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Exhibit No. 10
SHARE PURCHASE AGREEMENT
THIS SHARE PURCHASE AGREEMENT (this "Agreement") is entered into this
14th day of January, 1997, by and between UTI CHEMICALS (EUROPE) LTD., a
United Kingdom corporation ("UTI-UK") and XXXXXXX INVESTMENTS LIMITED, a
Jersey corporation (hereinafter referred to as the "Seller") and AMERICAN TIRE
CORPORATION, a Nevada corporation, (hereinafter referred to as the "Buyer"),
on the following:
Premises
A. Buyer is a corporation existing under the laws of the state of Nevada,
having been incorporated on January 30, 1995. Buyer is a publicly held
corporation whose common stock is traded in the over-the-counter market on the
National Association of Securities Dealer's OTC Bulletin Board under the
symbol "ATYR". Buyer is authorized to issue 25,000,000 shares of common
stock, par value $0.001 per share (the "Buyer's Common Stock"), of which
4,176,748 shares are issued and outstanding.
B. UTI-UK is a corporation existing under the laws of United Kingdom, having
been incorporated on __________ 1990, whose place of business is Xxxxx Xxxxx,
Xxxxxxxxx, Xxxxxxxxx, Xxxxxx Xxxxxxx.
C. Seller owns 100,000 full paid up shares of UTI-UK Capital Stock,
representing 100% of the issued and outstanding UTI-UK Capital Stock (the
"Shares") and desires to sell the Shares.
D. Buyer desires to purchase 100% of the UTI-UK Capital Stock from Seller at
a cash purchase price of US$400,000 and the issuance of 200,000 shares of the
Buyer's Common Stock.
Agreement
BASED, upon the foregoing premises, which are incorporated herein by this
reference, and for and in consideration of the mutual promises and covenants
hereinafter set forth, and other good and valuable consideration the receipt
and adequacy of which are hereby acknowledged, it is hereby agreed as follows:
1.01 Buyer agrees to purchase from Seller and Seller agrees to sell to Buyer
100,000 shares of UTI-UK Capital Stock, constituting 100% of UTI-UK's issued
and outstanding shares of Capital Stock. Buyer agrees to pay for such shares
an aggregate purchase price of US$400,000 and to issue to Seller, 200,000
shares of Buyer's Common Stock at Closing as hereinafter defined. For
purposes of accounting treatment, the purchase of the Shares by Buyer shall
be accounted for as the purchase of UTI-UK by the Buyer.
1.02 The closing (the "Closing") of the transactions contemplated by this
Agreement shall on or before January 31, 1996, unless extended by the mutual
consent of the parties, and be subject to compliance with or waiver of the
following conditions:
(a) The approval of the Agreement by the board of directors of the Buyer;
(b) The final date prescribed by any state or federal regulatory agency
pursuant to any state or federal law, rule, or regulation prior to which the
transactions may not be effectuated;
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(c) The satisfaction of all other conditions precedent to the Closing.
1.04 Closing Events.
(a) Buyer's Deliveries. Subject to fulfillment or waiver of the
conditions set forth in this Agreement, the Buyer shall deliver to Seller at
Closing all the following:
(i) A copy of the resolution of the Buyer's board of directors
authorizing the execution and performance of this Agreement and the
contemplated transactions, certified by the secretary of the Seller as of the
Closing Date;
(ii) A cashier's or bank check in the amount of US$400,000; and
(iii) A certificate representing 200,000 shares of the Buyer's Common
Stock.
In addition to the above deliveries, the Buyer shall take all steps and
actions as the Seller may reasonably request or as may otherwise be necessary
to consummate the transactions contemplated hereby.
(b) Seller's Deliveries. Subject to fulfillment or waiver of the conditions
set forth in this Agreement, Seller shall deliver to Buyer at Closing all the
following:
(i) A Certificate of Good Standing or its equivalent from the
appropriate authority, issued as of a date within five days prior to the
Closing Date certifying that UTI-UK is in good standing as a corporation in
the United Kingdom;
(ii) Copies of the resolutions of the Seller's and UTI-UK's board of
directors authorizing the execution and performance of this Agreement and the
contemplated transactions, certified by the secretary of each corporation as
of the Closing Date; and
(iii) The certificate(s) representing all the Shares of UTI-UK Capital
Stock, with appropriate stock powers, executed by a duly authorized officer of
Seller.
In addition to the above deliveries, the Seller and UTI-UK shall take all
steps and actions as the Buyer may reasonably request or as may otherwise be
necessary to consummate the transactions contemplated hereby.
2. Representations and Warranties of Seller and UTI-UK. As an
inducement to, and to obtain the reliance of Buyer in connection with its
purchase of the Shares, Seller and UTI-UK represent and warrant to Buyer that:
2.01 The Shares to be sold and transferred by Seller hereby are conveyed free
and clear of any and all liens, claims, and encumbrances, and Seller has the
free and unqualified right to bargain, sell, transfer, convey, and assign the
same without the prior authorization, consent, or approval of any other party.
2.02 UTI-UK is and will be on the Closing Date a corporation duly organized,
validly existing, and in good standing under the laws of the United Kingdom
and has the corporate power and is and will be duly authorized, qualified,
franchised, and licensed under all applicable laws, regulations, ordinances,
and orders of public authorities to own all of its properties and assets and
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to carry on its business in all material respects as it is now being
conducted, and there are no other jurisdictions in which it is not so
qualified in which the character and location of the assets owned by it or the
nature of the material business transacted by it requires qualification,
except where failure to do so would not have a material adverse effect on the
business, operations, properties, assets, or condition of UTI-UK. The
execution and delivery of this Agreement does not, and the consummation of the
transactions contemplated by this Agreement in accordance with the terms
hereof will not, violate any provision of UTI-UK's constating documents or
bylaws or other agreement to which it is a party or by which it is bound.
2.03 The board of directors of both the Seller and UTI-UK have authorized
the execution, delivery, and performance of this Agreement by the Seller and
UTI-UK and have approved the transactions contemplated hereby. This Agreement
has been duly authorized, executed, and delivered by the Seller and UTI-UK and
is a legal, valid, and binding obligation of both Seller and UTI-UK
enforceable in accordance with its terms except as such enforcement may be
limited by bankruptcy, insolvency, or other laws affecting enforcement of
creditor's rights generally and by general principles of equity.
2.04 The authorized capitalization of UTI-UK consists of 100,000 shares of
capital stock, ("UTI-UK Capital Stock"), 1 pound sterling per share, of which
100,000 shares are issued and outstanding. All issued and outstanding shares
of UTI-UK are legally issued, fully paid, and nonassessable and not issued in
violation of the preemptive or other right of any person. There are no
dividends or other amounts due or payable with respect to any of the shares of
capital stock of UTI-UK.
2.05 UTI-UK has no subsidiaries or predecessors as those terms are defined
under generally accepted accounting principles or regulation S-X promulgated
by the United States Securities and Exchange Commission (the "SEC").
2.06 Seller has provided the Buyer the Audit Report of Wise & Co., Chartered
Accountants and Registered Auditors, relating to the balance sheet of UTI-UK
as of December 31, 1995, and the related profit and loss account and cash flow
statement for the year then ended, and the accompanying notes to the cash flow
statement and financial statements. In addition, prior to the Closing, Seller
shall provide Buyer with unaudited financial statements for UTI-UK for the
fiscal year ended December 31, 1996. All such financial statements have been
or will be prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods involved. The balance
sheets of UTI-UK present fairly, as of their respective dates, the financial
position of UTI-UK. UTI-UK did not have, as of the date of any such balance
sheets, except as and to the extent reflected or reserved against therein, any
liabilities or obligations (absolute or contingent) which should be reflected
in a balance sheet or the notes thereto, and all assets reflected therein
present fairly the assets of UTI-UK. The profit and loss account and cash
flow statements present fairly the financial position and results of
operations of UTI-UK as of their respective dates and for the respective
periods covered thereby.
2.07 Except as set forth in this Agreement since the date of the most recent
UTI-UK balance sheet described in Section 2.06:
(a) There has not been (i) any material adverse change in the business,
operations, properties, level of inventory, assets, or condition of UTI-UK or
(ii) any damage, destruction, or loss to UTI-UK (whether or not covered by
insurance) materially and adversely affecting the business, operations,
properties, assets, or conditions of UTI-UK; and
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(b) To the best knowledge of UTI-UK, it has not become subject to any law or
regulation which materially and adversely affects, or in the future may
adversely affect, the business, operations, properties, assets, or condition
of UTI-UK.
2.08 Except as provided herein or disclosed in the most recent UTI-UK balance
sheet and the notes thereto, UTI-UK has good and marketable title to all of
its properties, inventory, interests in properties, and assets, which are
reflected in the most recent UTI-UK balance sheet or acquired after that date
(except properties, interests in properties, and assets sold or otherwise
disposed of since such date in the ordinary course of business), free and
clear of all mortgages, liens, pledges, charges, or encumbrances, except (i)
statutory liens or claims not yet delinquent; and (ii) such imperfections of
title and easements as do not, and will not, materially detract from, or
interfere with, the present or proposed use of the properties subject thereto
or affected thereby or otherwise materially impair present business operations
on such properties.
2.09 There are no actions, suits, or proceedings pending or, to the knowledge
of UTI-UK, threatened by or against UTI-UK or affecting UTI-UK, at law or in
equity, before any court or other governmental agency or instrumentality,
domestic or foreign, or before any arbitrator of any kind. UTI-UK does not
have any knowledge of any default on its part with respect to any judgment,
order, writ, injunction, decree, award, rule, or regulation of any court,
arbitrator, or governmental agency or instrumentality.
2.10 Except as included or described in Schedule 2.10:
(a) There are no material contracts, agreements, franchises, license
agreements, or other commitments to which UTI-UK is a party by which it or any
of the properties of UTI-UK are bound;
(b) All contracts, agreements, franchises, license agreements, and other
commitments to which UTI-UK is a party or by which its properties are bound
and which are material to the operations or financial condition of UTI-UK are
valid and enforceable by UTI-UK in all material respects; and
(c) UTI-UK is not a party to or bound by, and its properties are not subject
to, any material contract, agreement, other commitment or instrument; any
charter or other corporate restriction; or any judgment, order, writ,
injunction, decree, or award which materially and adversely affects, or in the
future may (as far as UTI-UK can now foresee) materially and adversely affect,
the business, operations, properties, assets, or condition of UTI-UK.
(d) UTI-UK is not in default in any material respect under the terms of any
outstanding contract, agreement, lease, or other commitment which is material
to the business, operations, properties, assets, or condition of UTI-UK, and
there is no event of default or other event which, with notice or lapse of
time or both, would constitute a default in any material respect under any
such contract, agreement, lease, or other commitment in respect of which
UTI-UK has not taken adequate steps to prevent such a default from
occurring.
2.11 All of the insurable properties of UTI-UK are insured for full
replacement value (subject to reasonable deductibles) against losses due to
fire and other casualty, with extended coverage, and other risks customarily
insured against by persons operating similar properties in the localities
where such properties are located and under valid and enforceable policies
issued by insurers of recognized responsibility. Such policy or policies
containing substantially equivalent coverage will be outstanding and in full
force at the Closing.
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3. Representations and Warranties of Buyer. As an inducement to, and to
obtain the reliance of Seller in connection with the sale of the shares of
Common Stock, Buyer represents and warrants as follows:
3.01 Buyer is a corporation duly organized, validly existing, and in good
standing under laws of the state of Nevada, United States of America.
3.02 All corporate and other proceedings required to be taken by or on the
part of Buyer to authorize Buyer to enter into and carry out this Agreement
and to purchase the Shares hereunder have been or, prior to the Closing will
be, duly authorized and properly taken. This Agreement has been duly executed
and delivered by Buyer and is valid and enforceable against it in accordance
with its terms, subject to laws of general application relating to bankruptcy,
insolvency and the relief of debtors and the rules of law governing specific
performance, injunctive relief and other equitable remedies.
4. Other Agreements.
4.01 Concurrently with the execution of this Agreement, Buyer and Seller
shall enter into a lock-up agreement, substantially in the form attached
hereto as Exhibit "A" (the "Lock-up Agreement"), wherein the Seller shall
agree not to sell during the 24 month period following the Closing, more than
50,000 shares of the Buyer's Common Stock; provided, however, all sales of the
Buyer's Common Stock are made in market transactions pursuant to an effective
registration statement or in reliance on an exemption from registration under
the Securities Act of 1933, as amended (the "Securities Act").
4.02 Concurrently with the execution of this Agreement, Buyer and Seller
shall enter into a management agreement, substantially in the form attached
hereto as Exhibit "B" (the "Management Agreement"), wherein the Buyer shall
retain the management services of the Seller and Seller shall agree to manage
the day-to-day operations of UTI-UK for a 12 month period, in exchange for a
monthly payment of US$9,990 per month.
5. Special Covenants and Representations Regarding the Shares. The
consummation of this Agreement and the transactions herein contemplated,
including the sale of the Shares by Seller to Buyer as contemplated hereby,
constitutes the offer and sale of securities under the Securities Act and
certain state statutes. Such transactions shall be consummated in reliance on
exemptions from the registration and prospectus delivery requirements of such
statutes which depend, inter alia, upon the circumstances under which Buyer
acquires such Shares. The parties shall cooperate and utilize their best
efforts to document reliance on exemptions from registration under applicable
federal and state securities laws.
6. Special Covenants and Representations Regarding the Seller's Common
Stock. The consummation of this Agreement and the issuance of the Buyer's
Common Stock to the Seller as partial consideration for all of the issued and
outstanding UTI-UK Capital Stock as contemplated hereby, constitutes the offer
and sale of securities under the Securities Act and applicable state
statutes. Such transactions shall be consummated in reliance on exemptions
from the registration and prospectus delivery requirements of such statutes
which depend, among other items, on the circumstances under which such
securities are acquired.
6.01 In order to provide documentation for reliance upon exemptions from the
registration and prospectus delivery requirements for issuance of the Buyer's
Common Stock and/or the delivery of appropriate separate representations, the
parties accept and concur in, the following representations and warranties:
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(a) Seller acknowledges that the neither the SEC nor the securities
commission of any other jurisdiction has made any determination as to the
merits of acquiring the Buyer's Common Stock and that this transaction
involves certain risks.
(b) The Seller has knowledge and experience in business and financial matters
that it is capable of evaluating the Buyer's business operations.
(c) Except as provided in Section 4.01, Seller has no present intention of
dividing the Buyer's Common Stock to be received or the rights under this
Agreement with others or of reselling or otherwise disposing of any portion of
such stock or rights, either currently or after the passage of a fixed or
determinable period of time or on the occurrence or nonoccurrence of any
predetermined event or circumstance.
(d) The Seller understands that the Buyer's Common Stock has not been
registered, but is being acquired by reason of a specific exemption under the
Securities Act as well as under certain other statutes for transactions by an
issuer not involving any public offering and that any disposition of the
Buyer's Common Stock, under certain circumstances, be inconsistent with this
exemption and may make the undersigned an "underwriter" within the meaning of
the Securities Act. It is understood that the definition of "underwriter"
focuses upon the concept of "distribution" and that any subsequent disposition
of the Buyer's Common Stock can only be effected in transactions which are not
considered distributions. Generally, the term "distribution" is considered
synonymous with "public offering" or any other offer or sale involving general
solicitation or general advertising. Under present United States securities
law, in determining whether a distribution occurs when securities are sold
into the public market, under certain circumstances one must consider the
availability of public information regarding the issuer, a holding period for
the securities sufficient to assure that the persons desiring to sell the
securities without registration first bear the economic risk of their
investment, and a limitation on the number of securities which the stockholder
is permitted to sell and on the manner of sale, thereby reducing the potential
impact of the sale on the trading markets. These criteria are set forth
specifically in rule 144 promulgated under the Securities Act, which allows
sales of securities in reliance upon rule 144 only in limited amounts in
accordance with the terms and conditions of that rule, after two years after
the date the Buyer's Common is acquired from the Buyer and the Buyer's Common
Stock is fully paid for, as calculated in accordance with rule 144(d). After
three years from the date the securities acquired from the Buyer and are
fully paid for, as calculated in accordance with rule 144(d), they can
generally be sold without meeting those conditions, provided the holder is not
(and has not been for the preceding three months) an affiliate of the
issuer.
(e) Seller acknowledges that the shares of Buyer's Common Stock must be held
and may not be sold, transferred, or otherwise disposed of for value unless
they are subsequently registered under the Securities Act or an exemption from
such registration is available. The certificate(s) representing the Buyer's
Common Stock will bear a legend in substantially the following form so
restricting the sale of such securities:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND ARE
"RESTRICTED SECURITIES" WITHIN THE MEANING OF RULE 144 PROMULGATED UNDER THE
SECURITIES ACT, AND ARE SUBJECT TO A LOCK-UP AGREEMENT DATED JANUARY 14,
1997. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD OR
TRANSFERRED WITHOUT COMPLYING WITH THE TERMS OF THE LOCK-UP AGREEMENT AND/OR
RULE 144 IN THE ABSENCE OF AN EFFECTIVE REGISTRATION OR OTHER COMPLIANCE UNDER
THE SECURITIES ACT.
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6.02 In connection with the transaction contemplated by this Agreement, the
Buyer shall file, with the assistance of its legal counsel, such notices,
applications, reports, or other instruments as may be deemed by them to be
necessary or appropriate in an effort to document reliance on such exemptions,
including a notice on form D to be filed with the SEC, and the appropriate
regulatory authority in the jurisdiction where the Seller resides unless an
exemption requiring no filing is available in such jurisdiction, all to the
extent and in the manner as may be deemed by such parties to be appropriate.
6.03 The Buyer and Seller acknowledge that the basis for relying on
exemptions from registration or qualifications are factual, depending on the
conduct of the various parties, and that no legal opinion or other assurance
will be required or given to the effect that the transactions contemplated
hereby are in fact exempt from registration or qualification.
7. No Representation Regarding Tax Treatment. No representation or warranty
is being made by any party to any other regarding the treatment of this
transaction for federal or state income taxation. Each party has relied
exclusively on its own legal, accounting, and other tax advisers regarding the
treatment of this transaction for federal and state income taxes and no
representation, warranty, or assurance from any other party or such other
party's legal, accounting, or other adviser.
8. Notices. All notices, demands, requests, or other communications required
or authorized hereunder shall be deemed given sufficiently if in writing and
if personally delivered; if sent by facsimile transmission, confirmed with a
written copy thereof sent by overnight express delivery; if sent by registered
mail or certified mail, return receipt requested and postage prepaid; or if
sent by overnight express delivery:
If to Buyer, to: AMERICAN TIRE CORPORATION
Attn.: Xxxxxxx X. Xxxxxxx
000 Xxxx Xxxx Xxxxxx
Xxxxxxx, Xxxx 00000 X.X.X.
Telecopy No.: 000 (000) 000-0000
With a copy to: Xxxxxxx X. Xxxxxx, Esq.
XXXXXX AND ASSOCIATES
0000 Xxxx 0000 Xxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
Telecopy No.: (000) 000-0000
If to Seller or
UTI-UK, to: UTI CHEMICAL (EUROPE) LTD.
Attn.: Xxxx Xxxx-Xxxxxxxx
Xxxxx Xxxxx
Xxxxxxxxx
Xxxxxxxxx XX00 0XX, Xxxxxxx
Telecopy No.: 000 00 0000 760547
With a copy to: [No information proved]
or such other addresses and facsimile numbers as shall be furnished by any
party in the manner for giving notices hereunder, and any such notice, demand,
request, or other communication shall be deemed to have been given as of the
date so delivered or sent by facsimile transmission, three days after the date
so mailed, or one day after the date so sent by overnight delivery.
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9. Attorneys' Fees. In the event that any party institutes any action or
suit to enforce this Agreement or to secure relief from any default hereunder
or breach hereof, the breaching party or parties shall reimburse the
nonbreaching party or parties for all costs, including reasonable attorneys'
fees, incurred in connection therewith and in enforcing or collecting any
judgment rendered therein.
10. Survival. The representations and warranties of the respective parties
set forth herein shall survive the Closing, the consummation of the
transactions contemplated in this Agreement, and the delivery of the Shares
pursuant hereto.
11. Governing Law. This Agreement shall be governed by and construed under
and in accordance with the laws of the United States of America and, with
respect to matters of state law, with the laws of the state of Nevada.
12. Entire Agreement. This Agreement represents the entire agreement between
the parties relating to the subject matter hereof, and there are no other
courses of dealing, understandings, agreements, representations, or
warranties, written or oral, except as set forth herein. No amendment or
modification hereof shall be effective until and unless the same shall have
been set forth in writing and signed by the parties hereto.
13. Third-Party Beneficiary. Seller, Buyer, and UTI-UK are the only parties
to this Agreement, and no one else shall be deemed to have any rights
hereunder or be deemed a third-party beneficiary.
14. Severability. If any provision of this Agreement or the application of
such provision to any person or circumstances shall be held invalid or
unenforceable, the remainder of this Agreement or the application of such
provisions to persons or circumstances other than those as to which it is held
invalid or unenforceable, shall not be affected thereby.
15. Brokers. Buyer and Seller agree that there were no finders or brokers
involved in bringing the Buyer and Seller together or who are instrumental in
the negotiations, execution, or consummation of this Agreement. Further,
Buyer and Seller each agree to indemnify the other against any claim by any
third person for any commission, brokerage, or finder's fee or other payment
with respect to this Agreement or the transactions contemplated hereby based
on any alleged agreement or understanding between the Buyer or Seller and such
third party, whether express or implied, from the actions of Buyer or Seller.
The covenants set forth in this section shall survive the Closing and the
consummation of the transactions herein contemplated.
16. Execution in Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, and all of which
taken together shall be but a single instrument.
PAGE
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17. No Waiver. Every right and remedy provided herein shall be cumulative
with every other right and remedy, whether conferred herein, in law or in
equity, and may be enforced concurrently herewith, and no waiver by any party
of the performance of any obligation of the other shall be construed as a
waiver of the same or any other default then, theretofore, or thereafter
occurring or existing.
IN WITNESS WHEREOF, the parties have executed this Agreement this 14th
day of January, 1997.
BUYER: SELLER:
AMERICAN TIRE CORPORATION XXXXXXX INVESTMENTS LIMITED
[A Nevada corporation] [A Jersey corporation]
/S/ Xxxxxxx X. Xxxxxxx, C.E.O. /S/ Xxxx Xxxx-Xxxxxxxx
Its Duly Authorized Officer Its Duly Authorized Officer
UTI CHEMICALS (EUROPE) LTD.
[A United Kingdom corporation]
/S/ Xxxx Xxxx-Xxxxxxxx
Its Duly Authorized Officer
PAGE
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Exhibit A to Share Purchase Agreement
January 14, 1997
AMERICAN TIRE CORPORATION
000 Xxxx Xxxx Xxxxxx
Xxxxxxx, Xxxx 00000
Re: Sale of Common Stock of American Tire Corporation) by Xxxxxxx Investment
Limited
Gentlemen:
Xxxxxxx Investment Limited, a Jersey corporation ("Xxxxxxx") is the
holder of 200,000 shares of restricted common stock of American Tire
Corporation (the "Company"), and may, therefore, personally benefit from the
development of a public trading market for the Company's Common Stock.
Pursuant to a Share Purchase Agreement dated January 14, 1997, between Xxxxxxx
and the Company, Xxxxxxx has agrees not to sell more than 50,000 its shares of
the Company's Common Stock in the public market prior to January 14, 1999;
provided, however, any such sales of the Company's Common Stock shall be made
in a market transaction pursuant to an effective registration statement or in
reliance on an exemption from registration under the Securities Act of 1933,
as amended (the "Securities Act").
Xxxxxxx agrees that the Company may place a restrictive legend to the
foregoing effect on the certificates representing the shares and may issue
appropriate stop-transfer instructions to its transfer agent.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND ARE
"RESTRICTED SECURITIES" WITHIN THE MEANING OF RULE 144 PROMULGATED UNDER THE
SECURITIES ACT, AND ARE SUBJECT TO A LOCK-UP AGREEMENT DATED JANUARY 14,
1997. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD OR
TRANSFERRED WITHOUT COMPLYING WITH THE TERMS OF THE LOCK-UP AGREEMENT AND/OR
RULE 144 IN THE ABSENCE OF AN EFFECTIVE REGISTRATION OR OTHER COMPLIANCE UNDER
THE SECURITIES ACT.
Xxxxxxx acknowledges that the breach or threatened breach by it of the
covenants set forth herein may result in irreparable injury to the Company
which is not adequately compensable by the payment of damages. Accordingly,
Xxxxxxx agrees that the Company may seek and obtain injunctive relief against
the breach or threatened breach by Xxxxxxx of any of the foregoing covenants.
Sincerely,
XXXXXXX INVESTMENTS LIMITED
/S/ Xxxx Xxxx-Xxxxxxxx
Its Duly Authorized Officer
Agreed and Accepted:
AMERICAN TIRE CORPORATION
/S/ Xxxxxxx X. Xxxxxxx
Its Duly Authorized Officer
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Exhibit B to Share Purchase Agreement
MANAGEMENT AGREEMENT
THIS MANAGEMENT AGREEMENT (the "Agreement") is entered into effective
this 14th day of January, 1997, by and between AMERICAN TIRE CORPORATION, a
Nevada corporation (the "Company"), and XXXXXXX INVESTMENTS LIMITED, a Jersey
corporation (the "Manager").
FOR AND IN CONSIDERATION of the mutual covenants contained herein and of
the mutual benefits to be derived hereunder, the parties agree as follows:
1. Employment. The Company hereby employs Manager to perform those duties
generally described in this Agreement, and Manager hereby accepts and agrees
to such employment on the terms and conditions hereinafter set forth.
2. Term. The term of this Agreement shall commence on February 1, 1997, and
end on January 31, 1998.
3. Duties. During the term of this Agreement, Manager shall be employed by
Company as the General Manager of UTI Chemical (Europe) Ltd. ("UTI-UK"). As
General Manager, Manager shall be responsible for:
(a) The day-to-day management and control of UTI-UK;
(b) The general business affairs and property of UTI-UK and general
supervision over its employees and agents;
(c) Subject to prior review by the Company, signing and executing official
documents and other instruments for and on behalf of UTI-UK;
(d) Assuring that the books, reports, statements, and other documents and
records required to be kept by UTI-UK are properly kept and filed;
(e) Having charge and supervision over and being responsible for the monies,
receipts, and disbursements of UTI-UK, including causing monies and other
valuable effects of UTI-UK to be deposited in the name and to the credit of
UTI-UK in such banks or other depositories as shall be determined by the
Company;
(f) Rendering, on a monthly basis, a statement of the financial condition of
UTI-UK, including causing to be kept correct books of account of all the
business and transactions of UTI-UK and such other documents and records
required to be kept for financial reporting purposes as specified by the
Company and/or its legal counsel or auditors; and
(g) Performing such other duties as from time to time may be assigned to
Manager by the Company.
Manager shall devote substantially all of his working time and efforts to the
business of UTI-UK and its subsidiaries and shall not, during the term of this
Agreement, be engaged in any other substantial business activities that will
significantly interfere or conflict with the reasonable performance of his
duties hereunder.
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4. Compensation. For all services rendered by Manager, Company shall pay to
Manager a management fee of US$9,990 per month throughout the term of this
Agreement, payable monthly. The rate of management fee may be increased at
any time as the board of directors may determine, based on earnings, increased
activities of UTI-UK, or such other factors as the board of directors may deem
appropriate.
5. Expenses. Company will reimburse Manager for all reasonable and ordinary
business expenses incurred by Manager in the course of providing management
services on behalf of UTI-UK under the terms of this Agreement, including
expenses for travel, lodging, meals, beverages, entertainment, and other
items. Manager shall provide the Company with receipts and/or other
documentation concerning all such business expenses and the Company, on
receipt of documentation acceptable to it, shall pay such expenses by making
periodic payments to the Manager.
6. Independent Contractor. Manager is retained under the terms of this
Agreement as an independent contractor and nothing herein shall be construed
as creating an employer/employee relationship between the parties. Manager
shall be solely liable for the payment of any taxes imposed or arising out of
the payment of the compensation to it by the Company as set forth in this
Agreement.
7. Covenant Not to Compete. For a period of two years after termination of
this Agreement, except in the event of breach of this Agreement by the
Company, Manager agrees that it will not directly or indirectly engage in,
assist, perform services for, establish or open, or have any equity interest
(other than ownership of 10% or less of the outstanding stock of any
corporation) in any person, firm, corporation, or business entity (whether as
an employee, officer, director, agent, security holder, creditor, consultant,
or otherwise) that engage in any business operations that would be in direct
competition of that of the Company. If in any judicial proceeding, a court
should refuse to enforce any of the separate covenants deemed included in this
section, then the unenforceable covenants shall be deemed to be eliminated
from these provisions for the purpose of those proceedings to the extent
necessary to permit the remaining separate covenants to be enforced.
This covenant not to compete shall not be construed as restricting
Manager's right to own shares in any company or limited partnership or
business entity (other than ownership of 10% or less of the outstanding stock
of any corporation) provided Manager does not perform services for, or
participate in any way in the management of, a business entity which competes
in the manner outlined above.
8. Nondisclosure of Information. Manager will not, directly or indirectly,
during or after the term of this Agreement disclose to any person not
authorized by the Company to receive or use such information, except for the
sole benefit of the Company, any of the Company's or UTI-UK's confidential or
proprietary data, information, or techniques, or give to any person not
authorized by the Company to receive it any information that is not generally
known to anyone other than the Company or that is designated by the Company as
"Limited," "Private," or "Confidential," or similarly designated.
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9. Termination for Cause. The Company may terminate this Agreement during
its term with cause ("Cause") by showing that Manager has materially breached
its terms; that Manager, in the determination of the board, has been grossly
negligent in the performance of its duties; that it has substantially failed
to meet written standards established by Company for the performance of its
duties; or that it has engaged in material willful or gross misconduct in the
performance of his duties hereunder.
10. Assignment. This Agreement may not be assigned or transferred by either
party without the prior written consent of the other party.
11. Indemnification. The Company shall indemnify Manager and hold Manager
harmless from liability for acts or decisions made by Manager while performing
services for Company to the greatest extent permitted by applicable law.
12. Entire Agreement. This Agreement is and shall be considered to be the
only agreement or understanding between the parties hereto with respect to the
retention of the management services of Manager by Company. All negotiations,
commitments, and understandings acceptable to both parties have been
incorporated herein. No letter, telegram, or communication passing between
the parties hereto covering any matter during this contract period, or any
plans or periods thereafter, shall be deemed a part of this Agreement; nor
shall it have the effect of modifying or adding to this Agreement unless it is
distinctly stated in such letter, telegram, or communication that is to
constitute a part of this Agreement and is attached as an amendment to this
Agreement and is signed by the parties to this Agreement.
13. Enforcement. Each of the parties to this Agreement shall be entitled to
any remedies available in equity or by statute with respect to the breach of
the terms of this Agreement by the other party.
14. Governing Law. This Agreement shall be governed by and interpreted in
accordance with the laws of the United States of America and, with respect to
matters of state law, with the laws of the state of Nevada.
15. Severability. If and to the extent that any court of competent
jurisdiction holds any provision or any part thereof of this Agreement to be
invalid or unenforceable, such holding shall in no way affect the validity of
the remainder of this Agreement.
16. Waiver. No failure by any party to insist upon the strict performance of
any covenant, duty, agreement, or condition of this Agreement or to exercise
any right or remedy consequent upon a breach hereof shall constitute a waiver
of any such breach or of any covenant, agreement, term, or condition.
PAGE
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AGREED AND ENTERED INTO as of the date first above written.
COMPANY:
AMERICAN TIRE CORPORATION
[A Nevada corporation]
By: /S/ Xxxxxxx X. Xxxxxxx
Its Duly Authorized Officer
MANAGER:
XXXXXXX INVESTMENTS LIMITED
[A Jersey corporation]
By: /S/ Xxxx Xxxx-Xxxxxxxx
Its Duly Authorized Officer
