<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
[_] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE
EXCHANGE ACT
For the transition period from ____________________ to ____________________
Commission file number: 000-28112
MOTORVAC TECHNOLOGIES, INC.
(Exact Name of Small Business Issuer as Specified in Its Charter)
STATE OF DELAWARE 33-0522018
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1431 S. VILLAGE WAY
SANTA ANA, CALIFORNIA 92705
(Address of Principal Executive Offices)
(714) 558-4822
(Issuer's Telephone Number, Including Area Code)
N/A
- --------------------------------------------------------------------------------
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last
Report)
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12
months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days. Yes X No
----- -----
(APPLICABLE ONLY TO CORPORATE ISSUERS)
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date.
Title Date Outstanding
Common Stock, $.01 par value September 30, 1996 4,514,918
Transitional Small Business Disclosure Format (check one);
Yes No X
----- -----
<PAGE>
MOTORVAC TECHNOLOGIES, INC
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1995 1996
---------- ----------
<S> <C> <C>
ASSETS
------
CURRENT ASSETS
Cash and cash equivalents $5,008 $3,739,435
Accounts receivable, net of allowance for doubtful accounts of $186,599
(December 31,1995) and $55,070 (September 30, 1996) 773,329 1,254,571
Inventories, net 1,109,250 1,279,730
Other Current Assets 166,778 216,288
---------- ----------
Total Current Assets 2,054,365 6,490,024
PROPERTY AND EQUIPMENT, net 288,527 249,371
INTANGIBLE ASSETS, net of accumulated amortization of $152,095
(December 31, 1995) and $425,761 (September 30, 1996) 1,672,348 1,401,530
OTHER ASSETS 25,000 25,000
---------- ----------
$4,040,240 $8,165,925
========== ==========
LIABILITIES AND STOCKHOLDERS (DEFICIENCY) EQUITY
------------------------------------------------
CURRENT LIABILITIES
Accounts payable and other accrued liabilities $1,364,490 $1,246,812
Accrued interest-related parties 649,901 63,005
Amounts payable to ex-licensor 219,250 200,059
---------- ----------
Total current liabilities 2,233,641 1,509,876
AMOUNTS PAYABLE TO EX-LICENSOR 219,295 0
NOTES PAYABLE TO RELATED PARTIES 5,273,872 1,420,000
COMMITMENTS AND OTHER CONTINGENCIES
STOCKHOLDERS' (DEFICIENCY) EQUITY
Cumulative Series A preferred stock ($.01 par); 95,295 shares authorized; and
95,295 and 0 shares outstanding as of December 31, 1995 and September 30,1996,
respectively; (liquidation preference $4,764,750 at December 31, 1995) 953 0
Cumulative Series B preferred stock ($.01 par); 55,000 shares authorized; and
54,300 and 0 shares outstanding as of December 31, 1995 and September 30, 1996,
respectively; (liquidation preference $2,715,000 at December 31, 1995) 543 0
Common Stock, $.01 par value; 10,000,000 shares authorized;
948,000 shares issued and outstanding at December 31, 1995
4,514,918 shares issued and outstanding at September 30, 1996 9,480 45,149
Additional paid in capital 6,995,448 16,501,762
Accumulated deficit (10,692,992) (11,310,862)
---------- ----------
Total Shareholders' (deficiency) equity (3,686,568) 5,236,049
---------- ----------
$4,040,240 $8,165,925
========== ==========
</TABLE>
<PAGE>
MOTORVAC TECHNOLOGIES, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
----------------------- ------------------------
<S> <C> <C> <C> <C>
Sept. 30 Sept. 30 Sept. 30 Sept. 30
1996 1995 1996 1995
---------- ---------- ---------- ----------
NET SALES $2,650,581 $1,483,804 $5,821,421 $3,527,599
COST OF SALES 1,546,676 1,004,243 3,113,784 2,227,250
---------- ---------- ---------- ----------
GROSS PROFIT 1,103,905 479,561 2,707,637 1,300,349
OPERATION EXPENSES
Selling, General and Administrative Expenses 1,167,833 914,473 3,097,050 2,861,331
Research and Development Expenses 18,387 67,670 63,223 298,616
---------- ---------- ---------- ----------
1,186,220 982,143 3,160,273 3,159,947
---------- ---------- ---------- ----------
LOSS FROM OPERATIONS (82,315) (502,582) (452,636) (1,859,598)
INTEREST EXPENSE TO RELATED PARTIES/(INTEREST REVENUE) (16,531) 144,794 165,234 385,796
---------- ---------- ---------- ----------
LOSS BEFORE PROVISION FOR INCOME TAXES (65,784) (647,376) (617,870) (2,245,393)
PROVISION FOR INCOME TAXES 0 0 0 0
---------- ---------- ---------- ----------
NET LOSS ($65,784) ($647,376) ($617,870) ($2,245,393)
========== ========== ========== ==========
PROFORMA DATA (NOTE 3)
Historical Loss ($65,784) ($617,870)
Proforma reduction in interest expense 0 132,416
---------- ----------
PRO FORMA NET LOSS ($65,784) ($485,454)
========== ==========
PROFORMA NET LOSS PER COMMON SHARE $ 0.01 $ 0.11
========== ==========
WEIGHTED AVERAGE OUTSTANDING
COMMON AND COMMON EQUIVALENT SHARES 4,527,907 4,479,766
========== ==========
</TABLE>
<PAGE>
MOTORVAC TECHNOLOGIES, INC
STATEMENT OF CASH FLOW
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
------------------------- -------------------------
Sept. 30 Sept. 30 Sept. 30 Sept. 30
1996 1995 1996 1995
---------- -------- ---------- ----------
<S> <C> <C> <C> <C>
CASH FLOW FROM OPERATION ACTIVITIES:
Net Loss ($65,784) ($647,366) ($617,870) ($2,245,393)
Discounts earned for early payment to ex-licensor (79,993) (79,993)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 117,403 44,117 348,264 145,811
Loss on disposal of long term assets 0 0 0 0
Net change in operation assets and liabilities:
Accounts receivable (230,865) (497,655) (481,242) (341,933)
Inventories (13,803) 178,810 (170,480) 130,909
Other current assets, intangibles and other assets (94,508) 14,193 (52,358) (65,122)
Interest payable to related parties 36,340 122,571 (586,896) 377,085
Accounts payable and other current liabilities 9,750 46,821 (117,678) (252,444)
---------- -------- ---------- ----------
net cash used in operating activities (321,460) (738,509) (1,758,253) (2,251,087)
---------- -------- ---------- ----------
CASH FLOW FROM INVESTING ACTIVITIES
Purchase of equipment (8,916) (59,249) (35,442) (105,450)
CASH FLOW FROM FINANCING ACTIVITIES
Net proceeds from issuance of 1,210,000 common stock (25,867) 0 5,130,187 0
Proceeds from issuance of notes payable to related parties 0 533,801 680,000 2,080,264
(Increase) decrease in receivable from licensor 0 20,154 0 188,701
Payments to ex-licensor (44,736) 0 (158,493) 0
Repayment of notes to related parties 0 0 (123,572) 0
---------- -------- ---------- ----------
net cash provided by financing activities (70,603) 553,955 5,528,122 2,268,965
---------- -------- ---------- ----------
NET INCREASE (DECREASE) IN CASH (400,979) (243,803) 3,734,427 (87,572)
CASH AND CASH EQUIVALENTS, Beginning of period 4,140,414 216,594 5,008 60,363
---------- -------- ---------- ----------
CASH AND CASH EQUIVALENTS, End of period $3,739,435 ($27,209) $3,739,435 ($27,209)
========== ======== ========== ==========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION
Interest paid 0 0 836,423 0
========== ======== ========== ==========
Income taxes paid 0 0 0 0
========== ======== ========== ==========
Conversion of Preferred Series A Stock
to Common Stock (net) 4,659,499
==========
Conversion of Preferred Series B Stock
to Common Stock (net) 2,170,425
==========
Conversion of Notes Payable to related
parties to Common Stock 4,410,300
==========
Non Cash reduction in payable to ex-licensor 79,993 79,993
========== ==========
</TABLE>
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Notes to Unaudited Consolidated Financial Statements:
-----------------------------------------------------
1. Basis of Presentation
---------------------
The information set forth in these consolidated financial statements as of
September 30, 1996 is unaudited and may be subject to normal year-end
adjustments. In the opinion of management, the unaudited financial
statements reflect all adjustments, consisting only of normal recurring
adjustments, necessary to present fairly the financial position of MotorVac
Technologies, Inc. (the "Company" or "MTI") for the period indicated.
Results of operations for the interim period ended September 30, 1996 are
not necessarily indicative of the results of operations for the full fiscal
year.
Certain amounts in the prior years' Consolidated Financial Statements have
been reclassified to conform to the current fiscal year's presentation been
reclassified to conform to the current fiscal year's presentation.
Certain information normally included in footnote disclosures to the
financial statements has been condensed or omitted in accordance with the
rules and regulations of the Securities and Exchange Commission.
2. Initial Public Offering
-----------------------
On May 1, 1996, the Company completed an initial public offering of
1,100,000 shares of its common stock at $5.375 per share, netting proceeds
to the Company, after underwriter's discounts and expenses, of approximately
$5,143,875. On June 13, 1996, the Company completed the sale to the
underwriter upon exercise of the underwriter's overallotment option of an
additional 110,000 shares at $5.375 per share, netting to the Company, after
underwriter's discounts and expenses, an additional amount of approximately
$514,388. Proceeds to the Company were used to repay approximately $836,000
of accrued interest and approximately $124,000 of offering expense
reimbursement to the Company's major shareholder. The remaining proceeds are
anticipated to be used to expand the Company's advertising and marketing
efforts, acquire related products or product lines, and for working capital.
3. Pro Forma Data
--------------
Pro Forma Net Loss
Pro forma net loss represents the results of operations adjusted to reflect
the impact of the elimination of interest expense related to the $4,410,300
in debt due Erin Mills International Investment Corporation ("EMIIC"), a
related party, and The WH & NC Eighteen Corporation ("WH & NC"), an
affiliate of EMIIC, which was exchanged for common stock immediately prior
to the consummation of the initial public offering.
<PAGE>
Pro Forma Net Loss Per Share
Historical net income per common share is not presented for the periods
prior to January 1, 1996 because it is not indicative of the ongoing entity.
Pro forma net loss per share has been computed by dividing pro forma net
loss by the weighted average number of shares of common stock and common
stock equivalent shares outstanding during the period.
Both the number of shares and the net loss per share are actual, not pro
forma, for the three months ended September 30, 1996.
4. Inventories
-----------
Inventories, which include materials, supplies, labor and manufacturing
overhead, are summarized as follows:
<TABLE>
<CAPTION>
December 31, 1995 September 30, 1996
----------------- ------------------
<S> <C> <C>
Materials and supplies 617,741 961,137
Work in process 100,750 100,751
Finished product 390,759 217,842
--------- ---------
1,109,250 1,279,730
========= =========
</TABLE>
<PAGE>
MOTORVAC TECHNOLOGIES, INC.
---------------------------
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
GENERAL
MotorVac Technologies, Inc. (the "Company") designs, develops, assembles,
markets and sells the MotorVac CarbonClean System for the diagnosis, maintenance
and repair of internal combustion engine fuel systems primarily for the
automotive after-market repair and service industry. The Company markets and
sells its fuel system cleaning machines and detergents through various
distribution channels, both in the United States and Canada ("Domestic") under
the trade name MotorVac, and outside the United States and Canada
("International") under the trade name CarbonClean.
The following discussion and analysis addresses the results of the Company's
operations for the nine months ended September 30, 1996, and for the three
months ended September 30, 1996, as compared to the Company's results of
operations for the nine months ended September 30, 1995, and for the three
months ended September 30, 1995. On May 1, 1996, the Company consummated an
initial public offering (the "IPO") of 1,100,000 shares of its common stock,
resulting in gross proceeds of approximately $5,912,500. On June 13, 1996, the
Company completed the sale of an additional 110,000 shares of its Common Stock
upon exercise of the underwriter's overallotment option (the "Overallotment"),
resulting in gross proceeds to the Company of approximately $591,250.
This Quarterly Report on Form 10-QSB contains certain forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934, and the Company intends that
such forward-looking statements be subject to the safe harbors created thereby.
The Company may experience significant fluctuations in future operating results
due to a number of factors, including, among other things, the size and timing
of customer orders, new or increased competition, delays in new product
enhancements and new product introductions, quality control difficulties,
changes in market demand, market acceptance of new products, product returns,
seasonality in product purchases by distributors and end users, and pricing
trends in the automotive after-market industry in general, and in the specific
markets in which the Company is active. Any of these factors could cause
operating results to vary significantly from prior periods. Significant
variability in orders during any period may have a material adverse impact on
the Company's cash flow or work flow, and any significant decrease in orders
could have a material adverse impact on the Company's results of operations and
financial condition. As a result, the Company believes that period-to-period
comparisons of its results of operations are not necessarily meaningful and
should not be relied upon as any indication of future performance. Fluctuations
in the Company's operating results could cause the price of the Company's Common
Stock to fluctuate substantially.
Assumptions relating to the foregoing involve judgments with respect to, among
other things, future economic, competitive and market conditions, all of which
are difficult or impossible to predict accurately, and many of which are beyond
the control of the Company. In addition, the business and operations of the
Company are subject to substantial risks which increase the uncertainty inherent
in the forward-looking statements. In light of the significant uncertainties
inherent in the forward-looking information included herein, the inclusion of
such information should not be regarded as a representation by the Company or
any other person that the objectives or plans of the Company will be achieved.
<PAGE>
RESULTS OF OPERATIONS
Comparison of Three Months Ended September 30, 1996 and 1995
Net Sales. Net sales for the three months ended September 30, 1996 increased
----------
$1,166,777 (approximately 78.6%) to $2,650,581 from $1,483,804 for the three
months ended September 30, 1995. This sales increase was due to increases in
both Domestic and International sales, with Domestic sales up 111.6% and
International sales up 12.1% from the same period last year. This sales
increase was due to an increase in machine sales to the Company's largest
customer in the U.S., the addition of John Bean Company as a distributor in the
U.S., and an increase in machine and detergent sales to a number of
International customers.
For the three months ended September 30, 1996, Domestic sales were $2,100,212
and International sales were $550,369. For the three months ended September
30, 1995, Domestic sales were $992,752, and International sales were $491,052.
Gross Profit. Gross profit for the three months ended September 30, 1996
-------------
increased by $624,344 (approximately 130.2%) to $1,103,905 from $479,561 for the
three months ended September 30, 1995. The primary reason for the increase was
the increase in the sales volume, and reductions in royalties, freight and
labor, which were partially offset by a cost increase of one component which
affected costs of sales late in the quarter.
Operating Expenses. Operating expenses increased by $204,077 (approximately
-------------------
20.8%) from $982,143 for the three months ended September 30, 1995, to
$1,186,220 for the three months ended September 30, 1996. The increase was
primarily attributable to legal and litigation costs associated with the
DeCarbon Australia Pty Ltd. litigation (see Part II, Item 1), which accounted
for $195,179 of the $204,077 increase.
Loss From Operations. As a result of the above, the loss from operations
---------------------
for the three months ended September 30, 1996 of $82,315 improved by $420,267
(approximately 83.6%) from a loss of $502,582 for the three months ended
September 30, 1995.
Interest. Interest (net) revenue for the three months ended September 30,
---------
1996 of $16,531 improved by $161,325 (approximately 111.4%) from interest
expense of $144,794 for the three months ended September 30, 1995. This
improvement was a result of the conversion of $4,410,300 of notes payable to
EMIIC which were converted to Common Stock at the IPO price on April 25, 1996,
and interest income the Company earned on the IPO proceeds.
Net Loss. The net loss for the three months ended September 30, 1996 of
---------
$65,784 improved by $581,592 (approximately 89.8%) from a net loss of $647,376
for the three months ended September 30, 1995.
Comparison of Nine Months Ended September 30, 1996 and 1995
Net Sales. Net sales for the nine months ended September 30, 1996 increased
----------
$2,293,822 (approximately 65.0%) to $5,821,421 from $3,527,599 for the nine
months ended September 30, 1995. This sales increase was due to increases in
both Domestic and International sales, with Domestic sales up 92.4% and
International sales up 28.9% from the same period last year.
Domestic sales for the nine months ended September 30, 1996 were $3,862,797,
and International sales for the same period were $1,958,624. For the nine
months ended September 30, 1995, Domestic sales were $2,007,819, and
International sales were $1,519,780.
Gross Profit. Gross profit for the nine months ended September 30, 1996
-------------
increased $1,407,288 (approximately 108.2%) to $2,707,637 from $1,300,349 for
the nine months ended September 30, 1995. The
<PAGE>
primary reason for this was the increase in the sales volume, the improvement in
the sales mix (with a larger increase in detergent sales than machine sales),
and and a reduction in royalties.
Operating Expenses. Operating expenses for the nine months ended September
-------------------
30, 1996 of $3,160,273 increased by only $326 (approximately 0%) from $3,159,947
for the nine months ended September 30, 1995. This increase was due mostly to
higher legal and litigation costs offset by reductions in numerous other expense
categories, mostly General and Administrative expenses.
Loss From Operations. As a result of the above, the loss from operations for
---------------------
the nine months ended September 30, 1996 improved by $1,406,962 (approximately
75.7%) to a loss of $452,636 from a loss of $1,859,598 for the nine months ended
September 30, 1995.
Interest. Interest (net) expense for the nine months ended September 30,
---------
1996 decreased by $220,562 (approximately 57.2%) to $165,234 from $385,796 for
the nine months ended September 30, 1995. The primary reason for the decrease
was the conversion of the EMIIC debt at the time of the IPO and interest earned
on the IPO proceeds.
Net Loss. The net loss for the nine months ended September 30, 1996 improved
---------
by $1,627,523 (approximately 72.5%) to $617,870 from a loss of $2,245,393 for
the nine months ended September 30, 1995.
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 1996, the Company had working capital of $4,980,144. At
December 31, 1995, the Company had a working capital deficit of $179,276.
For the Three Months Ended September 30, 1996
- ---------------------------------------------
Cash and cash equivalents at July 1, 1996 was $4,140,414. Cash used in
operating activities during the three months ended September 30, 1996, which
includes current assets and current liabilities, was $321,460. This amount
includes a $79,993 non-cash reduction in amounts payable to ex-licensor due to
the First Amendment to the Purchase Agreement between the Company and its ex-
licensor. Under the terms of that Agreement dated September 30, 1996, the
Company paid in October 1996 a total of $200,059 to its ex-licensor, accepted as
full payment of $280,052, due under the Purchase Agreement, thereby generating
a gain to the Company of $79,993. No other amounts are due to the ex-licensor
after this payment. Cash used in investing activities was $8,916, which
represented the purchase of fixed assets. Cash used from financing activities
was $70,603 representing additional costs from the issuance of 1,210,000 common
shares in the IPO and payments to ex-licensor of $44,736, under the terms of the
Purchase Agreement dated December 31, 1995. The net decrease in cash for the
three months ended September 30, 1996 was $400,979, resulting in ending cash of
$3,739,435.
For the Nine Months Ended September 30, 1996
- --------------------------------------------
Cash and cash equivalents at January 1, 1996 was $5,008. Cash used in
operating activities for the nine months ended September 30, 1996 was
$1,758,253, including the $79,993 payable reduction discussed above. Cash used
in investing activities was $35,442, which represents the purchase of fixed
assets. Cash from financing activities was $5,528,122, which consisted of
$680,000 of proceeds from the issuance of notes payable to related parties, and
$5,130,187 of net proceeds from the issuance of 1,210,000 shares of common stock
at the IPO price of $5.375, less commissions, expenses and fees, and repayment
of notes payable to related parties of $123,572 and payments to ex-licensor of
$158,493, under the terms of the Purchase Agreement dated December 31, 1995.
The net increase in cash for the nine months ended September 30, 1996 was
$3,734,427, resulting in ending cash of $3,739,435.
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Reference is hereby made to the discussion under the heading "Item 1. Legal
Proceedings" in the Company's Form 10-QSB for the quarter ended March 31, 1996
for information regarding the matter entitled DeCarbon Australia Pty. Ltd. v.
-------------------------------
MotorVac Technologies, Inc. (Case No. 764248). The Company has filed Cross-
- ---------------------------
Complaints against both DeCarbon and Robert L. Fisher, alleging generally breach
of contracts, trademark infringement, misappropriation of trade secrets and
unfair competition. Fisher, in turn, has cross-complained against the Company
generally for libel, slander, unfair competition and breach of an indemnity
agreement.
On October 29, 1996, the Company obtained a preliminary injunction against
DeCarbon from using the names "CarbonClean," "MotorVac," "MTI"; from falsely
representing any of their products as being from MotorVac or CarbonClean; from
soliciting any dealers or distributors of MotorVac and from disclosing or using
MotorVac's proprietary information which DeCarbon had obtained while a
distributor. The Company also obtained a preliminary injunction against Fisher
from using or disclosing confidential information which he obtained while he was
an employee of MotorVac. On October 31, 1996, the Company obtained dismissal of
that portion of Fisher's Cross-Complaint relating to his indemnity agreement.
Reference is hereby made to the discussion under the heading "Legal
Proceedings" contained on page 38 of the Company's Prospectus dated April 25,
1996 with regard to the action filed by the Company in the United States
District Court of the Northern District of Ohio, Eastern Division, against
Richard R. Green, individually and doing business as P&R Equipment Company,
Gregory M. Phillips, C.S.P. International, Inc. and certain other defendants,
and the counterclaim filed by certain of the defendants in connection with such
proceeding. Written discovery is currently scheduled for March, 1997 with a
preliminary court date set for July, 1997.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) 3.1 Amended and Restated Certificate of Incorporation (incorporated
herein by reference to Exhibit No. 3.1 to the Registrant's Registration
Statement on Form SB-2 filed with the Securities and Exchange Commission (the
"SEC") on February 29, 1996 (the "Form SB-2").
3.2 Third Amended and Restated Bylaws of Registrant (incorporated by
reference to Exhibit No. 3.2 to the Form SB-2).
3.3 Amendment to the Third Amended and Restated Bylaws of Registrant
(incorporated by reference to Exhibit No. 3.3 to Amendment No. 1 to the Form SB-
2 filed with the SEC on March 29, 1996) (the "Amendment No. 1 to Form SB-2").
4.1 Form of Underwriter's Warrant Agreement by and between the Registrant
and Meridian Capital Group, Inc. (incorporated by reference to Exhibit No. 4.1
to Amendment No. 2 to Form SB-2 filed with the SEC on April 25, 1996) (the
"Amendment No. 2 to Form SB-2").
4.2 Form of certificate evidencing shares of Registrant's common stock
(incorporated by reference to Exhibit No. 4.2 to Amendment No. 1 to Form SB-2).
<PAGE>
10.1 Letter Agreement dated September 15, 1996, by and between the
Registrant and Automotive Diagnostics canceling the Products Distribution
Agreement dated November 16, 1995, along with the Product Labeling Agreement.
10.2 Products Distribution Agreement dated September 15, 1996, by and
between the Registrant and Cartek International, Inc., covering the territory of
South and Central America and the Caribbean, with the exception of Brazil,
Mexico and Puerto Rico.
10.3 First Amendment to Purchase Agreement dated September 30, 1996,
between the Registrant, International Turbo Center, Inc., and Enviromotive, Inc.
11.1 Statement of Calculation of Pro Forma Net Loss Per Share and Net Loss
Per Share.
27.1 Financial Data Schedule in accordance with Article 5 of Regulation
SX.
(b) No reports on Form 8-K were filed during the quarter ended September 30,
1996.
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
MOTORVAC TECHNOLOGIES, INC.,
a Delaware corporation
By: s/ Lee W. Melody
-----------------------------------------------------------
Lee W. Melody, President
Date: November 1 , 1996
----------------------
By: s/ Allan T. Maguire
-----------------------------------------------------------
Allan T. Maguire, Vice President of Finance,
Chief Financial Officer, Treasurer and Secretary
Date: November 1 , 1996
----------------------
<PAGE>
MOTORVAC TECHNOLOGIES, INC.
---------------------------
EXHIBIT INDEX
-------------
3.1 Amended and Restated Certificate of Incorporation (incorporated herein
by reference to Exhibit No. 3.1 to the Registrant's Registration Statement on
Form SB-2 filed with the Securities and Exchange Commission (the "SEC") on
February 29, 1996 (the "Form SB-2").
3.2 Third Amended and Restated Bylaws of Registrant (incorporated by
reference to Exhibit No. 3.2 to the Form SB-2).
3.3 Amendment to the Third Amended and Restated Bylaws of Registrant
(incorporated by reference to Exhibit No. 3.3 to Amendment No. 1 to the Form SB-
2 filed with the SEC on March 29, 1996) (the "Amendment No. 1 to Form SB-2").
4.1 Form of Underwriter's Warrant Agreement by and between the Registrant
and Meridian Capital Group, Inc. (incorporated by reference to Exhibit No. 4.1
to Amendment No. 2 to Form SB-2 filed with the SEC on April 25, 1996) (the
"Amendment No. 2 to Form SB-2").
4.2 Form of certificate evidencing shares of Registrant's common stock
(incorporated by reference to Exhibit No. 4.2 to Amendment No. 1 to Form SB-2).
10.1 Letter Agreement dated September 15, 1996, by and between the
Registrant and Automotive Diagnostics canceling the Products Distribution
Agreement dated November 16, 1995, along with the Product Labeling Agreement.
10.2 Products Distribution Agreement dated September 15, 1996, by and
between the Registrant and Cartek International, Inc., covering the territory of
South and Central America and the Caribbean, with the exception of Brazil,
Mexico and Puerto Rico.
10.3 First Amendment to Purchase Agreement dated September 30, 1996,
between the Registrant, International Turbo Center, Inc., and Enviromotive, Inc.
11.1 Statement of Calculation of Pro Forma Net Loss Per Share.
27.1 Financial Data Schedule in accordance with Article 5 of Regulation
SX.
<PAGE>
EXHIBIT 10.1
[LETTERHEAD OF AUTOMOTIVE DIAGNOSTICS]
September 27, 1996
Mr. Lee W. Melody, President
MotorVac Technologies, Inc.
1431 S. Village Way
Santa Ana, California 92705
Re: MotorVac Technologies Inc. Products Distribution Agreement dated November
16, 1995 with Automotive Diagnostics, a division of SPX Corporation
Dear Mr. Melody,
This will confirm the voluntary cancellation of the above Agreement by the
mutual consent of both MotorVac and Automotive Diagnostics in accordance with
the following which shall apply notwithstanding anything in the Agreement to the
contrary:
1. The cancellation shall be effective September 15, 1996 after receipt and
return of signed copy of this letter.
2. Each part acknowledges there is no default, alleged default or claim of
default on the part of the other party.
3. The cancellation is voluntary and by the mutual consent of the parties.
4. Each party represents it has not assigned any interest in, to or under the
Agreement to any other person.
5. MotorVac is privileged to enter into a new or different distribution
agreement for all or part of the territory described in the Agreement with
any person as MotorVac may in its sole discretion desire or elect.
6. As of the effective date of cancellation each party shall be relieved,
released and discharged of and from any and all obligations owing under the
Agreement except those which relate to a) warranties on products sold prior
to the date of cancellation, b) liabilities required to be insured, covered
by insurance or for which product liability insurance was to be provided,
c) uncompleted orders accepted by MotorVac prior to the date of
cancellation and obligation for payment of the same, d) choice of law,
choice of forum and dispute resolution provisions, and e) unfilled
repurchase obligations.
<PAGE>
7. Except as set forth above this shall be in full settlement and satisfaction
of all claims either party may have against the other for any transactions
occurring between the parties to date and each party waives, acquits,
releases and forever discharges the other, its officers, directors,
employees and agents, of and from any and all manner of actions, causes of
action, debts, rights, damages, liabilities, claims or demands which either
now has or may hereafter arise out of or under the Agreement.
If this is consistent with your understanding kindly sign and return an original
copy of this letter to me.
Very truly yours,
/s/ Ron L. Ortiz
Ron L. Ortiz
President
Accepted and Agreed:
MotorVac Technologies, Inc.
By /s/ Lee W. Melody
- --------------------
Lee W. Melody
Its President
/ts
<PAGE>
EXHIBIT 10.2
MOTORVAC TECHNOLOGIES, INC.
PRODUCTS DISTRIBUTION AGREEMENT
THIS PRODUCTS DISTRIBUTION AGREEMENT ("AGREEMENT") is made and entered into
this ____________ day of _________________________, 1996, by and between
MOTORVAC TECHNOLOGIES, INC., a Delaware Corporation ("MTI"), with its principal
place of business located at 1431 S. Village Way, Santa Ana, California, U.S.A.
and CARTEK INTERNATIONAL, INC. ("Distributor") with its principal place of
business located at 2513 N.W. 74th Avenue, Miami, Florida 33122, U.S.A., with
reference to the following facts:
RECITALS
--------
A. MTI markets a range of products and replacement parts for cleaning gasoline
and diesel engines that are sold under the brand names listed in the
schedule attached hereto as Exhibit A, hereinafter referred to as the
"Products."
B. Distributor hereby represents that it possesses the facilities and ability
to promote the sale and distribution of the Products, in accordance with
the Agreement.
NOW, THEREFORE, in consideration of the foregoing recitals and the covenants and
agreements contained herein, the parties hereto hereby agree as follows:
1. APPOINTMENT OF SOLE AND EXCLUSIVE DISTRIBUTOR:
----------------------------------------------
a. The territory (the "Territory") covered by this Agreement is South and
Central America and the Caribbean, with the exception of Brazil,
Mexico and Puerto Rico.
(i) For the term of this Agreement and in accordance with all of the
terms, and subject to the conditions herein set forth, MTI hereby
appoints Distributor as the sole and exclusive distributor for
the sale and distribution of the Products within the Territory.
b. Distributor hereby accepts its appointment as a distributor of the
Products to develop a demand for, and to the best of its ability, sell
and distribute the Products within the Territory, and Distributor
hereby represents and warrants that it will make all sales hereunder
in accordance with the terms contained in this Agreement.
Distributor's obligations under this Agreement shall include, but not
be limited to:
INITIAL: _____
_____
THIS AGREEMENT IS INVALID UNLESS ALL PAGES ARE INITIALED BY THE COMPANY AND THE
DISTRIBUTOR AND EXHIBITS A AND B ARE ATTACHED
1
<PAGE>
(i) Establishing and maintaining Distributor owned facilities
located within the Territory for display and demonstration of
the Products;
(ii) Hiring, training and maintaining adequately trained sales and
technical personnel to develop a market and service the demand
for the Products in the Territory:
(iii) Undertaking advertising campaigns and trade shows;
(iv) Concurrent with execution hereof, Distributor shall provide to
MTI an Annual Minimum Performance Goal ("Annual Goal"), which
Annual Goal represents the minimum amount of Products to be
purchased by the Distributor from MTI for the first year of this
Agreement. The Distributor agrees that the Annual Goal shall be
required to be purchased by Distributor from MTI as follows:
(a) 50% of the Annual Goal or greater must be purchased
during the first 180 days of this Agreement and
subsequent years of this Agreement (the "First 180-Day
Goal"), and the balance of the Annual Goal must be
purchased during the second 180 days of this Agreement
and subsequent years of this Agreement (the "Second
180-Day Goal") (collectively called the "Annual Goal"),
which Annual Goal shall be deemed to be added to
Section 3b of this Agreement. During the remainder of
the term of this Agreement, the Distributor shall
provide MTI with an Annual Goal for all subsequent
years, and such Annual Goals shall be delivered to MTI
at least 60 days in advance of the start of each
respective year. All Annual Goals are subject to
acceptance by MTI at its sole discretion. In the event
that MTI does not accept the Annual Goal set by the
Distributor, MTI and the Distributor shall attempt to
come to an agreement on an Annual Goal. In the event
that (A) the Distributor does not timely deliver an
Annual Goal to MTI or (B) MTI does not accept an Annual
Goal set by the Distributor, or MTI and the Distributor
are unable to agree upon a replacement Annual Goal,
within 30 days of the date that the Distributor
communicates the Annual Goal to MTI (collectively, an
"Annual Goal Default"), then MTI may
INITIAL: _____
_____
THIS AGREEMENT IS INVALID UNLESS ALL PAGES ARE INITIALED BY THE COMPANY AND THE
DISTRIBUTOR AND EXHIBITS A AND B ARE ATTACHED
2
<PAGE>
terminate this Agreement in accordance with the
provisions of Section 8b hereof;
(v) Conducting its business in a manner that will reflect favorably
at all times on Distributor, MTI and the Products and the good
name, good will and reputation of MTI and its authorized
distributors. Distributor shall not itself or with others
participate in any illegal, deceptive, misleading or unethical
advertising or other practices or techniques that are or might
be detrimental to MTI, the Products or the public; and
(vi) Complying with all applicable laws and with the terms of this
Agreement in connection with the distribution of the Products.
2. TERM OF AGREEMENT:
------------------
a. The initial term of this Agreement shall be for three (3) years unless
earlier terminated as provided in this Agreement. Thereafter, the term
of this Agreement shall be automatically extended for successive one-
year periods unless either party to this Agreement gives the other
party to this Agreement notice of its intent to terminate this
Agreement, and such notice is received by the non-terminating party at
least sixty (60) days prior to the expiration of the initial term or
renewal term, as applicable.
3. DISTRIBUTOR PURCHASES:
----------------------
a. Exclusivity. Distributor shall obtain its requirements of Products
-----------
only from MTI.
b. Minimum Purchases/Performance Goals. Distributor acknowledges that it
------------------------------------
has represented to MTI that it possesses the facilities and the
ability to generate sales of and distribute the Products, in
accordance with this Agreement, and that based upon these
representations, MTI has entered into this Agreement with the
understanding that Distributor shall make the minimum purchases of
Product, in accordance with the Annual Goals set forth in this
Agreement or as periodically required by this Agreement. The
Distributor and the Company hereby agree that the Annual Goals, as set
forth following, are expressed in U.S. dollars and Units of Product.
If the Distributor meets or exceeds the Annual Goals or the First 180-
day Goal or the Second 180-day Goal, as defined in Section 1.b. of
this Agreement, for
INITIAL: _____
_____
THIS AGREEMENT IS INVALID UNLESS ALL PAGES ARE INITIALED BY THE COMPANY AND THE
DISTRIBUTOR AND EXHIBITS A AND B ARE ATTACHED
3
<PAGE>
the first year or subsequent years of this Agreement, in either U. S.
dollar purchases or Units of Product Purchases, that particular Goal
will be deemed to have been met. For the first year of this Agreement,
set forth below are the ANNUAL GOALS AS AGREED TO BETWEEN MTI AND THE
DISTRIBUTOR:
FOR THE FIRST YEAR:
-------------------
PRODUCTS
--------
Equipment:
Units of Petrol Machines
--------
Units of Diesel Machines
--------
Cleaning Solution:
Cases of Gasoline Fuel
System Cleaner or Drum
Equivalent
--------
Cases of Diesel Fuel
System Cleaner or Drum
Equivalent
--------
U. S. Dollar Annual Goal $350,000
--------
NOTE: MINIMUM PURCHASES OF 50% OF THE ABOVE TOTALS (IN EITHER PRODUCT OR IN
- -----
DOLLARS) MUST BE ACHIEVED WITHIN THE FIRST 180 DAYS FOR THIS FIRST YEAR OF THIS
AGREEMENT.
INITIAL: _____
_____
THIS AGREEMENT IS INVALID UNLESS ALL PAGES ARE INITIALED BY THE COMPANY AND THE
DISTRIBUTOR AND EXHIBITS A AND B ARE ATTACHED
4
<PAGE>
c. Minimum Performance Goals / Subsequent Years. The form of schedule shown
---------------------------------------------
below should be used by the Distributor to submit Annual Goals for the Year
as specified in Section 1.b.iv.
Set forth below is the ANNUAL GOAL as agreed between MTI and the
Distributor:
FOR THE YEAR FROM _________________________ TO _________________________ :
PRODUCTS
--------
Equipment:
Units of Petrol Machines _______________________________
Units of Diesel Machines _______________________________
Cleaning Solution:
Cases of Gasoline Fuel
System Cleaner or Drum
Equivalent _______________________________
Cases of Diesel Fuel
System Cleaner or Drum
Equivalent _______________________________
U. S. Dollar Annual Goal _______________________________
ANNUAL GOAL IS REQUIRED TO BE SUBMITTED BY THE DISTRIBUTOR TO MTI AT LEAST 60
DAYS BEFORE THE EXPIRATION OF EACH YEARLY ANNIVERSARY OF THE DATE OF SIGNING OF
THAT CERTAIN PRODUCTS DISTRIBUTION AGREEMENT BETWEEN DISTRIBUTOR AND MOTORVAC
TECHNOLOGIES, INC. ("MTI") AND THIS ANNUAL GOAL IS SUBJECT TO ACCEPTANCE BY MTI
IN ITS SOLE DISCRETION.
SUBMITTED BY: ____________________________ DATE: ________________
DISTRIBUTOR NAME: ________________________
ACCEPTED BY: ____________________________ DATE: ________________
ON BEHALF OF MTI
INITIAL: _____
_____
THIS AGREEMENT IS INVALID UNLESS ALL PAGES ARE INITIALED BY THE COMPANY AND THE
DISTRIBUTOR AND EXHIBITS A AND B ARE ATTACHED
5
<PAGE>
d. Normal Retail Price. Concurrent with each submission of Annual Goal
--------------------
by the Distributor under this Agreement, the Distributor shall also
submit to MTI the "Normal Retail Price" of each and all Products in
the Distributor's Territory. Such Normal Retail Price shall be the
price at which the Products are sold to the end user of the Products,
normally a repair garage or service center. Notwithstanding the
foregoing, Distributor is free to set its own resale prices
unilaterally. No employee or representative of MTI has any authority
to tell Distributor what its resale prices must be, nor to inhibit in
any way a Distributor's independent pricing decision.
e. Non-compete. During the term of this Agreement, Distributor will
------------
not, directly or indirectly, supply, sell, promote or distribute in
the Territory any other products that are similar to, or competitive
with, the Products. Distributor agrees that during the term of this
Agreement, and for a period of three (3) years after the termination
of this Agreement , Distributor will not attempt to replicate, sell,
promote, distribute or manufacture any cleaning solution or fuel
system cleaning machines for use, under any circumstances, with MTI's
patented and proprietary systems , and that any such actions by
Distributor would substantially and permanently damage MTI, and result
in the immediate termination of this Agreement (if applicable), and,
in connection therewith, MTI will be entitled to seek any remedy
available at law or in equity.
f. Restrictions With Respect to Proprietary Information.
-----------------------------------------------------
(i) Trade Secrets. Distributor hereby acknowledges and agrees that
-------------
MTI owns certain trade secrets and other confidential and/or
proprietary information and intellectual property which
constitute valuable property rights, which MTI has developed
through a substantial expenditure of time and money, which are
and will continue to be utilized in MTI's business and which are
not generally known to the trade. This proprietary information
expressly includes, but is not limited to, the list of names of
the distributors, dealers, customers and suppliers of MTI, the
identities of key personnel of the distributors, dealers,
customers and suppliers of MTI, and other information concerning
the Products, finances, personnel contractors processes, pricing
information, production schedules and other types of proprietary
information relating to MTI's operations. In recognition of these
facts, Distributor hereby agrees that the Distributor, both
during and after the term of this Agreement:
INITIAL: _____
_____
THIS AGREEMENT IS INVALID UNLESS ALL PAGES ARE INITIALED BY THE COMPANY AND THE
DISTRIBUTOR AND EXHIBITS A AND B ARE ATTACHED
6
<PAGE>
(a) Will not use or disclose, directly or indirectly, and will
keep secret and confidential, all trade secrets and
proprietary information of MTI, including but not limited to
those items specifically mentioned above;
(b) Will not, directly or indirectly, either on Distributor's
own behalf or on behalf of any other person or entity,
solicit or attempt to solicit any employee, contractor,
dealer or distributor of MTI to leave their employment,
contractor, dealer or distributor relationship with MTI;
(c) Upon the termination of this Agreement or at anytime at
MTI's request, Distributor shall return all documents or
materials which have been furnished to Distributor by MTI in
connection with this Agreement; and
(d) All uses by Distributor of MTI's name or any trademarks or
tradenames (or any other marks or names closely resembling
the same) now and hereafter owned by MTI or its affiliates
shall be subject to prior written approval by MTI.
Distributor is not authorized to use MTI's names or
trademarks in connection with any aspect of its business
other than in the sales, marketing and advertising of the
Products.
g. Distributor Further Acknowledges and Agrees:
--------------------------------------------
(i) Copying, duplicating, or imitating the Products by Distributor is
illegal and would result in permanent irreparable injury to MTI.
Any such activities will cause an immediate termination of this
Agreement, and MTI will be entitled to seek any remedy available
at law or in equity.
(ii) Distributor may sell the Products only in the Territory. If
Distributor sells any Products outside said Territory, either
directly or indirectly, the Distributor shall be in breach of
this Agreement and MTI shall have the right to terminate this
Agreement at its sole discretion by providing the Distributor
with 90 days advance written notice. MTI shall not be required to
sell to the Distributor any further Products after notification
of termination has been sent by MTI to the Distributor.
h. Purchase Price. MTI will sell to the Distributor the Products at the
---------------
prices shown in Exhibit B of this Agreement. These prices are
consistent with those
INITIAL: _____
_____
THIS AGREEMENT IS INVALID UNLESS ALL PAGES ARE INITIALED BY THE COMPANY AND THE
DISTRIBUTOR AND EXHIBITS A AND B ARE ATTACHED
7
<PAGE>
given to MTI's international distributors. MTI reserves the right to
adjust prices from time to time, but may not increase prices more than
two times per year, and each such price increase shall be effective
only on delivery of 30 days prior written notice by MTI to the
Distributor.
i. Payment. The payment of the purchase price for Products purchased by
--------
the Distributor from MTI may be made by cash, irrevocable letter of
credit, sight draft, electronic bank transfer or other such methods as
may be negotiated and accepted by MTI. No shipments of Product will be
made by MTI until method of payment has been accepted by MTI.
j. Brochures. MTI shall, at its expense, provide Distributor with an
----------
initial supply of MTI's current sales brochures and descriptive
materials in English, which materials include negatives, color
separations and ad slicks, as may be reasonably requested by
Distributor in connection with fulfilling Distributor's obligations
hereunder.
k. Orders. Distributor shall transmit written orders for Products to
-------
MTI. Distributor reserves the right to cancel an order if and when any
of the following circumstances occur and adversely affect the
Distributor or its business:
(i) War;
(ii) Cancellation of Most Favored Nation Treaty and Article 301; or
(iii) Anti-dumping duty charge.
l. Orders. MTI reserves the right to cancel any orders of the
-------
Distributor if and when any of the following circumstances occur and
adversely affect MTI or its business:
(i) War;
(ii) Orders by the government of the United States of America banning
foreign shipments; or
(iii) Acts of God that prevent MTI from completing an order.
MTI also reserves the right to cancel any order placed by the
Distributor or to refuse to ship or to delay the shipment thereof if
1. Distributor:
INITIAL: _____
_____
THIS AGREEMENT IS INVALID UNLESS ALL PAGES ARE INITIALED BY THE COMPANY AND THE
DISTRIBUTOR AND EXHIBITS A AND B ARE ATTACHED
8
<PAGE>
(i) shall fail to make any payments for Products in accordance with
the terms of this Agreement or in accordance with terms agreed
to between MTI and the Distributor, from time to time;
(ii) shall fail to meet the Annual Goal, or the First 180-day Goal or
the Second 180-day Goal set forth as part of this Agreement or
otherwise established from time to time;
(iii) has been notified of MTI's intent to terminate Distributor as a
distributor of MTI pursuant to this Agreement; or
(iv) is not in good financial condition, as determined by MTI; or
2. this Agreement shall have terminated pursuant to the provisions
hereof.
m. Shipments. MTI shall ship the Products or cause the Products to be
----------
shipped as ordered by Distributor upon MTI's acceptance of
Distributor's order and payment terms. MTI will not be responsible for
delays caused by shortage of materials, strikes, shortage of shipping
facilities, acts of God, or other causes not within the reasonable
control of MTI.
4. TRAINING:
---------
a. MTI shall provide initial training in the use of the Products to
Distributor except as specified below. MTI shall be responsible for
paying all expenses, salaries, travel and other costs incurred by
MTI's employees in connection with providing such training.
Distributor shall be responsible for the following expenses:
(i) Local transportation
(ii) Room and board (under special circumstances)
(iii) Any expenses related to the training which occurred in the
Territory.
Following the completion of the initial training and upon reasonable
request of Distributor, MTI shall make its personnel or consultants
available at locations to be selected by MTI for the purpose of
providing additional training in the use of the Products upon
reasonable request of Distributor. MTI shall, at its expense, supply
to Distributor a reasonable number of MTI's current operator manuals,
service bulletins and other materials for use in connection with the
use of the Products.
INITIAL: _____
_____
THIS AGREEMENT IS INVALID UNLESS ALL PAGES ARE INITIALED BY THE COMPANY AND THE
DISTRIBUTOR AND EXHIBITS A AND B ARE ATTACHED
9
<PAGE>
5. WARRANTIES:
-----------
a. Exclusive Warranties. MTI shall provide Distributor with the
---------------------
manufacturer's warranty applicable for the Products. Such warranty
generally provides that the equipment shall be in good working order
for a period of one (1) year from the date the Product is first placed
in service provided that the end of the Warranty period shall not be
--------
later than eighteen (18) months from the date of shipment of such
Product to the Distributor or the Distributor's customer by MTI (The
"Warranty Period").
b. Warranty Repairs. It will be the responsibility of the Distributor to
-----------------
effect repairs to the Products during the Warranty Period.
c. Parts Warranty Claims. All warranty claims must be submitted by the
----------------------
Distributor to MTI for approval. During the Warranty Period, MTI will
replace defective parts on a case by case basis at no charge to
Distributor with an agreed to freight allowance.
d. Sale of Replacement Parts. Nothing contained herein shall be deemed
--------------------------
to prohibit Distributor from selling replacement parts for the
Products within the Territory, provided that subject parts are
purchased from MTI.
e. Other. Distributor further acknowledges that said warranty is
------
effective only if the Products are used with CarbonClean/MotorVac
cleaning solutions listed in Exhibit A attached hereto. Distributor
acknowledges that no Warranties are created by this Agreement and,
with respect to the Products, MTI hereby disclaims all implied
warranties of merchantability and fitness for use for a particular
purpose.
6. INDEPENDENT CONTRACTOR:
-----------------------
This Agreement does not create the relationship of employer and employee,
partnership or agency between MTI and Distributor. Distributor, in
connection with all of its obligations hereunder, shall be an independent
contractor of MTI and under no circumstances is Distributor to be
considered to be the employee, partner or agent of MTI. Distributor is not
granted any right by this Agreement to create any obligation or
responsibility, on behalf of or in the name of MTI. Distributor covenants
that it is and will remain in compliance with all federal, state and local
laws and regulations applicable to its business including, without
limitation, all labor regulations, and foreign, and United States federal
and state tax requirements.
INITIAL: _____
_____
THIS AGREEMENT IS INVALID UNLESS ALL PAGES ARE INITIALED BY THE COMPANY AND THE
DISTRIBUTOR AND EXHIBITS A AND B ARE ATTACHED
10
<PAGE>
7. MODIFICATIONS AND IMPROVEMENTS:
-------------------------------
Upon making or discovering any improvements to the Product, Distributor
shall:
a. provide MTI with all details of such improvements;
b. acknowledge that such improvements and the right to obtain any patent,
trademark, copyright or other similar protection belong exclusively to
MTI; and
c. provide such assistance to MTI as MTI may reasonably require to obtain
patents, copyrights or other similar protection.
8. TERMINATION:
------------
This Agreement may be terminated for any of the following reasons:
a. Expiration. After the expiration of the term of this Agreement, in
-----------
accordance with Section 2 hereof.
b. Goals. In the event that Distributor fails to provide the required
------
Annual Goals in accordance with Section 1(b(iv) hereof or fails to
purchase the required First 180-day Goal or Second 180-day Goal
amounts at any time, MTI may terminate this Agreement, at its sole
discretion, by providing the Distributor with thirty (30) days advance
written notice of its intent to terminate this Agreement.
c. Default. If, during the term of this Agreement, Distributor defaults
--------
in the performance of any of its other obligations under this
Agreement, or any of the representations or warranties made by
Distributor are determined to be untrue, MTI may give Distributor
notice of default and if Distributor fails to cure such default within
thirty (30) days (or if such default cannot be cured within thirty
(30) days, no diligent effort has been made to cure such default),
this Agreement shall be deemed terminated as of the end of such ninety
(90) day period without any further action on the part of MTI .
Distributor will then accept no further orders for the Products from
the Territory and MTI shall have no further obligations to Distributor
hereunder.
INITIAL: _____
_____
THIS AGREEMENT IS INVALID UNLESS ALL PAGES ARE INITIALED BY THE COMPANY AND THE
DISTRIBUTOR AND EXHIBITS A AND B ARE ATTACHED
11
<PAGE>
d. Insolvency. This Agreement will automatically terminate if either
-----------
party should become bankrupt, insolvent, or cease to do business, or
make an assignment for the benefit of creditors.
e. Competition This Agreement shall automatically terminate in the event
-----------
that the Distributor breaches any of the covenants against competition
contained in Sections 3.e. and 3.f.(i) hereof;
f. Sales Outside the Territory. In the event that the Distributor
----------------------------
breaches the sales covenants contained in Section 3.g.(ii) hereto,
then MTI may terminate this Agreement in accordance with the notice
provisions contained in Section 3.g.(ii) hereof.
g. No Waivers. The failure of MTI to terminate this Agreement pursuant to
-----------
any of the subparagraphs in this Section shall not be considered to be
a waiver by MTI of its right to terminate this Agreement in the future
pursuant to this section for such default or any similar default.
h. Repurchase. In the event of termination of this Agreement by either
-----------
party for any reason, MTI may at its option repurchase from
Distributor at the net price paid by the Distributor to MTI, less a
25% restocking charge and actual freight, duties and taxes on the
shipment thereof to the Distributor, any MTI Products at the
Distributor's place of business or in the possession of the
Distributor. On demand and at the tender of the repurchase price and
related cost, shipping and handling expenses and charges incurred by
the Distributor, Distributor shall deliver such Products to MTI. The
payment shall be by negotiable instrument.
9. MISCELLANEOUS:
--------------
a. Modification-Waiver. No cancellation, modification, amendment,
--------------------
deletion, addition, or other change in this Agreement or any provision
hereof, or waiver of any right or remedy herein provided, shall be
effective for any purpose unless specifically set forth in a writing
signed by the party to be bound thereby. No waiver of any right or
remedy in respect of any occurrence or event shall be deemed nor shall
constitute a continuing waiver or a waiver of any similar occurrence
or event on any other occasion.
b. Final Agreement. This Agreement shall be deemed for all purposes to
----------------
have been made in California. This Agreement supersedes and terminates
all prior or contemporaneous other agreements, oral or written,
between the
INITIAL: _____
_____
THIS AGREEMENT IS INVALID UNLESS ALL PAGES ARE INITIALED BY THE COMPANY AND THE
DISTRIBUTOR AND EXHIBITS A AND B ARE ATTACHED
12
<PAGE>
parties hereto with respect to the subject matter hereof and the
transactions contemplated hereby and discharges any liability of MTI
or any affiliated or predecessor corporation in respect of any such
prior agreements, and, together with the Exhibits hereto, contains the
entire agreement of the parties with respect to the subject matter
hereof.
c. Controlling Law. This Agreement and the performance of the
----------------
obligations imposed upon the parties hereunder shall be governed by
and construed in accordance with the laws of the State of California,
to the exclusion of all other laws. The parties each
(i) confer sole and exclusive jurisdiction upon, and agree that the
proper venue of any such action shall be in, the courts located
in Orange County, California, in connection with all disputes
arising under or related to this Agreement, and
(ii) waive any and all objections that they may have with respect to
jurisdiction of, or venue in, such court.
d. Successors and Assigns. The provisions of this Agreement shall be
-----------------------
binding upon and insure to the benefit of MTI and Distributor and
their respective successors and permitted assigns. Distributor may not
assign this Agreement (by operation of law or otherwise) without the
prior written consent of MTI. MTI may assign this Agreement to its
subsidiaries or parent company or to any related company upon 30 days
advance written notice provided by MTI to the Distributor.
e. Confidentiality. The parties mutually agree that any confidential
----------------
information furnished to the other, so labeled or described shall
remain confidential and not be made available to any other party,
without written permission from the party furnishing said information.
f. Notices. Any notice required or permitted hereunder shall be given by
--------
mailing the same in a sealed envelope, postage paid and sent via
registered mail addressed as follows:
MTI: MOTORVAC TECHNOLOGIES, INC.
1431 S. Village Way
Santa Ana, California, USA 92705
INITIAL: _____
_____
THIS AGREEMENT IS INVALID UNLESS ALL PAGES ARE INITIALED BY THE COMPANY AND THE
DISTRIBUTOR AND EXHIBITS A AND B ARE ATTACHED
13
<PAGE>
Distributor: Cartek International, Inc.
2513 N.W. 74th Avenue
Miami, Florida 33122 U.S.A.
Attention: Emilio Banchs, President
Either party may change its address for notices hereunder by written
notice to the other party.
g. Limitation of Liability. MTI's liability to Distributor hereunder
------------------------
with respect to any order, MTI's performance thereof, or the Products
sold hereunder shall not exceed the purchase price paid by Distributor
for the Products. In no event shall MTI be liable to Distributor for
special, incidental or consequential damages.
h. Extraordinary Circumstances. Except for any payment obligations of
----------------------------
either party hereunder, neither MTI nor Distributor shall be liable
for any delay or failure to perform on account of any cause beyond
such party's reasonable control, including, but not limited to, work
stoppages, work slow-downs, strikes or other industrial disputes;
fire, explosions, floods, earthquakes or other acts of God; riots or
civil disturbances, war or other acts of civil or military
authorities; and delays caused by suppliers or material shortages.
i. Changes to Products. The Distributor hereby agrees and acknowledges
--------------------
the Company may, at its sole discretion, withdraw or replace or add
products to Exhibit A or B attached hereto at any time. The
distributor waives any right or notice on such a change.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
MotorVac Technologies, Inc., Cartek International, Inc.
a Delaware corporation
By: /s/ Lee W. Melody By: /s/ Emilio Banchs
------------------- -------------------
Its: President Its: President
------------------- -------------------
Date: 9/15/96 Date: 9/15/96
------------------- -------------------
INITIAL: _____
_____
THIS AGREEMENT IS INVALID UNLESS ALL PAGES ARE INITIALED BY THE COMPANY AND THE
DISTRIBUTOR AND EXHIBITS A AND B ARE ATTACHED
14
<PAGE>
EXHIBIT A
---------
PRODUCTS
--------
SUMMARY
-------
<TABLE>
<CAPTION>
PART # BRAND NAME
- ------ ----------
<S> <C>
500-0301 ECS-300i CarbonClean Gasoline Fuel System Cleaning
Machine
Includes: 200-3000 Basic Adaptor Kit
200-3000 Foreign Adaptor Kit
Instruction Manual
One Year Warranty
0500-4010 IDT 4000i CarbonClean Diesel Fuel System Cleaning
Machine
Includes: 200-3040 Adaptor Kit
User & Service Guide
One Year Warranty
400-0010 CarbonClean Diesel Fuel System Cleaner
(12) 16oz Cans
400-0020 CarbonClean Gasoline Fuel System Cleaner
(12) 8oz. Bottles
400-0030 CarbonClean Intake Cleaner (12) 8oz. Bottles
400-DRUM-D CarbonClean Diesel Fuel System Cleaner
55 Gallon Drum
</TABLE>
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DISTRIBUTOR AND EXHIBITS A AND B ARE ATTACHED
15
<PAGE>
EXHIBIT A
---------
PRODUCTS
--------
EQUIPMENT AND SOLVENT
---------------------
<TABLE>
<CAPTION>
PART # DESCRIPTION
- ------ -----------
<S> <C>
400-0010 Diesel Fuel System Cleaner - (12) 16oz. Cans
1 case = 12" x 10" x 8" (15 lbs)
30.5cm x 25.4cm x 20.3cm (6.8 kg)
400-0020 Gasoline Fuel System Cleaner - (12) 8oz. Bottles
1 case = 9" x 7" x 6" (7 lbs)
22.8cm x 17.8cm x 15.2cm (3.2 kg)
400-0030 Intake Cleaning Solvent - (12) 8oz. Bottles
1 case = 9" x 7" x 6" (7 lbs)
22.8cm x 17.8cm x 15.2cm (3.2 kg)
200-6000 Intake Cleaning Kit - (12) 8oz Bottle & Sprayer
1 case = 17" x 17" x 11" (15 lbs)
43.2cm x 43.2cm x 27.9cm (6.8 kg)
400-DRUM-D Diesel Fuel System Cleaner - 55 Gallon Drum
24" x 24" x 35" (462 lbs)/61.0cm x 61.0cm x 88.9cm (210
kg)
500-0301 ECS-300i Gasoline Fuel System Cleaning Machine
Includes: 200-3000 Basic Adaptor Kit
200-3009 Foreign Adaptor Kit
User Guide
One Year Warranty
16" x 15" x 38" (82 lbs)
40.6cm x 38.1cm x 96.5cm (37.2 kg)
500-4010 IDT 4000i Diesel Fuel System Cleaning Machine
Includes: 200-3040 Adaptor Kit
User and Service Guide
One Year Warranty
24" x 20" x 41" (115 lbs)
61.0cm x 50.8cm x 104cm (52.2 kg)
</TABLE>
INITIAL: _____
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DISTRIBUTOR AND EXHIBITS A AND B ARE ATTACHED
16
<PAGE>
<TABLE>
<CAPTION>
PART # DESCRIPTION
- ------ -----------
<S> <C>
500-0200 CCS II - CarbonClean System II
Includes: 200-8085 CCS II Basic Adaptor Kit
200-8059 CCS II - Deluxe Adaptor Kit
</TABLE>
INITIAL: _____
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DISTRIBUTOR AND EXHIBITS A AND B ARE ATTACHED
17
<PAGE>
EXHIBIT A
---------
PRODUCTS
--------
CARBONCLEAN REPLACEMENT PARTS
-----------------------------
SERIES 200 & 300
<TABLE>
<CAPTION>
PART # DESCRIPTION
- ------ -----------
<S> <C>
010-0005B XOLOX SHIELD
010-0006B TANK CAP
010-0007B P-200 CASTER
010-0008B P-200 HANDLE
010-0009B TANK RESERVOIR
010-0017B ECS 300i OVERLAY
010-0019B ECS HANDLE
010-0020B ECS AXLE
010-0021B ECS WHEEL
010-0022B ECS BASE LEG
010-0024B ECS HOSE BRACKET
010-0025B ECS CORD BRACKET
020-0010B BUZZER
020-0030B EXTERNAL WIRING HARNESS
020-0035B 5 AMP CIRCUIT BREAKER
020-0037B 10 AMP CIRCUIT BREAKER
020-0038B 15 AMP CIRCUIT BREAKER
020-0040B INTERNAL WIRING HARNESS
020-0063B ELEC. LAMP AMBER
020-0067B ELEC. LAMP WHITE
020-0073B ELEC. LAMP GREEN
020-0083B ELEC. LAMP RED
020-0090B RELAY 8 TRIM, EAR MOUNT
020-0100B ONOFF & PS/LEAK SWITCH
020-0110B PURGE SWITCH, 1/2 MT
020-0120B START SWITCH, 1/2 MT
020-0150B TIMER 60 MIN 3/8 W/NUT
020-0151B TIMER FACE PLATE
020-0152B TIMER KNOB BLACK
020-0374B STRAIN RELIEF 1/2 MT
030-0002B F.CONN 1/4 X 1/8 FPT NI
030-0004B P-200 FM UNION 5/16 X 1/4 NT (NY)
030-0005B MALE ELBOW 1/4 X 1/4 MPT
030-0006B MALE ELBOW 1/4 X 1/8 MPT
030-0013B HEX NIPPLE 1/4 P NI
030-0015B MALE ELBOW 5/16 X 1/8 MPT NY
</TABLE>
INITIAL: _____
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DISTRIBUTOR AND EXHIBITS A AND B ARE ATTACHED
18
<PAGE>
<TABLE>
<CAPTION>
PART # DESCRIPTION
- ------ -----------
<S> <C>
030-0016B M. CONN 5/16 X 1/8 MPT NY
030-0017B M. CONN 5/16 X 1/4 MPT NY
030-0020B M. CONN 3/8 X 1/4 MPT NAB NI
030-0021B ECS F CONN 5/16 X 1/8 FPT NI
030-0022B F. CONN 5/16T X 1/4 P NI
030-0023B M. CONN 5/16T X 1/4 P NI
030-0024B M. ELBOW 5/16T X 1/8 NI
030-0025B M. CONN 3/8T X 1/4P NI
030-0026B ECS F. CONN 1/4 BARB X 1/8 NI
030-0030B F. CONN 3/8 X 1/4 FPT NI
030-0031B ELBOW 1/4 MPT X 1/4 FPT NI
030-0050B M. CONN 3/8 X 1/8 MPT NI
030-0090B P-200 JUNCTION BLOCK 2 WAY 1/8 FPT
030-0095B ECS JUNCTION BLOCK, 2 WAY 1/4
030-0100B P-200 JUNCTION BLOCK-5 WAY 1/8
030-0105B ECS JUNCTION BLOCK-5 WAY 1/4
030-0130B MALE ELBOW 3/8 X 1/4 MPT NI
030-0131B FEMALE ELBOW 3/8 X 1/4 MPT NI
030-0140B MALE ELBOW 3/8 X 1/8 MPT NI
030-0150B MALE ELBOW 5/16 X 1/4 MPT NI
030-0160B M. CONN 5/16 X 1/8 MPT NI
030-0189B F. CONN 1/4 FPT X MPT NI
030-0192B COMP ALIGN NUT 5/16
030-0205B P-200 CROSS 1/8 FPT NI
030-0206B CROSS 1/4 FPT NI
030-0208B J. CONN 3/8 X 1/4 MPT NI
030-0209B TEE 3/8 NT X 1/4 MPT X 3/8 (NY)
USED WITH VACUUM SWITCH
030-0210B UNION 1/8 MPT X 1/4 MPT (NY)
030-0211B F. CONN 90 3/8 X 1/4 FPT NY
040-0401B XOLOX PUMP MOUNT NUT
040-0500B ECS GRAB HANDLE LOCKWASHER
040-0502B ECS "E' CLIP FOR AXLE
040-0503B ECS AXLE SPACER
040-0505B ECS GRAB HANDLE NUT
040-0506B ECS LEG CAP
040-0507B ECS AXLE BUSHING NY
040-0508B ECS VAC HOSE SNAP BUSHING
040-0509B ECS GRAB HANDLE BOLT
040-5326B 3/32 X 4 NYLON CABLE TIE
050-0010B PSI GAUGE
</TABLE>
INITIAL: _____
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DISTRIBUTOR AND EXHIBITS A AND B ARE ATTACHED
19
<PAGE>
<TABLE>
<CAPTION>
PART # DESCRIPTION
- ------ -----------
<S> <C>
050-0011B BAR GAUGE
050-0012B ECS VACUUM GAUGE
050-0013B ECS BAR VACUUM GAUGE
050-0008B VACUUM SWITCH 1/4 MPT
050-0015B 3 WAY SOLENOID 3/32
050-0017B PRESSURE SWITCH 1/8
050-0021B STAINLESS CK VALUE
050-0052B REG NEEDLE VALVE
050-0065B CONTROL VALVE
050-0074B FILTER, INLINE
050-0075B FILTER, SPIN-ON
050-0076B FILTER & BASE 1/4 FPT
050-0088B RELIEF VALVE 105 PSI
060-0440B HOSE CLAMP
060-0450B HOSE CLAMP
060-1000B 1/4 MALE TUBE ADAPTOR
060-1100B 5/16 MALE TUBE ADAPTOR
060-1200B 3/8 MALE TUBE ADAPTOR
060-1300B 1/4 FEMALE ADAPTOR (Open-end hose)
060-1400B 5/16 FEMALE ADAPTOR (Open-end hose)
060-1500B 3/8 FEMALE ADAPTOR (Open-end hose)
060-1600B 12 MM BANJO
060-1700B 90 TUBE 5/16 MPT FUEL INLET ADAPTOR
060-1800B 90 TUBE 3/8 MPT FUEL INLET ADAPTOR
060-1900B 12 MM BANJO BOLT
060-1901B 12 MM WASHER
060-1902B 12 MM CAP NUT
060-2000B 5/16 LOOP MALE ADAPTOR
060-2100B 3/8 PLUG COLLAR
060-2101B 3/8 CARB PLUG ADAPTOR
060-2200B 5/16 PLUG COLLAR
060-2201B 5/16 CARB PLUG ADAPTOR
060-2300B 14 MM FEMALE
060-2400B 1C MM BANJO
060-2401B 8 MM BANJO
060-2402B 14 MM BANJO
060-2501B FQD LOOP ADAPTOR
060-2502B TEE
060-2600B 16 MM FEMALE
060-2720B 10 MM BANJO BOLT
060-2800B 1/4 MALE CONNECTOR (Ford,GM,Chrysler,Jeep)
</TABLE>
INITIAL: _____
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DISTRIBUTOR AND EXHIBITS A AND B ARE ATTACHED
20
<PAGE>
<TABLE>
<CAPTION>
PART # DESCRIPTION
- ------ -----------
<S> <C>
060-2900B 5/16 MALE NYLON (Ford,Lincoln,Mercury)
060-3000B 1/8 MPT ADAPTOR (Ford,Lincoln,Mercury)
060-3100B TBI & PFI INLET (GM)
060-3105B FEMALE SIDE OF 3100 (GM)
060-2700B 14 MM X 16 MM MALE UNION
060-2710B 8 MM BANJO BOLT
060-2711B 8 MM WASHER (Set of 3)
060-3200B 1/4 MPT ADAPTOR (Ford,Lincoln,Mercury)
060-3300B TBI & PFI OUTLET (GM)
060-3304B TBI & PFI USED W/1700 (GM)
060-3305B FEMALE SIDE OF 3300 (GM) (Replaces 060-4000)
060-3500B 3/8 MALE ADAPTOR (Ford,Lincoln,Mercury)
060-3505B 3/8 FEMALE ADAPTOR (Ford,Lincoln,Mercury)
060-3508B SHRADER VALVE (Ford,Lincoln,Mercury)
060-3600B 1/2 MALE ADAPTOR (Ford,Lincoln,Mercury)
060-3605B 1/2 FEMALE ADAPTOR (Ford,Lincoln,Mercury)
060-3700B SHRADER VALVE (GM,Chrysler,Jeep)
060-3800B VOLVO ADAPTOR
060-3900B 5/16 FQD (Ford,Lincoln,Mercury)
060-3901B 3/8 FQD (Ford,Lincoln,Mercury)
060-3902B 1/4 FQD (Ford,Lincoln,Mercury)
060-4100B HYUNDAI ADAPTOR
060-4200B 5/16 MALE METAL (GM,Chrysler,Jeep)
060-4205B 5/16 FQD (GM,Chrysler,Jeep)
060-4300B 3/8 MALE CONNECTOR(Ford,GM,Chrysler,Jeep)
060-4305B 3/8 FQD (GM,Chrysler,Jeep)
060-4405B 1/4 FQD (GM,Chrysler,Jeep)
070-0080B 1/4 NYLON TUBE
070-0085B 5/16 NYLON TUBE
070-0086B 3/8 NYLON TUBE
070-0100B HOSE VACUUM
080-0230B 1/4 FPT FQD NI
080-3301B O-RING VITON USED w/3304
080-3302B SM. O-RING VITON Used w/3300,3304
080-3402B LG. O-RING VITON Used w/3100,3500,4100
080-3501B SMALL CLIP & TETHER (Ford,Lincoln,Mercury)
080-3601B LARGE CLIP & TETHER (Ford,Lincoln,Mercury)
080-3602B O-RING VITON Used w/3600
080-3701B VITON SEAL,3700
080-3903B 5/16 RETAINER (Ford,Lincoln,Mercury)
080-3904B 3/8 RETAINER (Ford,Lincoln,Mercury)
</TABLE>
INITIAL: _____
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DISTRIBUTOR AND EXHIBITS A AND B ARE ATTACHED
21
<PAGE>
<TABLE>
<CAPTION>
PART # DESCRIPTION
- ------ -----------
<S> <C>
080-3905B 1/4 RETAINER (Ford,Lincoln,Mercury)
080-4206B 5/16 RETAINER (GM,Chrysler,Jeep)
080-4306B 3/8 RETAINER (GM,Chrysler,Jeep)
080-4408B 1/4 RETAINER (GM,Chrysler,Jeep)
100-0090B ECS INTERNATIONAL MANUAL
100-0300B CHINESE OVERLAY
100-0104B FUEL INJECTOR PULSER IT100 (MQ)
100-4047B SPANNER NUT
100-4048B SPANNER WRENCH
100-5001B ICS TUBING (30")
200-0006B P-200 LOW FM ASSEMBLY
200-0007B P-200 HIGH FM ASSEMBLY
200-0011B P-200 BAR GAUGE ASSEMBLY
200-0050B P-200 2-WAY BLOCK ASSEMBLY
200-0064B P-200 5-WAY ASSEMBLY
200-0076B P-200 OUTPUT REGULATOR ASSEMBLY
(All"D"machines)
200-0083B P-200 RETURN REGULATOR ASSEMBLY
200-0093B TEE ASSEMBLY
200-0200B IN-LINE FILTER ASSEMBLY
200-0203B FILTER & TANK 5/16" ASSEMBLY
200-0204B TUTHILL FILTER & TANK 3/8" ASSEMBLY
200-0280B P-200 VACUUM SWITCH ASSEMBLY
200-0300B ECS/P-200 RETURN HOSE ASSEMBLY
200-0400B ECS/P-200 OUTPUT HOSE ASSEMBLY
200-0704B TUTHILL PUMP 5/16" ASSEMBLY
(With plumbing fittings)
200-0705B TUTHILL PUMP 3/8" ASSEMBLY
(With plumbing fittings)
200-0706B XOLOX PUMP ASSEMBLY
(With plumbing fittings)
200-0800B P-200 CONTROL VALVE ASSEMBLY
200-1002B ECS BAR GAUGE ASSEMBLY
200-1004B ECS BAR VACUUM GAUGE ASSEMBLY
200-1008B ECS 2-WAY ASSEMBLY
200-1010B ECS 5-WAY ASSEMBLY
200-1011B ECS OUTPUT REGULATOR ASSEMBLY
200-1012B ECS RETURN REGULATOR ASSEMBLY
200-1013B ECS CONTROL VALVE ASSEMBLY
200-1014B ECS TEE ASSEMBLY
200-1175B FUEL QD TOOL KIT
</TABLE>
INITIAL: _____
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DISTRIBUTOR AND EXHIBITS A AND B ARE ATTACHED
22
<PAGE>
<TABLE>
<CAPTION>
PART # DESCRIPTION
- ------ -----------
<S> <C>
200-3000B BASIC ADAPTOR KIT
200-3006B FORD ADAPTOR KIT
200-3008B GM ADAPTOR KIT
200-3009B ASIAN/EURO ADAPTOR KIT
200-4007B TIMER ASSEMBLY
200-4008B FILTER & BASE 3/8" ASSEMBLY
200-4009B FILTER & BASE 5/16" ASSEMBLY
200-5000B SOLENOID REPAIR KIT
200-8009B P-200 REGULATOR RETROFIT
300-3000B BASIC ORGANIZER BAG (GREEN)
300-3006B FORD ORGANIZER BAG (RED)
300-3008B GM ORGANIZER BAG (BLUE)
300-3009B ASIAN/EURO ORGANIZER BAG (ORANGE)
</TABLE>
INITIAL: _____
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DISTRIBUTOR AND EXHIBITS A AND B ARE ATTACHED
23
<PAGE>
EXHIBIT A
---------
IDT 4000I REPLACEMENT PARTS
---------------------------
<TABLE>
<CAPTION>
PART # DESCRIPTION
- ------ -----------
<S> <C>
010-0034B TANK CAP
010-0026B WHEEL
010-0037B LEG
010-0040B FOOT GLIDE
010-0461B LOWER SENDING UNIT ADAPTOR
020-0049B ALARM HORN
020-4045B LOWER SENDING UNIT
020-0043B ELECTRICAL HARNESS, LOWER UNIT
020-0045B ELECTRICAL HARNESS, INTERNAL MAIN
020-0046B ELECTRICAL HARNESS, EXT. BATTERY
020-0047B ELECTRICAL HARNESS, EXT. SHUTDOWN
020-0091B RELAY
050-0018B PRESSURE SWITCH
050-0044B HYDRAULIC PUMP 12v (Diesel)
050-0086B FILTER ELEMENT REPLACEMENTS (20)
060-0590B FQD (Supply Tank)
060-0592B MQD (Supply Tank)
080-0230B FQD (Hose End)
100-0200B CHINESE OVERLAY
200-1471B OUTPUT HOSE ASSEMBLY
200-1472B RETURN HOSE ASSEMBLY
200-1960B UNIVERSAL ADAPTOR KIT
200-4003B OUTPUT SOLENOID ASSEMBLY
200-4004B PUMP ASSEMBLY
200-4031B ELECTRONIC HEAD ASSEMBLY
200-4032B FILTER ASSEMBLY
200-4038B PRESSURE SWITCH ASSEMBLY
</TABLE>
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DISTRIBUTOR AND EXHIBITS A AND B ARE ATTACHED
24
<PAGE>
EXHIBIT B
---------
PRICING
-------
EFFECTIVE JANUARY 1, 1996
Home Office:
1431 S. Village Way
Santa Ana, CA 92705
Tel: (714) 558-4822
Fax: (714) 558-2756
INITIAL: _____
_____
THIS AGREEMENT IS INVALID UNLESS ALL PAGES ARE INITIALED BY THE COMPANY AND THE
DISTRIBUTOR AND EXHIBITS A AND B ARE ATTACHED
25
<PAGE>
EXHIBIT B
---------
PRICING
-------
F.O.B. WAREHOUSE
<TABLE>
<CAPTION>
PART # DESCRIPTION COST
- ------ ----------- ----
<S> <C> <C>
400-0010 Diesel Fuel System Cleaner - (12) 16oz Cans 95.00
1 case = 12" x 10" x 8" (15 lbs)
30.5cm x 25.4cm x 20.3cm (6.8 kg)
400-0020 Gasoline Fuel System Cleaner - (12) 8oz Bottles 62.00
1 case = 9" x 7" x 6" (7 lbs)
22.8cm x 17.8cm x 15.2cm (3.2 kg)
400-0030 Intake Cleaning Solvent - (12) 8oz Bottles 65.00
1 case = 9" x 7" x 6" (7 lbs)
22.8cm x 17.8cm x 15.2cm (3.2 kg)
200-6000 Intake Cleaning Kit - (12) 360.00
8oz Bottle & Sprayer
1 case = 17" x 17" x 11" (15 lbs)
43.2cm x 43.2cm x 27.9cm (6.8 kg)
400-DRUM-D Diesel Fuel System Cleaner - 55 Gallon Drum 2,050.00
24" x 24" x 35" (462 lbs)
61.0cm x 61.0cm x 88.9cm (210 kg)
500-0200 System II CarbonClean Machine w/Standard 825.00
Adaptor Set
200-8059 Adaptor Set - Deluxe for System II 150.00
(when purchased w/machine)
200-8059 Adaptor Set - Deluxe for System II 200.00
(when purchased without machine)
500-0307 ECS-300e Fuel System Cleaning Machine for Gasoline 1,495.00
Includes:
200-3000 Basic Adaptor Kit
200-3009 Euro/Asia Kit
User Guide
One Year Warranty
16" x 15" x 38" (82 lbs)
40.6cm x 38.1cm x 96.5cm (37.2 kg)
</TABLE>
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DISTRIBUTOR AND EXHIBITS A AND B ARE ATTACHED
26
<PAGE>
<TABLE>
<CAPTION>
PART # DESCRIPTION COST
- ------ ----------- ----
<S> <C> <C>
500-4000i IDT-4000i Fuel System Cleaning Machine for Diesel 1,650.00
Includes:
200-3040 Adaptor Kit
User & Service Guide
One Year Warranty
23 1/4" x 18" x 39 1/2" (98 lbs.)
59.0cm x 45.7cm x 100.3cm (44.5 kg)
200-3006 U.S. Ford Adaptor Kit 315.00
200-3008 U.S. G.M. Adaptor Kit 197.00
</TABLE>
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DISTRIBUTOR AND EXHIBITS A AND B ARE ATTACHED
27
<PAGE>
EXHIBIT B
---------
CARBONCLEAN REPLACEMENT PARTS PRICING
-------------------------------------
SERIES 200 & 300
<TABLE>
<CAPTION>
PART # DESCRIPTION PRICE
- ------ ----------- ------
<S> <C> <C>
010-0005B XOLOX SHIELD 15.65
010-0006B TANK CAP 7.75
010-0007B P-200 CASTER 9.50
010-0008B P-200 HANDLE 18.75
010-0009B TANK RESERVOIR 105.00
010-0017B ECS 300i OVERLAY 28.25
010-0019B ECS HANDLE 45.00
010-0020B ECS AXLE 23.70
010-0021B ECS WHEEL 12.55
010-0022B ECS BASE LEG 14.60
010-0024B ECS HOSE BRACKET 11.80
010-0025B ECS CORD BRACKET 14.05
020-0010B BUZZER 18.00
020-0030B EXTERNAL WIRING HARNESS 25.00
020-0035B 5 AMP CIRCUIT BREAKER 7.05
020-0037B 10 AMP CIRCUIT BREAKER 7.05
020-0038B 15 AMP CIRCUIT BREAKER 7.05
020-0040B INTERNAL WIRING HARNESS 60.00
020-0063B ELEC. LAMP AMBER 4.75
020-0067B ELEC. LAMP WHITE 4.75
020-0073B ELEC. LAMP GREEN 4.75
020-0083B ELEC. LAMP RED 4.75
020-0090B RELAY 8 TRIM, EAR MOUNT 18.65
020-0100B ONOFF & PS/LEAK SWITCH 4.20
020-0110B PURGE SWITCH, 1/2 MT 6.30
020-0120B START SWITCH, 1/2 MT 11.55
020-0150B TIMER 60 MIN 3/8 W/NUT 26.80
020-0151B TIMER FACE PLATE 3.05
020-0152B TIMER KNOB BLACK 1.75
020-0374B STRAIN RELIEF 1/2 MT 0.25
030-0002B F.CONN 1/4 X 1/8 FPT NI 2.18
030-0004B P-200 FM UNION 5/16 X 1/4 NT (NY) 6.55
030-0005B MALE ELBOW 1/4 X 1/4 MPT 2.50
030-0006B MALE ELBOW 1/4 X 1/8 MPT 2.18
030-0013B HEX NIPPLE 1/4 P NI 1.45
030-0015B MALE ELBOW 5/16 X 1/8 MPT NY 5.25
</TABLE>
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DISTRIBUTOR AND EXHIBITS A AND B ARE ATTACHED
28
<PAGE>
<TABLE>
<CAPTION>
PART # DESCRIPTION PRICE
- ------ ----------- -----
<S> <C> <C>
030-0016B M. CONN 5/16 X 1/8 MPT NY 2.55
030-0017B M. CONN 5/16 X 1/4 MPT NY 2.65
030-0020B M. CONN 3/8 X 1/4 MPT NAB NI 2.33
030-0021B ECS F CONN 5/16 X 1/8 FPT NI 2.40
030-0022B F. CONN 5/16T X 1/4 P NI 3.30
030-0023B M. CONN 5/16T X 1/4 P NI 2.35
030-0024B M. ELBOW 5/16T X 1/8 NI 2.75
030-0025B M. CONN 3/8T X 1/4P NI 2.90
030-0026B ECS F. CONN 1/4 BARB X 1/8 NI 2.20
030-0030B F. CONN 3/8 X 1/4 FPT NI 2.89
030-0031B ELBOW 1/4 MPT X 1/4 FPT NI 2.26
030-0050B M. CONN 3/8 X 1/8 MPT NI 2.56
030-0090B P-200 JUNCTION BLOCK 2 WAY 1/8 FPT 8.50
030-0095B ECS JUNCTION BLOCK, 2 WAY 1/4 6.25
030-0100B P-200 JUNCTION BLOCK-5 WAY 1/8 10.50
030-0105B ECS JUNCTION BLOCK-5 WAY 1/4 8.25
030-0130B MALE ELBOW 3/8 X 1/4 MPT NI 3.10
030-0131B FEMALE ELBOW 3/8 X 1/4 MPT NI 4.39
030-0140B MALE ELBOW 3/8 X 1/8 MPT NI 2.91
030-0150B MALE ELBOW 5/16 X 1/4 MPT NI 2.88
030-0160B M. CONN 5/16 X 1/8 MPT NI 2.09
030-0189B F. CONN 1/4 FPT X MPT NI 1.95
030-0192B COMP ALIGN NUT 5/16 0.97
030-0205B P-200 CROSS 1/8 FPT NI 3.97
030-0206B CROSS 1/4 FPT NI 6.31
030-0208B J. CONN 3/8 X 1/4 MPT NI 3.96
030-0209B TEE 3/8 NT X 1/4 MPT X 3/8 (NY) 7.70
USED WITH VACUUM SWITCH
030-0210B UNION 1/8 MPT X 1/4 MPT (NY) 1.06
030-0211B F. CONN 90 3/8 X 1/4 FPT NY 6.12
040-0401B XOLOX PUMP MOUNT NUT 0.05
040-0500B ECS GRAB HANDLE LOCKWASHER 0.05
040-0502B ECS "E' CLIP FOR AXLE 0.10
040-0503B ECS AXLE SPACER 0.45
040-0505B ECS GRAB HANDLE NUT 0.05
040-0506B ECS LEG CAP 0.20
040-0507B ECS AXLE BUSHING NY 0.15
040-0508B ECS VAC HOSE SNAP BUSHING 0.10
040-0509B ECS GRAB HANDLE BOLT 0.10
040-5326B 3/32 X 4 NYLON CABLE TIE 0.05
050-0008B VACUUM SWITCH 1/4 MPT 61.75
</TABLE>
INITIAL: _____
_____
THIS AGREEMENT IS INVALID UNLESS ALL PAGES ARE INITIALED BY THE COMPANY AND THE
DISTRIBUTOR AND EXHIBITS A AND B ARE ATTACHED
29
<PAGE>
<TABLE>
<CAPTION>
PART # DESCRIPTION PRICE
- ------ ----------- -----
<S> <C> <C>
050-0010B PSI GAUGE 34.75
050-0011B BAR GAUGE 37.45
050-0012B ECS VACUUM GAUGE 37.45
050-0013B ECS BAR VACUUM GAUGE 38.75
050-0015B 3 WAY SOLENOID 3/32 68.52
050-0017B PRESSURE SWITCH 1/8 46.75
050-0021B STAINLESS CK VALUE 78.63
050-0052B REG NEEDLE VALVE 50.00
050-0065B CONTROL VALVE 45.00
050-0074B FILTER, INLINE 14.95
050-0075B FILTER, SPIN-ON 15.95
050-0076B FILTER & BASE 1/4 FPT 56.90
050-0088B RELIEF VALVE 105 PSI 74.48
060-0440B HOSE CLAMP 1.40
060-0450B HOSE CLAMP 1.50
060-1000B 1/4 MALE TUBE ADAPTOR 9.24
060-1100B 5/16 MALE TUBE ADAPTOR 9.94
060-1200B 3/8 MALE TUBE ADAPTOR 10.64
060-1300B 1/4 FEMALE ADAPTOR (Open-end hose) 7.21
060-1400B 5/16 FEMALE ADAPTOR (Open-end hose) 7.42
060-1500B 3/8 FEMALE ADAPTOR (Open-end hose) 7.63
060-1600B 12 MM BANJO 21.70
060-1700B 90 TUBE 5/16 MPT FUEL INLET ADAPTOR 16.10
060-1800B 90 TUBE 3/8 MPT FUEL INLET ADAPTOR 15.61
060-1900B 12 MM BANJO BOLT 8.00
060-1901B 12 MM WASHER 0.42
060-1902B 12 MM CAP NUT 4.00
060-2000B 5/16 LOOP MALE ADAPTOR 7.07
060-2100B 3/8 PLUG COLLAR 3.57
060-2101B 3/8 CARB PLUG ADAPTOR 9.31
060-2200B 5/16 PLUG COLLAR 2.38
060-2201B 5/16 CARB PLUG ADAPTOR 9.31
060-2300B 14 MM FEMALE 13.58
060-2400B 1C MM BANJO 16.80
060-2401B 8 MM BANJO 16.24
060-2402B 14 MM BANJO 22.82
060-2501B FQD LOOP ADAPTOR 37.00
060-2502B TEE 40.80
060-2600B 16 MM FEMALE 14.98
060-2700B 14 MM X 16 MM MALE UNION 13.30
060-2710B 8 MM BANJO BOLT 10.60
</TABLE>
INITIAL: _____
_____
THIS AGREEMENT IS INVALID UNLESS ALL PAGES ARE INITIALED BY THE COMPANY AND THE
DISTRIBUTOR AND EXHIBITS A AND B ARE ATTACHED
30
<PAGE>
<TABLE>
<CAPTION>
PART # DESCRIPTION PRICE
- ------ ----------- -----
<S> <C> <C>
060-2711B 8 MM WASHER (Set of 3) 0.28
060-2720B 10 MM BANJO BOLT 11.90
060-2800B 1/4 MALE CONNECTOR (Ford,GM,Chrysler,Jeep) 19.67
060-2900B 5/16 MALE NYLON (Ford,Lincoln,Mercury) 19.67
060-3000B 1/8 MPT ADAPTOR (Ford,Lincoln,Mercury) 9.87
060-3100B TBI & PFI INLET (GM) 21.00
060-3105B FEMALE SIDE OF 3100 (GM) 19.32
060-3200B 1/4 MPT ADAPTOR (Ford,Lincoln,Mercury) 9.87
060-3300B TBI & PFI OUTLET (GM) 22.86
060-3304B TBI & PFI USED W/1700 (GM) 9.95
060-3305B FEMALE SIDE OF 3300 (GM) (Replaces 060-4000) 19.32
060-3500B 3/8 MALE ADAPTOR (Ford,Lincoln,Mercury) 34.26
060-3505B 3/8 FEMALE ADAPTOR (Ford,Lincoln,Mercury) 19.74
060-3508B SHRADER VALVE (Ford,Lincoln,Mercury) 13.68
060-3600B 1/2 MALE ADAPTOR (Ford,Lincoln,Mercury) 34.56
060-3605B 1/2 FEMALE ADAPTOR (Ford,Lincoln,Mercury) 20.72
060-3700B SHRADER VALVE (GM,Chrysler,Jeep) 17.92
060-3800B VOLVO ADAPTOR 16.80
060-3900B 5/16 FQD (Ford,Lincoln,Mercury) 18.62
060-3901B 3/8 FQD (Ford,Lincoln,Mercury) 14.91
060-3902B 1/4 FQD (Ford,Lincoln,Mercury) 14.70
060-4100B HYUNDAI ADAPTOR 34.93
060-4200B 5/16 MALE METAL (GM,Chrysler,Jeep) 19.67
060-4205B 5/16 FQD (GM,Chrysler,Jeep) 19.10
060-4300B 3/8 MALE CONNECTOR(Ford,GM,Chrysler,Jeep) 19.67
060-4305B 3/8 FQD (GM,Chrysler,Jeep) 14.70
060-4405B 1/4 FQD (GM,Chrysler,Jeep) 19.67
070-0080B 1/4 NYLON TUBE 0.82ft
070-0085B 5/16 NYLON TUBE 1.18ft
070-0086B 3/8 NYLON TUBE 1.56ft
070-0100B HOSE VACUUM 0.75ft
080-0230B 1/4 FPT FQD NI 12.65
080-3301B O-RING VITON USED w/3304 0.55
080-3302B SM. O-RING VITON Used w/3300,3304 0.55
080-3402B LG. O-RING VITON Used w/3100,3500,4100 0.50
080-3501B SMALL CLIP & TETHER (Ford,Lincoln,Mercury) 4.00
080-3601B LARGE CLIP & TETHER (Ford,Lincoln,Mercury) 4.00
080-3602B O-RING VITON Used w/3600 0.60
080-3701B VITON SEAL,3700 4.25
080-3903B 5/16 RETAINER (Ford,Lincoln,Mercury) 0.30
080-3904B 3/8 RETAINER (Ford,Lincoln,Mercury) 0.30
</TABLE>
INITIAL: _____
_____
THIS AGREEMENT IS INVALID UNLESS ALL PAGES ARE INITIALED BY THE COMPANY AND THE
DISTRIBUTOR AND EXHIBITS A AND B ARE ATTACHED
31
<PAGE>
<TABLE>
<CAPTION>
PART # DESCRIPTION PRICE
- ------ ----------- -----
<S> <C> <C>
080-3905B 1/4 RETAINER (Ford,Lincoln,Mercury) 0.40
080-4206B 5/16 RETAINER (GM,Chrysler,Jeep) 0.75
080-4306B 3/8 RETAINER (GM,Chrysler,Jeep) 0.80
080-4408B 1/4 RETAINER (GM,Chrysler,Jeep) 0.70
100-0090B ECS INTERNATIONAL MANUAL
100-0300B CHINESE OVERLAY 28.00
100-0104B FUEL INJECTOR PULSER IT100 (MQ) 144.00
100-4047B SPANNER NUT 5.00
100-4048B SPANNER WRENCH 12.00
100-5001B ICS TUBING (30") 0.75
200-0006B P-200 LOW FM ASSEMBLY 20.75
200-0007B P-200 HIGH FM ASSEMBLY 21.80
200-0011B P-200 BAR GAUGE ASSEMBLY 39.65
200-0050B P-200 2-WAY BLOCK ASSEMBLY 9.40
200-0064B P-200 5-WAY ASSEMBLY 119.31
200-0076B P-200 OUTPUT REGULATOR ASSEMBLY
(All"D"machines) 231.72
200-0083B P-200 RETURN REGULATOR ASSEMBLY 53.00
200-0093B TEE ASSEMBLY 16.35
200-0200B IN-LINE FILTER ASSEMBLY 14.95
200-0203B FILTER & TANK 5/16" ASSEMBLY 150.00
200-0204B TUTHILL FILTER & TANK 3/8" ASSEMBLY 160.00
200-0280B P-200 VACUUM SWITCH ASSEMBLY 62.95
200-0300B ECS/P-200 RETURN HOSE ASSEMBLY 27.00
200-0400B ECS/P-200 OUTPUT HOSE ASSEMBLY 27.00
200-0704B TUTHILL PUMP 5/16" ASSEMBLY
(With plumbing fittings) 215.00
200-0705B TUTHILL PUMP 3/8" ASSEMBLY
(With plumbing fittings) 215.00
200-0706B XOLOX PUMP ASSEMBLY
(With plumbing fittings) 215.00
200-0800B P-200 CONTROL VALVE ASSEMBLY 50.00
200-1002B ECS BAR GAUGE ASSEMBLY 39.95
200-1004B ECS BAR VACUUM GAUGE ASSEMBLY
200-1008B ECS 2-WAY ASSEMBLY 9.20
200-1010B ECS 5-WAY ASSEMBLY 198.50
200-1011B ECS OUTPUT REGULATOR ASSEMBLY 256.00
200-1012B ECS RETURN REGULATOR ASSEMBLY 53.00
200-1013B ECS CONTROL VALVE ASSEMBLY 50.00
200-1014B ECS TEE ASSEMBLY 20.45
200-1175B FUEL QD TOOL KIT 19.95
</TABLE>
INITIAL: _____
_____
THIS AGREEMENT IS INVALID UNLESS ALL PAGES ARE INITIALED BY THE COMPANY AND THE
DISTRIBUTOR AND EXHIBITS A AND B ARE ATTACHED
32
<PAGE>
<TABLE>
<CAPTION>
PART # DESCRIPTION PRICE
- ------ ----------- -----
<S> <C> <C>
200-3000B BASIC ADAPTOR KIT 325.00
200-3006B FORD ADAPTOR KIT 315.00
200-3008B GM ADAPTOR KIT 197.00
200-3009B ASIAN/EURO ADAPTOR KIT 263.00
200-4007B TIMER ASSEMBLY 31.60
200-4008B FILTER & BASE 3/8" ASSEMBLY 59.55
200-4009B FILTER & BASE 5/16" ASSEMBLY 58.25
200-5000B SOLENOID REPAIR KIT 35.00
200-8009B P-200 REGULATOR RETROFIT 60.00
300-3000B BASIC ORGANIZER BAG (GREEN) 22.95
300-3006B FORD ORGANIZER BAG (RED) 22.95
300-3008B GM ORGANIZER BAG (BLUE) 22.95
300-3009B ASIAN/EURO ORGANIZER BAG (ORANGE) 22.95
</TABLE>
INITIAL: _____
_____
THIS AGREEMENT IS INVALID UNLESS ALL PAGES ARE INITIALED BY THE COMPANY AND THE
DISTRIBUTOR AND EXHIBITS A AND B ARE ATTACHED
33
<PAGE>
EXHIBIT B
---------
IDT 4000I REPLACEMENT PARTS PRICING
-----------------------------------
<TABLE>
<CAPTION>
PART # DESCRIPTION PRICE
- ------ ----------- -----
<S> <C> <C>
010-0034B TANK CAP 15.00
010-0026B WHEEL 12.50
010-0037B LEG 25.00
010-0040B FOOT GLIDE 3.75
010-0461B LOWER SENDING UNIT ADAPTOR 12.50
020-0049B ALARM HORN 22.50
020-4045B LOWER SENDING UNIT 81.25
020-0043B ELECTRICAL HARNESS, LOWER UNIT 12.50
020-0045B ELECTRICAL HARNESS, INTERNAL MAIN 87.50
020-0046B ELECTRICAL HARNESS, EXT. BATTERY 25.00
020-0047B ELECTRICAL HARNESS, EXT. SHUTDOWN 37.50
020-0091B RELAY 18.95
050-0018B PRESSURE SWITCH 50.00
050-0044B HYDRAULIC PUMP 12v (Diesel) 121.25
050-0086B FILTER ELEMENT REPLACEMENTS (20) 125.25
060-0590B FQD (Supply Tank) 24.96
060-0592B MQD (Supply Tank) 17.19
080-0230B FQD (Hose End) 12.65
100-0200B CHINESE OVERLAY 28.00
200-1471B OUTPUT HOSE ASSEMBLY 45.50
200-1472B RETURN HOSE ASSEMBLY 45.50
200-1960B UNIVERSAL ADAPTOR KIT 368.30
200-4003B OUTPUT SOLENOID ASSEMBLY 54.70
200-4004B PUMP ASSEMBLY 201.80
200-4031B ELECTRONIC HEAD ASSEMBLY 676.81
200-4032B FILTER ASSEMBLY 151.56
200-4038B PRESSURE SWITCH ASSEMBLY 49.70
</TABLE>
INITIAL: _____
_____
THIS AGREEMENT IS INVALID UNLESS ALL PAGES ARE INITIALED BY THE COMPANY AND THE
DISTRIBUTOR AND EXHIBITS A AND B ARE ATTACHED
34
<PAGE>
EXHIBIT 10.3
FIRST AMENDMENT TO PURCHASE AGREEMENT
-------------------------------------
This FIRST AMENDMENT TO PURCHASE AGREEMENT (the "Amendment") is entered
into as of September 30, 1996, by and between MOTORVAC TECHNOLOGIES, INC., a
Delaware corporation ("MotorVac"), on the one hand, and INTERNATIONAL TURBO
CENTER, INC., a California corporation ("ITC"), and ENVIROMOTIVE, INC., a
California corporation and a wholly-owned subsidiary of ITC ("Enviromotive,"
and, collectively with ITC, the "Companies"), on the other hand.
RECITALS:
--------
A. MotorVac and the Companies have previously entered into a Purchase
Agreement entered into as of February 22, 1996, but made effective as of
December 31, 1995 (the "Purchase Agreement").
B. MotorVac and the Companies desire to amend the Purchase Agreement to
provide that the Companies shall accept aggregate payments of (i) One Hundred
Seventy-Two Thousand Fifty-Nine and 21/100 Dollars ($172,059.21) in full payment
of the Diesel Detergent Payments (as defined in the Purchase Agreement) and (ii)
Twenty-Eight Thousand Dollars ($28,000) in full payment of the Additional
Payments (as defined in the Purchase Agreement).
AGREEMENT:
---------
NOW, THEREFORE, in consideration of the foregoing Recitals and the
mutual agreements and obligations of the parties hereto, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Amendment. The Companies hereby agree that payment by MotorVac in
---------
the amount of (i) One Hundred Seventy-Two Thousand Fifty-Nine and 21/100 Dollars
($172,059.21) shall be accepted by the Companies as payment in full of all
Diesel Detergent Payments (as defined in the Purchase Agreement) payable under
the Purchase Agreement (the "Accelerated Diesel Payment") and (ii) Twenty-Eight
Thousand Dollars ($28,000) shall be accepted by the Companies as payment in full
of the Additional Payments (as defined in the Purchase Agreement) payable
under the Purchase Agreement (the "Accelerated Additional Payment"). MotorVac
shall pay the Accelerated Diesel Payment to the Guarantors (as defined below)
and shall deliver the Accelerated Additional Payment to Allen, Matkins, Leck,
Gamble & Mallory LLP for delivery to the Internal Revenue Service, in each case
on behalf of the Companies, within ten (10) days of receipt of a fully executed
copy of this Amendment executed by Enviromotive and ITC and an executed
acknowledgment from each of the Guarantors in a form reasonably acceptable to
MotorVac (the "Payment Date"). In consideration of MotorVac
<PAGE>
agreeing to make the Accelerated Diesel Payment and the Accelerated Additional
Payment, the Companies agree that MotorVac shall be fully released and
discharged from any further obligation to make any Diesel Detergent Payments
and/or Additional Payments under Sections 1(a)(ii) and (iii) of the Purchase
Agreement or otherwise under the Purchase Agreement.
2. Payment to Guarantors. By letter dated May 23, 1996 (the
---------------------
"Guarantor Instruction Letter"), Enviromotive instructed MotorVac to make all
payments of the Diesel Detergent Payments to certain individuals (collectively,
the "Guarantors") in the amounts set forth in the Guarantor Instruction Letter.
Enviromotive hereby notifies and instructs MotorVac to pay on behalf of
Enviromotive directly to the Guarantors (or their designee) and in proportion to
the percentages listed in the Guarantor Instruction Letter, the full amount of
the Accelerated Diesel Payment. Enviromotive acknowledges and agrees that the
receipt by the Guarantors of the Accelerated Diesel Payment shall be deemed to
be payment in full of the Diesel Detergent Payments and the Accelerated Diesel
Payment to Enviromotive. Enviromotive acknowledges that MotorVac's agreement to
make the Accelerated Diesel Payment is conditioned upon each of the Guarantors
agreeing to receive its portion of the Accelerated Diesel Payment and executing
and delivering to MotorVac an acknowledgment, reasonably acceptable to MotorVac,
of the terms of this Amendment.
3. Payment to Internal Revenue Service. The Companies hereby
-----------------------------------
instruct MotorVac to pay the Accelerated Additional Payment to the Internal
Revenue Service for the benefit of ITC Trust Fund Account No. 95-2458416. Not
later than the Payment Date, MotorVac shall deliver to Allen, Matkins, Leck,
Gamble & Mallory LLP, MotorVac's attorneys, a check in the amount of
Twenty-Eight Thousand Dollars ($28,000) representing the Accelerated Additional
Payment. MotorVac shall instruct Allen, Matkins, Leck, Gamble & Mallory LLP to
deliver such amount to the Internal Revenue Service, Department of the Treasury,
1130 Civic Center Boulevard, Suite B, Yuba City, California 95933 Attention:
Barbara Lane, together with a copy of the check to Ray Mushet, Jack Meismer and
Doug Decinces. The check representing payment of the Accelerated Additional
Payment shall note that it is in payment of the Trust Fund Account balance,
Account No. 95-2458416, for the benefit of ITC.
4. Miscellaneous. Except as amended hereby, the Purchase Agreement
-------------
shall remain in full force and effect. This Amendment shall be governed by and
construed in accordance with the laws of the State of California and may be
amended only by a written instrument executed by each of the parties hereto.
This Amendment may be executed in one or more counterparts (including by means
of a telecopied signature page), each of which shall be deemed an original, but
all of which together shall constitute a single agreement. This Amendment,
together with the Purchase Agreement (as amended hereby) and the Guarantor
Instruction Letter (as amended hereby), constitutes the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof, is intended as a complete and exclusive statement of the terms of their
agreement and supersedes any prior or contemporaneous oral or written agreements
or understandings related to the subject matter hereof.
IN WITNESS HEREOF, the parties hereto have executed this Amendment as
of the date first above written.
-2-
<PAGE>
"Enviromotive" ENVIROMOTIVE, INC., a California corporation
By: /s/ Jack Misemer
_________________________________________
Name: Jack Misemer
__________________________________
Title: President
_________________________________
"ITC" INTERNATIONAL TURBO CENTER, INC., a
California corporation
By: /s/ Jack Misemer
_________________________________________
Name: Jack Misemer
__________________________________
Title: President
_________________________________
"MotorVac" MOTORVAC TECHNOLOGIES, INC., a
Delaware corporation
By: /s/ Allan T. Maguire
_________________________________________
Allan T. Maguire
Vice President, Finance and Chief
Financial Officer
-3-
<PAGE>
EXHIBIT 11.1
Motorvac Technologies, Inc.
Calculation of Proforma Net Loss Per Share
For the Three Months Ended September 30, 1996 and
For The Nine Months Ended September 30, 1996
<TABLE>
<CAPTION>
Three Months Nine Months
Ended Ended
Sept. 30. 1996 Sept. 30. 1996
-------------- --------------
<S> <C> <C>
Proforma Net Loss:
Net Loss ($65,784) ($617,870)
Proforma Reduction of Interest Expense 0 132,416
--------- ---------
Proforma Net Loss (65,784) (485,454)
========= =========
Proforma Weighted Average Outstanding Common and
Common Equivalent Shares:
Common Stock Outstanding, December 31, 1995
Common stock equivalents:
Conversion of Series A Preferred Stock
Conversion of Series B Preferred Stock
Common Shares Issued in Initial Public Offering
Conversion of $4,410,300 of Notes Payable to Related party
Common Stock Equivalents before below 4,404,918 4,404,918
Common stock issued in Overallotment on June 15, 1995 110,000 110,000
Weighting of overallotment Stock 110,000 42,956
Incremental Shares, assuming exercise of options granted
after Sept. 30, 1996 12,989 7,256
Incremental Shares Related to repayment of Interest 0 24,636
--------- ---------
Total Incremental Shares 122,989 74,848
--------- ---------
Proforma Weighted Average Outstanding Common and
--------- ---------
Common Equivalent Shares 4,527,907 4,479,766
========= =========
Proforma Net Loss per Common Share and Common
Share Equivalent 0.01 0.11
========= =========
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS OF MOTORVAC INCORPORATED AS OF AND FOR THE
PERIOD ENDED SEPTEMBER 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JUL-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 3,739,435
<SECURITIES> 0
<RECEIVABLES> 1,309,641
<ALLOWANCES> 55,070
<INVENTORY> 1,279,730
<CURRENT-ASSETS> 6,490,024
<PP&E> 511,576
<DEPRECIATION> 262,205
<TOTAL-ASSETS> 8,165,925
<CURRENT-LIABILITIES> 1,509,876
<BONDS> 0
0
0
<COMMON> 45,149
<OTHER-SE> 16,501,762
<TOTAL-LIABILITY-AND-EQUITY> 8,165,925
<SALES> 2,650,581
<TOTAL-REVENUES> 2,650,581
<CGS> 1,546,676
<TOTAL-COSTS> 1,546,676
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (16,531)
<INCOME-PRETAX> (65,784)
<INCOME-TAX> 0
<INCOME-CONTINUING> (65,784)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (65,784)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
