THIS OPTION HAS 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.
OPTION AGREEMENT
OPTION AGREEMENT, dated as of July 22, 1997, by and
between TRADELINK INTERNATIONAL LIMITED, a Bahamian corporation
(the "Optionee"), on the one hand, and VECTOR AEROMOTIVE
CORPORATION, a Nevada corporation ("Vector") on the other.
WHEREAS, effective as of July 22, 1997, the Optionee
and Vector entered into a Share Purchase Agreement (the
"Purchase Agreement") pursuant to which, among other things,
the Optionee is to receive the right (the "Option") to purchase
up to 60,000,000 Common Shares, par value $.01 per share (the
"Option Shares") of Vector pursuant to the terms of an option
agreement; and
WHEREAS, this option agreement (the "Option
Agreement") constitutes the option agreement described in the
Purchase Agreement;
NOW, THEREFORE, in consideration of the agreements
set forth below, the parties here agrees as follows:
1. The Option. Subject to the terms and conditions
hereof, the Optionee is hereby granted the Option, at any time
or from time to time commencing on the date of Option Agreement
and at or before 5:00 P.M., Eastern Time, on or before thirty
(30) days following the Conversion Date, as defined in the Loan
Agreement (as defined in the Purchase Agreement) (such period
hereinafter the "Option Exercise Period"), but not thereafter,
to subscribe for and purchase the Option Shares for a purchase
price of One Million Two Hundred Fifty Thousand Dollars
($1,250,000). (the "Option Exercise Price"). If the rights
represented hereby shall not be exercised during the Option
Exercise Period, this Option shall become and be void without
further force or effect, and all rights represented hereby
shall cease and expire.
2. Exercise of Option. During the Option Exercise
Period, the Optionee may exercise this Option upon presentation
and surrender of this Option and upon payment of the Option
Exercise Price for the Option Shares to be purchased to Vector
at the principal office of Vector or to any officer or director
of Vector. Upon exercise of this Option, the form of election
hereinafter provided must be duly executed and the instructions
for registration of the Option Shares acquired by such exercise
must be completed and so delivered with this Option to Vector.
On exercise of this Option, unless (i) Vector receives an
opinion from counsel satisfactory to it that such a legend is
not required in order to assure compliance with the Securities
Act of 1933, as amended (the "1933 Act"), or any applicable
state securities laws, or (ii) the Option Shares are registered
under the 1933 Act, each certificate for Option Shares issued
hereunder shall bear a legend reading substantially as follows:
This option has 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.
The foregoing legend may be removed with respect to any Option
Shares sold upon registration or sold pursuant to an exemption
from registration including the exemption, for sales made in
accordance with Rule 144 promulgated under the 1933 Act,
provided Vector receives an opinion from counsel satisfactory
to it that such legend may be removed.
3. Assignment. Subject to the terms contained
herein, this Option may be assigned by the Optionee in whole or
in part by execution by the Optionee of the form of assignment
attached to this Agreement. In the event of any assignment,
Vector, upon request and upon surrender of this Option by the
Optionee at the principal office of Vector accompanied by
payment of all transfer taxes, if any, payable in connection
therewith, shall transfer this Option on the books of Vector.
If the assignment is in whole, Vector shall execute and deliver
a new Option or Options of like tenor to this Option to the
appropriate assignee expressly evidencing the right to purchase
the aggregate number of Option Shares purchasable hereunder;
and if the assignment is in part, Vector shall execute and
deliver to the appropriate assignee a new Option or Options of
like tenor expressly evidencing the right to purchase the
portion of the aggregate number of Option Shares as shall be
contemplated by any such assignment, and shall concurrently
execute and deliver to the Optionee a new Option of like tenor
to this Option evidencing the right to purchase the remaining
portion of the Option Shares purchasable hereunder which have
not been transferred to the assignee.
4. Transfer of Option. The Optionee, by acceptance
hereof, agrees that, before any transfer is made of all or any
portion of this Option, the Optionee shall give written notice
to Vector at least 15 days prior to the date of such proposed
transfer, which notice shall specify the identity, address and
affiliation, if any, of such transferee. No such transfer
shall be made unless and until Vector has received an opinion
of counsel for Vector or for the Optionee stating that no
registration under the 1933 Act or any state securities law is
required with respect to such disposition or a registration
statement has been filed by Vector and declared effective by
the Securities and Exchange Commission covering such proposed
transfer and the Option and/or the Option Shares have been
registered under appropriate state securities laws.
5. Share Dividends, Reclassification,
Reorganization Provisions.
(a) If, prior to the expiration of this
Option by exercise or by its terms, Vector shall issue any of
its Common Shares as a share dividend or subdivide the number
of outstanding Common Shares into a greater number of shares
then, in either of such cases, the Option Exercise Price per
share purchasable pursuant to this Option in effect at the time
of such action shall be proportionately reduced and the number
of Option Shares purchasable pursuant to this Option shall be
proportionately increased; and conversely, if Vector shall
reduce the number of outstanding Common Shares by combining
such shares into a smaller number of shares then, in such case,
the Option Exercise Price per share purchasable pursuant to
this Option in effect at the time of such action shall be
proportionately increased and the number of Option Shares at
that time purchasable pursuant to this Option shall be
proportionately decreased. If Vector shall, at any time during
the life of this Option, declare a dividend payable in cash on
its Common Shares and shall at substantially the same time
offer to its shareholders a right to purchase new Common Shares
from the proceeds of such dividend or for an amount
substantially equal to the dividend, all Common Shares so
issued shall, for the purpose of this Option, be deemed to have
been issued as a share dividend. Any dividend paid or
distributed upon Common Shares in shares of any other class of
securities convertible into Common Shares shall be treated as
a dividend paid in Common Shares to the extent that Common
Shares are issuable upon the conversion thereof.
(b) If, prior to the expiration of this
Option by exercise or by its terms, Vector shall be
recapitalized by reclassifying its outstanding Common Shares,
or Vector or a successor corporation shall consolidate or merge
with or convey all or substantially all of its or any successor
corporation's property and assets to any other corporation or
corporations (any such corporation being included within the
meaning of the term "successor corporation" used above in the
event of any consolidation or merger of any such corporations
with, or the sale of all or substantially all of the property
of any such corporation, to another corporation or
corporations), the Optionee shall thereafter have the right to
purchase, upon the basis and upon the terms and conditions and
during the time specified in this Option, in lieu of the Option
Shares theretofore purchasable upon the exercise of this
Option, such shares, securities or assets as may be issued or
payable with respect to, or in exchange for, the number of
Option shares theretofore purchasable upon the exercise of this
Option had such recapitalization, consolidation, merger or
conveyance not taken place and, in any such event, the rights
of the Optionee to an adjustment in the number of Option shares
purchasable upon the exercise upon this Option as herein
provided shall continue and be preserved in respect of any
shares, securities or assets which the Optionee becomes
entitled to purchase.
(c) If, (i) Vector shall take a record of
holders of its Common Shares for the purpose of entitling them
to receive a dividend payable otherwise than in cash, or any
other distribution in respect of the Common shares (including
cash), pursuant to, without limitation, any spin-off, split-off,
or distribution of Vector's assets; or (ii) Vector shall
take a record of the holders of its Common Shares for the
purpose of entitling them to subscribe for or purchase any
shares of any class or to receive any other rights; or (ii) in
the event of any classification, reclassification or other
reorganization of the securities which Vector is authorized to
issue, consolidation or merger by Vector with or into another
corporation, or conveyance of all or substantially all of the
assets of Vector; or (iv) in the event of any voluntary or
involuntary dissolution, liquidation or winding up of Vector;
then, and in any such case, Vector shall mail to the Optionee,
at least 30 days prior thereto, a notice stating the date or
expected date on which a record is to be taken for the purpose
of such dividend, distribution or rights, or the date on which
such classification, reclassification, reorganization,
consolidation, merger, conveyance, dissolution, liquidation or
winding up, as the case may be, will be effected. Such notice
shall also specify the date or expected date, if any is to be
fixed, as to which holders of Common Shares of record shall be
entitled to participate in such dividend, distribution or
rights, or shall be entitled to exchange their Common Shares or
securities or other property deliverable upon such
classification, reclassification, reorganization,
consolidation, merger, conveyance, dissolution, liquidation or
winding up, as the case may be.
(d) If Vector, at any time while this
Option shall remain unexpired and unexercised in whole or in
part, shall sell all or substantially all of its property,
dissolve, liquidate or wind up its affairs, the Optionee may
thereafter receive upon exercise hereof, in lieu of each Option
Share which it would have been entitled to receive, the same
kind and amount of any securities or assets as may be issuable,
distributable or payable upon any such sale, dissolution,
liquidation or winding up with respect to each Common Shares of
Vector purchased upon exercise of this Option.
6. Reservation of Shares Issuable on Exercise of
Option. At all times during the Option Exercise Period, Vector
will reserve and keep available out of its authorized Common
Shares, solely for issuance upon the exercise of this Option,
such number of Common Shares and other securities as from time
to time may be issuable upon exercise of this Option.
7. Request to Transfer Agent. On exercise of all
or any portion of this Option, Vector shall, within ten days of
the receipt of good and clean funds for the purchase of any or
all of the Option Shares, advise its Transfer Agent and
Registrar of the required issuance of the number of Option
Shares and the names in which such shares are to be registered
pursuant to the exercise form attached to this Agreement.
Vector shall also execute and deliver any and all such further
documents as may be requested by the Transfer Agent and
Registrar for the purpose of effecting the issuance of Option
shares upon payment therefor by the Optionee or any assignee.
8. Loss, Theft, Destruction or Mutilation. Upon
receipt by Vector of evidence satisfactory to it (in the
exercise of its reasonable discretion) of the ownership of and
the loss, theft, destruction or mutilation of this Option, and
the purchase by the Optionee of a lost security bond (or, if
acceptable to Vector, the provision of a satisfactory indemnity
from the Optionee) in an amount equal to or exceeding the total
value of the Option Shares to be purchased hereunder, Vector
will execute and deliver, in lieu thereof, a new Option of like
tenor.
9. Optionee Not a Shareholder. The Optionee or any
other holder of this Option shall, as such, not be entitled by
reason of ownership of this Option to any rights whatsoever of
a shareholder of Vector.
10. Transfer Taxes. The Optionee or its assignee(s)
will pay all taxes in respect of the issue or transfer of this
Option or the Option Shares issuable upon exercise hereof.
11. Mailing of Notice. All notices and other
communications from Vector to the Optionee or from the Optionee
to Vector shall be mailed by first class, certified mail,
postage prepaid, or sent by receipt confirmed facsimile
transmission, to the address furnished to each party in writing
by the other party.
12. Fractional Shares. No fractional shares or
scrip representing fractional shares shall be issued upon
exercise of this Option. With respect to any fraction of a
share called for upon the exercise hereof, Vector shall issue
to the Optionee at no extra cost another whole share for any
fraction which is one-half or greater, and the Optionee shall
forfeit the fractional share that is less than one-half of a
share.
13. Common Shares Defined. Whenever reference is
made in this Option to the issue or sale of Common Shares, the
term "Common Shares" shall mean the voting Common Shares of
Vector of the class authorized as of the date hereof and any
other class of stock ranking on a party with such Common
Shares.
14. Registration Rights. The Optionee and Vector
acknowledge their execution of a Registration Rights Agreement
between the parties which provides, among other things, for
certain registration rights which are for the benefit of the
Optionee and any assignee(s). Vector's agreements with respect
to the registration rights will continue in effect regardless
of the exercise or surrender of this Option by either the
Optionee or any assignee(s).
15. Opinion of Legal Counsel. As a condition to the
payment by Optionee of the Purchase Price specified in the
Purchase Agreement, Vector shall deliver to Optionee at the
Closing an opinion of its legal counsel in form and substance
satisfactory to the Optionee and its counsel.
16. Purchase Agreement. This Option is in addition
to the Purchase Agreement and the rights of the Optionee under
this Option and the Purchase Agreement are cumulative.
17. Governing Law. This Option shall be governed
by, and construed in accordance with, the laws of the State of
Florida.
IN WITNESS WHEREOF, the parties have executed this
Option Agreement on the day and year first above written.
VECTOR:
VECTOR AEROMOTIVE CORPORATION
By: /S/ Xxxxx Xxxxx Xxxx
Name:Xxxxx Xxxxx Xxxx
Title:President
OPTIONEE:
TRADELINK INTERNATIONAL LIMITED
By: /s/ X.X. Xxxxxxx
Name:X. X. Xxxxxxx
Title:President and General Manager
FORM TO BE USED TO EXERCISE OPTION:
EXERCISE FORM
The undersigned hereby elects irrevocably to exercise
the within Option and to purchase ____________ Common Shares of
Vector Aeromotive Corporation, called for hereby, and hereby
makes payment of $________________ (at the rate of $. per
share) in payment of the Option Exercise Price pursuant hereto.
Please issue the shares as to which this Option is exercised in
accordance with the instructions given below.
___________________________________
Signature
Date:___________________
INSTRUCTIONS FOR REGISTRATION OF SHARES:
Register Shares in name of:
____________________________________
(Print)
Address:_______________________________________________________
FORM TO BE USED TO ASSIGN OPTION:
ASSIGNMENT
For value received, _____________________________ does hereby
sell, assign and transfer unto ___________________ the right to
purchase _____________ Common Shares of Vector Aeromotive
Corporation, evidenced by the within Option, and does hereby
irrevocably constitute and appoint Vector Aeromotive
Corporation and/or its Transfer Agent as attorney to transfer
the same on the books of Vector Aeromotive Corporation with
full power of substitution in the premises.
_____________________________
Signature
Signature Guaranteed
_____________________________
Date:________________________
NOTICE: The signature to the form to exercise or form to
assign must correspond with the name as written upon the face
of the within Option in every particular without alteration or
enlargement or any change whatsoever, and must be guaranteed by
a bank, other than a savings bank, or by a trust company or by
a firm having membership on a registered national securities
exchange.
