EXHIBIT 10.20
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made as of the 7th day
of December, 2001, by and between McLAREN PERFORMANCE TECHNOLOGIES, INC., a
Delaware corporation located at 00000 Xxxx Xxxxx Xxxx Xxxx, Xxxxxxx, Xxxxxxxx
00000 (the "Company"), and EMM McLAREN INVESTMENT COMPANY, L.L.C., a Michigan
limited liability company located at 0000 Xxxxxxx, Xxxxx 000, Xxxx, Xxxxxxxx
00000 (the "Purchaser").
RECITALS:
A. The Purchaser is the purchaser of 433,674 shares of Common Stock (as
defined below) pursuant to a certain McLaren Stock Option Purchase Agreement
dated as of August 1, 2001, by and between the Purchaser and the Company (the
"Purchase Agreement").
B. The Purchaser has the right to purchase an additional 86,734 shares of
Common Stock pursuant to two Warrants each dated as of December 7, 2001, issued
to the Purchaser by the Company (the "Warrants").
C. The Company and the Purchaser desire to set forth the registration
rights to be granted to the Purchaser.
NOW, THEREFORE, in consideration of the mutual promises set forth herein,
and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties agree as follows:
1. Definitions. As used in this Agreement, the following terms shall have
the following respective meanings:
"Commission" shall mean the Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act.
"Common Stock" shall mean the common stock of the Company, $0.00001 par value.
The terms "register", "registered" and "registration" refer to a registration
effected by preparing and filing a registration statement in compliance with the
Securities Act, and the declaration or ordering of the effectiveness of such
registration statement.
"Registrable Securities" means the shares of Common Stock purchased by the
Purchaser pursuant to the terms of the Subscription Agreement, and the shares of
Common Stock issuable to Purchaser upon exercise of the Warrants.
"Securities Act" shall mean the Securities Act of 1933, as amended, or any
similar federal statute promulgated in replacement thereof, and the rules and
regulations of the Commission thereunder, all as the same shall be in effect at
the time.
"Securities" shall mean the Registrable Securities and any securities issued in
respect thereto or upon conversion thereof.
2. Demand Registration.
(a) Demand Rights. Subject to the limitations set forth in Section 5
hereof, at any time beginning 180 days after the date hereof, one time only,
upon written demand by the Purchaser to the Company demanding registration of
not less than 200,000 shares of Common Stock that constitute Registrable
Securities, the Company shall, as soon as practicable, use its reasonable best
efforts to effect a registration with respect to such Registrable Securities (as
adjusted for stock splits, stock dividends, recapitalizations and similar
events), including, without limitation, the execution of an undertaking to file
post-effective amendments, appropriate qualifications under applicable blue sky
or other state securities laws and appropriate compliance with applicable
regulations issued under the Securities Act, as would permit or facilitate the
sale and distribution of all or such portion of such Registrable Securities as
are specified in such request; provided that the Company shall not be obligated
to take any action to effect any such registration, qualification or compliance
pursuant to this Section 2:
(i) which would require the Company to prepare and file a
form of registration statement other than Form S-3 or any successor
form;
(ii) in any particular jurisdiction in which the Company
would be required to execute a general consent to service of process in
effecting such registration, qualification or compliance unless the
Company is already subject to service in such jurisdiction and except
as may be required by the Securities Act;
(iii) within the one hundred twenty (120) day period
immediately following the effective date of a registration statement
pertaining to a public offering of Common Stock for its own account or
for the account of another shareholder of the Company, other than a
registration relating solely to employee benefit plans or securities
issued or issuable to employees or consultants (including a
registration on Form S-8), a registration relating solely to a
Commission Rule 145 transaction, a registration on Form S-4 in
connection with a merger, acquisition, divestiture, reorganization or
similar event or a registration on any registration form which does not
include substantially the same information as would be required to be
included in a registration statement covering the sale of Registrable
Securities;
(iv) after the Company has effected one (1) registration
pursuant to this Section 2 and such registration has been declared or
ordered effective; or
(v) if the Company furnishes to the Purchaser a letter
signed by the Chief Executive Officer or the President of the Company
stating that the Company intends to file a registration statement in
connection with a bona fide firm commitment underwritten registration
for securities to be offered for its own account (the "Intended
Registration"); provided, however, that if the Company does not file
with the Commission its Intended Registration within ninety (90) days
of the request of the Purchaser, the Company shall file the requested
registration statement within thirty (30) days of the termination of
such ninety (90) day period.
(b) Underwriting. The sale of Registrable Securities pursuant to this
Section 2 must be made by means of a firm commitment underwriting through
underwriters who are reasonably acceptable to the Company and the Purchaser that
are proposed to be distributed through such underwriting. The right of the
Purchaser to registration pursuant to this Section 2 shall be conditioned upon
the Purchaser's participation in such underwriting and the inclusion of the
Purchaser's Registrable Securities in the underwriting to the extent requested
by the Purchaser as may be permitted herein. The Company and the Purchaser shall
enter into an underwriting agreement in customary form with the underwriter or
underwriters selected for such underwriting. Notwithstanding any other provision
of this Section 2(b), if the underwriter determines that marketing factors
require a limitation of the number of shares to be underwritten and so advises
the Purchaser in writing, then the Purchaser shall so advise the Company and the
number of Registrable Securities that may be included in the registration and
underwriting shall be allocated first to the Purchaser; second to the Company;
and third to other shareholders of the Company who have requested to sell in the
registration. No Registrable Securities excluded from the underwriting by reason
of the underwriter's marketing limitation shall be included in such
registration; provided, however, that, notwithstanding Section 2(a)(iv) above,
Purchaser's demand registration rights under this Section 2 shall survive an
effective registration under this Section 2 with respect to any Registrable
Securities which are so excluded subject to the limitations of Sections 2(a)(i),
(ii), (iii), and (v). If the Purchaser disapproves of the terms of the
underwriting, the Purchaser may elect to withdraw therefrom by written notice to
the Company and the underwriter. The Registrable Securities and/or other
securities so withdrawn from such underwriting shall also be withdrawn from such
registration. In the event of such withdrawal, the Purchaser's demand
registration rights under Section 2(a) shall immediately terminate. If the
underwriter has not limited the number of Registrable Securities to be
underwritten, the Company may include securities for its own account or the
account of others in such registration if the underwriter so agrees and if the
number of Registrable Securities which would otherwise have been included in
such registration and underwriting will not thereby be limited.
(c) Delay of Registration. If the Company shall furnish to the Purchaser:
(i) a certificate signed by the President of the Company stating that, in the
good faith judgment of the Board of Directors of the Company, it would be
seriously detrimental to the Company and its shareholders for such registration
statement to be filed on or before the date filing would be required, and (ii) a
letter from the Company's underwriter confirming that the filing of such
registration statement would be severely detrimental to the Company and its
shareholders, then the Company may direct that such request for registration be
delayed for a period not in excess of ninety (90) days.
3. Piggyback Registration.
(a) Piggyback Rights. If at any time after the date hereof, the Company
shall determine to register for sale for cash any of its Common Stock, for its
own account or for the account of others (other than the Purchaser), other than
a registration relating solely to employee benefit plans or securities issued or
issuable to employees or consultants (including a registration on Form S-8), a
registration relating solely to a Commission Rule 145 transaction, a
registration on Form S-4 in connection with a merger, acquisition, divestiture,
reorganization or similar event or a registration on any registration form which
does not include substantially the same information as would be required to be
included in a registration statement covering the sale of Registrable
Securities, the Company promptly will give to the Purchaser written notice
thereof and shall use its reasonable best efforts to include in such
registration (and any related qualification under blue sky laws or other
compliance), and in any underwriting involved therein, all the Registrable
Securities specified in a written request, made within ten (10) days after
receipt of such written notice from
the Company, by the Purchaser. However, the Company may, without the consent of
the Purchaser, withdraw such registration statement prior to its becoming
effective if the Company has abandoned its proposal to register the securities
proposed to be registered thereby.
(b) Underwriting. If the registration of which the Company gives notice
is for a registered public offering involving an underwriting, the Company shall
so advise the Purchaser as a part of the written notice given pursuant to
Section 3(a). In such event the right of the Purchaser to registration pursuant
to Section 3(a) shall be conditioned upon the Purchaser's participation in such
underwriting and the inclusion of the Purchaser's Registrable Securities in the
underwriting to the extent provided herein. The Purchaser shall (together with
the Company and any other shareholders of the Company distributing their
securities through such underwriting) enter into an underwriting agreement in
customary form with the underwriter or underwriters selected for such
underwriting by the Company. Notwithstanding any other provision of this Section
3(b), if the underwriter or the Company determines that marketing factors
require a limitation of the number of shares to be underwritten, the underwriter
may exclude some or all Registrable Securities from such registration and
underwriting. The Company shall so advise the Purchaser, and the number of
shares of Registrable Securities that may be included in the registration and
underwriting, if any, shall be determined as follows: The number of shares of
Common Stock that may be included in the registration and underwriting shall be
allocated first to the Company and then to all selling shareholders, including
the Purchaser, who have requested to sell in the registration on a pro rata
basis according to the number of shares of Common Stock, including Registrable
Securities, requested to be included.
(c) Exclusion. No Registrable Securities excluded from the
underwriting by reason of the underwriter's marketing limitation shall be
included in such registration. If the Purchaser disapproves of the terms of any
such underwriting, such person may elect to withdraw therefrom by written notice
to the Company and the underwriter. The Registrable Securities and/or other
securities so withdrawn from such underwriting shall also be withdrawn from such
registration; provided, however, that, if by the withdrawal of such Registrable
Securities a greater number of Registrable Securities held by other Holders may
be included in such registration.
4. Registration Procedures. In the event of a registration, qualification
or compliance effected by the Company pursuant to Section 2 or Section 3, the
Company will keep the Purchaser advised in writing as to the initiation of each
registration, qualification and compliance and as to the completion thereof. At
its expense, the Company will use its reasonable best efforts to:
(a) Keep such registration, qualification or compliance effective for a
period of ninety (90) days or until the Purchaser has completed the distribution
described in the registration statement relating thereto, whichever first
occurs; and
(b) Furnish such number of prospectuses and other documents incident
thereto as the Purchaser from time to time may reasonably request.
5. Rule 144(k). Notwithstanding anything to the contrary contained herein,
the Purchaser shall not have rights to a registration under Section 2 or Section
3 after the time that the Purchaser could sell any of its Registrable Securities
pursuant to Rule 144(k) promulgated under the Securities Act or any successor
rule thereto.
6. Registration Expenses.
(a) With respect to a registration pursuant to Section 2, the Purchaser
and the Company shall each pay 50% of all registration, filing and NASD fees,
printing expenses, all fees and expenses of complying with securities or blue
sky laws, and the fees and disbursements of counsel for the Company and the
Purchaser and their respective independent accountants; provided that the
Company shall pay all of its own underwriting discounts, commissions, transfer
taxes and fees incurred as a result of the Company's inclusion of securities
(other than the Purchaser's Registrable Securities) in such offering.
(b) With respect to a registration pursuant to Section 3, the Company
shall pay all registration, filing and NASD fees, printing expenses, all fees
and expenses of complying with securities or blue sky laws, and the fees and
disbursements of counsel for the Company and of its independent accountants;
provided that the Purchaser shall pay all of its own underwriting discounts,
commissions, transfer taxes and fees and disbursements of counsel and other
experts retained by the Purchaser.
7. Assignment of Rights. The Purchaser may not assign its rights under
this Agreement to any party without the prior written consent of the Company
which consent shall not be unreasonably withheld or delayed, and any attempted
transfer in violation of this Section 7 shall be null and void.
8. Information of Purchaser. The Purchaser shall promptly furnish to the
Company such information regarding the Purchaser and the distribution proposed
by the Purchaser as the Company may request in writing for the preparation of
and/or inclusion in a registration statement.
9. Standstill Agreement. In connection with each offering pursuant to a
registration statement for which the Purchaser is or may be eligible to include
Registrable Securities pursuant to this Agreement, the Purchaser shall refrain
from selling any Registrable Securities not included in such registration during
the period of distribution of securities by such underwriters pursuant to such
registration and the period in which the underwriting syndicate participates in
the after market; provided, however, that such period shall not exceed the
shortest such period applicable to any person subject to such restriction in
connection with such registration. The Company may impose stop- transfer
instructions with respect to the shares (or securities) pursuant to the
foregoing restriction until the end of such period.
10. Indemnification.
(a) In the event of the registration of Registrable Securities
hereunder,, the Company shall indemnify and hold harmless the Purchaser against
any losses, claims, damages or liabilities to which the Purchaser, insofar as
such losses, claims, damages or liabilities (or actions or proceedings, whether
commenced or threatened, in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any registration statement under which such shares were registered under the
Securities Act, any preliminary prospectus, final prospectus or summary
prospectus contained therein, or any amendment or supplement thereto, or any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein in light of the
circumstances in which they were made not misleading, and the Company shall
reimburse the
Purchaser for any legal or any other expenses reasonably incurred by him in
connection with investigating or defending any such loss, claim, damage,
liability, action or proceeding; provided that the Company shall not be liable
in any such case to the extent that any such loss, claim, damage, liability (or
action or proceeding in respect thereof) or expense arises out of or is based
upon an untrue statement or alleged untrue statement in or omission or alleged
omission from such registration statement, any such preliminary prospectus,
final prospectus, summary prospectus, amendment or supplement in reliance upon
and in conformity with written information furnished to the Company through an
instrument duly executed by or on behalf of the Purchaser. Such indemnity shall
remain in full force and effect regardless of any investigation made by or on
behalf of the Company.
(b) In the event of the registration of Registrable Securities
hereunder, the Purchaser shall indemnify and hold harmless the Company, its
directors and officers and each other Person, if any, who controls the Company
within the meaning of Section 15 of the Securities Act, against any losses,
claims, damages or liabilities, joint or several, to which the Company or any
such director or officer or controlling person may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement in or omission or alleged omission from such registration
statement, any preliminary prospectus, final prospectus or summary prospectus
contained therein, or any amendment or supplement thereto, if such statement or
alleged statement or omission or alleged omission was made in reliance upon and
in conformity with written information about the Purchaser furnished to the
Company through an instrument duly executed by the Purchaser specifically
stating that it is for use in the preparation of such registration statement,
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement. Such indemnity shall remain in full force and effect, regardless of
any investigation made by or on behalf of the Company or any such director,
officer or controlling person and shall survive the transfer by the Purchaser of
such shares.
(c) Promptly after receipt by an indemnified party of notice of the
commencement of any action or proceeding involving a claim referred to in
Section 10(a) or (b) (including any governmental action), such indemnified party
shall, if a claim in respect thereof is to be made against an indemnifying
party, give written notice to the indemnifying party of the commencement of such
action; provided that the failure of any indemnified party to give notice as
provided herein shall not relieve the indemnifying party of its obligations
under Section 10(a) or (b), except to the extent that the indemnifying party is
actually prejudiced by such failure to give notice. In case any such action is
brought against an indemnified party, the indemnifying party shall be entitled
to participate in and to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party and, after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be liable to such indemnified party
for any legal or other expenses subsequently incurred by the latter in
connection with the defense thereof other than reasonable costs of
investigation. Neither an indemnified nor an indemnifying party shall be liable
for any settlement of any action or proceeding effected without its consent. No
indemnifying party shall, without the consent of the indemnified party, consent
to entry of any judgment or enter into any settlement which does not include as
an unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect of such claim or
litigation.
11. Miscellaneous.
(a) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Michigan applicable to contracts
entered into and to be performed entirely within the State of Michigan.
(b) Successors and Assigns. Except as otherwise provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties hereto.
(c) Entire Agreement. This Agreement constitutes the full and entire
understanding and agreement between the parties with regard to the subjects
hereof.
(d) Notices, etc. All notices and other communications required or
permitted hereunder shall be in writing and shall be effective three (3) days
after mailed by first-class mail, postage prepaid, or otherwise delivered by
hand or by messenger, addressed (a) if to a Purchaser, at such Purchaser's
address set forth in the introduction to this Agreement, or at such other
address as such Purchaser shall have furnished to the Company in writing, or (b)
if to the Company, at such address as the Company shall have furnished to the
Purchaser in writing.
(e) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be enforceable against the parties actually
executing such counterparts, and all of which together shall constitute one
instrument.
(f) Severability. In the case any provision of this Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
(g) Amendments. The provisions of this Agreement may be amended at any
time and from time to time, and particular provisions of this Agreement may be
waived, with and only with an agreement or consent in writing signed by the
Company and the Purchaser.
This Agreement is hereby executed as of the date first above written.
McLAREN PERFORMANCE TECHNOLOGIES, INC.
By:/s/ Xxxxxx Xxxxx
---------------------------------------------
Xxxxxx Xxxxx, President
EMM McLAREN INVESTMENT COMPANY, L.L.C.
By:_____________________________________________
Its:____________________________________________
