EXHIBIT 14
SECOND AMENDMENT TO OPTION AGREEMENT
THIS SECOND AMENDMENT TO OPTION AGREEMENT (this "AMENDMENT") is made and
entered into as of the 7th day of January, 1997, by and between XXXXXXXX &
XXXXXX, LLC, a Colorado limited liability company (the "COMPANY") and Bedford
Capital Financial Corporation, a corporation organized under the laws of Liberia
("BEDFORD").
RECITALS
A. The Company and Bedford entered into that certain Xxxxxxxx & Xxxxxx,
LLC Option Agreement dated July 26, 1995, as amended by that certain First
Amendment to Option Agreement dated October 15, 1996 (collectively, the "OPTION
AGREEMENT") pursuant to which the Company granted Bedford an option to purchase
235,000 shares of the common stock of PMC International, Inc., a Colorado
corporation ("PMCI") owned by the LLC.
B. The Company and Bedford now desire to amend the Option Agreement as
more fully set forth below.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and Bedford hereby
agree as follows:
1. DEFINITIONS. Except as specifically defined herein, defined terms
shall have the same meanings as set forth in the Option Agreement.
2. CONSENTS. Bedford hereby consents to (i) the assignment and
assumption of the Option Agreement, as hereby amended, to and by KP3, LLC, a
Colorado limited liability company ("NEW LLC"), (ii) the sale of the Reserved
Shares to New LLC and (iii) the pledge of the Option Shares to secure the New
LLC's obligations in connection with any Permitted Indebtedness (as defined
below).
3. AMENDMENTS. The Option Agreement is hereby amended as follows:
(a) Section 1(a) is hereby amended by inserting the word
"outstanding" immediately prior to the words "options granted" in the last
sentence of such subsection.
(b) Section 1(c) is hereby amended by deleting the words "of even
date herewith" and inserting "December 24, 1996" in lieu thereof.
(c) Sections 2, 3, 4 and 5 are hereby deleted in their entirety and
the following is inserted in lieu thereof:
"2. PAYMENT OF PERMITTED INDEBTEDNESS. Immediately upon the Closing
by Bedford of the Option, the Company shall cause the funds
representing the Purchase Price to be applied to payment of the
Geman Note or any other Permitted Indebtedness (as defined below)
which encumbers the Option Shares."
"3. DEFAULT IN PAYMENT OF PERMITTED INDEBTEDNESS. Upon receipt by
the Company of a notice of default of its obligations under any
Permitted Indebtedness (as defined below), the Company shall
immediately give the Bedford notice of such default. In the
event that the Company shall default in its obligations under any
Permitted Indebtedness, Bedford shall be entitled to cure such
default, if and to the extent, the Company and/or PMCI fails to
do so within any applicable time periods set forth in the
documentation related to the Permitted Indebtedness. If Bedford
provides funds with which to cure a default in the payment of
principal and interest, it shall be entitled to receive any
shares of PMCI Stock which are released from the applicable
pledge agreement by reason of such payment or performance or
shall be deemed to have loaned the amount of such payment to the
Company in the event that no PMCI Stock is released from the
pledge agreement as a result of such payment, as in the case of
the payment of an installment of interest."
"4. RESTRICTIONS ON BUSINESS ACTIVITIES. The Company hereby
represents and warrants that its sole business activity is
limited to its holding of PMCI Stock (i) for transfer to Bedford,
Xxxxxxx X. Xxxxxxxx, Apex Investment Fund, Ltd., Canmerge
Consultants, Ltd., Devonshire Trust and Stradwick Investments
Canada, Ltd., each of which has been granted
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options to purchase PMCI Stock, (ii) for sale to third
parties, and (iii) for distribution to the members of the
Company. The Company hereby covenants and agrees that unless
and until the Option is exercised and closed or expires,
(a) notwithstanding the foregoing, it shall not sell the Option
Shares without the prior written consent of Bedford and (b) it
shall not engage in any other business activity or acquire any
assets other than the PMCI Stock (or such assets as are necessary
to pay the Permitted Indebtedness (defined below) and to
administer and consummate the transaction described above with
respect to the PMCI Stock)."
"5. RESTRICTIONS ON BORROWING. While the Option is outstanding, the
Company shall not incur any indebtedness except as necessary to
facilitate payment of (i) the Geman Note, (ii) indebtedness
incurred to pay interest on the Geman Note, (iii) any
indebtedness incurred to repay principal under the Geman Note
("SUBSTITUTE INDEBTEDNESS"), (iv) any indebtedness incurred to
pay interest on the Substitute Indebtedness and (v) any
indebtedness incurred as a result of refinancing of the
Substitute Indebtedness, provided the indebtedness incurred in
connection with such refinancing does not exceed the principal
and interest outstanding under the Substitute Indebtedness
(collectively, the "PERMITTED INDEBTEDNESS"). Any Permitted
Indebtedness or obligations relating to Permitted Indebtedness
that are secured by the Option Shares shall provide for the
release of the Option Shares from the pledge relating thereto
upon application of the Purchase Price to the Permitted
Indebtedness."
4. NO FURTHER AMENDMENT. Except as amended and modified by this
Amendment, the Option Agreement remains unmodified and in full force and effect
as of the date hereof.
5. COUNTERPARTS; FACSIMILE SIGNATURES. This Amendment may be executed in
one or more identical counterparts, each of which shall be deemed an original,
and all of which when taken together shall constitute one and the same
instrument. Signatures
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by facsimile transmission shall constitute the due and valid execution of
this Amendment by the parties.
IN WITNESS WHEREOF, this Amendment has been executed by the parties as of
the day and year first set forth above.
XXXXXXXX & XXXXXX, LLC, a Colorado limited
liability company
By: /s/ XXXXXXX X. XXXXXXXX
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Xxxxxxx X. Xxxxxxxx, Manager
"BEDFORD"
BEDFORD CAPITAL FINANCIAL
CORPORATION, a corporation organized
under the laws of Liberia
By: /s/ X.X. XXXXX XXXXXX
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Title: Assistant Secretary
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