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
Certificate Number Certificate Number
Names
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
Title: President
TRADELINK INTERNATIONAL LIMITED
By: /s/ X. X. Xxxxxxx
Name: X. X. Xxxxxxx
Title: President & General Manager
V'POWER CORPORATION
By: /s/ Sudjaswin E. L.
Name: Sudjaswin E. L.
Title:President & Managing Director
