DEBT CONVERSION AND PREFERRED STOCK AGREEMENT
This AGREEMENT dated as of July 22, 1997 is entered
into by and between:
1. AUTOMOBILI LAMBORGHINI, U.S.A., INC., a
corporation incorporated under the laws of Delaware and
having its principal address at 0000 Xxxxxxxxx Xxxxxxx Xxxxx,
Xxxxxxxxxxxx, Xxxxxxx 00000 (hereinafter referred to as
"ALUSA").
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 ALUSA in the
principal amount of
$568,577.40 (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, ALUSA 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 5,686 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 ALUSA.
2. In consideration of the issuance of the Preferred
Shares in accordance with this Agreement, as full payment for
the Preferred Shares, ALUSA hereby satisfies and cancels the
Indebtedness.
3. ALUSA represents and warrants that the Indebtedness
includes and consists of all indebtedness, obligations,
agreements and covenants of Vector to ALUSA 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Agreement are superseded by this Agreement.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, ALUSA 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
Xxxxx 0000
Xxxxxxxxxxxx, XX 00000
(000) 000-0000
Fax: (000) 000-0000
AUTOMOBILI LAMBORGHINI, U.S.A., INC.
By: /s/ Vittorio DiCupua
Title: Chariman
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
2 5686
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, U.S.A.,
Inc., a company authorized under the laws of the State of
Delaware, is the registered holder of FIVE THOUSAND THREE
HUNDRED EIGHTY-EIGHT 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, 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 428
February 1, 1999 430
March 1, 1999 433
April 1, 1999 435
May 1, 1999 437
June 1, 1999 439
July 1, 1999 442
August 1, 1999 444
September 1, 1999 446
October 1, 1999 448
November 1, 1999 451
December 1, 1999 453
