owner and ownership and owner and ownership as
recorded in the books of the Corporation.
6. Option to Purchase Shares Owned by V'Power.
THIS OPTION HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY BE
OFFERED AND SOLD ONLY IF REGISTERED PURSUANT TO
THE PROVISIONS OF THAT ACT OR IF, IN THE OPINION
OF COUNSEL TO THE SELLER, AN EXEMPTION FROM
REGISTRATION THEREUNDER IS AVAILABLE, THE
AVAILABILITY OF WHICH MUST BE ESTABLISHED TO THE
SATISFACTION OF VECTOR.
(a) The Market Option. Subject to the terms and
conditions of this Paragraph 6, Tradelink and its assigns
are hereby granted and shall have an option (this "Market
Option"), at any time or from time to time commencing on
the date that is six (6) months from the date that
Tradelink purchases Common Stock by exercise of the
Tradelink Options (the "Commencement Date") and at or
before 5:00 P.M., Eastern Time, on the date that is the
forth university of the Commencement Date (the "Option
Exercise Period"), but not thereafter, to purchase any and
all of the Option Shares (as defined below) for the Option
Exercise Price (as defined below). The term "Option
Shares" shall mean any and all shares of the Common Stock
owned, directly or indirectly through any Affiliate, by
V'Power at the time of any Option Notice (as defined
below). At the request of Tradelink or its assigns, the
Option Shares shall be the Common Stock owned, directly or
indirectly through any Affiliate, by V'Power that has been
registered with the Securities and Exchange Commission
under the Securities Act of 1933 (the 1933 Act"), which
registration is current. The term "Option Exercise Price"
shall mean seventy percent (70%) of the average of the per
share market prices (as defined below) for the Common
Stock on each of the last ten (10) trading days immediately
preceding the last regular trading day immediately
preceding an Option Notice multiplied by the number of
Option Shares specified for purchase in the Option Notice.
The term "market price" shall mean the average of the
closing bid and ask price at the close of the applicable
trading day. An Option Notice shall be irrevocable unless
the Shareholders otherwise agree. If the rights
represented hereby shall not be exercised during the Option
Exercise Period, this Market Option shall become and be
void without further force or effect, and all rights
represented hereby shall cease and expire.
(b) Exercise of Market Option. During the
Option Exercise Period, Tradelink or its assigns may
exercise this Market Option upon written notice to V'Power
specifying the number of Option Shares to be purchased and
the Option Exercise Price (the "Option Notice). Tradelink
or its assigns shall deliver to V'Power the full Option
Exercise Price for the number of Option Shares specified
for purchase in the Option Notice within thirty (30) days
after the Option Notice; and, simultaneously with such
payment of the Option Exercise Price for the Option Shares
to be purchased, V'Power shall deliver to Vector stock
certificate(s) for the minimum number of shares specified
for purchase in the Option Notice, with a stock power or
other stock transfer form completed and duly executed and
instructions for registration in the name of Tradelink or
its assigns of the Option Shares so specified for purchase
in the Option Notice. In the event of the exercise of this
Market Option in part only, Tradelink shall have the right
at any time and from time to time to exercise this Market
Option on one or more additional occasions until Tradelink
shall have purchased the number of Option Shares
purchasable under this Market Option as to which this
Market Option has not been exercised. On exercise of this
Market Option, unless (i) Vector receives an opinion from
counsel satisfactory to it that such a legend is not
required in order to assure compliance with the 1933 Act or
any applicable state securities laws or (ii) the Option
Shares are registered under the 1933 Act, each certificate
for Option Shares issued upon exercise of this Market
Option shall bear a legend reading substantially as
follows:
These securities have not been registered
under the Securities Act of 1933, as
amended, and may be offered and sold only if
registered pursuant to the provisions of
that Act or if, in the opinion of counsel to
the seller, an exemption from registration
thereunder is available, the availability of
which must be established to the
satisfaction of Vector.
The foregoing legend may be removed with respect to any
Option Shares sold upon registration or sold pursuant to an
exemption from registration including the exemption for
sales made in accordance with Rule 144, 17 C.F.R. Section
230.144, provided Vector receives an opinion from counsel
satisfactory to it that such legend may be removed.
(c) Assignment. Subject to the terms contained
in this Market Option, this Market Option may be assigned
by Tradelink in whole or in part by execution by Tradelink
of the form of assignment attached to this Agreement. In
the event of any assignment, V'Power shall recognize an
Option Notice from the assignee for the Option Shares
designated in the assignment and instruct transfer of the
Option Shares subject to such assignment as specified by
the assignee.
(d) Share Dividends, Reclassification,
Reorganization Provisions.
(i) If, prior to the expiration of this
Market Option by full exercise or by its terms and during
any period in which the market price for Option Shares is
calculated and thereafter until transfer of Option Shares
pursuant to an exercise of this Market Option, Vector shall
issue any of its Common Shares as a share dividend or
subdivide the number of outstanding Common Shares into a
greater number of shares, or Vector shall reduce the number
of outstanding Common Shares by combining such shares into
a smaller number of shares, in any such case, the Option
Shares, the Option Exercise Price, the Option Notice and
the other aspects of this Market Option shall be adjusted
proportionately. If Vector shall declare a dividend
payable in cash on its Common Shares and shall at
substantially the same time offer to its shareholders a
right to purchase new Common Shares from the proceeds of
such dividend or for an amount substantially equal to the
dividend, all Common Shares so issued shall, for the
purpose of this Market Option, be deemed to have been
issued as a share dividend. Any dividend paid or
distributed upon Common Shares in shares of any other class
of securities convertible into Common Shares shall be
treated as a dividend paid in Common Shares to the extent
that Common Shares are issuable upon the conversion
thereof.
(ii) If, prior to the expiration of this
Market Option by exercise or by its terms, Vector shall be
recapitalized by reclassifying its outstanding Common
Shares, or Vector or a successor corporation shall
consolidate or merge with or convey all or substantially
all of its or any successor corporation's property and
assets to any other corporation or corporations (any such
corporation being included within the meaning of the term
"successor corporation" used above in the event of any
consolidation or merger of any such corporations with, or
the sale of all or substantially all of the property of any
such corporation, to another corporation or corporations),
Tradelink shall thereafter have the right to purchase, upon
the basis and upon the terms and conditions and during the
time specified in this Market Option, in lieu of the Option
Shares theretofore purchasable upon the exercise of this
Market Option, such shares, securities or assets as may be
issued or payable with respect to, or in exchange for, the
number of Option Shares theretofore purchasable upon the
exercise of this Market Option had such recapitalization,
consolidation, merger or conveyance not taken place and, in
any such event, the rights of Tradelink to an adjustment in
the number of Option Shares purchasable upon the exercise
upon this Market Option as herein provided shall continue
and be preserved in respect of any shares, securities or
assets which Tradelink becomes entitled to purchase.
(e) Request to Transfer Agent. On exercise of
all or any portion of this Market Option, Vector shall,
within ten days of the receipt of certificates representing
the Option Shares and other items required by subparagraph
(b), advise its Transfer Agent and Registrar of the
required transfer of the number of Option Shares specified
and the names in which such shares are to be registered
pursuant to the exercise of this Market Option. Vector
shall also execute and deliver any and all such further
documents as may be requested by the Transfer Agent and
Registrar for the purpose of effecting the transfer of
Option Shares upon payment therefor by Tradelink or any
assignee.
(f) Transfer Taxes. Tradelink or its assigns
will pay all taxes in respect of the issue or transfer of
this Market Option or the Option Shares issuable upon
exercise of this Market Option.
(g) Governing Law. This Market Option shall be
governed by, and construed in accordance with, the laws of
the State of Florida, which is intended to be different
than the other aspects of this Agreement except to the
extent the other terms and conditions of this Agreement are
construed as part of this Market Option.
7. Term. This Agreement shall be for a term of ten
(10) years from the date of this Agreement and shall remain
in full force and effect for such period.
8. Prohibition of Purchase of Additional Shares.
The Shareholders agree for the Option Exercise Period that
no additional shares of the Common Stock except upon
exercise of an option identified in this Agreement shall be
purchased by the Shareholders or their affiliates without
the consent of the other Shareholders.
9. Binding Effect. This Agreement shall be binding
upon and shall operate for the benefit of the Shareholders,
the Corporation and their successors and assigns.
10 Remedies.
(a) In addition to any other remedy provided by
law, any party to this Agreement shall be entitled to have
specific performance of this Agreement ordered by a court
of competent jurisdiction and, should any party be found to
be in violation of this Agreement or to have refused to
perform under this Agreement, all court costs, including a
reasonable attorneys' fee (which shall include attorneys'
fee for any appeal), shall be taxable against the party or
parties found by the court to have violated this Agreement
or to have refused to perform under this Agreement.
(b) In connection with any litigation in a trial
or on appeal arising out of this Agreement, the prevailing
party shall be entitled to recover attorneys fees and
costs.
11. Severability. The invalidity of one or more
provisions of this Agreement or any part of this Agreement,
all of which are inserted conditionally upon their being
valid in law, shall not effect the validity of any other
provisions of this Agreement. In the event that any
provisions contained in this Agreement are found to be
unreasonable by any court of competent jurisdiction, then
any such provisions that are found to be unreasonable shall
be considered automatically reduced to the extent that, in
the opinion of such court of competent jurisdiction, such
provisions shall be reasonable. In the event that any
provisions contained in this Agreement shall be invalid in
their entirety, this instrument shall be construed as if
such invalid provisions had not been inserted.
12. Waiver of Breach. The waiver of any party to
this Agreement of any provision of this Agreement shall not
operate or be construed as a waiver of any other or
subsequent breach.
13. Notices. Any notice required or permitted to be
given under this Agreement shall be given in writing and
mailed by registered or certified mail, return receipt
requested, or by established overnight service to the other
parties to this Agreement at the addresses stated below.
Name Address
Tradelink c/o Xxxxxxx X. Xxxxxxxx, Xx.,
Esquire
Xxxxxxxx & Xxxxx
One Independent Drive, Suite
3131
Xxxxxxxxxxxx, XX 00000
V'Power Xxxxxxxxxxx Xxxxx
00 Xxxxxxx Xxxxxx
Nassau, New Providence
The Bahamas
With a copy to: Xxxxxx X. Xxxxxx,
Esquire
Winthrop, Stimson, Xxxxxx &
Xxxxxxx
Xxx Xxxxxxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Fax No. (000) 000-0000
Changes in said addresses shall be made by notice pursuant
to this Paragraph.
14. Applicable Law. This Agreement shall be
construed and enforced in accordance with the laws of the
State of Nevada.
15. Definition of Affiliate. The term "Affiliate"
shall mean a person that directly or indirectly, through
one or more intermediaries, controls, is controlled by or
is under common control with another person and any
officer, director, employee, agent, trustee with such other
person or its affiliates as beneficiary of the trust,
spouse, relative [first cousin or closer], including
specifically without limitation, as the term relates to
V'Power, Automobili Lamborghini, S.p.A. and Automobili
Lamborghini U.S.A., Inc.
IN WITNESS WHEREOF, the Shareholders have executed
this Agreement as of the day and year first above written.
VECTOR AEROMOTIVE CORPORATION
By: /s/ Xxxxx Xxxxx Xxxx
Name: Xxxxx Xxxxx Xxxx
TRADELINK INTERNATIONAL LIMITED
By: /s/ X. X. Xxxxxxx
Name: X. X. Xxxxxxx
V'POWER CORPORATION
By: /s/ Sudjaswin E. L.
Name: Sudjaswin E. L.
ANNEX IV
FORM OF LAMBORGHINI
DEBT CONVERSION AND PREFERRED STOCK AGREEMENT
AUTOMOBILI LAMBORGHINI, S.p.A.
AUTOMOBILI LAMBORGHINI, U.S.A., INC.
DEBT CONVERSION AND PREFERRED STOCK AGREEMENT
This AGREEMENT dated as of July 22, 1997 is
entered into by and between:
1. AUTOMOBILI LAMBORGHINI, S.p.A., a
corporation incorporated under the laws of the Republic of
Italy and having its principal address at Xxx Xxxxxx, 00,
00000 Xxxx Xxxxx Xxxxxxxxx (XX), Xxxxx (hereinafter
referred to as "ALSPA").
2. VECTOR AEROMOTIVE CORPORATION, a company
incorporated under the law of the State of Nevada, U.S.A.,
having its principal office at 000 Xxxxxx Xxxxxx, Xxxxx
Xxxx Xxxxxxx, Xxxxxxx 00000 (hereinafter referred to as
"Vector").
Each of the above parties individually will be
called a "Party", and collectively, the "Parties";
RECITALS
WHEREAS, Vector is justly indebted to ALSPA in
the principal amount of
$424,111.00 (the "Indebtedness"); and
WHEREAS, Vector has authorized capitalization of
600,000,000 shares of Common Stock, $.01 par value (the
"Common Stock"), and 5,000,000 shares of Preferred Stock,
$.10 par value (the "Preferred Stock"); and
WHEREAS, ALSPA is willing to convert the
Indebtedness to the Preferred Stock as described in this
Agreement.
NOW, THEREFORE THE PARTIES HEREBY AGREE AS
FOLLOWS:
XXI. Vector represents and warrants that it has
authorized the issuance of 4,241 shares of Preferred Stock
in the form attached to this Agreement as Exhibit "A" (the
"Preferred Shares") and, subject to the terms of this
Agreement (including without limitation Paragraph 7),
hereby tenders the Preferred Shares to ALSPA.
XXII. In consideration of the issuance of the
Preferred Shares in accordance with this Agreement, as full
payment for the Preferred Shares, ALSPA hereby satisfies
and cancels the Indebtedness.
XXIII. ALSPA represents and warrants that the
Indebtedness includes and consists of all indebtedness,
obligations, agreements and covenants of Vector to ALSPA
involving the payment of money or property. For purposes
of this Section 3, the payment of property does not include
the issuance of Preferred Stock of Vector.
XXIV. This Agreement shall be binding upon the
successors and assigns of each Party.
XXV. This Agreement shall be governed by and construed
under the laws of the State of Florida, without regard to
its principles of conflict of laws.
XXVI. This Agreement contains the entire
understanding between the Parties relating to the subject
matter of this Agreement, and all prior proposals,
discussions and writings between the Parties relating to
the subject matter of this Agreement are superseded by this
Agreement.
XXVII. The obligations of the Parties in Paragraphs
1-3 of this Agreement shall become effective upon the
execution by Tradelink International Limited ("Tradelink")
of its option to acquire 60,000,000 shares of Vector's
Common Stock pursuant to the Option Agreement dated as of
July 22, 1997 (the "Effective Date"). Until the Effective
Date or until the Tradelink option expires, ALSPA shall
forbear any action to collect the Indebtedness.
XXVIII. None of the terms of this Agreement shall be
deemed to be waived by either Party or amended unless such
waiver or amendment be in writing and duly executed on
behalf of the parties to be charged with such waiver or
amendment by its authorized officer and unless such waiver
or amendment cites specifically that it is a waiver or
amendment to the terms of this Agreement. The failure of
either Party to insist strictly upon any of the terms or
provisions of this Agreement shall not be deemed a waiver
of any subsequent breach or default of the terms or
provisions of this Agreement.
XXIX. This Agreement may be executed in any number
of counterparts, each of which when executed and delivered
shall be an original, but all of such counterparts shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the Parties have caused this
Agreement to be executed by their duly authorized
representatives as of the date and year first written
above.
VECTOR AEROMOTIVE CORPORATION
By: /s/ Xxxxx Xxxxx Xxxx
Title: President
Address for Notices:
c/o Xxxxxxx X. Xxxxxxxx, Xx., Esquire
Xxxxxxxx & Xxxxx
Xxx Xxxxxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxxxxxxx, XX 00000
(000) 000-0000
Fax: (000) 000-0000
AUTOMOBILI LAMBORGHINI, S.p.A.
By: /s/ Vittorio DiCupua
Title: President
Address for Notices:
x/x Xxxxxxxx, Xxxxxxx, Xxxxxx
& Xxxxxxx
Xxx Xxxxxxx Xxxx Xxxxx
Xxx Xxxx, XX 00000
Att: Xxxxxx Xxxxxx, Esq.
(000) 000-0000
Fax: (000) 000-0000
Certificate NumberShares
1 4241
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY BE OFFERED AND
SOLD ONLY IF REGISTERED PURSUANT TO THE PROVISIONS OF THAT
ACT OR IF, IN THE OPINION OF COUNSEL TO THE SELLER, AN
EXEMPTION FROM REGISTRATION THEREUNDER IS AVAILABLE, THE
AVAILABILITY OF WHICH MUST BE ESTABLISHED TO THE
SATISFACTION OF VECTOR.
VECTOR AEROMOTIVE CORPORATION
INCORPORATED UNDER THE LAWS OF THE STATE OF NEVADA
AUTHORIZED TO BE ISSUED 10,000 SHARES OF SERIES A CUMULATIVE PREFERRED
STOCK
PAR VALUE $.10 PER SHARE
This Certifies that Automobili Lamborghini, S.p.A., a
company authorized under the laws of the Republic of Italy, is
the registered holder of FOUR THOUSAND TWO HUNDRED FORTY-ONE
shares of the Series A Cumulative Preferred Stock of VECTOR
AEROMOTIVE CORPORATION, fully paid and non-assessable,
transferable only on the books of the Corporation by holder
hereof in person or by Attorney upon surrender of this
Certificate properly endorsed. The voting powers, designations,
preferences, limitations, restrictions, relative rights and
other aspects of the Series A Cumulative Preferred Stock are set
forth (i) in the Articles of Incorporation of the Corporation,
which are incorporated in this Certificate as if fully set forth
in this Certificate, and (ii) resolutions of the Board of
Directors of the Corporation adopted July 22, 1997, which are
incorporated in this Certificate as if fully set forth in this
Certificate and (iii) additional provisions of Class A
Cumulative Preferred Stock set forth in this Certificate. The
Corporation will furnish to each holder of Series A Cumulative
Preferred Stock upon request without change a copy of the
Articles of Incorporation and resolutions of the Board of
Directors.
In Witness Whereof, the said Corporation has caused this
Certificate to be signed by its duly authorized officers and its
Corporate Seal to be hereunto affixed this ____ day of July
A.D. 1997.
__________________________________________________________________
Secretary President
ADDITIONAL PROVISIONS OF CERTIFICATE FOR
SERIES A CUMULATIVE PREFERRED STOCK
The Series A Cumulative Preferred Stock shall be
deemed to be issued simultaneously and shall be on equal
parity as to all references, powers and rights except as
set forth in the written provisions of each series of
Preferred Stock. Each share of he Series A Cumulative
Preferred Stock shall be issued for $100.00.
Dividends. So long as any shares of Series A
Cumulative Preferred Stock will be outstanding, the holders
of the Series A Cumulative Preferred Stock will be entitled
to receive cumulative preferential dividends accruing at
the LIBOR Rate on the value of $100.00 per share, payable
quarterly on the 1st day of March, June, September and
December of each year, beginning December 1, 1997 (each
date being called a "Dividend Payment Date"), the dividends
to be cumulative and payable as allowed by the Nevada
Business Corporation Act, Chapter 78, Nevada Revised
Statutes, with respect to the quarterly dividend period (or
portion of it) ending on the day preceding the respective
Dividend Payment Date, fixed for that purpose by the Board
in advance of payment of each particular dividend. The
LIBOR Rate shall mean the rate (rounded, if necessary, to
the next higher 1/100 of 1%) for deposits in United States
Dollars for a maturity of three months which appears on the
Telerate Page 3750 at approximately 11:00 a.m. London time
representing the offered side of dollar deposits in the
London market two (2) London business days prior to the
effective date of the applicable LIBOR Rate. The LIBOR
Rate shall be presumed to be the three months London
Interbank Offered Rates as shown in the Wall Street Journal
under "Money Rates" as long as such rates are published.
The LIBOR Rate will be fixed on the Original Issue Date and
thereafter be changed at every Dividend Payment Date to be
effective until the next Dividend Payment Date. The
"Original Issue Date" means the first date on which the
Corporation will issue any shares of Series A Cumulative
Preferred Stock. Dividends on the Series A Cumulative
Preferred Stock shall be cumulative from the Original Issue
Date (whether or not declared and whether or not in any
dividend period or dividend periods there will be net
profits or net assets of the Corporation legally available
for the payment of those dividends).
So long as any shares of Series A Cumulative Preferred
Stock shall remain outstanding, the Corporation may not
declare or pay any dividend, make a distribution, or
purchase, acquire, redeem, or set aside or make monies
available for a sinking fund for the purchase or redemption
of, any shares of stock of the Corporation ranking junior
to the Series A Cumulative Preferred Stock with respect to
the payment of dividends or the distribution of assets on
liquidation, dissolution or winding up of the Corporation
including Common Stock, par value $.01, of the Corporation
("junior stock") (other than as a result of a
reclassification of junior stock into another class of
junior stock, or the exchange or conversion of one junior
stock for or into another junior stock) unless (i) all
dividends in respect of the Series A Cumulative Preferred
Stock for all past dividend periods have been paid and such
dividends for the current dividend period have been paid or
declared and duly provided for, and (ii) all amounts in
respect of the mandatory redemption of Series A Cumulative
Preferred Stock pursuant to the terms of paragraph 5 below
have been paid for all prior applicable periods and all
amounts in respect of such mandatory redemption for the
current applicable period have been paid or duly provided
for. Subject to the foregoing, and not otherwise, the
dividends (payable in cash, stock or otherwise) as may be
determined by the Board may be declared and paid on any
junior stock from time to time out of any funds legally
available, and the Series A Cumulative Preferred Stock will
not be entitled to participate in any such dividends,
whether payable in cash, stock or otherwise.
Liquidation Rights. In the event of any liquidation,
dissolution or winding up of the Corporation, whether
voluntary or involuntary, the holders of Series A
Cumulative Preferred Stock then outstanding are entitled to
be paid out of the assets of the Corporation available for
distribution to its shareholders, whether such assets are
capital, surplus or earnings, before any payment or
declaration and setting apart for payment of any amount
will be made in respect of any shares of any junior stock
with respect to the payment of dividends or distribution of
assets on liquidation, dissolution or winding up of the
Corporation, an amount equal to $100 per share plus all
accumulated and unpaid dividends (including a prorated
quarterly dividend from the last Dividend Payment Date to
the date of such payment) in respect of any liquidation,
dissolution or winding up consummated.
If upon any liquidation, dissolution or winding up of
the Corporation, whether voluntary or involuntary, the
assets to be distributed among the holders of Series A
Cumulative Preferred Stock shall be insufficient to permit
the payment to the shareholders of the full preferential
amounts aforesaid, then the entire assets of the
Corporation to be distributed shall be distributed ratably
among the holders of Series A Cumulative Preferred Stock
based on the full preferential amounts for the number of
shares of Series A Cumulative Preferred Stock.
A consolidation or merger of the Corporation with or
into any other corporation or corporations in which the
stockholders of the Corporation receive solely capital
stock of the acquiring or surviving corporation (or of the
direct or indirect parent corporation of the acquiring
corporation), except for cash in lieu of fractional shares,
will not be deemed to be a liquidation, dissolution, or
winding up of the Corporation as those terms are used in
this Certificate.
Mandatory Redemption. The Corporation will, at the
redemption price equal to $100 per share plus an amount,
payable in cash, equal to the sum of all accumulated and
unpaid dividends per share (including a prorated quarterly
dividend from the last Dividend Payment Date to the
applicable Redemption Date) (the "Redemption Price"),
redeem from any source of funds legally available therefor,
the amount of shares of Series A Cumulative Preferred Stock
outstanding on the date set forth on the Redemption
Schedule attached to this Certificate. Redemption Date
shall be the date on which any shares of Series A
Cumulative Preferred Stock are redeemed by the Corporation.
This Certificate shall be notice of this mandatory
redemption on the dates specified on the Redemption
Schedule, and any further notice is waived by acceptance of
this Certificate.
If the Corporation's records show there is more than
one holder of Series A Cumulative Preferred Stock, the
Corporation will effect the redemption pro rata according
to the number of shares held by each holder of Series A
Cumulative Preferred Stock shown on the books of the
Corporation. On or before the date fixed for redemption,
each holder of Series A Cumulative Preferred Stock will
surrender the certificate or certificates representing the
shares of Series A Cumulative Preferred Stock to the
Corporation and the Redemption Price for the shares will be
paid in cash on the Redemption Date to the person whose
name appears on the certificate or certificates as the
owner, and each surrendered certificate will be canceled
and retired. In the event that less than all of the shares
represented by any certificate are redeemed, a new
certificate will be issued representing the unredeemed
shares.
Unless the Corporation defaults in the payment in full
of the Redemption Price, dividends on the Series A
Cumulative Preferred Stock called for redemption will cease
to accumulate on the Redemption Date, and all rights of the
holders of the shares redeemed will cease to have any
further rights with respect to the shares on the Redemption
Date, other than to receive the Redemption Price.
Optional Redemption. The Corporation may, at the
option of the Board of Directors, redeem at any time from
any source of funds legally available, in whole or in part,
in any manner proscribed by the Board of Directors, any and
all of the shares of Series A Cumulative Preferred Stock
outstanding at the Redemption Price.
Other Redemptions. In the event that any Organic
Change (as defined below) is to occur, any holder of Series
A Cumulative Preferred Stock may require the Corporation to
redeem, at the Redemption Price, all or any portion of the
holder's shares of Series A Cumulative Preferred Stock
immediately prior to the consummation of the Organic
Change. The Corporation will give written notice of any
impending Organic Change, stating the substance and
intended date of consummation of it not more than thirty
(30) nor less than fifteen (15) days prior to the date of
consummation thereof, to each holder of Series A Cumulative
Preferred Stock. Each such holder shall have fifteen (15)
days (the "Notice Period") from the date of such notice to
demand (by written notice mailed to the Corporation)
redemption of all or any portion of the shares of Series A
Cumulative Preferred Stock owned by such holder. If by the
expiration of the Notice Period any holders have so elected
to demand redemption, the Corporation will give prompt
written notice of such election (stating the total number
of shares so demanded to be redeemed) to each other holder
of Series A Cumulative Preferred Stock within five (5) days
after the expiration of the Notice Period. Each holder who
has not demanded redemption will be afforded ten (10) days
from the date of the notice to demand redemption of all or
any portion of the holder's shares of Series A Cumulative
Preferred Stock by mailing written notice of it to the
Corporation. Immediately prior to the consummation of the
Organic Change, the Corporation will redeem all shares of
Series A Cumulative Preferred Stock as to which redemption
rights under this subparagraph (c)(i) have been exercised.
For purposes of this paragraph (v)(i), the term "Organic
Change" means (A) any sale, lease, exchange or other
transfer (other than the creation of security interests to
secure financings, but including any foreclosures with
respect to them) of all or substantially all of the
property and assets of the Corporation (whether or not in
the ordinary course of business) or (B) any merger or
consolidation to which the Corporation is a party (other
than a merger in which the Corporation will be the
surviving corporation and, after giving effect to the
merger, the holders of the Corporation's outstanding
capital stock immediately preceding such merger will own
shares possessing more than 50% of the voting power of the
Corporation).
If, at the time of any redemption arising from an
Organic Change, the funds of the Corporation legally
available for redemption of Series A Cumulative Preferred
Stock are insufficient to redeem the number of shares
required to be redeemed, those funds which are legally
available will be used to redeem the maximum possible
number of such shares, pro rata based upon the number of
shares requested to be redeemed by the holders of it. At
any time thereafter when additional funds of the
Corporation become legally available for the redemption of
Series A Cumulative Preferred Stock, the funds will
immediately be used to redeem the balance of the shares of
Series A Cumulative Preferred Stock which the Corporation
has become obligated to redeem as a result of an Organic
Change, but which it has not redeemed; or, if a person
other than the Corporation is the surviving or resulting
corporation in any Organic Change, the person will, at the
consummation of the Organic Change, redeem the balance of
the shares of Series A Cumulative Preferred Stock (and the
Corporation will so provide in its agreements with the
person relating to the Organic Change). Redemptions made
as a result of an Organic Change will not relieve the
Corporation of its obligation to redeem Series A Cumulative
Preferred Stock otherwise as provided in this Certificate
or the resolutions of the Board of Directors authorizing
the Series A Cumulative Preferred Stock.
Upon failure of the Corporation to comply with all the
obligations to and agreements with the holders of Series A
Cumulative Preferred Stock, the shares of stock represented
by this Certificate shall, at the option of the holder, be
immediately redeemable in full, payable in cash, and if
the Corporation will fail on demand to so redeem the same
in full plus an amount equal to the sum of all accumulated
and unpaid dividends per share (including a prorated
quarterly dividend from the last Dividend Payment Date to
the applicable Redemption Date), then the holder shall be
entitled to require the liquidation of the Corporation in
the order provided by law.
Voting Rights. Except as otherwise provided by law,
the Articles of Incorporation of the Corporation or in this
Certificate, the holders of Series A Cumulative Preferred
Stock shall have no power to vote on any question or in any
proceeding, or to be represented at or to receive notice of
any meeting of the stockholders of the Corporation.
If at any time or times, dividends payable on Series A
Cumulative Preferred Stock have not been paid or declared
and a sum sufficient for their payment set aside for a
period of one and one-half years, then the holders of
Series A Cumulative Preferred Stock, voting separately as a
class, shall be entitled to elect two (2) directors of the
Corporation as provided in the Articles of Incorporation of
the Corporation. The right to elect directors shall
continue until dividends in default on Series A Cumulative
Preferred Stock are paid in full or funds sufficient for
their payment are set aside, and shall cease when the
dividends are so paid or set aside, subject to future
reactivation in the event of future defaults. The
directors so elected by the holders of Series A Cumulative
Preferred Stock shall serve until the next annual meeting
of the stockholders of the Corporation and until their
respective successors are elected by the holders of Series
A Cumulative Preferred Stock and have qualified. Any
director elected by the holders of Series A Cumulative
Preferred Stock may be removed by the vote of a majority of
the holders of Series A Cumulative Preferred Stock. When
the holders of Series A Cumulative Preferred Stock are
divested of special voting power, the term of office of the
persons elected as directors by the holders of Series A
Cumulative Preferred Stock shall terminate.
No Reissuance. No Series A Cumulative Preferred Stock
acquired by the Corporation by reason of redemption,
purchase, or otherwise will be reissued, and all shares
will be canceled, retired and eliminated from the shares
which the Corporation will be authorized to issue.
Notices. All notices to the Corporation permitted
here will be personally delivered or sent by first class
mail, postage prepaid, addressed to its principal office
located at 000 Xxxxxx Xxxxxx, Xxxxx Xxxx Xxxxxxx, Xxxxxxx
00000, Attention: Treasurer, or to other address at which
its principal office is located and as to which notice is
similarly given to the holders of the Series A Cumulative
Preferred Stock at their addresses appearing on the books
of the Corporation.
Costs. In the event of any default by the Corporation
of its obligations to or agreements with the holders of the
Series A Cumulative Preferred Stock, the Corporation shall
pay, in addition to all other amounts required to be paid
to the holders of Series A Cumulative Preferred Stock, all
costs associated with the enforcement of the rights and
remedies of the holders of Series A Cumulative Preferred
Stock, including without limitation reasonable attorneys
fees and costs, whether or not suit is instituted,
including in trial, on appeal, bankruptcy proceedings or
otherwise.
Waiver. No delay or omission on the part of any
holder of the Series A Cumulative Preferred Stock in
exercising any right of such holder shall operate as a
waiver of such rights or any other rights of the holders of
Series A Cumulative Preferred Stock. No waiver of any
rights shall be binding upon any holder of Series A
Cumulative Preferred Stock unless in a writing signed by or
authorized by such holder, and then only to the extent that
this is set forth in such waiver.
Jurisdiction. The Corporation and each holder of
Series A Cumulative Preferred Stock, by acceptance of the
Series A Cumulative Preferred Stock, specifically
authorizes any action brought upon the enforcement of
Series A Cumulative Preferred Stock to be instituted and
prosecuted in either the Circuit Court of Xxxxx County,
Florida, or the United States District Court in the Middle
District of Florida; and the Corporation and each holder of
the Series A Cumulative Preferred Stock hereby waives any
plea of jurisdiction or venue as not being in Xxxxx County,
Florida, and consents to a transfer of jurisdiction and
venue to the Circuit Court of Xxxxx County, Florida, or the
United States District Court for the Middle District of
Florida upon request of any party.
ASSIGNMENT
For Value Received, the undersigned does hereby sell,
assign and transfer unto
__________________ Shares represented by the within Certificate, and does
hereby irrevocably constitute and appoint
________________________________________________ Attorney
to transfer the said Shares on the books of the Corporation
with full power of substitution in the premises.
Dated ____________________, 19__
In presence of
SERIES A CUMULATIVE PREFERRED STOCK
REDEMPTION SCHEDULE
Redemption Date Number of Shares
May 1, 1998 50
June 1, 1998 50
July 1, 1998 50
August 1, 1998 50
September 1, 1998 50
October 1, 1998 50
November 1, 1998 50
December 1, 1998 50
January 1, 1999 311
February 1, 1999 313
March 1, 1999 315
April 1, 1999 316
May 1, 1999 318
June 1, 1999 319
July 1, 1999 321
August 1, 1999 323
September 1, 1999 324
October 1, 1999 326
November 1, 1999 327
December 1, 1999 328
DEBT CONVERSION AND PREFERRED STOCK AGREEMENT
This AGREEMENT dated as of July 22, 1997 is
entered into by and between:
1. AUTOMOBILI LAMBORGHINI, U.S.A., INC., a
corporation incorporated under the laws of Delaware and
having its principal address at 0000 Xxxxxxxxx Xxxxxxx
Xxxxx, Xxxxxxxxxxxx, Xxxxxxx 00000 (hereinafter
referred to as "ALUSA").
2. VECTOR AEROMOTIVE CORPORATION, a company
incorporated under the law of the State of Nevada,
U.S.A., having its principal office at 000 Xxxxxx
Xxxxxx, Xxxxx Xxxx Xxxxxxx, Xxxxxxx 00000 (hereinafter
referred to as "Vector").
Each of the above parties individually will
be called a "Party", and collectively, the "Parties";
RECITALS
WHEREAS, Vector is justly indebted to ALUSA
in the principal amount of
$568,577.40 (the "Indebtedness"); and
WHEREAS, Vector has authorized capitalization
of 600,000,000 shares of Common Stock, $.01 par value
(the "Common Stock"), and 5,000,000 shares of Preferred
Stock, $.10 par value (the "Preferred Stock"); and
WHEREAS, ALUSA is willing to convert the
Indebtedness to the Preferred Stock as described in
this Agreement.
NOW, THEREFORE THE PARTIES HEREBY AGREE AS
FOLLOWS:
XXX. Vector represents and warrants that it has
authorized the issuance of 5,686 shares of Preferred
Stock in the form attached to this Agreement as Exhibit
"A" (the "Preferred Shares") and, subject to the terms
of this Agreement (including without limitation
Paragraph 7), hereby tenders the Preferred Shares to
ALUSA.
XXXI. In consideration of the issuance of the
Preferred Shares in accordance with this Agreement, as
full payment for the Preferred Shares, ALUSA hereby
satisfies and cancels the Indebtedness.
XXXII. ALUSA represents and warrants that the
Indebtedness includes and consists of all indebtedness,
obligations, agreements and covenants of Vector to
ALUSA involving the payment of money or property. For
purposes of this Section 3, the payment of property
does not include the issuance of Preferred Stock of
Vector.
XXXIII. This Agreement shall be binding upon the
successors and assigns of each Party.
XXXIV. This Agreement shall be governed by and
construed under the laws of the State of Florida,
without regard to its principles of conflict of laws.
XXXV. This Agreement contains the entire
understanding between the Parties relating to the
subject matter of this Agreement, and all prior
proposals, discussions and writings between the
Parties relating to the subject matter of this
Agreement are superseded by this Agreement.
XXXVI. The obligations of the Parties in
Paragraphs 1-3 of this Agreement shall become effective
upon the execution by Tradelink International Limited
("Tradelink") of its option to acquire 60,000,000
shares of Vector's Common Stock pursuant to the Option
Agreement dated as of July 22, 1997 (the "Effective
Date"). Until the Effective Date or until the
Tradelink option expires, ALUSA shall forbear any
action to collect the Indebtedness.
XXXVII. None of the terms of this Agreement
shall be deemed to be waived by either Party or amended
unless such waiver or amendment be in writing and duly
executed on behalf of the parties to be charged with
such waiver or amendment by its authorized officer and
unless such waiver or amendment cites specifically that
it is a waiver or amendment to the terms of this
Agreement. The failure of either Party to insist
strictly upon any of the terms or provisions of this
Agreement shall not be deemed a waiver of any
subsequent breach or default of the terms or provisions
of this Agreement.
XXXVIII. This Agreement may be executed in any
number of counterparts, each of which when executed and
delivered shall be an original, but all of such
counterparts shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the Parties have caused
this Agreement to be executed by their duly authorized
representatives as of the date and year first written
above.
VECTOR AEROMOTIVE CORPORATION
By: /s/ Xxxxx Xxxxx Xxxx
Title: President
Address for Notices:
c/o Xxxxxxx X. Xxxxxxxx, Xx., Esquire
Xxxxxxxx & Xxxxx
Xxx Xxxxxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxxxxxxx, XX 00000
(000) 000-0000
Fax: (000) 000-0000
AUTOMOBILI LAMBORGHINI, U.S.A., INC.
By: /s/ Vittorio DiCupua
Title: Chariman
Address for Notices:
x/x Xxxxxxxx, Xxxxxxx, Xxxxxx
& Xxxxxxx
Xxx Xxxxxxx Xxxx Xxxxx
Xxx Xxxx, XX 00000
Att: Xxxxxx Xxxxxx, Esq.
(000) 000-0000
Fax: (000) 000-0000
Certificate NumberShares
2 5686
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY BE OFFERED
AND SOLD ONLY IF REGISTERED PURSUANT TO THE PROVISIONS
OF THAT ACT OR IF, IN THE OPINION OF COUNSEL TO THE
SELLER, AN EXEMPTION FROM REGISTRATION THEREUNDER IS
AVAILABLE, THE AVAILABILITY OF WHICH MUST BE
ESTABLISHED TO THE SATISFACTION OF VECTOR.
VECTOR AEROMOTIVE CORPORATION
INCORPORATED UNDER THE LAWS OF THE STATE OF NEVADA
AUTHORIZED TO BE ISSUED 10,000 SHARES OF SERIES A
CUMULATIVE PREFERRED STOCK
PAR VALUE $.10 PER SHARE
This Certifies that Automobili Lamborghini,
U.S.A., Inc., a company authorized under the laws of
the State of Delaware, is the registered holder of FIVE
THOUSAND THREE HUNDRED EIGHTY-EIGHT shares of the
Series A Cumulative Preferred Stock of VECTOR
AEROMOTIVE CORPORATION, fully paid and non-assessable,
transferable only on the books of the Corporation by
holder hereof in person or by Attorney upon surrender
of this Certificate properly endorsed. The voting
powers, designations, preferences, limitations,
restrictions, relative rights and other aspects of the
Series A Cumulative Preferred Stock are set forth (i)
in the Articles of Incorporation of the Corporation,
which are incorporated in this Certificate as if fully
set forth in this Certificate, and (ii) resolutions of
the Board of Directors of the Corporation adopted July
22, 1997, which are incorporated in this Certificate as
if fully set forth in this Certificate and (iii)
additional provisions of Class A Cumulative Preferred
Stock set forth in this Certificate. The Corporation
will furnish to each holder of Series A Cumulative
Preferred Stock upon request without change a copy of
the Articles of Incorporation and resolutions of the
Board of Directors.
In Witness Whereof, the said Corporation has
caused this Certificate to be signed by its duly
authorized officers and its Corporate Seal to be
hereunto affixed this ____ day of July A.D. 1997.
__________________________________________________________________
Secretary President
ADDITIONAL PROVISIONS OF CERTIFICATE FOR
SERIES A CUMULATIVE PREFERRED STOCK
The Series A Cumulative Preferred Stock shall be
deemed to be issued simultaneously and shall be on
equal parity as to all references, powers and rights
except as set forth in the written provisions of each
series of Preferred Stock. Each share of he Series A
Cumulative Preferred Stock shall be issued for $100.00.
Dividends. So long as any shares of Series A
Cumulative Preferred Stock will be outstanding, the
holders of the Series A Cumulative Preferred Stock will
be entitled to receive cumulative preferential
dividends accruing at the LIBOR Rate on the value of
$100.00 per share, payable quarterly on the 1st day of
March, June, September and December of each year,
beginning December 1, 1997 (each date being called a
"Dividend Payment Date"), the dividends to be
cumulative and payable as allowed by the Nevada
Business Corporation Act, Chapter 78, Nevada Revised
Statutes, with respect to the quarterly dividend period
(or portion of it) ending on the day preceding the
respective Dividend Payment Date, fixed for that
purpose by the Board in advance of payment of each
particular dividend. The LIBOR Rate shall mean the
rate (rounded, if necessary, to the next higher 1/100
of 1%) for deposits in United States Dollars for a
maturity of three months which appears on the Telerate
Page 3750 at approximately 11:00 a.m. London time
representing the offered side of dollar deposits in the
London market two (2) London business days prior to the
effective date of the applicable LIBOR Rate. The LIBOR
Rate shall be presumed to be the three months London
Interbank Offered Rates as shown in the Wall Street
Journal under "Money Rates" as long as such rates are
published. The LIBOR Rate will be fixed on the
Original Issue Date and thereafter be changed at every
Dividend Payment Date to be effective until the next
Dividend Payment Date. The "Original Issue Date"
means the first date on which the Corporation will
issue any shares of Series A Cumulative Preferred
Stock. Dividends on the Series A Cumulative Preferred
Stock shall be cumulative from the Original Issue Date
(whether or not declared and whether or not in any
dividend period or dividend periods there will be net
profits or net assets of the Corporation legally
available for the payment of those dividends).
So long as any shares of Series A Cumulative
Preferred Stock shall remain outstanding, the
Corporation may not declare or pay any dividend, make a
distribution, or purchase, acquire, redeem, or set
aside or make monies available for a sinking fund for
the purchase or redemption of, any shares of stock of
the Corporation ranking junior to the Series A
Cumulative Preferred Stock with respect to the payment
of dividends or the distribution of assets on
liquidation, dissolution or winding up of the
Corporation including Common Stock, par value $.01, of
the Corporation ("junior stock") (other than as a
result of a reclassification of junior stock into
another class of junior stock, or the exchange or
conversion of one junior stock for or into another
junior stock) unless (i) all dividends in respect of
the Series A Cumulative Preferred Stock for all past
dividend periods have been paid and such dividends for
the current dividend period have been paid or declared
and duly provided for, and (ii) all amounts in respect
of the mandatory redemption of Series A Cumulative
Preferred Stock pursuant to the terms of paragraph 5
below have been paid for all prior applicable periods
and all amounts in respect of such mandatory redemption
for the current applicable period have been paid or
duly provided for. Subject to the foregoing, and not
otherwise, the dividends (payable in cash, stock or
otherwise) as may be determined by the Board may be
declared and paid on any junior stock from time to time
out of any funds legally available, and the Series A
Cumulative Preferred Stock will not be entitled to
participate in any such dividends, whether payable in
cash, stock or otherwise.
Liquidation Rights. In the event of any
liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, the
holders of Series A Cumulative Preferred Stock then
outstanding are entitled to be paid out of the assets
of the Corporation available for distribution to its
shareholders, whether such assets are capital, surplus
or earnings, before any payment or declaration and
setting apart for payment of any amount will be made in
respect of any shares of any junior stock with respect
to the payment of dividends or distribution of assets
on liquidation, dissolution or winding up of the
Corporation, an amount equal to $100 per share plus all
accumulated and unpaid dividends (including a prorated
quarterly dividend from the last Dividend Payment Date
to the date of such payment) in respect of any
liquidation, dissolution or winding up consummated.
If upon any liquidation, dissolution or winding up
of the Corporation, whether voluntary or involuntary,
the assets to be distributed among the holders of
Series A Cumulative Preferred Stock shall be
insufficient to permit the payment to the shareholders
of the full preferential amounts aforesaid, then the
entire assets of the Corporation to be distributed
shall be distributed ratably among the holders of
Series A Cumulative Preferred Stock based on the full
preferential amounts for the number of shares of Series
A Cumulative Preferred Stock.
A consolidation or merger of the Corporation with
or into any other corporation or corporations in which
the stockholders of the Corporation receive solely
capital stock of the acquiring or surviving corporation
(or of the direct or indirect parent corporation of the
acquiring corporation), except for cash in lieu of
fractional shares, will not be deemed to be a
liquidation, dissolution, or winding up of the
Corporation as those terms are used in this
Certificate.
Mandatory Redemption. The Corporation will, at
the redemption price equal to $100 per share plus an
amount, payable in cash, equal to the sum of all
accumulated and unpaid dividends per share (including a
prorated quarterly dividend from the last Dividend
Payment Date to the applicable Redemption Date) (the
"Redemption Price"), redeem from any source of funds
legally available therefor, the amount of shares of
Series A Cumulative Preferred Stock outstanding on the
date set forth on the Redemption Schedule attached to
this Certificate. Redemption Date shall be the date on
which any shares of Series A Cumulative Preferred Stock
are redeemed by the Corporation. This Certificate
shall be notice of this mandatory redemption on the
dates specified on the Redemption Schedule, and any
further notice is waived by acceptance of this
Certificate.
If the Corporation's records show there is more
than one holder of Series A Cumulative Preferred Stock,
the Corporation will effect the redemption pro rata
according to the number of shares held by each holder
of Series A Cumulative Preferred Stock shown on the
books of the Corporation. On or before the date fixed
for redemption, each holder of Series A Cumulative
Preferred Stock will surrender the certificate or
certificates representing the shares of Series A
Cumulative Preferred Stock to the Corporation and the
Redemption Price for the shares will be paid in cash on
the Redemption Date to the person whose name appears on
the certificate or certificates as the owner, and each
surrendered certificate will be canceled and retired.
In the event that less than all of the shares
represented by any certificate are redeemed, a new
certificate will be issued representing the unredeemed
shares.
Unless the Corporation defaults in the payment in
full of the Redemption Price, dividends on the Series A
Cumulative Preferred Stock called for redemption will
cease to accumulate on the Redemption Date, and all
rights of the holders of the shares redeemed will cease
to have any further rights with respect to the shares
on the Redemption Date, other than to receive the
Redemption Price.
Optional Redemption. The Corporation may, at the
option of the Board of Directors, redeem at any time
from any source of funds legally available, in whole or
in part, in any manner proscribed by the Board of
Directors, any and all of the shares of Series A
Cumulative Preferred Stock outstanding at the
Redemption Price.
Other Redemptions. In the event that any Organic
Change (as defined below) is to occur, any holder of
Series A Cumulative Preferred Stock may require the
Corporation to redeem, at the Redemption Price, all or
any portion of the holder's shares of Series A
Cumulative Preferred Stock immediately prior to the
consummation of the Organic Change. The Corporation
will give written notice of any impending Organic
Change, stating the substance and intended date of
consummation of it not more than thirty (30) nor less
than fifteen (15) days prior to the date of
consummation thereof, to each holder of Series A
Cumulative Preferred Stock. Each such holder shall
have fifteen (15) days (the "Notice Period") from the
date of such notice to demand (by written notice mailed
to the Corporation) redemption of all or any portion of
the shares of Series A Cumulative Preferred Stock owned
by such holder. If by the expiration of the Notice
Period any holders have so elected to demand
redemption, the Corporation will give prompt written
notice of such election (stating the total number of
shares so demanded to be redeemed) to each other holder
of Series A Cumulative Preferred Stock within five (5)
days after the expiration of the Notice Period. Each
holder who has not demanded redemption will be afforded
ten (10) days from the date of the notice to demand
redemption of all or any portion of the holder's shares
of Series A Cumulative Preferred Stock by mailing
written notice of it to the Corporation. Immediately
prior to the consummation of the Organic Change, the
Corporation will redeem all shares of Series A
Cumulative Preferred Stock as to which redemption
rights under this subparagraph (c)(i) have been
exercised. For purposes of this paragraph (v)(i), the
term "Organic Change" means (A) any sale, lease,
exchange or other transfer (other than the creation of
security interests to secure financings, but including
any foreclosures with respect to them) of all or
substantially all of the property and assets of the
Corporation (whether or not in the ordinary course of
business) or (B) any merger or consolidation to which
the Corporation is a party (other than a merger in
which the Corporation will be the surviving corporation
and, after giving effect to the merger, the holders of
the Corporation's outstanding capital stock immediately
preceding such merger will own shares possessing more
than 50% of the voting power of the Corporation).
If, at the time of any redemption arising from an
Organic Change, the funds of the Corporation legally
available for redemption of Series A Cumulative
Preferred Stock are insufficient to redeem the number
of shares required to be redeemed, those funds which
are legally available will be used to redeem the
maximum possible number of such shares, pro rata based
upon the number of shares requested to be redeemed by
the holders of it. At any time thereafter when
additional funds of the Corporation become legally
available for the redemption of Series A Cumulative
Preferred Stock, the funds will immediately be used to
redeem the balance of the shares of Series A Cumulative
Preferred Stock which the Corporation has become
obligated to redeem as a result of an Organic Change,
but which it has not redeemed; or, if a person other
than the Corporation is the surviving or resulting
corporation in any Organic Change, the person will, at
the consummation of the Organic Change, redeem the
balance of the shares of Series A Cumulative Preferred
Stock (and the Corporation will so provide in its
agreements with the person relating to the Organic
Change). Redemptions made as a result of an Organic
Change will not relieve the Corporation of its
obligation to redeem Series A Cumulative Preferred
Stock otherwise as provided in this Certificate or the
resolutions of the Board of Directors authorizing the
Series A Cumulative Preferred Stock.
Upon failure of the Corporation to comply with all
the obligations to and agreements with the holders of
Series A Cumulative Preferred Stock, the shares of
stock represented by this Certificate shall, at the
option of the holder, be immediately redeemable in
full, payable in cash, and if the Corporation will
fail on demand to so redeem the same in full plus an
amount equal to the sum of all accumulated and unpaid
dividends per share (including a prorated quarterly
dividend from the last Dividend Payment Date to the
applicable Redemption Date), then the holder shall be
entitled to require the liquidation of the Corporation
in the order provided by law.
Voting Rights. Except as otherwise provided by
law, the Articles of Incorporation of the Corporation
or in this Certificate, the holders of Series A
Cumulative Preferred Stock shall have no power to vote
on any question or in any proceeding, or to be
represented at or to receive notice of any meeting of
the stockholders of the Corporation.
If at any time or times, dividends payable on
Series A Cumulative Preferred Stock have not been paid
or declared and a sum sufficient for their payment set
aside for a period of one and one-half years, then the
holders of Series A Cumulative Preferred Stock, voting
separately as a class, shall be entitled to elect two
(2) directors of the Corporation as provided in the
Articles of Incorporation of the Corporation. The
right to elect directors shall continue until dividends
in default on Series A Cumulative Preferred Stock are
paid in full or funds sufficient for their payment are
set aside, and shall cease when the dividends are so
paid or set aside, subject to future reactivation in
the event of future defaults. The directors so elected
by the holders of Series A Cumulative Preferred Stock
shall serve until the next annual meeting of the
stockholders of the Corporation and until their
respective successors are elected by the holders of
Series A Cumulative Preferred Stock and have qualified.
Any director elected by the holders of Series A
Cumulative Preferred Stock may be removed by the vote
of a majority of the holders of Series A Cumulative
Preferred Stock. When the holders of Series A
Cumulative Preferred Stock are divested of special
voting power, the term of office of the persons elected
as directors by the holders of Series A Cumulative
Preferred Stock shall terminate.
No Reissuance. No Series A Cumulative Preferred
Stock acquired by the Corporation by reason of
redemption, purchase, or otherwise will be reissued,
and all shares will be canceled, retired and eliminated
from the shares which the Corporation will be
authorized to issue.
Notices. All notices to the Corporation permitted
here will be personally delivered or sent by first
class mail, postage prepaid, addressed to its principal
office located at 000 Xxxxxx Xxxxxx, Xxxxx Xxxx
Xxxxxxx, Xxxxxxx, Attention: Treasurer, or to other
address at which its principal office is located and as
to which notice is similarly given to the holders of
the Series A Cumulative Preferred Stock at their
addresses appearing on the books of the Corporation.
Costs. In the event of any default by the
Corporation of its obligations to or agreements with
the holders of the Series A Cumulative Preferred Stock,
the Corporation shall pay, in addition to all other
amounts required to be paid to the holders of Series A
Cumulative Preferred Stock, all costs associated with
the enforcement of the rights and remedies of the
holders of Series A Cumulative Preferred Stock,
including without limitation reasonable attorneys fees
and costs, whether or not suit is instituted,
including in trial, on appeal, bankruptcy proceedings
or otherwise.
Waiver. No delay or omission on the part of any
holder of the Series A Cumulative Preferred Stock in
exercising any right of such holder shall operate as a
waiver of such rights or any other rights of the
holders of Series A Cumulative Preferred Stock. No
waiver of any rights shall be binding upon any holder
of Series A Cumulative Preferred Stock unless in a
writing signed by or authorized by such holder, and
then only to the extent that this is set forth in such
waiver.
Jurisdiction. The Corporation and each holder of
Series A Cumulative Preferred Stock, by acceptance of
the Series A Cumulative Preferred Stock, specifically
authorizes any action brought upon the enforcement of
Series A Cumulative Preferred Stock to be instituted
and prosecuted in either the Circuit Court of Xxxxx
County, Florida, or the United States District Court in
the Middle District of Florida; and the Corporation and
each holder of the Series A Cumulative Preferred Stock
hereby waives any plea of jurisdiction or venue as not
being in Xxxxx County, Florida, and consents to a
transfer of jurisdiction and venue to the Circuit Court
of Xxxxx County, Florida, or the United States District
Court for the Middle District of Florida upon request
of any party.
ASSIGNMENT
For Value Received, the undersigned does hereby
sell, assign and transfer unto
___________________________________________
Shares represented by the within Certificate, and does
hereby irrevocably constitute and appoint
______________________________________________
Attorney to transfer the said Shares on the books of
the Corporation with full power of substitution in the
premises.
Dated ____________________, 19__
In presence of
____________________________
NOTICE: The signature of this Assignment must correspond
with the name as written upon the face of the
Certificate, in every particular, without alteration
or enlargement, or any change whatever.
SERIES A CUMULATIVE PREFERRED STOCK
REDEMPTION SCHEDULE
Redemption Date Number of Shares
May 1, 1998 50
June 1, 1998 50
July 1, 1998 50
August 1, 1998 50
September 1, 1998 50
October 1, 1998 50
November 1, 1998 50
December 1, 1998 50
January 1, 1999 428
February 1, 1999 430
March 1, 1999 433
April 1, 1999 435
May 1, 1999 437
June 1, 1999 439
July 1, 1999 442
August 1, 1999 444
September 1, 1999 446
October 1, 1999 448
November 1, 1999 451
December 1, 1999 453
ANNEX V
FORM OF DEBT FORGIVENESS AND TECHNOLOGY AGREEMENT
DEBT FORGIVENESS AND TECHNOLOGY AGREEMENT
This AGREEMENT dated as of July 22, 1997, is
entered into by and between:
1. V'POWER CORPORATION, a corporation
incorporated under the law of the Bahamas and having its
principal address at Gedung Xxxxx Xxxxx, X0. Medan Merdeka
Timur no. 17, Xxxxxxx 00000, Xxxxxxxxx (hereinafter
referred to as "V'Power").
2. VECTOR AEROMOTIVE CORPORATION, a company
incorporated under the law of the State of Nevada, U.S.A.,
having its principal office at 000 Xxxxxx Xxxxxx, Xxxxx
Xxxx Xxxxxxx, Xxxxxxx 00000 (hereinafter referred to as
"Vector").
Each of the above parties individually will be
called a "Party", and collectively, the "Parties";
RECITALS
WHEREAS, Vector is justly indebted in the amount
of $451,103.95 (collectively, the "Indebtedness") to
V'Power (i) pursuant to an Assignment of Receivables dated
as of July 22, in the principal amount of $423,118.22, and
(ii) in the amount of $27,985.73 for advances in December,
1996, March, 1997 and May, 1997, to cover telephone bills
and premiums on Directors and officers insurance, and
WHEREAS, V'Power wishes to purchase the
Transferred Property (as hereinafter defined) and Vector is
willing to sell the Transferred Property for $500,000.
NOW, THEREFORE THE PARTIES HEREBY AGREE AS
FOLLOWS:
Article 1
Certain Definitions
1.1 "Affiliate" shall mean a person [individual
or separate business entity] that directly or indirectly,
through one or more intermediaries, controls, is controlled
by or is under common control with another person, any
officer, director, employee or agent of the first person,
trustee with the first person or its Affiliate as
beneficiary of the trust, and spouse or relative [first
cousin or closer] or any of the above. Automobili
Lamborghini, S.p.A., a corporation incorporated under the
law of the Republic of Italy, Automobili Lamborghini,
U.S.A., Inc., a corporation incorporated under the laws of
Delaware and Timor Putra National, a corporation
incorporated under the laws of the Republic of Indonesia,
are Affiliates of V'Power for all purposes.
1.2 "Initial Delivery Date" shall mean the date
following the execution of this Agreement on which
Technical Information concerning the Model is first
transmitted to V'Power by Vector.
1.3 "Intellectual Property Rights" shall mean
inventions, patents, patent applications, technical
designs, copyright, developments, techniques and other
property rights of a similar nature, whether or not
protectable by registration, owned by Vector relating to
the design, development and manufacture of the Model as
each such item may exist on the date of this Agreement, but
shall not include the exterior or interior styling of the
Model or any Vector trademark or trade name.
1.4 "Model" shall mean Vector's M-12 vehicle.
1.5 "Technical Information" shall mean technical
knowledge, know-how, data, drawings, specifications, stress
and finite element analysis, CAD files, sketches, and
other information and material related to the details of
the Model owned by Vector as each such item may exist on
the date of this Agreement, and technical and
administrative knowledge, know-how, data, standards,
procedures, systems, lay-outs, drawings and other
information relating to the manufacture of the Model and
parts of the Model, owned by Vector as each such item may
exist on the date of this Agreement, but shall not include
the exterior or interior styling of the Model or any Vector
trademark or trade name.
1.6 "Transferred Property" shall mean all
Intellectual Property Rights and all Technical Information
relating to the Model.
Article 2
Debt Forgiveness and Conversion
2.1 In consideration of the transfer of
Transferred Property in accordance with this Agreement, as
full payment for such transfer, V'Power hereby forgives
the Indebtedness and tenders in cash in United States
Dollars the amount of $48,896.05.
2.2 V'Power represents and warrants that the
Indebtedness includes and consists of all indebtedness,
obligations, agreements and covenants of Vector to V'Power
involving the payment of money or property. For purposes
of this Section 2.3, the payment of property does not
include the issuance of Common Stock of Vector.
Article 3
Transfer of Transferred Property
3.1 Vector hereby grants to V'Power, during the
term of this Agreement, the perpetual, non-transferable
(except to V'Power's Affiliates) and non-exclusive right
(i) to use the Transferred Property for all purposes in its
business or the business of any Affiliate of V'Power and
(ii) to manufacture and sell products of any kind or nature
using the Transferred Property. Nothing in this Agreement
shall impose on Vector any responsibility or obligation to
have or obtain any Transferred Property.
3.2 All royalties for the sale, use and transfer
of the Transferred Property have been paid in full.
3.3 Vector shall provide V'Power, on or before
the thirtieth (30th) day after the date of this Agreement,
Technical Information described below relating to the Model
as each such item exists on the date of this Agreement:
(a) Non-costed xxxx of material.
(b) Product drawings and master line drawings
(reproducible and/or CAD files as
appropriate), including engineering
specifications for all parts, components and
assemblies.
(c) Design installation manuals by system/sub-system
including engineering specifications
for assembly, such as tightening torque,
heating requirements, greases, glues, etc.
(d) Master service manual.
(e) Owners manuals and graphic manuals and
masters.
(f) Reports of all prototype construction and
tests.
(g) Product development reports and vehicle
maturity charts.
(h) Engineering specifications for complete
Model assemblies.
(i) Design failure mode and effect analysis
studies on all safety related parts.
(j) Warranty manual and "fault-finding" service
manual.
3.4 V'Power shall defend, indemnify and hold
harmless Vector from and against any and all liability,
demands, damages, expenses and losses for death, personal
injury, property damage or any other claim or liability
("claims and damages") arising out of the use by V'Power or
any Affiliate of any of the Transferred Property, or out of
the use, sale or the disposition by V'Power or its
Affiliates of any products manufactured by V'Power or any
Affiliate using the Transferred Property, provided there
shall be no liability under this paragraph 3.4 for
indirect, consequential or special damages or from damages
resulting from defects in the Transferred Property not
created by the use of the Transferred Property by V'Power
or any Affiliate.
3.5 For a period of seven years from the date of
this Agreement, Vector within a reasonable time will
provide V'Power with any changes or revisions to the
Technical Information and any improvements, provisions or
updates to any Intellectual Property Rights. Within thirty
(30) days of incorporation into Technical Information,
Vector will provide V'Power a copy of Technical Information
incorporating any changes, revisions or updates. Vector
shall have no obligation to make any changes, revisions,
amendments or updates to the Transferred Property.
3.6 During normal business hours and in a
reasonable time relative to Vector's business operations,
Vector will provide a representative of V'Power reasonable
access to the status and results of all research and
development relating to the Transferred Property. Vector
and V'Power will cooperate to minimize the disruption of
such access to Vector's normal business operations.
V'Power shall reimburse Vector for the direct cost of an
employee of Vector, who shall be present with the
representative of V'Power at all times such representative
is reviewing such research and development, and the direct
cost of any employees or consultants of Vector requested by
V'Power to be so present. Vector shall have no
responsibility or obligation to conduct any research or
development relating to the Transferred Property.
3.7 Vector shall have the right from time to
time during normal business hours to inspect the premises
of V'Power at any location where records relating to the
Transferred Property are maintained, provided this
inspection is coordinated not to unreasonably interfere
with the normal business operations of V'Power.
3.8 V'Power shall not transfer or grant a
sublicense of the Transferred Property except as provided
in this Agreement and shall not allow any third Party to
use the Transferred Property by obtaining information
contained within the Transferred Property from V'Power.
3.9 At all times during the term of this
Agreement V'Power shall comply with all governmental laws
and regulations applicable to the use of the Transferred
Property or the production and sale of products containing
or using in any way the Transferred Property.
Article 4
Negation of Warranty
4.1 THE TRANSFERRED PROPERTY IS PROVIDED ON AN
"AS-IS" BASIS, AND THERE ARE NO REPRESENTATIONS OR
WARRANTIES, EXPRESSED OR IMPLIED, INCLUDING ANY WARRANTY OF
MERCHANTABILITY OF FITNESS FOR ANY PARTICULAR PURPOSE.
V'POWER SHALL BE SOLELY RESPONSIBLE FOR THE SELECTION, USE,
EFFICIENCY AND SUITABILITY OF THE TRANSFERRED PRODUCT, AND
VECTOR SHALL HAVE NO RESPONSIBILITY OR LIABILITY THEREFORE.
4.2 VECTOR SHALL HAVE NO RESPONSIBILITY OR
LIABILITY TO V'POWER FOR THE INFRINGEMENT OF PROPRIETARY
RIGHTS OF THE TRANSFERRED PROPERTY OR ANY PORTION OF THE
TRANSFERRED PROPERTY.
Article 5
Confidentiality
5.1 Each Party agrees that any confidential
information received from the other Party shall be
disclosed only to personnel of the receiving Party on a
strictly Need to Know' basis for the purposes specified in
this Agreement, and that personnel receiving such
confidential information shall be notified of all the
obligations of confidentiality in respect thereof.
5.2 No disclosure of confidential information by
either Party to a third Party shall be made without the
prior written agreement of the other Party, and then only
after obtaining from the third Party a written undertaking
to maintain confidentiality equivalent in all respects to
those contained herein.
5.3 Restrictions and conditions of Sections 5.1
and 5.2 shall not apply where the receiving Party can
demonstrate that such confidential information is:
(a) in or comes into the public domain at any
time without breach of this Article 5 or any
other obligation of confidentiality or is
made available to the general public without
restrictions by the disclosing Party, or
(b) known to the receiving Party at the time of
disclosure, or is independently developed by
it or its employers without reference to or
use of any disclosed confidential
information, or
(c) rightfully received from a third Party
without restriction or without breach of
this Agreement.
5.4 If the receiving Party or its executive
officers, employees, or representatives become legally
compelled to disclose any of the confidential information
covered by this Agreement, the receiving Party shall
provide the other Party with immediate notice thereof and
at least seven days prior to such required disclosure in
order that the disclosing Party may seek a protective
order, or take other appropriate measures to ensure its
interests are protected.
Article 6
Indemnification and Contribution
6.1 Subject to the conditions set forth below,
Vector agrees to indemnify and hold harmless V'Power, its
officers, directors, partners, employees, agents and
counsel against any and all loss, liability, claim, damage,
and expense whatsoever (which shall include, for all
purposes of this Article 6, but not be limited to,
attorneys' fees and any and all expense whatsoever incurred
in investigating, preparing, or defending against any
litigation, commenced or threatened, or any claim
whatsoever and any and all amounts paid in settlement of
any claim or litigation) as and when incurred, arising out
of, resulting from, based upon, or in connection with any
breach of any representation, warranty, covenant or
agreement of Vector contained in this Agreement. The
foregoing agreement to indemnify shall be in addition to
any liability Vector may otherwise have, including
liabilities arising under this Agreement. V'Power agrees
to indemnify and hold harmless Vector, its officers,
directors, partners, employees, agents and counsel against
any and all loss, liability, claim, damage, and expense
whatsoever (which shall include, for all purposes of this
Article 6, but not be limited to, attorneys' fees and any
and all expense whatsoever incurred in investigating,
preparing, or defending against any litigation, commenced
or threatened, or any claim whatsoever and any and all
amounts paid in settlement of any claim or litigation) as
and when incurred, arising out of, resulting from, based
upon, or in connection with any breach of any
representation, warranty, covenant or agreement of V'Power
contained in this Agreement.
6.2 If any action is brought against one Party,
that Party or any of its officers, directors, employees,
agents or counsel, of any controlling persons (an
"Indemnified Party" or, collectively, "Indemnified
Parties"), in respect of which indemnity may be sought
against the other Party (the "Indemnifying Party") pursuant
to this Agreement, such Indemnified Party or Parties shall
promptly notify the Indemnifying Party in writing of the
institution of such action (but the failure so to notify
shall not relieve the Indemnifying Party from any liability
it may have) and the Indemnifying Party shall promptly
assume the defense of such action including the employment
of counsel satisfactory to such Indemnified Party or
Parties and payment of expenses. Such Indemnified Party or
Parties shall have the right to employ its or their own
counsel in any such case, but the fees and expenses of such
counsel shall be at the expense of such Indemnified Party
or Parties, unless the employment of such counsel shall
have been authorized in writing by the Indemnifying Party
in connection with the defense of such action or the
Indemnifying Party shall not have promptly employed counsel
satisfactory to the Indemnified Party or Parties to have
charge of the defense of such action or such Indemnified
Party or Parties shall have reasonably concluded that there
may be one or more legal defenses available to it or them
or other indemnified parties which are different from or
additional to those available to the Indemnifying Party, in
any of which events such fees and expenses shall be borne
by the Indemnifying Party and the Indemnifying Party shall
not have the right to direct the defense of such action on
behalf of the Indemnified Party or Parties. Anything in
this paragraph to the contrary notwithstanding, the
Indemnifying Party shall not be liable for any settlement
of any claim or action effected without its written
consent.
Article 7
Binding Effect
This Agreement shall be binding upon the
successors and assigns of each Party, provided that V'Power
may only assign this Agreement to one or more of its
Affiliates, unless Vector's prior written consent is first
obtained. If any assignee uses the Transferred Property to
produce vehicles used in motor racing, such assignee shall
identify Vector's connection with such vehicles, with the
terms to be agreed in good faith.
Article 8
Limitation of Liability
8.1 IN NO EVENT SHALL VECTOR OR V'POWER OR ANY
AFFILIATES BE LIABLE TO ANY OTHER PARTY TO THIS AGREEMENT
FOR ANY INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES OR LOST
PROFITS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
PERFORMANCE OR BREACH OF THIS AGREEMENT, NOTWITHSTANDING
SUCH PARTY HAVING BEEN ADVISED OF THE POSSIBILITY THEREOF.
VECTOR'S LIABILITY IN THIS AGREEMENT TO V'POWER, IF ANY,
SHALL IN NO EVENT EXCEED THE TOTAL OF THE AMOUNT OF
FORGIVENESS OF THE INDEBTEDNESS SET FORTH IN SECTION 2.1 OF
THIS AGREEMENT.
8.2 IN NO EVENT SHALL VECTOR BE LIABLE TO
V'POWER FOR ANY DAMAGES RESULTING FROM OR RELATING TO ANY
FAILURE OF THE TRANSFERRED PROPERTY OR ANY PRODUCT OR
MANUFACTURER PRODUCT UTILIZING THE TRANSFERRED PROPERTY.
Article 9
Governing Law and Arbitration
9.1 This Agreement shall be governed by and
construed under the laws of the State of Florida, without
regard to its principles of conflict of laws.
9.2 Any controversy or claim arising out of or
relating to this contract, or the breach thereof, which is
not settled amicably, including the arbitrability of the
dispute or claim or any issue, shall be settled by binding
arbitration in accordance with current arbitration rules of
the American Arbitration Association ("AAA") by a sole
arbitrator appointed by the parties or, if they cannot
agree upon an arbitrator, by three arbitrators, one of whom
shall be designated by each party, and the third appointed
by the other two. Arbitrator compensation and expenses
shall be paid equally by each Party, and each Party shall
be responsible for its own expenses, including legal fees.
The arbitration shall be governed by the United States
Arbitration Act, 9 U.S.C. Section 1-16, to the exclusion of
any provisions of State law inconsistent therewith or which
would produce a different result. Should said Act be
determined to be inapplicable, then the arbitration shall
be governed by the Florida Arbitration Code, Chapter 682,
Florida Statutes. The place of arbitration shall be
Jacksonville, Florida, at any location as the arbitrator
directs, having due regard of the convenience of the
parties, of witnesses and of the arbitrator. The
arbitrator shall determine the rights and obligations of
the parties according to the substantive laws of the State
of Florida, excluding conflict of law principles, and shall
give effect to applicable statutes of limitation. The
arbitrator may consolidate arbitrations involving common
questions of law or fact. The arbitrator may make any
order to protect a Party or person from annoyance,
embarrassment, oppression, or undue burden or expense that
justice requires. The arbitrator may make final, interim,
interlocutory and partial awards, and may grant any remedy
or relief which the arbitrator deems just and equitable and
within the scope of the agreement of the parties, including
but not limited to specific performance and, in the event
of a frivolous or malicious action, the awarding of
attorneys fees and costs, but the arbitrator is not
empowered to award damages in excess of liquidated or
actual damages, whichever is applicable, nor is the
arbitrator empowered to award punitive damages. Judgment
on the award rendered by the arbitrator may be entered by
any court having jurisdiction.
9.3 Nothing in this Article 9, nor the exercise
of any rights hereunder, shall limit the right of any Party
hereto at any time to obtain injunctive relief from a court
having jurisdiction to protect a Party from loss,
irreparable injury, or the dissipation of property while a
dispute is being resolved pursuant to the foregoing
subparagraphs of this Article 9. The preceding sentence
notwithstanding, the pursuit of injunctive relief shall not
constitute a waiver of the right or obligation of any Party
to submit any dispute or claim to the procedures authorized
and required in the foregoing subparagraphs of this Article
9. The Parties hereto agree that this Article 9 shall
limit and completely bar, to the maximum extent permitted
by law, any relief otherwise available to them from any
court of competent jurisdiction other than the injunctive
relief specifically excepted in this Section 9.3.
Article 10
Miscellaneous
10.1 This Agreement contains the entire
understanding between the Parties relating to the subject
matter of this Agreement, and all prior proposals,
discussions and writings between the Parties relating to
the subject matter of this Agreement are superseded by this
Agreement.
10.2 In the event any term or provision of this
Agreement shall for any reason be judicially held to be
invalid, illegal or unenforceable in any respect, such
invalidity, illegalities or unenforceabilities shall not
effect any other term or provision of this Agreement and
this Agreement shall interpreted and construed as such term
or provision, to the extent such term or provision shall
have been held to be invalid, illegal or unenforceable,
have never been contained in this Agreement.
10.3 None of the terms of this Agreement shall be
deemed to be waived by either Party or amended unless such
waiver or amendment be in writing and duly executed on
behalf of the parties be charged with such waiver or
amendment by its authorized officer and unless such waiver
or amendment cites specifically that it is a waiver or
amendment to the terms of this Agreement. The failure of
either Party to insist strictly upon any of the terms or
provisions of this Agreement shall not be deemed a waiver
of any subsequent breach or default of the terms or
provisions of this Agreement. No course of dealing or oral
communication shall form the basis of any amendment to this
Agreement or waiver or any term or provision of this
Agreement, and each Party hereby specifically waives any
right it may have to claim to the contrary.
IN WITNESS WHEREOF, the Parties have caused this
Agreement to be executed by their duly authorized
representatives as of the date and year first written
above.
VECTOR AEROMOTIVE CORPORATION
By: /s/ Xxxxx Xxxxx Xxxx
Title: Pressident
Address for Notices:
c/o Xxxxxxx X. Xxxxxxxx, Xx., Esquire
Xxxxxxxx & Xxxxx
Xxx Xxxxxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxxxxxxx, XX 00000
(000) 000-0000
Fax: (000) 000-0000
V'POWER CORPORATION
By: /s/ Sudjaswin, E. L.
Title: President & Managing Director
Address for Notices:
x/x Xxxxxxxx, Xxxxxxx, Xxxxxx
& Xxxxxxx
Xxx Xxxxxxx Xxxx Xxxxx
Xxx Xxxx, XX 00000
Att: Xxxxxx Xxxxxx, Esq.
(000) 000-0000
Fax: (000) 000-0000
ANNEX VI
FORM OF LOAN AND SECURITY AGREEMENT
(WITH NOTE I AND NOTE II ATTACHED)
LOAN AND SECURITY AGREEMENT
between
VECTOR AEROMOTIVE CORPORATION
"Borrower"
and
TRADELINK INTERNATIONAL LIMITED
"Lender"
Dated: July 22, 1997
LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT (the "Agreement"),
dated as of July 22, 1997, between VECTOR AEROMOTIVE
CORPORATION, a Nevada corporation (the "Borrower"), and
TRADELINK INTERNATIONAL CORPORATION, LIMITED, a corporation
organized under the laws of The Bahamas (the "Lender");
W I T N E S S E T H :
In consideration of the premises and of the mutual
covenants herein contained and to induce the Lender to
extend credit to the Borrower, the parties agree as
follows:
39. Definitions. In addition to terms defined elsewhere
in this Agreement, the following terms have the meanings
indicated:
39.1 Defined Terms.
"Account" shall mean any account receivable,
any rights of payment for goods sold or leased or for
services rendered, which is not evidenced by an
instrument or chattel paper, whether or not it has
been earned by performance, together with all
guaranties, letters of credit and other security
therefor and all other debts, obligations and liabili-
ties in whatever form, owing to Borrower from any
person, firm or corporation or any other legal entity,
whether now existing or hereafter arising, now or
hereafter received by or belonging or owing to
Borrower, however otherwise established or created,
all right, title and interest of Borrower in the
merchandise or services that gave rise to any of the
foregoing, including the rights of reclamation and
stoppage in transit and all rights of an unpaid seller
of merchandise or services and monies, securities and
other property and the proceeds of such property, now
or hereafter held or received by, or in transit to,
Lender from or for Borrower, whether for safekeeping,
pledge, custody, transmission, collection or
otherwise, and all of Borrower's credits and balances
with Lender at any time existing.
"Account Debtor" shall mean a Person who is
obligated under any Account, Chattel Paper, General
Intangible or instrument (as instrument is defined in
the Code).
"Advance" shall mean an advance of proceeds
of the Loan to the Borrower pursuant to this
Agreement, on any given Advance Date.
"Advance Date" shall mean the date as of
which an Advance is made.
"Advance Request" shall mean the written
request for an Advance under the Loan as identified in
Section 3.3 ("Notice and Manner of Borrowing") hereof.
"Affiliate" of a named Person shall mean (a)
any Person owning 5% more of the voting stock or
rights of such named Person or of which the named
Person owns 5% or more of such voting stock or rights;
(b) any Person controlling, controlled by or under
common control with such named Person; (c) any officer
or director of such named Person or any Affiliates of
the named Person; and (d) any family member of the
named Person or any Affiliate of such named Person.
"Business Day" shall mean a weekday on which
commercial banks are open for business in
Jacksonville, Florida.
"Chattel Paper" shall mean all writing or
writings which evidence both a monetary obligation and
a security interest in or the lease of specific goods
and in addition includes all property included in the
definition of "chattel paper" as used in the Code,
together with any guaranties, letters of credit and
other security therefor, whether now owned or
hereafter acquired or received by or belonging to
Borrower.
"Code" shall mean the Florida Uniform
Commercial Code, as in effect from time to time.
"Collateral" means the following property of
the Borrower, wherever located and whether now owned
by Borrower or hereafter acquired: (a) all Inventory;
(b) all General Intangibles; (c) all Accounts and
Chattel Paper and any other instrument or intangible
representing payment for goods or services; (d) all
Equipment;(e) to the extent not named above, all
personal property of the Borrower, whether now owned
or hereafter acquired or received by or belonging to
Borrower and wherever located; (f) all books and
records (including without limitation computer tapes
and data files) related to all property in which
Debtor grants a security interest under the Security
Agreement or any other agreement between Borrower and
the Lender, whether now owned or hereafter acquired or
received by or belonging to Borrower and wherever
located, and all replacements and substitutions for
such books and records; (g) all parts, replacements,
substitutions, profits, products and cash and non-cash
proceeds of any of the foregoing (including insurance
proceeds payable by reason of loss or damage thereto
and tax refunds) in any form and wherever located; and
(h) all replacements and substitutions for or
accessing to all such property. Collateral shall
include all written or electronically recorded records
relating to any such Collateral and other rights
relating thereto.
"Conversion Date" shall mean the day that is
immediately after the fifth consecutive day that the
principal balance under Line of Credit I is equal to
or exceeds the Maximum Loan Amount ($1,250,000).
"Debt" shall mean all liabilities of a
Person as determined under generally accepted
accounting principles and all obligations which such
Person has guaranteed or endorsed or is otherwise
secondarily or jointly liable, and shall include,
without limitation (a) all obligations for borrowed
money or purchased assets, (b) obligations secured by
assets whether or not any personal liability exists,
(c) the capitalized amount of any capital or finance
lease obligations, (d) the unfunded portion of pension
or benefit plans or other similar liabilities,
(e) obligations as a general partner, (f) contingent
obligations pursuant to guaranties, endorsements,
letters of credit and other secondary liabilities, and
(g) obligations for deposits.
"Default Rate" shall mean the highest lawful
rate of interest per annum specified in any Note to
apply after a default under such Note or, if no such
rate is specified, a rate equal to the lesser of
(a) five (5) percentage points above the rate on the
Loan otherwise in effect from time to time, or (b) the
highest rate of interest allowed by law.
"Equipment" shall mean all machinery,
furniture, computer equipment and related accessories,
fixtures, leasehold improvements, equipment, motor
vehicles, rolling stock and other tangible property of
a Person of every description, except Inventory and
in addition includes all property included in the
definition of "equipment" as used in the Code, whether
now owned or hereafter acquired and wherever located,
and all replacements and substitutions for such goods
or accessions to such goods.
"Event of Default" shall mean any event
specified as such in Section 6.1 hereof ("Events of
Default"), provided that there shall have been
satisfied any requirement in connection with such
event for the giving of notice or the lapse of time,
or both; "Default" or "default" shall mean any of such
events, whether or not any such requirement for the
giving of notice or the lapse of time or the happening
of any further condition, event or act shall have been
satisfied.
"General Intangibles" shall mean all
intangible personal property (including things in
action) except Accounts, Chattel Paper and
instruments (as defined in the Code), including all
contract rights, copyrights, trademarks, trade names,
service marks, patents, patent drawings, licenses,
designs, formulas, rights to a Person's name itself,
customer lists, chooses-in-action (whether they arise
in tort or contract), rights to all prepaid expenses,
marketing expenses, rights to receive future
contracts, fees, commissions and orders relating in
any respect to any business of a Person, all licenses
and permits, all computer programs and other software
owned by a Person, or which a Person has the right to
use, and all rights for breach of warranty or other
claims for funds to which a Person may be entitled,
and in addition includes all property included in the
definition of "general intangibles" as used in the
Code, in all cases whether now owned or hereafter
acquired or received by or belonging to Borrower,
whether or not excluded from coverage under the Code
by Section 679.104 or similar provisions.
"Indebtedness" shall mean all obligations
now or hereafter owed to the Lender by the Borrower,
whether related or unrelated to the Loan, including,
without limitation, amounts owed or to be owed under
the terms of the Loan Documents, or arising out of the
transactions described therein, including, without
limitation, the Loan, sums advanced to pay overdrafts
on any account maintained by the Borrower with the
Lender, reimbursement obligations for outstanding
letters of credit or banker's acceptances issued to
the account of the Borrower, amounts paid by the
Lender under letters of credit or drafts accepted by
the Lender for the account of the Borrower, together
with all interest accruing thereon, all fees, all
costs of collection, attorneys' fees and expenses of
or advances by the Lender which the Lender pays or
incurs in discharge of obligations of the Borrower or
to repossess, protect, preserve, store or dispose of
any Collateral, whether such amounts are now due or
hereafter become due, direct or indirect, absolute or
contingent, and whether such amounts due are from time
to time reduced or entirely extinguished and
thereafter re-incurred or reinstated.
"Inventory" means all goods, parts,
merchandise and other personal property of a Person
which is held for sale or lease or furnished or to be
furnished under a contract for services or raw
materials, and all work in process and materials used
or consumed or to be used or consumed in a Person's
business, and in addition, includes all property
included in the definition of "inventory" as used in
the Code, whether manufactured, assembled or
commingled, finished goods and products, and other
tangible personal property, whether now owned or
hereafter acquired, received by or belonging to
Borrower.
"Lien" (collectively "Liens") shall mean any
mortgage, pledge, statutory lien or other lien arising
by operation of law, security interest, trust
arrangement, financing lease, collateral assignment or
other encumbrance, or any segregation of assets or
revenues (whether or not constituting a security
interest) with respect to any present or future
assets, revenues or rights to the receipt of income of
the Person referred to in the context in which the
term is used.
"Loan" shall mean the loans, lines of credit
and other credit accommodations identified in Sections
3.1 and 3.2 hereof.
"Line of Credit I" shall mean the line of
credit converting to a term loan as described in
Section 3.1 hereof.
"Line of Credit II" shall mean the line of
credit as described in Section 3.2 hereof.
"Loan Documents" shall mean this Agreement,
any other Security Agreement, any Note, the Advance
Requests, UCC-l financing statements and all other
documents and instruments now or hereafter evidencing,
describing, guaranteeing or securing the Loan or
delivered in connection with this Agreement, as they
may be modified.
"Maximum Loan Amount" as it refers to Line
of Credit I shall mean $1,250,000 or such other amount
as the Lender may consent to in writing from time to
time and as it refers to Line of Credit II shall mean
$2,500,000 or such other amount as the Lender may
consent to in writing from time to time.
"Note" or "Notes" shall mean one or more
Promissory Notes, as defined in Article 3, and any
other promissory note now or hereafter evidencing the
Loan and all modifications, extensions and renewals
thereof. "Note I" shall mean the Promissory Note, as
defined in Section 3.1, and any other promissory note
now or hereafter evidencing Line of Credit I and all
modifications, extensions and renewals thereof. "Note
II" shall mean the Promissory Note, as defined in
Section 3.2, and any other promissory note now or
hereafter evidencing Line of Credit II and all
modifications, extensions and renewals thereof.
"Permitted Debt" shall mean (a) the
Indebtedness; and (b) any other Debt listed on Exhibit
1.1C hereto (if any) and any extensions, renewals,
replacements, modifications and refundings of any such
Debt if, and to the extent, permitted by Exhibit 1.1C;
provided, however, that the principal amount of such
Debt may not be increased from the amount shown as
outstanding on such exhibit; and (c) such other Debt
as the Lender may consent to in writing from time to
time.
"Permitted Liens" shall mean (a) Liens
securing the Indebtedness; (b) Liens for taxes and
other statutory Liens, landlord's Liens and similar
Liens arising out of operation of law (provided they
are subordinate to the Lender's Liens on Collateral)
so long as the obligations secured thereby are not
past due or are being contested as permitted herein;
(c) Liens described on Exhibit 1.1D hereto (if any),
provided, however, that no debt not now secured by
such Liens shall become secured by such Liens
hereafter and such Liens shall not encumber any other
assets; and (d) such other Liens as the Lender may
consent to in writing from time to time.
"Person" shall mean any natural person,
corporation, unincorporated organization, trust,
joint-stock company, joint venture, association,
company, limited or general partnership, any
government, or any agency or political subdivision of
any government, which includes where applicable the
Borrower.
"Purchase Agreement" shall mean that certain
Share Purchase Agreement between Lender and Borrower
dated the date of this Agreement.
"Security Agreement" shall mean this
Agreement as it relates to a security interest in the
Collateral, and any other mortgage, security agreement
or similar instrument now or hereafter executed by the
Borrower or other Person granting the Lender a
security interest in any Collateral to secure the
Indebtedness.
"Subsidiary" shall mean any corporation,
partnership or other Person in which the Borrower,
directly or indirectly, owns more than fifty percent
(50%) of the stock, capital or income interests, or
other beneficial interests, or which is effectively
controlled by the Borrower.
39.2 Financial Terms. All financial terms used
herein shall have the meanings assigned to them under
generally accepted accounting principles unless another
meanings shall be specified.
40. Representations and Warranties. In order to
induce the Lender to enter into this Agreement and to make
the Loan, the Borrower makes the following representations
and warranties, all of which shall survive the execution
and delivery of the Loan Documents. Unless otherwise
specified, such representations and warranties shall be
deemed made as of the date hereof and as of the Advance
Date of any Advance by the Lender to the Borrower:
40.1 Valid Existence and Power. The Borrower is
a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its
organization is duly qualified or licensed to transact
business in all places where the failure to be so qualified
would have a material adverse effect on it. The Borrower
and each other Person which is a party to any Loan Document
(other than the Lender) has the power to make and perform
the Loan Documents executed by it and all such instruments
will constitute the legal, valid and binding obligations of
such Person, enforceable in accordance with their
respective terms, subject only to bankruptcy and similar
laws affecting creditors' rights generally.
40.2 Authority. The execution, delivery and
performance thereof by the Borrower and each other Person
(other than the Lender) executing any Loan Document have
been duly authorized by all necessary action of such
Person, and do not and will not violate any provision of
law or regulation, or any writ, order or decree of any
court or governmental or regulatory authority or agency or
any provision of the governing instruments of such Person,
and do not and will not, with the passage of time or the
giving of notice, result in a breach of, or constitute a
default or require any consent under, or result in the
creation of any Lien upon any property or assets of such
Person pursuant to, any law, regulation, instrument or
agreement to which any such Person is a party or by which
any such Person or its respective properties may be
subject, bound or affected.
40.3 Financial Condition. All balance sheets,
financial statements, profit and loss statements, and all
other information heretofore furnished to the Lender are
true and correct and fairly reflect the financial condition
of the Borrower and its Subsidiaries, if any, as of the
dates thereof, including all Debt. Other than as disclosed
in financial statements delivered on or prior to the date
hereof to the Lender, the Borrower does not have any direct
or contingent obligations or liabilities (including any
guarantees or leases) or any material unrealized or antici-
pated losses from any commitments of such Person except as
described on Exhibit 2.3 (if any). The Borrower is not
aware of any material adverse fact (other than facts which
are generally available to the public and not particular to
the Borrower, such as general economic or industry trends)
concerning the conditions or future prospects of the
Borrower which has not been fully disclosed to the Lender,
including any adverse change in the operations or financial
condition of such Person since the date of the most recent
financial statements delivered to the Lender.
40.4 Litigation. Except as disclosed on Exhibit
2.4 (if any), there are no suits or proceedings pending, or
to the knowledge of the Borrower threatened, before any
court or by or before any governmental or regulatory
authority, commission, bureau of agency or public
regulatory body against or affecting the Borrower or its
assets, which if adversely determined would have a material
adverse effect on the financial condition or business of
the Borrower.
40.5 Agreements, Etc. The Borrower is not a
party to any agreement or instrument or subject to any
court order, governmental decree or any charter or other
corporate restriction, adversely affecting its business,
properties or assets, operations or condition (financial or
otherwise) nor is the Borrower in default in the
performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any
agreement or instrument to which it is a party, or any law,
regulation, decree, order or the like.
40.6 Authorizations. All authorizations,
consents, approvals and licenses required under applicable
law or regulation for the ownership or operation of the
property owned or operated by the Borrower or for the
conduct of any business in which it is engaged have been
duly issued and are in full force and effect, and it is not
in default, nor has any event occurred which with the
passage of time or the giving of notice, or both, would
constitute a default, under any of the terms or provisions
of any part thereof, or under any order, decree, ruling,
regulation, closing agreement or other decision or
instrument of any governmental commission, bureau or other
administrative agency or public regulatory body having
jurisdiction over the Borrower, which default would have a
material adverse effect on the Borrower. Except as noted
herein, no approval, consent or authorization of, or filing
or registration with, any governmental commission, bureau
or other regulatory authority or agency is required with
respect to the execution, delivery or performance of any
Loan Document.
40.7 Title. The Borrower has good title to all
of the assets shown in its financial statements free and
clear of all Liens, except Permitted Liens. The Borrower
alone has full ownership rights in all Collateral.
40.8 Collateral. The security interests granted
to the Lender herein and pursuant to any other Security
Agreement (a) constitute and, as to subsequently acquired
property included in the Collateral covered by the Security
Agreement, will constitute, security interests under the
Code entitled to all of the rights, benefits and priorities
provided by the Code and (b) are, and as to such
subsequently acquired Collateral will be fully perfected,
superior and prior to the rights of all third persons, now
existing or hereafter arising, subject only to Permitted
Liens. All of the Collateral is intended for use solely in
the Borrower's business.
40.9 Location. The chief executive office of the
Borrower where the Borrower's business records are located
is the address designated for notices in Section 8.4
("Notices") and the Borrower has no other places of
business except as shown on Exhibit 2.9 (if any).
40.10 Taxes. The Borrower has filed all
federal and state income and other tax returns which, to
the best knowledge of the Borrower, are required to be
filed, and have paid all taxes as shown on said returns and
all taxes, including ad valorem taxes, shown on all
assessments received by it to the extent that such taxes
have become due. The Borrower is not subject to any
federal, state or local tax Liens, nor has the Borrower
received any notice of deficiency or other official notice
to pay any taxes. The Borrower has paid all sales and
excise taxes payable by it.
40.11 Withholding Taxes. The Borrower has
paid all withholding, FICA and other payments required by
federal, state or local governments with respect to any
wages paid to employees.
40.12 Labor Law Matters. No goods or
services have been or will be produced by the Borrower in
violation of any applicable labor laws or regulations or
any collective bargaining agreement or other labor
agreements or in violation of any minimum wage,
wage-and-hour or other similar laws or regulations.
40.13 Accounts. Each Account, instrument,
Chattel Paper and other writing constituting any portion of
the Collateral is (a) genuine and enforceable in accordance
with its terms except for such limits thereon arising from
bankruptcy and similar laws relating to creditors' rights;
(b) not subject to any defense, setoff, claim or
counterclaim of a material nature against the Borrower
except as to which the Borrower has notified the Lender in
writing; and (c) not subject to any other circumstances
that would impair the validity, enforceability or amount of
such Collateral except as to which the Borrower has
notified the Lender in writing.
40.14 Use and Location of Collateral. The
Collateral is located only, and shall at all times be kept
and maintained only, at the Borrower's location or
locations as described herein. No such Collateral is
attached or affixed to any real property so as to be
classified as a fixture unless the Lender has otherwise
agreed in writing.
40.15 Judgment Liens. The Borrower, nor any
of its assets, are subject to any unpaid judgments (whether
or not stayed) or any judgment liens in any jurisdiction.
40.16 Intent and Effect of Transactions.
This Agreement and the transactions contemplated herein
(a) are not made or incurred with intent to hinder, delay
or defraud any person to whom the Borrower has been, is
now, or may hereafter become indebted; (b) do not render
the Borrower insolvent nor is the Borrower insolvent on the
date of this Agreement; (c) do not leave the Borrower with
an unreasonably small capital with which to engage in its
business or in any business or transaction in which it
intends to engage; and (d) are not entered into with the
intent to incur, or with the belief that the Borrower would
incur, debts that would be beyond its ability to pay as
such debts mature.
40.17 Subsidiaries. The Borrower has no
Subsidiaries.
40.18 Hazardous Materials. The Borrower's
property and improvements thereon have not in the past been
used, are not presently being used, and will not in the
future be used for, nor does the Borrower engage in, the
handling, storage, manufacture, disposition, processing,
transportation, use or disposal of hazardous or toxic
materials.
40.19 ERISA. The Borrower does not have any
pension, profit-sharing or other benefit plan subject to
the Employee Retirement Income Security Act of 1974, as
amended ("ERISA").
41. The Loan
41.1 Line of Credit I. The Lender may in its
discretion lend to the Borrower a total principal amount
not to exceed the Maximum Loan Amount for working capital
to be used in the operation of the Borrower's business.
Line of Credit I shall be evidenced by and payable in
accordance with the terms of a promissory note ("Note I")
in the face amount of the Maximum Loan Amount for Line of
Credit I. Note I shall evidence the outstanding principal
balance of Line of Credit I, as it may change from time to
time. ADVANCES UNDER LINE OF CREDIT I ARE DISCRETIONARY
WITH THE LENDER AND THE PRINCIPAL BALANCE OF THE REVOLVING
LOAN, OR SO MUCH THEREOF AS MAY BE ADVANCED, SHALL BE
PAYABLE IN FULL ON DEMAND. Advances under Line of Credit I
shall be subject to the following terms:
(a) Advances of proceeds of Line of Credit
I shall be limited to the Maximum Loan Amount at any
time outstanding;
(b) All Advances by the Lender to or for
the account of the Borrower, whether or not in excess
of the Maximum Loan Amount, shall be considered part
of the indebtedness under Note I, shall bear interest
as provided in Note I, and shall be entitled to all
rights and benefits hereunder and under all other Loan
Documents; and
(c) The Borrower shall not request and the
Lender will not be required to consider requests for
Advances under Line of Credit I after the Conversion
Date; provided that the Lender may in its discretion
extend such date in writing and further provided that
the repayment obligations of the Borrower for Advances
made by the Lender after such date (as it may be
extended) shall be binding on the Borrower to the same
extent as obligations with respect to Advances made
prior to such date.
(d) As of the Conversion Date, the Lender
shall pay from an Advance under Line of Credit II
(which hereby is authorized without any notice to or
action by the Borrower) any amount due under Note I
that exceeds the Maximum Loan Amount for Line of
Credit I, and simultaneously with such payment the
interest rate and payment terms of Note I shall be
converted without any notice to or action by any
Person to Ten percent (10%) and payments based on a
term loan for ten (10) years with equal monthly
payments, and otherwise as set forth in Note I.
41.2 Line of Credit II. From and after the
Conversion Date, the Lender may in its discretion lend to
the Borrower a total principal amount not to exceed the
Maximum Loan Amount for working capital to be used in the
operation of the Borrower's business. Line of Credit II
shall be evidenced by and payable in accordance with the
terms of a promissory note ("Note II") in the face amount
of the Maximum Loan Amount for Line of Credit II. Note II
shall evidence the outstanding principal balance of Line of
Credit II, as it may change from time to time. ADVANCES
UNDER LINE OF CREDIT II ARE DISCRETIONARY WITH THE LENDER
AND THE PRINCIPAL BALANCE OF THE REVOLVING LOAN, OR SO MUCH
THEREOF AS MAY BE ADVANCED, SHALL BE PAYABLE IN FULL ON
DEMAND. Advances under Line of Credit II shall be subject
to the following terms:
(a) Advances of proceeds of Line of Credit
II shall be limited to the Maximum Loan Amount at any
time outstanding;
(b) All Advances by the Lender to or for
the account of the Borrower, whether or not in excess
of the Maximum Loan Amount, shall be considered part
of the indebtedness under Note II, shall bear interest
as provided in Note II, and shall be entitled to all
rights and benefits hereunder and under all other Loan
Documents; and
41.3 Limitations on Advances. The outstanding
balance of the Loan may increase and decrease from time to
time, and Advances thereunder may be repaid and reborrowed,
but the total of Advances outstanding at any one time under
the Loan shall never exceed the applicable Maximum Loan
Amount.
41.4 Notice and Manner of Borrowing. Unless
another satisfactory procedure for disbursements is agreed
upon in writing by the parties, the following procedure
will be used for disbursement of proceeds of the Loan. The
Borrower shall deliver a written and signed Advance Request
to the Lender not later than 12:00 noon, Jacksonville time,
on the second Business Day prior to the proposed Advance
Date, in the form attached hereto as Exhibit 3.3, setting
forth the amount of the requested Advance, and a
reconciliation from the previous Advance Request (or
monthly report), specifying the date (which shall be a
Business Day), and the amount of the proposed Advance of
proceeds, and providing such other information as the
Lender may require.
41.5 Calculation of Interest. All interest under
the Notes or hereunder shall be calculated on the basis of
a 360-day year for the actual number of days elapsed in an
interest period (actual/360 method), unless the Lender
shall otherwise elect.
41.6 Overdue Payments. Any payments not made as
and when due shall bear interest from the date due until
paid at the Default Rate.
41.7 Sales Tax. The Borrower shall notify the
Lender if any Account includes any sales or other similar
tax and the Lender may, but shall not be obligated to,
remit any such taxes directly to the taxing authority and
make Advances. In no event shall the Lender be liable for
any such taxes.
42. Conditions Precedent to Borrowing. Prior to any
Advance of the proceeds of any Loan, the following
conditions shall have been satisfied, in the sole opinion
of the Lender and its counsel:
42.1 Conditions Precedent to Initial Advance. In
addition to any other requirement set forth in this
Agreement, the Lender will not make the initial Advance
under Line of Credit I unless and until the following
conditions shall have been satisfied:
(a) Loan Documents. The Borrower and each
other party to any Loan Documents, as applicable,
shall have executed and delivered this Agreement, the
Notes, and other required Loan Documents, all in form
and substance satisfactory to the Lender.
(b) Supporting Documents. The Borrower
shall cause to be delivered to the Lender the
following documents:
(i) A copy of the governing
instruments of the Borrower and a good standing
certificate of the Borrower, certified by the
appropriate official of its state of
incorporation and the State of Florida, if
different;
(ii) Incumbency certificate and
certified resolutions of the board of directors
(or other appropriate Persons) of the Borrower
and each other Person executing any Loan
Documents authorizing the execution, delivery and
performance of the Loan Documents; and
(iii) UCC-11 searches and other Lien
searches showing no existing security interests
in or Liens on the Collateral other than the
security interests of the Lender and Permitted
Encumbrances.
(c) Insurance. The Borrower shall have
delivered to the Lender satisfactory evidence of
insurance meeting the requirements of Section 5.3
("Insurance").
(d) Perfection of Liens. UCC-l financing
statements and, if applicable, certificates of title
covering the Collateral executed by the Borrower shall
duly have been recorded or filed in the manner and
places required by law to establish, preserve, protect
and perfect the interests and rights created or
intended to be created by this Agreement and any other
Security Agreement; and all taxes, fees and other
charges in connection with the execution, delivery and
filing of this Agreement, the Security Agreement and
the financing statements shall duly have been paid.
(e) Subordinations. The Lender shall have
received subordinations satisfactory to it from all
lessors that might have landlord's Liens on any
Collateral.
(f) Additional Documents. The Borrower
shall have delivered to the Lender all additional
opinions, documents, certificates and other assurances
that the Lender or its counsel may require.
42.2 Conditions Precedent to Each Advance. The
following conditions, in addition to any other requirements
set forth in this Agreement, shall have been met or
performed by the Advance Date with respect to any Advance
Request:
(a) Advance Request. The Borrower shall
have delivered to the Lender an Advance Request and
other information, as required under in Section 3.3
("Notice and Manner of Borrowing").
(b) No Default. No default under this
Agreement and the Purchase Agreement shall have
occurred and be continuing or will occur upon the
making of the Advance in question and the Borrower
shall have delivered to the Lender an officer's
certificate to such effect, which may be incorporated
in the Advance Request.
(c) Correctness of Representations. All
representations and warranties made by the Borrower
herein or otherwise in writing in connection herewith
(including the Purchase Agreement) shall be true and
correct with the same effect as though the
representations and warranties had been made on and as
of the proposed Advance Date, and the Borrower shall
have delivered to the Lender an officer's certificate
to such effect, which may be incorporated in the
Advance Request.
(d) No Adverse Change. There shall have
been no material adverse change in the condition,
financial or otherwise, of the Borrower from such
condition as it existed on the date of the most recent
financial statements of the Borrower delivered prior
to date thereof.
(e) The litigation between Borrower and
Xxxxxx X. Xxxxxxx shall have been concluded to the
satisfaction of Lender and the settlement
proceeds from the litigation between Tokai
Bank and Borrower shall have been disbursed
in a manner satisfactory to Lender, in both
cases in Lender's sole discretion.
(f) Further Assurances. The Borrower shall
have delivered such further documentation or
assurances as the Lender may reasonably require.
4.3 Waiver and Application of Conditions. The
conditions to Lender's obligation contained in Sections 4.1
and 4.2 of this Agreement are for the sole benefit of
Lender and may be waived by Lender in whole or in part at
any time in Lender's sole discretion. No waiver of any
such condition shall be valid unless in writing. No waiver
of any condition shall operate as a waiver of any condition
other than as stated in the written waiver or as a waiver
of the same condition of any Advance other than as stated
in the written waiver. The conditions to Lender's
obligation contained in Sections 4.1 and 4.2 of this
Agreement, nevertheless, shall not apply to any Advance if
the failure of the condition is caused by any affirmative
action of Vector taken after the date of this Agreement.
43. Covenants of the Borrower. The Borrower
covenants and agrees that from the date hereof and until
payment in full of the Notes and the formal termination of
this Agreement, unless the Lender shall otherwise consent
in writing, the Borrower:
43.1 Use of Loan Proceeds. Shall use the
proceeds of the Loan only for working capital in the
operation of the business of the Borrower and shall furnish
the Lender all evidence that it may reasonably require with
respect to such use.
43.2 Maintenance of Business and Properties.
Shall at all times maintain, preserve and protect all
Collateral and all the remainder of its material property
used or useful in the conduct of its business, and keep the
same in good repair, working order and condition, and from
time to time make, or cause to be made, all material
needful and proper repairs, renewals, replacements,
betterments and improvements thereto so that the business
carried on in connection therewith may be conducted
properly and in accordance with standards generally
accepted in businesses of a similar type and size at all
times, and maintain and keep in full force and effect all
licenses and permits necessary to the proper conduct of its
business.
43.3 Insurance. Shall maintain such liability
insurance, workers' compensation insurance, business
interruption insurance and casualty (loss by fire and other
hazards included in the term "extended coverage") insurance
as may be required by law, customary and usual for prudent
businesses in its industry or as may be reasonably required
by the Lender and shall insure and keep insured all
Collateral and other properties in good and responsible
insurance companies satisfactory to the Lender. All hazard
insurance covering Collateral shall be in amounts and shall
contain co-insurance and deductible provisions approved by
the Lender, shall name and directly insure the Lender as
secured party and loss payee under a long-form New York
standard loss payee clause, or its equivalent, and shall
not be terminable except upon 30 days' written notice to
the Lender. The Lender is authorized, but not obligated,
to purchase any or all of such insurance or "single
interest insurance" protecting only its security interests,
if available, all at the Borrower's expense. In such
event, the Borrower agrees to reimburse the Lender for the
cost of such insurance to the extent that the same is not
included in the principal amount of the Notes. In the
event of any Default under this Agreement, Lender is
authorized in its sole discretion to cancel any insurance
and credit any premium refund against the unpaid balance
due on the Notes.
43.4 Notice of Default. Shall provide to the
Lender immediate notice of (a) the occurrence of a Default,
(b) any material litigation or material changes in existing
litigation or any judgment against it or its assets,
(c) any material damage or loss to property, (d) any notice
from taxing authorities as to claimed deficiencies or any
tax lien or any notice relating to alleged ERISA
violations, (e) any Reportable Event, as defined in ERISA,
(f) any rejection, return, offset, dispute, loss or other
circumstance having a material adverse effect on any
Collateral, and (g) any loss or threatened loss of material
licenses, permits or patents.
43.5 Inspections. Shall permit inspections of
the Collateral and the records of such Person pertaining
thereto, at such times and in such manner as may be
reasonably required by the Lender and shall further permit
such inspection, review and audits of its other records and
its properties (with such reasonable frequency and at such
reasonable times as the Lender may desire) by the Lender as
the Lender may deem necessary or desirable from time to
time. The cost of such audits, reviews and inspections
shall be borne by the Borrower.
43.6 Financial Information. Shall maintain books
and records in accordance with generally accepted
accounting principles and shall furnish to the Lender the
following periodic financial information:
(a) Annual Reports. Within 90 days after
the end of each fiscal year of the Borrower, a copy of
a Form 10-K as filed with the Securities and Exchange
Commission and in compliance with the rules and
regulations relating to such a filing, or a
consolidated and consolidating balance sheet and a
consolidated and consolidating statement of income
(loss), surplus (deficit) and cash flow, together with
supporting Schedules; all in reasonable detail and
prepared in conformity with generally accepted
accounting principles, applied on a basis consistent
with that of the preceding year; all examined by an
independent certified public accountant acceptable to
the Lender, showing the financial condition of the
Borrower and any Subsidiaries at the close of such
year and the results of operations of the Borrower and
any Subsidiaries during the year. The opinion of such
independent certified public accountant shall not be
acceptable to the Lender if qualified due to any
limitations in scope imposed by the Borrower or any
Subsidiaries. Any other qualification of the opinion
by the accountant shall render the acceptability of
the financial statements subject to Lender approval.
(b) Monthly Reports. Within 30 days after
the end of each calendar month similar financial
statements to those referred to in subparagraph (a)
above, unaudited but certified as to their correctness
by the chief operating officer or the principal
financial officer of the Borrower, all in reasonable
detail, prepared in accordance with generally accepted
accounting principals applied on a consistent basis
throughout the period involved and prior periods, such
balance sheets to be as of the end of such period and
such statements of income and surplus to be for the
period from beginning of the fiscal year to the end of
such period, and in each case subject to audit and
year-end adjustments.
(c) No Default Certificates. Together with
each report required by Subsection (a) and (b), shall
submit a certificate of its president or chief
financial officer that no Default or Event of Default
then exists or if a Default or Event of Default
exists, the nature and duration thereof and the
Borrower's intention with respect thereto, and in
addition, shall cause the Borrower's independent
auditors (if applicable) to submit to the Lender,
together with its audit report, a statement that, in
the course of such audit, it discovered no
circumstances which it believes would result in a
Default or Event of Default or if it discovered any
such circumstances, the nature and duration thereof.
(d) Additional Securities Filings. Within
the time period required for such filings, a copy of
any Form 10-Q, Form 8-K and any other document
required to be filed by Securities Exchange Act of
1934, as amended, and the rules and regulations of
the Securities and Exchange Commission, as filed with
the Securities and Exchange Commission and in
compliance with the rules and regulations relating to
such a filing.
(e) Additional Information. In addition to
the financial statements required in this Agreement,
the Lender reserves the right to require other or
additional financial or other information concerning
the Borrower and the Collateral.
43.7 Debt. Shall not create or permit to exist
any Debt, including any guaranties or other contingent
obligations, except Permitted Debt.
43.8 Liens. Shall not create, assume or permit
to exist any Liens on any of its property except Permitted
Exceptions.
43.9 Merger, Sale, Etc. Shall maintain its
corporate existence, good standing and necessary
qualifications to do business and shall not merge or
consolidate with any Person or acquire all or substantially
all of the assets of, or 50% or more of any class of equity
interest of, any Person or sell, lease, assign or otherwise
dispose of any Collateral or substantial portion of its
other assets (other than sales of obsolete or worn-out
equipment and sales of Inventory in the ordinary course of
business).
43.10 Loans and Other Investments. Shall not
make or permit to exist any advances or loans to, or
guarantee or become contingently liable, directly or
indirectly, in connection with the obligations, leases,
stock or dividends of, or own, purchase or make any
commitment to purchase any stock, bonds, notes, debentures
or other securities of, or any interest in, or make any
capital contributions to (all of which are sometimes
collectively referred to herein as "Investments") any
Person except for (a) purchases of direct obligations of
the United States government, (b) deposits in commercial
banks insured by the Federal Deposit Insurance Corporation,
(c) commercial paper of any U.S. corporation having the
highest ratings then given by Xxxxx'x Investors Service,
Inc. or Standard & Poor's Corporation, and (d) endorsement
of negotiable instruments for collection in the ordinary
course of business.
43.11 Change in Business. Shall not enter
into any business which is substantially different from the
business or businesses in which it is presently engaged.
43.12 Accounts. (a) shall not sell, assign
or discount any of its Accounts, Chattel Paper or any
promissory notes held by it other than the discount of such
notes in the ordinary course of business for collection;
and (b) shall notify the Lender promptly in writing with
any discount, offset or other deductions not shown on the
face of an Account invoice and any dispute over an Account,
and any information relating to an adverse change in any
Account Debtor's financial condition or ability to pay its
obligations.
43.13 No Change in Name, Offices; Removal of
Collateral. Shall not, unless it shall have given 60 days'
advance written notice thereof to the Lender, (a) change
its name or the location of its chief executive office or
other office where books or records are kept or (b) permit
any Inventory or other tangible Collateral to be located at
any location other than as specified in Section 2.9.
("Location").
43.14 No Sale, Leaseback. Shall not enter
into any sale-and-leaseback or similar transaction.
43.15 Payment of Taxes, Etc. Shall pay
before delinquent all of its debts and taxes except that
the Lender shall not unreasonably withhold its consent to
nonpayment of taxes being actively contested in accordance
with law (provided that the Lender may require bonding or
other assurances).
43.16 Compliance; Hazardous Materials. Shall
strictly comply with all laws, regulations, ordinances and
other legal requirements, specifically including, without
limitation, ERISA, all securities laws and all laws
relating to hazardous materials and the environment; and
unless approved in writing by the Lender, the Borrower
shall not engage in the storage, manufacture, disposition,
processing, handling, use or transportation of any
hazardous or toxic materials, whether or not in compliance
with applicable laws and regulations.
43.17 Subsidiaries. Shall not acquire, form
or dispose of any Subsidiaries or permit any Subsidiary to
issue capital stock except to its parent.
43.18 Withholding Taxes. Pay as and when due
all employee withholding, FICA and other payments required
by federal, state and local governments with respect to
wages paid to employees.
43.19 Further Assurances. Shall take such
further action and provide to the Lender such further
assurances as may be reasonably requested to ensure
compliance with the intent of this Agreement and the other
Loan Documents.
44. Default.
44.1 Events of Default. Each of the following
shall constitute an Event of Default under this Agreement
and be a default under both Note I and Note II:
(a) Any representation or warranty made by
the Borrower or any other party to any Loan Document
(other than the Lender) herein or therein or in any
certificate or report furnished in connection herewith
or therewith shall prove to have been untrue or
incorrect in any material respect when made and at
each Advance; or
(b) There shall occur any default by the
Borrower in the payment, when due, of any principal of
or interest on the Notes, any amounts due hereunder or
any other Loan Document or any other Indebtedness (not
cured within any grace period provided in such Note or
in the document or instrument evidencing such
Indebtedness); or
(c) There shall occur any default by the
Borrower or any other party to any Loan Document
(other than the Lender) in the performance of any
agreement, covenant or obligation contained in this
Agreement or such Loan Document not provided for
elsewhere in this Article 6 and such default is not
cured within any grace period provided in this
Agreement or such other Loan Document; or
(d) Any other obligation now or hereafter
owed by the Borrower to the Lender shall be in default
and not cured within any period of grace provided
therein or the Borrower shall be in default under any
obligation in excess of $10,000 owed to any other
obligee, which default entitles the obligee to
accelerate any such obligations or exercise other
remedies with respect thereto; or
(e) The Borrower shall (i) voluntarily
liquidate or terminate operations or apply for or
consent to the appointment of, or the taking of
possession by, a receiver, custodian, trustee or
liquidator of the Borrower or of all or of a
substantial part of its assets, (ii) admit in writing
its inability, or be generally unable, to pay its
debts as the debts become due, (iii) make a general
assignment for the benefit of its creditors,
(iv) commence a voluntary case under the federal
Bankruptcy Code (as now or hereafter in effect), (v)
file a petition seeking to take advantage of any other
law relating to bankruptcy, insolvency,
reorganization, winding-up, or composition or
adjustment of debts, (vi) fail to controvert in a
timely and appropriate manner, or acquiesce in writing
to, any petition filed against it in an involuntary
case under the Bankruptcy Code, or (vii) take any
corporate action for the purpose of effecting any of
the foregoing; or
(f) Without its application, approval or
consent, a proceeding shall be commenced, in any court
of competent jurisdiction, seeking in respect of
Borrower any remedy under the federal Bankruptcy Code,
the liquidation, reorganization,
dissolution, winding-up, or composition or readjustment of
debt, the appointment of a trustee, receiver, liquidator or
the like of the Borrower, or of all or any substantial part
of the assets of the Borrower, or other like relief under
any law relating to bankruptcy, insolvency, reorganization,
winding-up, or composition or adjustment of debts; or
(g) Any security interest or Lien of the
Lender hereunder or under any other Security Agreement
shall not constitute a perfected security interest of
first priority in the Collateral thereby encumbered,
subject only to Permitted Liens; or
(h) There shall occur any material loss,
theft, damage or destruction of any of the Collateral,
which loss is not fully insured; or
(i) A judgment in excess of $10,000 shall
be rendered against the Borrower and shall remain
undischarged, undismissed and unstayed for more than
ten days (except judgments validly covered by
insurance with a deductible of not more than $10,000)
or there shall occur any levy upon, or attachment,
garnishment or other seizure of, any material portion
of the assets of the Borrower by reason of the issu-
ance of any tax levy, judicial attachment or
garnishment or levy of execution or upon entry of a
tax lien involving Borrower; and
(j) If at any time all of the members of
the Board of Directors of the Borrower shall not be
persons acceptable to the Lender, which acceptance has
been evidenced in writing.
THE FOREGOING ENUMERATION OF EVENTS OF DEFAULT
NOTWITHSTANDING, NOTHING HEREIN SHALL BE DEEMED TO LIMIT,
RESTRICT, IMPAIR OR DIMINISH THE ABSOLUTE RIGHT OF THE
LENDER TO DEMAND PAYMENT OF THE LOAN IN FULL, AT ANY TIME,
WITHOUT CAUSE.
44.2 Remedies. If any Default shall occur, the
Lender may, without notice to the Borrower, at its option,
withhold further Advances to the Borrower of proceeds of
the Loan. Should (a) any Event of Default under Section
6.1(g) occur and not be cured within thirty (30) days
following delivery of written notice thereof by the Lender
to the Borrower (which notice shall be complete upon hand
or overnight delivery or upon facsimile delivery or mailing
by certified mail, return receipt requested) or (b) any
other Event of Default occur, the Lender may declare any or
all Indebtedness to be immediately due and payable (if not
earlier demanded), bring suit against the Borrower to
collect the Indebtedness, exercise any remedy available to
the Lender hereunder and take any action or exercise any
remedy provided herein or in any other Loan Document or
under applicable law, without demand or any notice or other
action by Lender, all of which hereby are expressly waived.
No remedy shall be exclusive of other remedies or impair
the right of the Lender to exercise any other remedies.
45. Security Agreement.
45.1 Security Interest.
(a) As security for the payment and
performance of any and all of the Indebtedness and the
performance of all other obligations and covenants of
the Borrower hereunder and under the other Loan
Documents, certain or contingent, now existing or
hereafter arising, which are now, or may at any time
or times hereafter be owing by the Borrower to the
Lender, the Borrower hereby pledges to the Lender and
gives the Lender a continuing security interest in and
general Lien upon and right of set-off against, all
right, title and interest of the Borrower in and to
the Collateral, whether now owned or hereafter
acquired by the Borrower, wherever located. As
further assurance for the payment and performance of
the Indebtedness, Borrower hereby assigns to Lender
all sums, including returned or unearned premiums,
which may become payable under any policy of insurance
on the Collateral, and Borrower hereby directs each
insurance company issuing any such policy to make
payment of such sums directly to Lender, subject to
prior interests noted in this Agreement.
(b) Except as herein or by applicable law
otherwise expressly provided, the Lender shall not be
obligated to exercise any degree of care in connection
with any Collateral in its possession, to take any
steps necessary to preserve any rights in any of the
Collateral or to preserve any rights therein against
prior parties, and the Borrower agrees to take such
steps. In any case the Lender shall be deemed to have
exercised reasonable care if it shall have taken such
steps for the care and preservation of the Collateral
or rights therein as the Borrower may have reasonably
requested the Lender to take and the Lender's omission
to take any action not requested by the Borrower shall
not be deemed a failure to exercise reasonable care.
No segregation or specific allocation by the Lender of
specified items of Collateral against any liability of
the Borrower shall waive or affect any security
interest in or Lien against other items of Collateral
or any of the Lender's options, powers or rights under
this Agreement or otherwise arising.
(c) The Lender may at any time and from
time to time, with or without notice to the Borrower,
(i) transfer into the name of the Lender or the name
of the Lender's nominee any of the Collateral, (ii)
notify any Account Debtor or other obligor of any
Collateral to make payment thereon direct to the
Lender of any amounts due or to become due thereon and
(iii) receive and after a default direct the
disposition of any proceeds of any Collateral.
45.2 Remedies.
(a) If an Event of Default shall have
occurred and be continuing, without waiving any of its
other rights hereunder or under any other Loan
Documents, the Lender shall have all rights and
remedies of a secured party under the Code (and the
Uniform Commercial Code of any other applicable
jurisdiction) and such other rights and remedies as
may be available hereunder, under other applicable law
or pursuant to contract. If requested by the Lender,
the Borrower will promptly assemble the Collateral and
make it available to the Lender at a place to be
designated by the Lender. The Borrower agrees that
any notice by the Lender of the sale or disposition of
the Collateral or any other intended action hereunder,
whether required by the Code or otherwise, shall
constitute reasonable notice to the Borrower if the
notice is mailed to the Borrower by regular or
certified mail, postage prepaid, at least five days
before the action to be taken. The Borrower shall be
liable for any deficiencies in the event the proceeds
of the disposition of the Collateral do not satisfy
the Indebtedness in full.
(b) If an Event of Default shall have
occurred and be continuing, the Lender may demand,
collect and xxx for all amounts owed pursuant to
Accounts, General Intangibles, Chattel paper or for
proceeds of any Collateral (either in the Borrower's
name or the Lender's name at the latter's option),
with the right to enforce, compromise, settle or
discharge any such amounts. The Borrower appoints the
Lender as the Borrower's attorney-in-fact to endorse
the Borrower's name on all checks, commercial paper
and other instruments pertaining to Collateral or
proceeds.
(c) The Borrower specifically authorizes
the Lender, without limiting any other rights of the
Lender, to apply the proceeds realized from
disposition of the Collateral to satisfy the following
items, in the order here listed:
(1) The cost of reimbursing any person whose
interest in the premises is physically damaged by
the entry and removal of the Collateral, upon
Borrower'S failure to do so; next to
(2) The expenses of taking, removing, holding
for sale, repairing or otherwise preparing for sale
and selling of said Collateral, specifically
including the Lender'S reasonable attorney's fees
(including appellate costs, if any) and both legal
and collection expenses; next to
(3) The expense of liquidating any liens,
security interests, attachments or encumbrances
superior to the security interests herein created;
and, finally to
(4) The unpaid principal and all accumulated
interest hereunder and to any other debt owed to
Lender by any signer hereof.
Any surplus, after the satisfaction of the
foregoing items (1) through (4) shall be paid to
Borrower or to any other party lawfully entitled
thereto and known to the Lender. Further, if
proceeds realized from disposition of the
Collateral shall fail to satisfy any of the
foregoing items (1) through (4), Borrower shall
forthwith pay deficiency balance to Lender.
45.3 Power of Attorney. The Borrower authorizes the
Lender at the Borrower's expense to file any financing
statements relating to the Collateral (without the
Borrower's signature thereon) which the Lender deems
appropriate and the Borrower irrevocably appoints the
Lender as its attorney-in-fact to execute any such
financing statements in the Borrower's name and to perform
all other acts which the Lender deems appropriate to
perfect and to continue perfection of the security interest
of the Lender. The Borrower hereby appoints the Lender as
the Borrower's attorney-in-fact to endorse, present and
collect on behalf of the Borrower and in the Borrower's
name any draft, checks or other documents necessary or
desirable to collect any amounts which the Borrower may be
owed. Borrower further hereby irrevocably appoints the
Lender as its attorney-in-fact, which power of attorney
shall be irrevocable for so long as any amount is unpaid
under either Note, to give Lender the sole right to file
Proof of Loss and/or any other forms required to collect
from any insurer any amount due from any loss, damage or
destruction of the Collateral; to agree to and bind
Borrower as to the amount of said recovery; to designate
payee(s) of such recovery; to grant releases to payor-insurers
for their liability; to grant subrogation rights
to any such payor-insurer, to endorse any settlement check
or draft. Borrower further agrees not to exercise any of
the foregoing powers granted to Lender without the Lender's
prior written consent.
45.4 Entry. The Borrower hereby irrevocably consents
to any act by the Lender or its agents in entering upon any
premises for the purposes of either (i) inspecting the
Collateral or (ii) taking possession of the Collateral; and
the Borrower hereby waives its right to assert against the
Lender or its agents any claim based upon trespass or any
similar cause of action for entering upon any premises
where the Collateral may be located.
7.5. Deposits; Insurance. Upon the occurrence and
continuance of an Event of Default, the Borrower authorizes
the Lender to collect and apply against the Indebtedness
when due any cash or deposit accounts in its possession,
and any refund of insurance premiums or any insurance
proceeds payable on account of the loss or damage to any of
the Collateral and irrevocably appoints the Lender as its
attorney-in-fact to endorse any check or draft or take
other action necessary to obtain such funds.
7.6. Other Rights. The Borrower authorizes the Lender
without affecting the Borrower's obligations hereunder or
under any other Loan Document from time to time (i) to take
from any party and hold additional Collateral or guaranties
for the payment of the Indebtedness or any part thereof,
and to exchange, enforce or release such collateral or
guaranty of payment of the Indebtedness or any part thereof
and to release or substitute any endorser or guarantor or
any party who has given any security interest in any
collateral as security for the payment of the Indebtedness
or any part thereof or any party in any way obligated to
pay the Indebtedness or any part thereof; (ii) upon the
occurrence of any Event of Default to direct the manner of
the disposition of the Collateral and the enforcement of
any endorsements, guaranties, letters of credit or other
security relating to the Indebtedness or any part thereof
as the Lender in its sole discretion may determine; (iii)
upon the occurrence of any Event of Default to take
immediate possession of the Collateral without notice or
resort to legal process, and for such purpose, to enter
upon any premises on which the Collateral or any part
thereof may be situated and remove the same therefrom, or,
at its option, to render the Collateral unusable;(iv) upon
the occurrence of any Event of Default, at Lender's option,
to dispose of said Collateral on Borrower's premises; and
(v) to make or have made any repairs deemed necessary or
desirable at time of repossession, possession or sale, the
cost of which is to be charged against the Borrower.
7.7. Accounts. Before or after any Event of Default,
the Lender may notify any Account Debtor of the Lender's
security interest and may direct such Account Debtor to
make payment directly to the Lender for application against
the Indebtedness. Any such payments received by or on
behalf of the Borrower at any time, whether before or after
default, shall be the property of the Lender, shall be held
in trust for the Lender and not commingled with any other
assets of any Person (except to the extent they may be
commingled with other assets of the Borrower in an account
with the Lender) and shall be immediately delivered to the
Lender in the form received. The Lender shall have the
right to apply any proceeds of Collateral to such of the
Indebtedness as it may determine.
7.8. Tangible Collateral. Except as otherwise
provided herein or agreed to in writing by the Lender, no
Inventory or other tangible collateral shall be commingled
with, or become an accession to or part of, any property of
any other Person so long as such property is Collateral.
Upon the occurrence of any Event of Default, the Borrower
shall, upon the request of the Lender, promptly assemble
all tangible Collateral for delivery to the Lender or its
agents. No tangible Collateral shall be allowed to become
a fixture unless the Lender shall have given its prior
written authorization.
7.9. Waiver of Marshalling. The Borrower hereby
waives any right it may have to require marshaling of its
assets.
7.10. Waiver of Automatic Stay. The Borrower hereby
waives the application of the automatic stay of enforcement
provided in Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx Bankruptcy
Code and agrees that the Lender may proceed with
enforcement and collection notwithstanding the filing of a
petition in bankruptcy.
8. Miscellaneous.
8.1. No Waiver, Remedies Cumulative. No failure on
the part of the Lender to exercise, and no delay in
exercising, any right hereunder or under any other Loan
Document shall operate as a waiver thereof, nor shall any
single or partial exercise of any right hereunder preclude
any other or further exercise thereof or the exercise of
any other right. The remedies herein provided are
cumulative and are in addition to any other remedies
provided by law, any Loan Document or otherwise, and may be
pursued singly, successively or together, in the sole
discretion of Lender, and may be exercised as often as
occasion therefor shall arise.
8.2. Survival of Representations. All representations
and warranties made herein shall survive the making of the
Loans hereunder and the delivery of the Notes, and shall
continue in full force and effect so long as any balance of
either Note is outstanding, there exists any commitment by
the Lender to the Borrower, and until this Agreement is
formally terminated in writing.
8.3. Expenses. Whether or not the Loan herein
provided for shall be made, the Borrower shall pay all
reasonable costs and expenses in connection with the
preparation, execution, delivery, amendment and enforcement
of this Agreement and any Loan Document, including the
reasonable fees and disbursements of counsel for the Lender
in connection therewith, whether suit be brought or not and
whether incurred at trial or on appeal, and all costs of
repossession, storage, disposition, protection and
collection of Collateral. If the Borrower should fail to
pay any tax or other amount required by this Agreement to
be paid or which may be reasonably necessary to protect or
preserve any Collateral or the Borrower's or Lender's
interests therein, the Lender may make such payment and the
amount thereof shall be payable on demand, shall bear
interest at the Default Rate from the date of demand until
paid and shall be deemed to be Indebtedness entitled to the
benefit and security of the Loan Documents.
In addition, the Borrower agrees to pay and save the
Lender harmless against any liability for payment of any
state documentary stamp taxes, intangible taxes or similar
taxes (including interest or penalties, if any) which may
now or hereafter be determined to be payable in respect to
the execution, delivery or recording of any Loan Document
or the making of any Advance, whether originally thought to
be due or not, and regardless of any mistake of fact or law
on the part of the Lender or the Borrower with respect to
the applicability of such tax. The provisions of this
Section shall survive payment in full of the Loan and
termination of this Agreement.
8.4. Notices. Any notice or other communication
hereunder to any party hereto shall be by hand delivery,
overnight delivery, facsimile, telegram, telex or
registered or certified mail and unless otherwise provided
herein shall be deemed to have been given or made when
delivered, telegraphed, telexed, faxed or deposited in the
mails, postage prepaid, addressed to the party at its
address specified below (or at any other address that the
party may hereafter specify to the other parties in
writing):
The Lender: Tradelink International Limited
0000 Xxxx Xxxxxx
Xxxxx Xxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxx Xxxxxxx
With copy to: Xxxxxxxx & Xxxxx
One Independent Drive, Suite 3131
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx, Xx.
The Borrower: Vector Aeromotive Corporation
000 Xxxxxx Xxxxxx
Xxxxx Xxxx Xxxxxxx, Xxxxxxx
Attention: Treasurer
8.5. Governing Law. This Agreement and the Loan
Documents shall be deemed contracts made under the laws of
the State of Florida and shall be governed by and construed
in accordance with the laws of Florida except insofar as
the laws of another jurisdiction may govern the perfection,
priority and enforcement of security interests in
Collateral located in another jurisdiction.
8.6. Successors and Assigns. This Agreement shall be
binding upon and shall inure to the benefit of the Borrower
and the Lender, and their respective successors and
assigns; provided, that the Borrower may not assign any of
its rights hereunder without the prior written consent of
the Lender, and any such assignment made without such
consent will be void.
8.7. Counterparts. This Agreement may be executed in
any number of counterparts and by different parties hereto
in separate counterparts, each of which when so executed
and delivered shall be deemed an original and all of which
when taken together shall constitute but one and the same
instrument.
8.8. No Usury. Notwithstanding anything contained in
this Agreement, the Notes, or in any other Loan Document to
the contrary, in no event will interest or other charges
deemed to be interest be chargeable against the Borrower if
such amount (combined with any other amounts considered to
be in the nature of interest) would exceed the maximum
amount permitted by law from time to time while any of the
Notes is outstanding, and in the event any amount in excess
of the lawful maximum is charged or collected by the Lender
or paid by the Borrower, the Borrower shall be entitled to
the reimbursement of such excess together with interest
thereon at the highest lawful rate at the time of such
overcharge.
8.9. Powers. All powers of attorney granted to the
Lender are coupled with an interest and are irrevocable.
8.10. Approvals. If this Agreement calls for the
approval or consent of the Lender, such approval or consent
may be given or withheld in the sole discretion of the
Lender unless otherwise specified herein.
8.11. Jurisdiction, Service of Process.
(a) Any suit, action or proceeding against the
Borrower with respect to this Agreement, the Collateral
or any Loan Document or any judgment entered by any
court in respect thereof may be brought in the courts of
Clay County, Florida or in the U.S. District court for
the Middle District of Florida as the Lender (in its
sole discretion) may elect, and the Borrower hereby
accepts the nonexclusive jurisdiction of those courts
for the purpose of any suit, action or proceeding.
Service of process in any such case may be had against
the Borrower by delivery in accordance with the notice
provisions herein or as otherwise permitted by law, and
the Borrower agrees that such service shall be valid in
all respects for establishing personal jurisdiction over
it.
(b) In addition, the Borrower hereby irrevocably
waives, to the fullest extent permitted by law, any
objection which it may now or hereafter have to the
laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement, the Loan
Documents, the Collateral or any judgment entered by any
court in respect thereof brought in Clay County, Florida
or the U.S. District Court for the Middle District of
Florida, as selected by the Lender, and hereby further
irrevocably waives any claim that any suit, action or
proceedings brought in Clay County, Florida or in such
District Court has been brought in an inconvenient
forum.
8.12. Multiple Borrowers. If more than one Person is
named herein as the Borrower, all obligations,
representations and covenants herein and in other Loan
Documents to which the Borrower is a party shall be joint
and several.
8.13. Waiver of Jury Trial. THE BORROWER AND THE
LENDER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVE THE RIGHT EITHER OF THEM MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED UPON THIS AGREEMENT OR
ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT
AND ANY OTHER LOAN DOCUMENT AND ANY OTHER AGREEMENT
CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY. THIS PROVISION
IS A MATERIAL INDUCEMENT FOR THE PARTIES ENTERING INTO THIS
AGREEMENT.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first
above written.
TRADELINK INTERNATIONAL LIMITED
By: /s/ X. X. Xxxxxxx
Its President
VECTOR AEROMOTIVE CORPORATION
By: /s/ Xxxxx Xxxxx Xxxx
Its President
SCHEDULE OF EXHIBITS
(If any exhibit is omitted, the information called for
therein
shall be considered "None" or "Not Applicable")
Exhibit Section Reference Title
1.1C 1.1 ("Permitted Debt") Permitted Debt
1.1D 1.1 ("Permitted Liens") Permitted
Liens
2.3 2.3 ("Financial Condition") Contingent
Liabilities
2.4 2.4 ("Litigation") Litigation
2.9 2.9 ("Location") Offices of
Borrower
3.3 3.3 ("Notice & Manner of Borrowing") Form of
Advance
Request
EXHIBIT 1.1C
Permitted Debt
The following shall be additional Permitted Debt:
1. Any Debt approved by the Board of Directors of
Vector after the date of this Agreement.
EXHIBIT 1.1D
Permitted Liens
The following shall be additional Permitted Liens:
1. Deposits made in the ordinary course of business
in connection with workers' compensation, unemployment
insurance, social security and similar laws.
2. Attachment, judgment and other similar non-tax
Liens arising in connection with court proceedings but only
if and for so long as (a) the execution or enforcement of
such Liens is and continues to be effectively stayed and
bonded on appeal, (b) the validity and/or amount of the
claims secured thereby are being actively contested in good
faith by appropriate legal proceedings and (c) such Liens
do not, in the aggregate, materially detract from the value
of the assets of the Person whose assets are subject to
such Lien or materially impair the use thereof in the
operation of such Person's business.
3. Liens securing Permitted Debt incurred solely for
the purpose of financing the acquisition of equipment,
provided that such Lien does not secure more than the
purchase price of such equipment and does not encumber
property other than the purchased property.
EXHIBIT 2.3
CONTINGENT LIABILITIES
The following are contingent liabilities of the
Borrower:
[Describe listing liable party, maximum potential
liability, nature of liability and its current status]
EXHIBIT 2.4
LITIGATION
Describe any suit or proceeding pending or threatened
:
[Describe any suit or proceeding pending or threatened
before any court, governmental or regulatory authority,
commission, Bureau or agency or public regulatory body.]
EXHIBIT 2.9
OFFICES OF BORROWER
List any offices of Borrower not listed in Section 8.4.
NAME LOCATION TYPE OF
FACILITY
N/A 000 Xxxxxx Xxxxxx production
plant
Green Cove Springs
Florida
EXHIBIT 3.3
FORM OF ADVANCE REQUEST
Borrower Name: VECTOR AEROMOTIVE CORPORATION
Maximum Loan Amount: ___ $1,250,000 or ___ $2,500,000
Previous Advances (aggregate): $______________
Repayments (aggregate): $________________
Amount of Loan remaining: $_______________
Amount requested: $________________
Advance Date: ________________, 199__
All representations and warranties made by Borrower in the
Agreement or otherwise in writing in connection with the
Agreement are true and correct as of the date hereof.
There has not been a material adverse change in the
condition, financial or otherwise, of the Borrower from the
condition as it existed on the date of the most recent
financial statements of Borrower delivered to the Lender.
The undersigned hereby certifies, represents and warrants
that there has not occurred an event of Default under the
Agreement or any other Loan Document and no event has
occurred that with the passage of time or the giving of
notice will constitute an Event of Default and the making
of the Advance requested hereby will not cause an Event or
Default or such an event.
___________________________(SEAL)
PROMISSORY NOTE
$1,250,000 July 22, 1997
(Date of Execution and Delivery)
LENDER: TRADELINK INTERNATIONAL LIMITED (hereinafter
termed "LENDER"), 0000 Xxxx Xxxxxx, Xxxxx Xxxxxx,
Xxxxxxxxxx 00000-0000
BORROWER(S): VECTOR AEROMOTIVE CORPORATION, a Nevada
corporation, 000 Xxxxxx Xxxxxx, Xxxxx Xxxx Xxxxxxx, Xxxxxxx
00000
BORROWER(S) REPRESENT HEREWITH THAT THE LOAN EVIDENCED IS
BEING OBTAINED PRIMARILY FOR BUSINESS PURPOSES.
FOR VALUE RECEIVED: to wit, money loaned, the above-named;
undersigned BORROWER(s) (hereinafter collectively
termed "BORROWER"), jointly and severally (if more than one
BORROWER), promise(s) to pay to the order of LENDER at its
office in the above city, or wherever else LENDER may
specify, the sum of ONE MILLION TWO HUNDRED FIFTY THOUSAND
DOLLARS ($1,250,000), with interest paid as follows. From
the date of the first advance under this Note until the
date that is the day immediately after the fifth
consecutive day that the principal balance outstanding
under this Note is $1,250,000 (the "Conversion Date"),
interest shall accrue and be paid at the annual rate of
LENDER'S PRIME RATE plus 2.0% as that rate may change from
time to time with changes to occur on the date the LENDER'S
PRIME RATE changes. From and after the Conversion Date,
interest shall accrue and be paid at the annual rate of ten
percent (10.0%) .
The Borrower shall pay interest and principal under this
Note as follows. Until the Conversion Date, interest shall
be payable monthly in arrears commencing on the day that
is thirty (30) days after the date of this Note and
continuing on the same day of each consecutive month
thereafter, and all principal outstanding and accrued and
unpaid interest shall be payable in full ON DEMAND. From
and after the Conversion Date, this Note shall be payable
in consecutive monthly payments of $16,518.84, commencing
on the day that is thirty (30) days after the Conversion
Date and continuing on the same day of each consecutive
month thereafter until the date that is one hundred twenty
(120) months after the Conversion Date, at which time (the
"Maturity Date") all principal outstanding and accrued and
unpaid interest shall be payable in full.
The undersigned agrees to pay a late charge equal to 5%
of each payment of principal and/or interest which is not
paid within 10 days of the date on which it is due. At
LENDER'S option, the rate of interest charged shall become
a rate equal to the lesser of (a) five (5) percentage
points above the rate on the Note otherwise in effect, or
(b) the highest rate allowed by the law of the State of
Florida, commencing with and continuing for so long as this
Note is in Default (as hereinafter defined). Further, upon
BORROWER'S Default and where LENDER deems it necessary or
proper to employ an attorney to enforce collection of any
unpaid balance or to otherwise protect its interests
hereunder, then BORROWER agrees to pay to the LENDER
reasonable attorney's and legal fees for the services and
expenses of counsel, paralegals and others employed after
maturity or default to collect this Note, whether or not
suit be brought, and whether incurred in connection with
collection, trial, appeal, bankruptcy proceedings or
otherwise, and to indemnify and to hold the LENDER
harmless against liability for the payment of state
documentary stamp taxes, intangible taxes and other taxes
(including interest and penalties, if any) which may be
determined to be payable with respect to this transaction.
If the interest provision contained herein refers to
"LENDER'S PRIME RATE," the LENDER'S PRIME RATE shall be the
prime rate as published in the Wall Street Journal ("WSJ")
as of the date of this Note ("WSJ Prime Rate"). The
interest rate will change from time to time as the WSJ
Prime Rate changes in an amount equal to the change in the
WSJ Prime Rate, but will not change more often than once a
month which will occur on the first day of each calendar
month and will be based on the prime rate published in the
WSJ on the 25th of the prior calendar month. If more than
one rate is published, the highest rate published shall
apply; and if the 25th or the date of closing falls on a
day when the WSJ Prime Rate is not published, the WSJ Prime
Rate shall be the rate published on the last day prior to
the 25th or the date of closing. The BORROWER understands
and agrees that the WSJ Prime Rate is not represented or
intended to be the lowest or most favorable rate offered by
LENDER to any of its borrowers.
If the scheduled payment amount is insufficient to pay
accrued interest, BORROWER shall make an additional payment
of the amount of the accrued interest in excess of the
scheduled payment.
PAYMENT of this Note, all obligations of the undersigned
BORROWER hereunder and under the Security Agreement defined
below ("OBLIGATIONS") to LENDER, its successors and
assigns, is secured, inter alia (and includes the terms and
obligations set forth therein), by a valid, subsisting Loan
and Security Agreement made by and between BORROWER and
LENDER (the "Loan Agreement") describing certain personal
property (the "COLLATERAL"), and by this reference is
incorporated herein.
If an Event of Default under this Note occurs or if the
BORROWER violates any of the terms or breaches any of the
conditions of the Loan Agreement, the entire principal sum
and accrued interest shall become due and payable without
notice unless otherwise provided in the Loan Agreement at
the option of the LENDER. TIME BEING OF THE ESSENCE OF
THIS NOTE. Failure to exercise this option shall not
constitute a waiver of the right to exercise the same at
any other time. Upon such Default, the principal of the
Note and any part thereof, and accrued unpaid interest, if
any, shall bear interest at the rate of the then highest
legal rate permissible by law. All parties liable for the
payment of this Note agree to pay the LENDER hereof
reasonable attorneys' fees for the services and expenses of
counsel employed after maturity or Default to collect this
Note (including any appeals relating to such enforcement
proceedings), or to protect or enforce the security hereto,
whether or not suit be brought. Notwithstanding any other
provisions of this Note, LENDER may, in the sole discretion
of LENDER, accept payments under this Note made by BORROWER
after any Default has occurred, without waiving any of
LENDER'S rights or remedies under this Note.
The remedies of LENDER as provided herein and in the
Loan Agreement shall be cumulative and concurrent, and may
be pursued singly, successively or together, at the sole
discretion of LENDER, and may be exercised as often as
occasion therefor shall arise. No act of omission or
commission of LENDER, including specifically any failure to
exercise any right, remedy or recourse, shall be effective
as a waiver thereof unless it is set forth in a written
document executed by LENDER and then only to the extent
specifically recited therein. A waiver or release with
reference to one event shall not be construed as
continuing, as a bar to, or as a waiver or release of, any
subsequent right, remedy or recourse as to any subsequent
event.
BORROWER and all sureties, endorsers and guarantors of
this Note, jointly and severally, hereby (a) waive demand,
presentment for payment, notice of nonpayment, protest,
notice of protest, notice of dishonor, notice of
acceleration after Default and all other notices, filing of
suit and diligence in collecting this Note, in enforcing
any of the security rights or in proceeding against the
COLLATERAL; (b) agree to any substitution, exchange,
addition or release of any of the COLLATERAL or the
addition or release of any party or person primarily or
secondarily liable hereon; (c) agree that LENDER shall not
be required first to institute any suit, or to exhaust his,
their or its remedies against BORROWER or any other person
or party to become liable hereunder or against the
COLLATERAL in order to enforce payment of this Note; (d)
consent to any extension, rearrangement, renewal or
postponement of time of payment of this Note and to any
other indulgence with respect hereto without notice,
consent or consideration to any of the foregoing (except
the express written release by LENDER of any such person),
they shall be and remain jointly and severally, directly
and primarily, liable for all sums due under this Note and
the Loan Agreement.
As used herein, the words "BORROWER" and "LENDER" shall
be deemed to include BORROWER and LENDER as defined herein
and their respective heirs, personal representatives,
successors and assigns.
This Note is executed and delivered at the Place of
Execution and shall be construed and enforced in accordance
with the laws of the State of Florida.
Anything contained herein to the contrary
notwithstanding, if for any reason the effective rate of
interest on this Note should exceed the maximum lawful
rate, the effective rate shall be deemed reduced to and
shall be such maximum lawful rate, and any sums of interest
which have been collected in excess of such maximum lawful
rate shall be applied as a credit against the unpaid
balance due hereunder and thereafter delivered to BORROWER.
Under no circumstances shall BORROWER, or any parties
liable for the payment of this Note, be required to pay
interest in excess of the maximum rate allowed by
applicable law.
Interest is computed on the basis of a 360-day year for
the actual number of days in the interest period
(Actual/360 Computation) unless indicated below. LENDER'S
Actual/360 or 365/360 computation determines the annual
effective interest yield by taking the stated (nominal)
interest rate for a year's period and then dividing said
rate by 360 to determine the daily periodic rate to be
applied for each day in the interest period. Application
of such computation produces an annualized effective
interest rate exceeding that of the nominal rate.
At LENDER'S option, any repayments of this Note, other
than by U.S. currency, will not be credited to the
outstanding loan balance until LENDER receives collected
funds.
In the event any provision(s) of this instrument shall
be left blank or incomplete, BORROWER hereby authorizes and
empowers LENDER to supply and complete the necessary
information as a ministerial task consistent with the
understanding between the parties.
Upon any transfer of this Note, the LENDER may deliver
the property held as security, or any part thereof, to the
transferee, as well as any subsequent holder hereof, who
shall thereupon become vested with all the powers and
rights herein given to the LENDER in respect to the
property so transferred and delivered; and the LENDER shall
thereafter be forever relieved and fully discharged from
any liability or responsibility with respect to such
property so transferred but with respect to any property
not so transferred, the LENDER shall retain all rights and
powers hereby given.
WAIVER OF JURY TRIAL. BY THE EXECUTION HEREOF, BORROWER
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY AGREES,
THAT:
(A) NEITHER THE BORROWER NOR ANY ASSIGNEE, SUCCESSOR,
HEIR, OR LEGAL REPRESENTATION OF ANY OF THE SAME SHALL SEEK
A JURY TRIAL IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM, OR
ANY OTHER LITIGATION PROCEDURE ARISING FROM OR BASED UPON
THIS PROMISSORY NOTE, ANY OTHER LOAN AGREEMENT OR ANY LOAN
DOCUMENT EVIDENCING, SECURING OR RELATING TO THE
OBLIGATIONS OR TO THE DEALINGS OR RELATIONSHIP BETWEEN OR
AMONG THE PARTIES THERETO;
(B) NEITHER THE BORROWER NOR LENDER WILL SEEK TO
CONSOLIDATE ANY SUCH ACTION, IN WHICH A JURY TRIAL HAS BEEN
WAIVED, WITH ANY OTHER ACTION IN WHICH A JURY TRIAL HAS NOT
BEEN OR CANNOT BE WAIVED;
(C) THE PROVISIONS OF THIS PARAGRAPH HAVE BEEN FULLY
NEGOTIATED BY THE PARTIES HERETO, AND THESE PROVISIONS
SHALL BE SUBJECT TO NO EXCEPTIONS;
(D) NEITHER THE BORROWER NOR LENDER HAS IN ANY WAY
AGREED WITH OR REPRESENTED TO ANY OTHER PARTY THAT THE
PROVISIONS OF THIS PARAGRAPH WILL NOT BE FULLY ENFORCED IN
ALL INSTANCES; AND
(E) THIS PROVISION IS A MATERIAL INDUCEMENT FOR LENDER
TO ENTER INTO THIS TRANSACTION.
EVENTS OF DEFAULT. BORROWER shall be in Default
under this Note upon the happening of any of the following
events, circumstances or conditions, namely:
(1) Default in the payment or performance of any of the
OBLIGATIONS provided hereunder or in connection herewith or
any other OBLIGATIONS of BORROWER or any affiliate (as
defined in 11 U.S.C. 101(2), hereinafter affiliate) of
BORROWER or any endorser, guarantor or surety for BORROWER
to LENDER or any affiliate of LENDER, howsoever created,
primary or secondary, whether direct or indirect, absolute
or contingent, now or hereafter existing, due or to become
due, or of any other covenant, warranty or undertaking
expressed herein, therein, or in any other document
establishing said endorsement, guaranty, or surety; or any
other document executed by BORROWER in conjunction
herewith; or
(2) Any warranty, representation or statement made or
furnished to LENDER by or on behalf of BORROWER, or any
guarantor, endorser, or surety for BORROWER in connection
with this Note or to induce LENDER to make a loan to
BORROWER which was false in any material respect when made
or furnished or has become materially false, if such
warranty of BORROWER or guarantor, endorser or surety for
BORROWER was ongoing in nature; or
(3) Death, dissolution, liquidation, termination of
existence, insolvency, business failure, appointment of a
receiver, custodian, or trustee for any part of the
property of, assignment for the benefit of creditors by, or
the commencement of any proceeding under any bankruptcy or
insolvency laws by or against BORROWER or any endorser,
guarantor, or surety for BORROWER; or
(4) BORROWER or any guarantor, endorser, or surety for
BORROWER shall allow the acquisition of substantially all
of the business or assets of BORROWER or guarantor,
endorser, or surety for BORROWER or a material portion of
such business or assets if such a sale is outside
BORROWER'S or guarantor's, endorser's or surety's ordinary
course of business, or more than 50% of the outstanding
stock or voting power of any other entity, or enter into
any transaction of merger or consolidation without prior
written consent of LENDER; or
(5) Failure of a corporate BORROWER or endorser,
guarantor, or surety for said BORROWER to maintain its
corporate existence in good standing; or
(6) Upon the entry of any monetary judgment or the
assessment and/or filing of any tax lien against BORROWER
or any endorser, surety, or guarantor, or upon the issuance
of any writ of garnishment, judicial seizure of, or
attachment against any property of, debts due or rights of
BORROWER or any endorser, surety or guarantor, to
specifically include commencement of any action or
proceeding to seize monies of BORROWER or any endorser,
surety or guarantor on deposit in any bank account with
LENDER; or
(7) The BORROWER or any endorser, guarantor, or surety
for said BORROWER shall be a debtor, either voluntarily,
under (and as the term debtor is defined in) the United
States Bankruptcy Code or should the BORROWER be generally
not paying BORROWER'S debts as such debts become due; or
(8) Failure of BORROWER, endorsers, guarantors or
sureties to furnish financial statements or other financial
information reasonably requested by LENDER; or
(9) Loss, theft, substantial damage, destruction, sale
or encumbrance to or of any COLLATERAL, or the assertion or
making of any foreclosure, levy, seizure, mechanic's or
materialman's lien or attachment thereof or thereon; or
(10) If LENDER should otherwise deem itself or the
debt created hereunder unsafe or insecure; or should
LENDER, in good faith, believe that the prospect of payment
or other performance is impaired.
THE FOREGOING ENUMERATION OF EVENTS OF DEFAULT
NOTWITHSTANDING, NOTHING HEREIN SHALL BE DEEMED TO LIMIT,
RESTRICT, IMPAIR OR DIMINISH THE ABSOLUTE RIGHT OF THE
LENDER TO DEMAND PAYMENT OF THE NOTE IN FULL, AT ANY TIME,
WITHOUT CAUSE.
No waivers, amendments or modifications shall be valid
unless in writing. No waiver by LENDER of any Default(s)
shall operate as a waiver of any other default or the same
default on a future occasion. All rights of LENDER
hereunder shall inure to the benefit of its successors and
assigns; and all obligations of BORROWER shall bind his
heirs, executors, administrators, successors and/or
assigns.
If more than one person has signed this instrument, such
parties are jointly and severally obligated hereunder.
Further, use of the masculine pronoun herein shall include
the feminine and neuter and also the plural. If any
provision of this instrument shall be prohibited or invalid
under applicable law, such provision shall be ineffective
but only to the extent of such prohibition of invalidity,
without invalidation the remainder of such provision or the
remaining provisions of this Note. In the case of conflict
between the terms of this Note and any Loan Agreement
and/or Letter of Intent issued in connection herewith, the
priority of controlling terms shall be first this Note,
then the Loan Agreement, then the Letter of Intent.
IN WITNESS WHEREOF, the BORROWER, on the day and year
first written above, has caused this Note to be executed
under seal by (i) if a corporation, adoption of the
facsimile seal printed hereon for such special occasion and
purpose (or if an impression seal appears hereon by
affixing such impression seal) by its duly authorized
officer(s), or (ii) if by individuals, by hereunto setting
their hands and seals.
VECTOR AEROMOTIVE CORPORATION
By: /s/ Xxxxx Xxxxx Xxxx
Its President
Taxpayer Identification Number 00-0000000
PROMISSORY NOTE
$2,500,000 July 22, 1997
(Date of Execution and Delivery)
LENDER: TRADELINK INTERNATIONAL LIMITED (hereinafter
termed "LENDER"), 0000 Xxxx Xxxxxx, Xxxxx Xxxxxx,
Xxxxxxxxxx 00000-0000
BORROWER(S): VECTOR AEROMOTIVE CORPORATION, a Nevada
corporation, 000 Xxxxxx Xxxxxx, Xxxxx Xxxx Xxxxxxx, Xxxxxxx
00000
BORROWER(S) REPRESENT HEREWITH THAT THE LOAN EVIDENCED IS
BEING OBTAINED PRIMARY FOR BUSINESS PURPOSES.
FOR VALUE RECEIVED: to wit, money loaned, the above-named;
undersigned BORROWER(s) (hereinafter collectively
termed "BORROWER"), jointly and severally (if more than one
BORROWER), promise(s) to pay to the order of LENDER at its
office in the above city, or wherever else LENDER may
specify, the sum of TWO MILLION FIVE HUNDRED THOUSAND
DOLLARS ($2,500,000), with interest paid as follows. From
the date of the first advance under this Note, interest
shall accrue and be paid at the annual rate of LENDER'S
PRIME RATE plus 2.0% as that rate may change from time to
time with changes to occur on the date the LENDER'S PRIME
RATE changes.
The Borrower shall pay interest and principal under this
Note as follows. Interest shall be payable monthly in
arrears commencing on the day that is thirty (30) days
after the date of this Note and continuing on the same day
of each consecutive month thereafter, and all principal
outstanding and accrued and unpaid interest shall be
payable in full ON DEMAND.
The undersigned agrees to pay a late charge equal to 5%
of each payment of principal and/or interest which is not
paid within 10 days of the date on which it is due. At
LENDER'S option, the rate of interest charged shall become
a rate equal to the lesser of (a) five (5) percentage
points above the rate on the Note otherwise in effect, or
(b) the highest rate allowed by the law of the State of
Florida, commencing with and continuing for so long as this
Note is in Default (as hereinafter defined). Further, upon
BORROWER'S Default and where LENDER deems it necessary or
proper to employ an attorney to enforce collection of any
unpaid balance or to otherwise protect its interests
hereunder, then BORROWER agrees to pay to the LENDER
reasonable attorney's and legal fees for the services and
expenses of counsel, paralegals and others employed after
maturity or default to collect this Note, whether or not
suit be brought, and whether incurred in connection with
collection, trial, appeal, bankruptcy proceedings or
otherwise, and to indemnify and to hold the LENDER
harmless against liability for the payment of state
documentary stamp taxes, intangible taxes and other taxes
(including interest and penalties, if any) which may be
determined to be payable with respect to this transaction.
If the interest provision contained herein refers to
"LENDER'S PRIME RATE," the LENDER'S PRIME RATE shall be the
prime rate as published in the Wall Street Journal ("WSJ")
as of the date of this Note ("WSJ Prime Rate"). The
interest rate will change from time to time as the WSJ
Prime Rate changes in an amount equal to the change in the
WSJ Prime Rate, but will not change more often than once a
month which will occur on the first day of each calendar
month and will be based on the prime rate published in the
WSJ on the 25th of the prior calendar month. If more than
one rate is published, the highest rate published shall
apply; and if the 25th or the date of closing falls on a
day when the WSJ Prime Rate is not published, the WSJ Prime
Rate shall be the rate published on the last day prior to
the 25th or the date of closing. The BORROWER understands
and agrees that the WSJ Prime Rate is not represented or
intended to be the lowest or most favorable rate offered by
LENDER to any of its borrowers.
PAYMENT of this Note, all obligations of the undersigned
BORROWER hereunder and under the Security Agreement defined
below ("OBLIGATIONS") to LENDER, its successors and
assigns, is secured, inter alia (and includes the terms and
obligations set forth therein), by a valid, subsisting Loan
and Security Agreement made by and between BORROWER and
LENDER (the "Loan Agreement") describing certain personal
property (the "COLLATERAL"), and by this reference is
incorporated herein.
If an Event of Default under this Note occurs or if the
BORROWER violates any of the terms or breaches any of the
conditions of the Loan Agreement, the entire principal sum
and accrued interest shall become due and payable without
notice unless otherwise provided in the Loan Agreement at
the option of the LENDER. TIME BEING OF THE ESSENCE OF
THIS NOTE. Failure to exercise this option shall not
constitute a waiver of the right to exercise the same at
any other time. Upon such Default, the principal of the
Note and any part thereof, and accrued unpaid interest, if
any, shall bear interest at the rate of the then highest
legal rate permissible by law. All parties liable for the
payment of this Note agree to pay the LENDER hereof
reasonable attorneys' fees for the services and expenses of
counsel employed after maturity or Default to collect this
Note (including any appeals relating to such enforcement
proceedings), or to protect or enforce the security hereto,
whether or not suit be brought. Notwithstanding any other
provisions of this Note, LENDER may, in the sole discretion
of LENDER, accept payments under this Note made by BORROWER
after any Default has occurred, without waiving any of
LENDER'S rights or remedies under this Note.
The remedies of LENDER as provided herein and in the
Loan Agreement shall be cumulative and concurrent, and may
be pursued singly, successively or together, at the sole
discretion of LENDER, and may be exercised as often as
occasion therefor shall arise. No act of omission or
commission of LENDER, including specifically any failure to
exercise any right, remedy or recourse, shall be effective
as a waiver thereof unless it is set forth in a written
document executed by LENDER and then only to the extent
specifically recited therein. A waiver or release with
reference to one event shall not be construed as
continuing, as a bar to, or as a waiver or release of, any
subsequent right, remedy or recourse as to any subsequent
event.
BORROWER and all sureties, endorsers and guarantors of
this Note, jointly and severally, hereby (a) waive demand,
presentment for payment, notice of nonpayment, protest,
notice of protest, notice of dishonor, notice of
acceleration after Default and all other notices, filing of
suit and diligence in collecting this Note, in enforcing
any of the security rights or in proceeding against the
COLLATERAL; (b) agree to any substitution, exchange,
addition or release of any of the COLLATERAL or the
addition or release of any party or person primarily or
secondarily liable hereon; (c) agree that LENDER shall not
be required first to institute any suit, or to exhaust his,
their or its remedies against BORROWER or any other person
or party to become liable hereunder or against the
COLLATERAL in order to enforce payment of this Note; (d)
consent to any extension, rearrangement, renewal or
postponement of time of payment of this Note and to any
other indulgence with respect hereto without notice,
consent or consideration to any of the foregoing (except
the express written release by LENDER of any such person),
they shall be and remain jointly and severally, directly
and primarily, liable for all sums due under this Note and
the Loan Agreement.
As used herein, the words "BORROWER" and "LENDER" shall
be deemed to include BORROWER and LENDER as defined herein
and their respective heirs, personal representatives,
successors and assigns.
This Note is executed and delivered at the Place of
Execution and shall be construed and enforced in accordance
with the laws of the State of Florida.
Anything contained herein to the contrary
notwithstanding, if for any reason the effective rate of
interest on this Note should exceed the maximum lawful
rate, the effective rate shall be deemed reduced to and
shall be such maximum lawful rate, and any sums of interest
which have been collected in excess of such maximum lawful
rate shall be applied as a credit against the unpaid
balance due hereunder and thereafter delivered to BORROWER.
Under no circumstances shall BORROWER, or any parties
liable for the payment of this Note, be required to pay
interest in excess of the maximum rate allowed by
applicable law.
Interest is computed on the basis of a 360-day year for
the actual number of days in the interest period
(Actual/360 Computation) unless indicated below. LENDER'S
Actual/360 or 365/360 computation determines the annual
effective interest yield by taking the stated (nominal)
interest rate for a year's period and then dividing said
rate by 360 to determine the daily periodic rate to be
applied for each day in the interest period. Application
of such computation produces an annualized effective
interest rate exceeding that of the nominal rate.
At LENDER'S option, any repayments of this Note, other
than by U.S. currency, will not be credited to the
outstanding loan balance until LENDER receives collected
funds.
In the event any provision(s) of this instrument shall
be left blank or incomplete, BORROWER hereby authorizes and
empowers LENDER to supply and complete the necessary
information as a ministerial task consistent with the
understanding between the parties.
Upon any transfer of this Note, the LENDER may deliver
the property held as security, or any part thereof, to the
transferee, as well as any subsequent holder hereof, who
shall thereupon become vested with all the powers and
rights herein given to the LENDER in respect to the
property so transferred and delivered; and the LENDER shall
thereafter be forever relieved and fully discharged from
any liability or responsibility with respect to such
property so transferred but with respect to any property
not so transferred, the LENDER shall retain all rights and
powers hereby given.
WAIVER OF JURY TRIAL. BY THE EXECUTION HEREOF, BORROWER
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY AGREES,
THAT:
(A) NEITHER THE BORROWER NOR ANY ASSIGNEE, SUCCESSOR,
HEIR, OR LEGAL REPRESENTATION OF ANY OF THE SAME SHALL SEEK
A JURY TRIAL IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM, OR
ANY OTHER LITIGATION PROCEDURE ARISING FROM OR BASED UPON
THIS PROMISSORY NOTE, ANY OTHER LOAN AGREEMENT OR ANY LOAN
DOCUMENT EVIDENCING, SECURING OR RELATING TO THE
OBLIGATIONS OR TO THE DEALINGS OR RELATIONSHIP BETWEEN OR
AMONG THE PARTIES THERETO;
(B) NEITHER THE BORROWER NOR LENDER WILL SEEK TO
CONSOLIDATE ANY SUCH ACTION, IN WHICH A JURY TRIAL HAS BEEN
WAIVED, WITH ANY OTHER ACTION IN WHICH A JURY TRIAL HAS NOT
BEEN OR CANNOT BE WAIVED;
(C) THE PROVISIONS OF THIS PARAGRAPH HAVE BEEN FULLY
NEGOTIATED BY THE PARTIES HERETO, AND THESE PROVISIONS
SHALL BE SUBJECT TO NO EXCEPTIONS;
(D) NEITHER THE BORROWER NOR LENDER HAS IN ANY WAY
AGREED WITH OR REPRESENTED TO ANY OTHER PARTY THAT THE
PROVISIONS OF THIS PARAGRAPH WILL NOT BE FULLY ENFORCED IN
ALL INSTANCES; AND
(E) THIS PROVISION IS A MATERIAL INDUCEMENT FOR LENDER
TO ENTER INTO THIS TRANSACTION.
EVENTS OF DEFAULT. BORROWER shall be in Default
under this Note upon the happening of any of the following
events, circumstances or conditions, namely:
(1) Default in the payment or performance of any of the
OBLIGATIONS provided hereunder or in connection herewith or
any other OBLIGATIONS of BORROWER or any affiliate (as
defined in 11 U.S.C. 101(2), hereinafter affiliate) of
BORROWER or any endorser, guarantor or surety for BORROWER
to LENDER or any affiliate of LENDER, howsoever created,
primary or secondary, whether direct or indirect, absolute
or contingent, now or hereafter existing, due or to become
due, or of any other covenant, warranty or undertaking
expressed herein, therein, or in any other document
establishing said endorsement, guaranty, or surety; or any
other document executed by BORROWER in conjunction
herewith; or
(2) Any warranty, representation or statement made or
furnished to LENDER by or on behalf of BORROWER, or any
guarantor, endorser, or surety for BORROWER in connection
with this Note or to induce LENDER to make a loan to
BORROWER which was false in any material respect when made
or furnished or has become materially false, if such
warranty of BORROWER or guarantor, endorser or surety for
BORROWER was ongoing in nature; or
(3) Death, dissolution, liquidation, termination of
existence, insolvency, business failure, appointment of a
receiver, custodian, or trustee for any part of the
property of, assignment for the benefit of creditors by, or
the commencement of any proceeding under any bankruptcy or
insolvency laws by or against BORROWER or any endorser,
guarantor, or surety for BORROWER; or
(4) BORROWER or any guarantor, endorser, or surety for
BORROWER shall allow the acquisition of substantially all
of the business or assets of BORROWER or guarantor,
endorser, or surety for BORROWER or a material portion of
such business or assets if such a sale is outside
BORROWER'S or guarantor's, endorser's or surety's ordinary
course of business, or more than 50% of the outstanding
stock or voting power of any other entity, or enter into
any transaction of merger or consolidation without prior
written consent of LENDER; or
(5) Failure of a corporate BORROWER or endorser,
guarantor, or surety for said BORROWER to maintain its
corporate existence in good standing; or
(6) Upon the entry of any monetary judgment or the
assessment and/or filing of any tax lien against BORROWER
or any endorser, surety, or guarantor, or upon the issuance
of any writ of garnishment, judicial seizure of, or
attachment against any property of, debts due or rights of
BORROWER or any endorser, surety or guarantor, to
specifically include commencement of any action or
proceeding to seize monies of BORROWER or any endorser,
surety or guarantor on deposit in any bank account with
LENDER; or
(7) The BORROWER or any endorser, guarantor, or surety
for said BORROWER shall be a debtor, either voluntarily,
under (and as the term debtor is defined in) the United
States Bankruptcy Code or should the BORROWER be generally
not paying BORROWER'S debts as such debts become due; or
(8) Failure of BORROWER, endorsers, guarantors or
sureties to furnish financial statements or other financial
information reasonably requested by LENDER; or
(9) Loss, theft, substantial damage, destruction, sale
or encumbrance to or of any COLLATERAL, or the assertion or
making of any foreclosure, levy, seizure, mechanic's or
materialman's lien or attachment thereof or thereon; or
(10) If LENDER should otherwise deem itself or the debt
created hereunder unsafe or insecure; or should LENDER, in
good faith, believe that the prospect of payment or other
performance is impaired.
THE FOREGOING ENUMERATION OF EVENTS OF DEFAULT
NOTWITHSTANDING, NOTHING HEREIN SHALL BE DEEMED TO LIMIT,
RESTRICT, IMPAIR OR DIMINISH THE ABSOLUTE RIGHT OF THE
LENDER TO DEMAND PAYMENT OF THE NOTE IN FULL, AT ANY TIME,
WITHOUT CAUSE.
No waivers, amendments or modifications shall be valid
unless in writing. No waiver by LENDER of any Default(s)
shall operate as a waiver of any other default or the same
default on a future occasion. All rights of LENDER
hereunder shall inure to the benefit of its successors and
assigns; and all obligations of BORROWER shall bind his
heirs, executors, administrators, successors and/or
assigns.
If more than one person has signed this instrument, such
parties are jointly and severally obligated hereunder.
Further, use of the masculine pronoun herein shall include
the feminine and neuter and also the plural. If any
provision of this instrument shall be prohibited or invalid
under applicable law, such provision shall be ineffective
but only to the extent of such prohibition of invalidity,
without invalidation the remainder of such provision or the
remaining provisions of this Note. In the case of conflict
between the terms of this Note and any Loan Agreement
and/or Letter of Intent issued in connection herewith, the
priority of controlling terms shall be first this Note,
then the Loan Agreement, then the Letter of Intent.
IN WITNESS WHEREOF, the BORROWER, on the day and year
first written above, has caused this Note to be executed
under seal by (i) if a corporation, adoption of the
facsimile seal printed hereon for such special occasion and
purpose (or if an impression seal appears hereon by
affixing such impression seal) by its duly authorized
officer(s), or (ii) if by individuals, by hereunto setting
their hands and seals.
VECTOR AEROMOTIVE CORPORATION
By: /s/ Xxxxx Xxxxx Xxxx
Its President
Taxpayer Identification Number 00-0000000
