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:
1. 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.
2. 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.
3. 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.
4. This Agreement shall be binding upon the
successors and assigns of each Party.
5. 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.
6. 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matter of this Agreement are superseded by this Agreement.
7. 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.
8. 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.
9. 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
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
____________________________
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.
(WE MAY WANT TO PUT MOST OF THE ADDITIONAL PROVISIONS IN
THE BOARD RESOLUTIONS IN ORDER TO PRODUCE A ONE PAGE
FRONT-BACK CERTIFICATE WITH SUMMARY PROVISIONS ONLY)
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
