Exhibit 10.10
RIGHTS AGREEMENT
THIS RIGHTS AGREEMENT (this "AGREEMENT") is made and entered into effective
as of the 30th day of April 2001 by and among AZTORE HOLDINGS, INC., an Arizona
corporation ("AZTORE"), DYNA-CAM ENGINE CORPORATION, a Nevada corporation
("DYNA-CAM"), and Xxxxxxxx X. Xxxxx and Xxxxxx X. Xxxxxx ("CONTROLLING
SHAREHOLDERS").
RECITALS:
A. Concurrent with this Agreement, Aztore and Dyna-Cam have entered into
that certain Loan Agreement.
B. The performance by Aztore of the terms of the Loan Agreement are of
significant benefit to Dyna-Cam and Controlling Shareholders.
C. Pursuant to the terms of the Loan Agreement, certain monetary
obligations created thereunder are anticipated to be repaid to Aztore upon the
sale of shares of Dyna-Cam's Series A 10% Cumulative Convertible Preferred Stock
("SERIES A STOCK").
D. In order to induce Aztore to enter into and perform the Loan Agreement,
and in order to cause the holders of all outstanding Series A Stock to have
meaningful influence as to the management of Dyna-Cam, the parties hereby enter
into this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the terms and conditions set forth
herein, the parties hereby agree as follows:
1. DIRECTOR APPOINTMENT
(a) For so long as any monetary obligation of Dyna-Cam under the Loan
Agreement is outstanding and throughout the term of this Agreement, Aztore shall
have the right to designate a majority of the members of the Board of Directors.
(b) Upon all monetary obligations of Dyna-Cam under the Loan Agreement
being satisfied and for so long as any Series A Stock is outstanding, throughout
the term of this Agreement, the holders of a majority of the outstanding shares
of Series A Stock shall have the right to designate a majority of the members of
the Board of Directors.
2. BOARD MEMBERS
During the term of this Agreement, the number of Dyna-Cam's Board of
Directors shall not exceed five, unless an increase in such number is authorized
by consent of Aztore during the period Paragraph 1(a) is effective or by the
holders of a majority of the outstanding shares of Series A Stock during the
period Paragraph 1(b) is effective.
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3. VOTING AGREEMENT
The Controlling Shareholders shall vote their shares of Dyna-Cam Common
Stock in accordance with the terms of this Agreement. In the event the
Controlling Shareholders fail to vote their shares of Dyna-Cam in accordance
with this Agreement, Xxxxxxx X. Xxxxxx, or such other person designated by
Aztore, is hereby appointed proxy to vote such shares on behalf of the
Controlling Shareholders. The appointment as proxy hereunder is a power coupled
with an interest and shall be irrevocable throughout the term of this Agreement.
4. BOARD AUTHORITY
The Board of Directors shall have all authority as provided under the
Nevada General Corporation Law. The foregoing notwithstanding, the Board must
have a super majority vote (four directors out of five) to sell the Company or
sell assets of Dyna-Cam, except in the ordinary course of business, or to
authorize the sale of additional equity, or to modify the exercise prices of the
outstanding warrants. Such restriction excludes the Series A Preferred shares
which have previously been authorized.
5. RELATIONSHIP
For all purposes of this Agreement, Aztore shall act on its own behalf and
not as agent for the holders of the Series A Stock.
6. TERM
This Agreement shall commence upon the date set forth above and shall
expire on March 31, 2003.
7. GOVERNING LAW; VENUE
Except to the extent corporate governance provisions are subject to the
Nevada General Corporation Law, this Agreement shall be governed by and
construed in accordance with the laws of the State of Arizona, without reference
to choice of law principles. Jurisdiction and venue for any litigation resulting
from any dispute over the provisions of this Agreement shall reside exclusively
with the federal and state courts sitting in Maricopa County, Arizona.
8. SEVERABILITY
If any term or provision of this Agreement shall be found by a court of
competent jurisdiction to be invalid, illegal or otherwise unenforceable, the
same shall not effect the other terms or provisions hereof or the whole of this
Agreement, but such term or provision shall be deemed modified to the least
extent necessary in the court's opinion to render such term or provision
enforceable, and the rights and obligations of the parties shall be construed
and enforced accordingly, preserving to the fullest permissible extent the
intent and agreements of the parties herein set forth.
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9. COMPLETE AGREEMENT; AMENDMENT
This Agreement sets forth the entire understanding between the parties
hereto and supercedes all prior agreements, arrangements and communications,
whether oral or written, with respect to the subject matter hereof. No other
agreements, representations, warranties or other matters, whether oral or
written, shall be deemed to bind the parties hereto with respect to the subject
matter hereof. This Agreement may not be modified or amended except by the
mutual written agreement of the parties.
IN WITNESS WHEREOF, the parties have duly executed this Agreement to be
effective as of the day and year first above written.
AZTORE:
AZTORE HOLDINGS, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
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Its: President
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DYNA-CAM:
DYNA-CAM ENGINE CORPORATION
By: /s/ Xxxx X. Xxxx
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Its: President
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CONTROLLING SHAREHOLDERS:
/s/ Xxxxxxxx X. Xxxxx
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Xxxxxxxx X. Xxxxx
/s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
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