EXHIBIT C
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT dated as of January 24,
1996 between VECTOR AEROMOTIVE CORPORATION, a Nevada corporation (the
"Company"), and V' POWER CORPORATION, a Bahamian Company ("VPC").
The parties agree as follows:
Section 1. Definitions. For purposes of this Agreement:
(a) The terms "register," "registered," and "registration"
refer to a registration effected by preparing and filing a registration
statement or similar document in compliance with the Securities Act of 1933, as
amended (the "Securities Act"), and the declaration or ordering of effectiveness
of such registration statement or document;
(b) The term "Registrable Securities" means (i) the Shares, as
defined under the Share Purchase Agreement, dated as of December 29, 1995,
between the Company and VPC (the "Share Purchase Agreement"), and the Option
Shares, as defined under the Option Agreement, which is to be entered into by
the Company and VPC in accordance with paragraph 1.3(b) of the Share Purchase
Agreement in the form which is attached to the Share Purchase Agreement
(collectively, the "Shares"), and (ii) any Common Shares of the Company issued
as (or issuable upon the conversion or exercise of any warrant, right or other
security which is issued as) a dividend or other distribution with respect to,
or in exchange for or in replacement of, the Shares or the Option Shares, in
each case held by any Holder (as defined in clause (d) below);
(c) The number of shares of "Registrable Securities then
outstanding" shall be equal to the number of Common Shares of the Company
outstanding which are, and the number of Common Shares of the Company issuable
pursuant to then exercisable or convertible securities which upon issuance would
be, Registrable Securities;
(d) The term "Holder" or "Holders" means VPC and any of its
successors or assigns which hold Registrable Securities; and
(e) The term "Closing Date" is used herein as defined in
Article II of the Share Purchase Agreement.
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Section 2. Demand Registration.
(a) If at any time on and after the Closing Date, the Company
shall receive a written request from Holders of at least 25% of the Registrable
Securities then outstanding that the Company file a registration statement under
the Securities Act covering the registration of Registrable Securities held by
them, then the Company shall, subject to the limitations of this Section 2, use
its best efforts to effect within 90 days of such request or as soon as
practicable thereafter, the registration under the Securities Act of all
Registrable Securities which such Holders request to be registered, provided,
that the filing of any registration statement which does not result in the
effective registration of all of the Registrable Securities for which a demand
has been made and the continuing effectiveness of such registration for an
uninterrupted period of six (6) months from the initial effective date thereof,
shall not be deemed to fulfill the Company's obligations under this Section
2(a).
(b) In addition to, and not in limitation of the foregoing, if
the Company shall receive a written request from any of the Holders
aforementioned in Section 2(a) that the Company file one or more post-effective
amendments to the registration statement referred to therein so as to extend the
effectiveness of such registration statement beyond the six-month period
referred to in Section 2(a), then the Company shall use its best efforts to
effect as soon as practicable the filing of any such post-effective amendment.
(c) In addition to, and not in limitation of the foregoing
Sections 2(a) and 2(b), if at any time on and after the Closing Date and
following the effective date of the registration statement referred to in
Section 2(a), the Company shall receive a written request from Holders of at
least 25% of the Registrable Securities then outstanding that the Company file a
registration statement under the Securities Act covering the registration of
Registrable Securities held by them, then the Company shall, subject to the
limitations of this Section 2, use its best efforts to effect within 90 days of
such request or as soon as practicable thereafter, the registration under the
Securities Act of all Registrable Securities which such Holders request to be
registered, and to file as soon as practicable any and all post-effective
amendments thereto which may be requested by the aforementioned Holders.
(d) If the Holders intend to distribute the Registrable
Securities covered by their request by means of an underwriting, they shall so
advise the Company as a part of their request made pursuant to this Section 2.
The Holders shall (together with the Company as provided in Section 3) enter
into an underwriting agreement in customary form with a mutually acceptable
underwriter or underwriters. Notwithstanding any other provision of this Section
2, if the managing underwriter advises the Holders in writing that marketing
factors require a
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limitation of the number of shares to be underwritten, then the number of shares
of Registrable Securities of the Holders that may be included in the
underwriting shall be so limited pro rata.
(e) The Company shall be obligated to effect one registration
pursuant to Section 2(a) in accordance with the terms thereof. The Company shall
be obligated to file as many post-effective amendments pursuant to Section 2(b)
and to effect as many registrations pursuant to Section 2(c) as may be requested
by Holders in accordance therewith.
Section 3. "Piggyback" Rights. For a period of three years
from the Closing Date, and if (but without any obligation to do so) the Company
proposes to register any of its Common Shares under the Securities Act in
connection with the public offering of such Common Shares for cash proceeds
payable in whole or in part to the Company (other than with respect to a
Registration Statement filed on Form S-8 or Form S-4 or such other similar form
then in effect under the Securities Act), the Company shall, at such time,
promptly give the Holders written notice of such registration (at the respective
addresses of the Holders appearing in the Company's records). Upon the written
request of any Holder given within 20 days after giving of such notice by the
Company, the Company shall, subject to the provisions of Section 7, cause to be
registered under the Securities Act all of the Registrable Securities that such
Holder has requested to be registered; provided, however, if the managing
underwriter of the public offering of shares proposed to be registered by the
Company advises the Holders in writing that marketing factors require a
limitation of the number of shares to be underwritten, then the number of shares
of Registrable Securities of the Holders that may be included in the
underwriting shall be so limited pro rata.
Section 4. Registration Procedure. Whenever required under
this Agreement to effect the registration of any Registrable Securities, the
Company shall, as expeditiously as is reasonably possible:
(a) Prepare and file with the SEC a registration statement
with respect to such Registrable Securities and use its best efforts to cause
such registration statement to become and remain effective and maintain the
qualifications referred to in Section 4(d) below for such period as may be
necessary for the selling Holders to dispose of the Registrable Securities being
offered for sale.
(b) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Securities Act.
(c) Furnish to the Holders of the Registrable Securities
covered by such registration statement such number of
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copies of a prospectus, including a preliminary prospectus, in conformity with
the requirements of the Securities Act, and such other documents as they may
reasonably request in order to facilitate the disposition of the Registrable
Securities owned by them.
(d) Use its best efforts to register and qualify the
securities covered by such registration statement under such jurisdictions as
shall be reasonably requested by the Holders, provided that the Company shall
not be required in connection therewith or as a condition thereto to qualify to
do business or to file a general consent to service of process in any such
jurisdiction but the Company may be required to file a consent to service
substantially in the form of the Uniform Consent to Service of Process Form U-2.
(e) In the event of any underwritten public offering, enter
into and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering. Each selling
Holder participating in such underwriting shall also enter into and perform its
obligations under such an agreement.
(f) Notify each holder of Registrable Securities covered by
such registration statement, at any time when a prospectus relating thereto
covered by such registration statement is required to be delivered under the
Securities Act, of the happening of any event as a result of which the
prospectus included in such registration statement, as then in effect, includes
an untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing.
(g) Furnish to each Holder requesting registration of
Registrable Securities pursuant to this Agreement, on the date that such
Registrable Securities are delivered to the underwriters for sale in connection
with a registration pursuant to this Agreement, if such securities are being
sold through underwriters, or, if such securities are not being sold through
underwriters, on the date that the registration statement with respect to such
securities becomes effective (i) an opinion, dated such date, of the counsel
representing the Company for the purposes of such registration, in form and
substance as is customarily given to underwriters in an underwritten public
offering addressed to the underwriters, if any, and to the Holders requesting
registration of Registrable Securities and (ii) a letter dated such date, from
the independent certified public accountants of the Company, in form and
substance as is customarily given by independent certified public accountants to
underwriters in an underwritten public offering, addressed to the underwriters,
if any, and to the Holders requesting registration of Registrable Securities.
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Section 5. Furnish Information. The selling Holders shall
promptly furnish to the Company in writing such reasonable information regarding
themselves, the Registrable Securities held by them, and the intended method of
disposition of such securities as shall be required to effect the registration
of their Registrable Securities.
Section 6. Expenses of Registration. All expenses, other than
underwriting discounts, relating to Registrable Securities incurred in
connection with registration, filing or qualification pursuant to Section 2(a)
and Section 3 of this Agreement, including (without limitation) all
registration, filing and qualification fees, printers' bills, mailing and
delivery expenses, accounting fees, and the fees and disbursements of counsel
for the Company and the Holders shall be borne by the Company. All of the
foregoing expenses relating to the Registrable Securities incurred in connection
with registration, filing or qualification pursuant to Section 2(b) or 2(c) of
this Agreement shall be borne by the Holders requesting the relevant
post-effective amendment or registration.
Section 7. Indemnification and Contribution. In the event any
Registrable Securities are included in a registration statement under this
Agreement:
(a) To the extent permitted by law, the Company will indemnify
and hold harmless each Holder, the officers and directors of each Holder, any
underwriter (as defined in the Securities Act) for such holder, and each person,
if any, who controls such Holder or underwriter within the meaning of the
Securities Act or the Securities Exchange Act of 1934 (the "Exchange Act"),
against any losses, claims, damages, or liabilities (joint or several) to which
they may become subject under the Securities Act, the Exchange Act or other
federal or state law, insofar as such losses, claims, damages, or liabilities
(or actions in respect thereto) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in such
registration statement, including any preliminary prospectus or final prospectus
contained therein or any amendments or supplements thereto, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading; and the Company will reimburse each such Holder, officer or
director, underwriter or controlling person for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability, or action; provided, however, that the
indemnity agreement contained in this Section 7(a) shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability, or action if such
settlement is effected without the consent of the Company (which consent shall
not be unreasonably withheld), nor shall the Company be liable in any such case
for any such loss, claim, damage, liability, or action to the extent that it
arises out of or is based upon an
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untrue statement or alleged untrue statement or omission or alleged omission
made in such registration statement, preliminary prospectus or final prospectus
or any amendment or supplement thereto in reliance upon and in conformity with
written information furnished expressly for use in connection with such
registration by any such Holder, underwriter or controlling person; provided,
further, however, that if any losses, claims, damages or liabilities arise out
of or are based upon any untrue statement, alleged untrue statement, omission or
alleged omission contained in any preliminary prospectus, and made in reliance
upon and in conformity with written information furnished by such Holder
expressly for use therein, which did not appear in the final prospectus, the
Company shall not have any such liability with respect thereto to such Holder,
any person who controls such Holder within the meaning of the Securities Act, or
any director of such Holder, if such Holder delivered a copy of the preliminary
prospectus to the person alleging such losses, claims, damages or liabilities
and failed to deliver a copy of the final prospectus, as amended or supplemented
if it has been amended or supplemented, to such person at or prior to the
written confirmation of the sale to such person, provided that such Holder had
an obligation to deliver a copy of the final prospectus to such person; and
(b) To the extent permitted by law, each selling Holder will
indemnify and hold harmless the Company, each of its directors, each of its
officers who has signed the registration statement, each person, if any, who
controls the Company within the meaning of the Securities Act, any underwriter
and any other Holder selling securities in such registration statement or any of
its directors or officers or any person who controls such Holder or underwriter,
against any losses, claims, damages or liabilities (joint or several) to which
the Company or any such director, officers, controlling person, or underwriter
or controlling person, or other such Holder or director, officer or controlling
person may become subject, under the Securities Act, the Exchange Act or other
federal or state law, insofar as such losses, claims, damages or liabilities (or
actions in respect thereto) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in such registration
statement, including any preliminary prospectus or final prospectus contained
therein or any amendments or supplements thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
if the untrue statement or omission or alleged untrue statement or omission in
respect of which such loss, claim, damage or liability is asserted was made in
reliance upon and in conformity with written information furnished by such
Holder expressly for use in connection with such registration; and each such
Holder will reimburse any legal or other expenses reasonably incurred by the
Company or any such director, officer, controlling person, underwriter or
controlling person, or other Holder, officer, director, or controlling person in
connection
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with investigating or defending any such loss, claim, damage, liability or
action; provided, however, that the indemnity agreement contained in this
Section 7(b) shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability or action, if such settlement is effected without the
consent of the Holder (which consent shall not be unreasonably withheld);
provided, further, that the maximum liability of any selling Holder under this
Section 7(b) in regard to any registration statement shall in no event exceed
the amount of the net proceeds received by such selling Holder from the sale of
securities under such registration statement; provided, further, however, that
if any losses, claims, damages or liabilities arise out of or are based upon an
untrue statement, alleged untrue statement, omission or alleged omission
contained in any preliminary prospectus which did not appear in the final
prospectus, such seller shall not have any such liability with respect thereto
to the Company, any person who controls the Company within the meaning of the
Securities Act, any officer of the Company who signed the registration statement
or any director of the Company, if the Company delivered a copy of the
preliminary prospectus to the person alleging such losses, claims, damages or
liabilities and failed to deliver a copy of the final prospectus, as amended or
supplemented if it has been amended or supplemented, to such person at or prior
to the written confirmation of the sale to such person, provided that the
Company had an obligation to deliver a copy of the final prospectus to such
person.
(c) Promptly after receipt by an indemnified party under this
Section 7 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 7, deliver to
the indemnifying party a written notice of the commencement thereof, and the
indemnifying party shall have the right to participate in and, to the extent the
indemnifying party so desires, jointly with any other indemnifying party
similarly notified, to assume the defense thereof with counsel mutually
satisfactory to the parties. An indemnified party shall have the right to retain
its own counsel, however, the fees and expenses of such counsel shall be at the
expense of the indemnified party, unless (i) the employment of such counsel has
been specifically authorized in writing by the indemnifying party, (ii) the
indemnifying party has failed to assume the defense and employ counsel, or (iii)
the named parties to any such action (including any impleaded parties) include
both the indemnified party and the indemnifying party, and the indemnified party
shall have been advised by such counsel that there may be one or more legal
defenses available to it which are different from or additional to those
available to the indemnifying party (in which case the indemnifying party shall
not have the right to assume the defense of such action on behalf of such
indemnified party, it being understood, however, that the indemnifying party
shall not, in connection with any one such action or separate but substantially
similar or related
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actions in the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of more than one
separate firm of attorneys for all indemnified parties). The failure to deliver
written notice to the indemnifying party will not relieve it of any liability
that it may have to any indemnified party under this Agreement.
(d) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party in respect of
any losses, claims, damages or liabilities or actions in respect thereof
referred to therein, then each indemnifying party shall in lieu of indemnifying
such indemnified party contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities or
actions in such proportion as is appropriate to reflect the relative fault of
the Company, on the one hand, and selling Holders, on the other, in connection
with the statements or omissions which resulted in such losses, claims, damages,
liabilities or actions as well as any other relevant equitable considerations,
including the failure to give any required notice. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company, on the one hand,
or by such selling Holders on the other, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The parties hereto acknowledge and agree that it would
not be just and equitable if contribution pursuant to this subparagraph (d) were
determined by pro rata allocation (even if all of the selling Holders were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to above in
this subparagraph (d). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities or actions in respect thereof
referred to above in this subparagraph (d) shall be deemed to include any legal
or other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any such action or claim. Notwithstanding the
provisions of this subparagraph (d), the amount the selling Holders shall be
required to contribute shall not exceed the amount, if any, by which the total
price at which the securities sold by each of them were offered to the public
exceeds the amount of any damages which they would have otherwise been required
to pay by reason of such untrue or alleged untrue statement or omission or
alleged omission, or other violation of law. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of
fraudulent misrepresentation.
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Section 8. Miscellaneous.
(a) Binding Effect. This Agreement shall be binding upon and
shall inure to the benefit of the original parties hereto and each person who
becomes a party hereto, and their respective heirs, personal representatives,
successors and assigns.
(b) Notices. Except as otherwise provided herein, any notice,
consent or request to be given in connection with any term or provision of this
Agreement shall be deemed to have been given sufficiently if sent by hand,
registered or certified mail, postage prepaid, facsimile transmission or courier
(next day delivery), to the Company or to VPC at its address as designated in,
or from time to time pursuant to, Article XII of the Share Purchase Agreement.
(c) Integration. This Agreement contains the entire agreement
between the parties with respect to the transactions contemplated hereby and no
party shall be bound by, nor shall any party be deemed to have made, any
covenants, representations, warranties, undertakings or agreements except those
contained in such entire Agreement. The section and paragraph headings contained
in this Agreement are for the reference purposes only and shall not affect in
any way the meaning or interpretation of this Agreement.
(d) Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original but all of
which together shall constitute one and the same agreement.
(e) Amendment. This Agreement may be amended, changed, waived
or terminated only in writing by the Company and VPC.
(f) Governing Law. This Agreement and the rights and remedies
of the parties hereto shall be governed by and construed in accordance with the
laws of the State of New York.
IN WITNESS WHEREOF, this Agreement has been executed effective
as of the date first above written.
VECTOR AEROMOTIVE CORPORATION
By:/s/ SUDJASWIN E.L.
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Sudjaswin E.L., President
V' POWER CORPORATION
By:/s/ X.X. XXXX
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X.X. Xxxx, President
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