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EXHIBIT 10.5
UNIVERSAL AUTOMOTIVE INDUSTRIES, INC.
REGISTRATION AGREEMENT
DATED AS OF
AUGUST 28, 2001
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TABLE OF CONTENTS
PAGE
Section 1. Definitions.......................................................1
Section 2. Demand Registration...............................................2
2.1. Request for Registration..................................2
2.2. Demand Registrations......................................2
2.3. Priority on Demand Registrations..........................2
2.4. Selection of Underwriters.................................3
2.5. Other Registration Rights.................................3
Section 3. Piggyback Registrations...........................................3
3.1. Right to Piggyback........................................3
3.2. Priority on Piggyback Registrations.......................3
3.3. Selection of Underwriters.................................3
Section 4. Limitations.......................................................3
4.1. Holdback..................................................3
4.2. Cessation of Sales........................................4
4.3. Other Registrations.......................................4
Section 5. Registration Procedures...........................................4
5.1. Company Procedures........................................4
5.2. Seller Procedures.........................................7
5.3. Inclusion of Information..................................7
Section 6. Registration Expenses.............................................7
6.1. Registration Expenses.....................................7
6.2. Legal Expenses............................................8
6.3. Other Expenses............................................8
Section 7. Indemnification...................................................8
7.1. Company Indemnification...................................8
7.2. Holder Indemnification....................................8
7.3. Resolution of Claims......................................9
7.4. Survival; Contribution....................................9
Section 8. Participation in Underwritten Registrations.......................9
Section 9. Transfer of Registration Rights..................................10
Section 10. Current Public Information; Rule 144A...........................10
Section 11. No Conflict.....................................................10
Section 12. Miscellaneous...................................................10
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12.1. Adjustments Affecting Registrable Securities.............10
12.2. Remedies.................................................10
12.3. Consent to Amendments; Waiver............................11
12.4. Successors and Assigns...................................11
12.5. Severability.............................................11
12.6. Counterparts.............................................11
12.7. Descriptive Headings.....................................11
12.8. Notices..................................................11
12.9. No Third-Party Beneficiaries.............................12
12.10. Entire Agreement.........................................12
12.11. Construction.............................................12
12.12. Governing Law............................................13
12.13. Submission to Jurisdiction...............................13
12.14. Attorneys' Fees..........................................13
12.15. Waiver of Jury Trial.....................................13
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REGISTRATION AGREEMENT
This REGISTRATION AGREEMENT ("Agreement") is dated as of August 28,
2001, by and between Universal Automotive Industries, Inc., a Delaware
corporation ("Company"), and Venture Equities Management, Inc., an Illinois
corporation ("Purchaser").
The parties hereto agree as follows:
Section 1. Definitions. All capitalized terms used, but not defined,
herein shall have the meanings set forth in the Purchase Agreement. For purposes
of this Agreement, the following terms have the meanings set forth below:
"Agreement" has the meaning set forth in the preamble.
"Common Stock" means the Common Stock, $0.01 par value per share, of
the Company.
"Company" has the meaning set forth in the preamble.
"Person" means an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization, and a governmental entity or any
department, agency, or political subdivision thereof.
"Preferred Stock" means the Series A Preferred Stock, $0.01 par value
per share, of the Company.
"Purchase Agreement" means that certain Purchase Agreement, of even
date herewith, by and between the Purchaser and the Company.
"Purchaser" has the meaning set forth in the preamble.
"Registrable Securities" means: (a) any Common Stock issued or issuable
upon the conversion of any Preferred Stock; (b) any other shares of Common Stock
held at any time and from time to time by the Purchaser; and (c) any Common
Stock issued or issuable with respect to the securities referred to in clause
(a) or (b) by way of a stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation, or other
reorganization. As to any particular Registrable Securities, such securities
shall cease to be Registrable Securities when a registration statement with
respect to the distribution of such securities shall have become effective under
the Securities Act or such securities may be distributed to the public in
compliance with Rule 144 under the Securities Act (or any similar rule then in
force); provided, however, that if any such securities cease to be eligible for
distribution to the public in compliance with Rule 144, then such securities
shall again be deemed to be Registrable Securities. For purposes of this
Agreement, a Person shall be deemed to be a holder of Registrable Securities
whenever such Person has the right to acquire directly or indirectly such
Registrable Securities (upon conversion or exercise in connection with a
transfer of securities or otherwise, but disregarding any restrictions or
limitations upon the exercise of such right), irrespective of whether such
acquisition has actually been consummated.
"Registration Expenses" has the meaning set forth in Section 6.1.
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"Securities Act" means the Securities Act of 1933, as amended from time
to time.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time.
Section 2. Demand Registration.
2.1. Request for Registration. Subject to the terms and conditions of
this Agreement, at any time after the Closing Date, the holders of a majority of
the Registrable Securities may request registration by the Company under the
Securities Act of all or part of their Registrable Securities on Form S-1 or any
similar long-form registration ("Long-Form Registrations") or on Form S-3 or any
similar short-form registration ("Short-Form Registrations"), if available. Each
request for a Demand Registration (as defined below) shall specify the
approximate number of Registrable Securities requested to be registered, the
intended method of distribution thereof, and the anticipated per share price
range for such offering. Within 15 days after receipt of any such request, the
Company shall give written notice of such requested registration to all other
holders of the Registrable Securities, and shall include as soon as practicable
(but in any event, within 30 days of the receipt of such request) in such
registration all Registrable Securities that such other holders have requested
to be registered and included therein. Long-Form Registrations and Short-Form
Registrations are collectively referred to in this Agreement as "Demand
Registrations."
2.2. Demand Registrations. The holders of a majority of the Registrable
Securities shall be entitled to request two Long-Form Registrations or two
Short-Form Registrations. Demand Registrations shall be Short-Form Registrations
whenever the Company is permitted to use any applicable short form. The Company
shall use best efforts to make Short-Form Registrations available for the sale
of Registrable Securities. A registration shall not count as a permitted Demand
Registration until it has become effective, and no registration shall count as a
permitted Demand Registration unless the Persons holding Registrable Securities
covered by such registration are able to register and sell 100% of the
Registrable Securities requested to be included in such registration.
2.3. Priority on Demand Registrations. The Company shall not include in
any Demand Registration any securities that are not Registrable Securities
without the prior written consent of the holders of a majority of the
Registrable Securities. If a Demand Registration is an underwritten offering and
the managing underwriter or underwriters advise the Company in writing that, in
its or their opinion, the number of Registrable Securities and, if permitted
hereunder, other securities requested to be included in such offering, exceeds
the number of Registrable Securities and other securities, if any, that can be
sold without having an adverse effect on the price, timing, or distribution of
such offering, the Company shall include in such registration, prior to the
inclusion of any securities that are not Registrable Securities, the number of
Registrable Securities requested to be included, which, in the opinion of such
underwriter or underwriters, can be sold without having an adverse effect on the
price, timing, or distribution of such offering, pro rata among the respective
holders thereof on the basis of the number of Registrable Securities owned by
each such holder, and only such lesser number of other securities as shall not,
in the opinion of the managing underwriter or underwriters, be likely to have
such an adverse effect.
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2.4. Selection of Underwriters. If any offering pursuant to a Demand
Registration is in the form of an underwritten offering, then the holders of a
majority of the Registrable Securities shall have the right to select the
managing underwriter or underwriters to administer the offering, and such
managing underwriter or underwriters shall be of nationally-recognized standing.
2.5. Other Registration Rights. Except as provided in this Agreement,
the Company shall not impair any right of any holder of the Registrable
Securities under Section 2 without the prior written consent of the holders of a
majority of the Registrable Securities, which shall not be unreasonably
withheld.
Section 3. Piggyback Registrations.
3.1. Right to Piggyback. Whenever the Company proposes to register any
of its securities under the Securities Act for its own account or for the
account of other Persons (other than a registration on Form S-4 or Form S-8 or
successor form) and the registration form to be used may be used for the
registration of Registrable Securities ("Piggyback Registration"), the Company
shall give prompt written notice (in any event within 20 business days after its
receipt of notice of any exercise of demand registration rights other than under
this Agreement) to the holders of the Registrable Securities of its intention to
effect such a registration, and shall include in such registration all
Registrable Securities (subject to Section 3.2) that the holders of the
Registrable Securities have requested to be included.
3.2. Priority on Piggyback Registrations. If a Piggyback Registration
is an underwritten registration on behalf of the Company, and the managing
underwriter or underwriters advise the Company in writing that, in its or their
opinion, the number of securities requested to be included in such registration
exceeds the number that can be sold without having an adverse effect on the
price, timing, or distribution of such offering, then Company shall include in
such registration its securities in the following order of priority: (a) first,
one hundred percent (100%) of the securities that the Company proposes to sell
for its own account or for the account of other Persons; and (b) second, the
Registrable Securities requested to be included in such registration pursuant to
Section 3.1 together with all other securities eligible for inclusion in such
registration pro rata among the respective holders thereof on the basis of the
number of Registrable Securities and other securities, as applicable, owned by
the holders thereof; provided, however, that all of the securities referenced in
clause (a) have been included.
3.3. Selection of Underwriters. If any offering pursuant to a Piggyback
Registration is in the form of an underwritten offering, then the Company shall
have the right to select the managing underwriter or underwriters to administer
the offering, and such managing underwriter or underwriters shall be of
nationally-recognized standing.
Section 4. Limitations.
4.1. Holdback. Each holder of Registrable Securities agrees not to
effect any public sale or distribution (including sales pursuant to Rule 144
under the Securities Act) of equity securities of the Company, or any securities
convertible into, or exchangeable or exercisable for, such securities, during
the period beginning on the effective date of any underwritten Demand
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Registration or any underwritten Piggyback Registration in which Registrable
Securities are included (except as part of such underwritten registration or
pursuant to registrations on Form S-4 or Form S-8 or any successor form) and
ending on the date that is 180 days thereafter, unless the underwriter or
underwriters managing the registered public offering otherwise agree.
4.2. Cessation of Sales.
(a) Upon receipt of written notice from the Company pursuant to
Section 5.1(e), each holder of Registrable Securities hereby agrees to
discontinue the disposition of the Registrable Securities covered by a
registration statement or prospectus until such order set forth in
Section 5.1(e) has been withdrawn or lifted.
(b) Upon receipt of written notice from the Company pursuant to
Section 5.1(f), each holder of Registrable Securities hereby agrees to
discontinue the disposition of the Registrable Securities covered by a
registration statement or prospectus until such holders: (i) receive
copies of a supplemented or amended prospectus and have been advised in
writing by the Company that such supplemented or amended prospectus may
be used; or (ii) are advised in writing by the Company that the
applicable prospectus may be used. If so directed by the Company, the
holders of Registrable Securities shall deliver to the Company all
copies then in such holder's possession of the prospectus covering such
Registrable Securities current at the time of receipt of notice by the
Company.
4.3. Other Registrations. The Company agrees not to effect any public
sale or distribution of its equity securities, or any securities convertible
into, or exchangeable or exercisable for, such securities, during the period
beginning on the effective date of any underwritten Demand Registration or any
underwritten Piggyback Registration (except as part of such underwritten
registration or pursuant to registrations on Form S-4 or Form S-8 or any
successor form) and ending on the date that is 180 days thereafter, unless the
underwriter or underwriters managing the registered public offering otherwise
agree.
Section 5. Registration Procedures.
5.1. Company Procedures. Whenever the holders of the Registrable
Securities have requested that any Registrable Securities be registered pursuant
to this Agreement, the Company shall use its best efforts to effect the
registration and the sale of such Registrable Securities in accordance with the
intended method of disposition thereof, and pursuant thereto the Company shall
as expeditiously as possible:
(a) prepare and file with the Securities and Exchange Commission a
registration statement with respect to such Registrable Securities and
use best efforts to cause such registration statement to become
effective (provided that before filing a registration statement or
prospectus or any amendments or supplements thereto, the Company shall
furnish to the counsel selected by the holders of a majority of the
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Registrable Securities being registered copies of all such documents
proposed to be filed);
(b) prepare and file with the Securities and Exchange Commission
such amendments and supplements to such registration statement and the
prospectus used in connection therewith as may be necessary to keep
such registration statement effective for a period of not less than 180
days (or, if such registration statement is pursuant to a Short-Form
Registration, then for a period that shall be necessary to keep such
registration statement effective for the period that shall be adequate
to sell all Registrable Securities covered thereby) and comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement during such period in
accordance with the intended methods of disposition by the sellers
thereof set forth in such registration statement;
(c) furnish to the holders of the Registrable Securities being
registered such number of copies of such registration statement, each
amendment and supplement thereto, the prospectus included in such
registration statement (including each preliminary prospectus), and
such other documents as the holders of the Registrable Securities being
registered may reasonably request to facilitate the disposition of the
Registrable Securities owned by such holders;
(d) use best efforts to register or qualify, if necessary, such
Registrable Securities being registered under such other securities or
blue sky laws of such jurisdictions as the holders of a majority of the
Registrable Securities being registered reasonably request and do any
and all other acts and things that may be reasonably necessary or
advisable to enable the holders of the Registrable Securities being
registered to consummate the disposition in such jurisdictions of such
Registrable Securities owned by such holders (provided that the Company
shall not be required to: (i) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify; (ii)
subject itself to taxation in any such jurisdiction; or (iii) consent
to general service of process in any such jurisdiction);
(e) in the event of the issuance of any stop order suspending the
effectiveness of a registration statement, or of any order suspending
or preventing the use of any related prospectus or suspending the
qualification of any securities included in such registration statement
for sale in any jurisdiction, use best efforts promptly to obtain the
withdrawal of such order;
(f) notify the holders of the Registrable Securities being
registered, at any time when a prospectus relating thereto 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 contains an untrue statement of a material fact or omits any
fact necessary to make the statements therein not misleading, and, at
the request of the holders of a majority of the Registrable Securities
being registered, the Company shall prepare a supplement or amendment
to such prospectus so that, as thereafter delivered to the holders of
Registrable Securities being registered, such prospectus shall not
contain an
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untrue statement of a material fact or omit to state any fact necessary
to make the statements therein not misleading;
(g) cause all such Registrable Securities included in an offering
hereunder to be listed on any national stock exchange or market on
which any Registrable Securities are listed, or, if the Registrable
Securities are not listed on any national stock exchange or market, the
Company shall use best efforts to qualify the Registrable Securities
for inclusion on the Nasdaq SmallCap Market;
(h) provide a transfer agent and registrar for all such
Registrable Securities being registered not later than the effective
date of such registration statement;
(i) enter into such customary agreements (including underwriting
agreements in customary form) and take all such other reasonable
actions as the holders of a majority of the Registrable Securities
being registered or the underwriter or underwriters, if any, reasonably
request to expedite or facilitate the disposition of such Registrable
Securities being registered;
(j) make available for inspection at the Company's principal
office (during normal business hours and upon reasonable notice) by any
holder of the Registrable Securities being registered, any underwriter
participating in any disposition pursuant to such registration
statement, and any attorney, accountant, or other agent retained by any
holder of the Registrable Securities being registered or underwriter,
all financial and other records, pertinent corporate documents and
properties of the Company, and cause the Company's officers, directors,
employees, and independent accountants to supply all information
reasonably requested by any holder of the Registrable Securities being
registered, underwriter, attorney, accountant, or agent in connection
with such registration statement;
(k) comply with all applicable rules and regulations of the
Securities and Exchange Commission;
(l) permit the holders of a majority of the Registrable Securities
being registered to participate in the preparation of such registration
or comparable statement and to require the insertion therein of
material, furnished to the Company in writing, which in the reasonable
judgment of the Company and its counsel should be included;
(m) obtain from its counsel an opinion or opinions in customary
form and substance;
(n) obtain a cold comfort letter from the Company's independent
public accountants in customary form and covering such matters of the
type customarily covered by cold comfort letters as the holders of a
majority of the Registrable Securities being registered reasonably
request; provided that such a comfort letter shall not be required in
connection with a Short-Form Registration unless the underwriter or
underwriters otherwise require; and
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(o) take all other actions reasonably necessary to effect the
registration of the Registrable Securities contemplated hereby.
5.2. Seller Procedures. Each holder of the Registrable Securities
agrees as follows:
(a) Each holder of the Registrable Securities shall cooperate with
the Company as reasonably requested by the Company in connection with
the preparation of the registration statement covering such holder's
Registrable Securities, and for so long as the Company is obligated to
file and keep effective such registration statement, shall provide to
the Company, in writing, for use in such registration statement, all
such information regarding such holder and its plan of distribution of
the Registrable Securities being included in such registration
statement as may be reasonably necessary to enable the Company to
prepare the registration statement and prospectus covering the
Registrable Securities, to maintain the currency and effectiveness
thereof, and otherwise to comply with all applicable requirements of
law in connection therewith.
(b) Each holder of the Registrable Securities shall, with respect
to a registration under this Agreement, advise the Company immediately
if such holder knows or becomes aware of any matter regarding such
holder that such holder believes may result in the inclusion in a
prospectus or registration statement of an untrue statement of a
material fact or the omission of a material fact required to be stated
therein or necessary to make the statements therein not misleading, and
shall assist the Company in preparing and filing with the Securities
and Exchange Commission any amendments or supplements to such
prospectus or registration statement that may be necessary or
appropriate to permit the prospectus and registration statement to be
used under the Securities Act in connection with the offer and sale of
Registrable Securities.
5.3. Inclusion of Information. If any registration or comparable
statement refers to any holder of Registrable Securities by name or otherwise as
the holder of any securities of the Company and, if in its sole and exclusive
judgment, such holder is or might be deemed to be a controlling person of the
Company, such holder shall have the right to require the insertion therein of
language, in form and substance satisfactory to such holder and presented to the
Company in writing, to the effect that the holding by such holder of such
securities is not to be construed as a recommendation by such holder of the
investment quality of the Company's securities covered thereby and that such
holding does not imply that such holder shall assist in meeting any future
financial requirements of the Company.
Section 6. Registration Expenses.
6.1. Registration Expenses. All expenses incident to the Company's
performance of, or compliance with, this Agreement, including, all registration
and filing fees, fees and expenses of compliance with securities or blue sky
laws, printing expenses, messenger and delivery expenses, and fees and
disbursements of counsel for the Company and all independent certified public
accountants, underwriters (excluding discounts and commissions) and other
Persons retained by the Company (all such expenses being herein called
"Registration Expenses"), shall be borne by the Company. In addition to the
foregoing, the Company shall pay its internal expenses (including all salaries
and expenses of its officers and employees performing legal or
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accounting duties), the expense of any annual audit or quarterly review, the
expense of any liability insurance obtained by the Company, and the expenses and
fees for listing the securities to be registered on each securities exchange on
which similar securities issued by the Company are then listed or on the Nasdaq
National Market. Notwithstanding anything to the contrary herein, the holders of
the Registrable Securities shall bear all underwriting discounts and
commissions, and any stock transfer taxes payable upon the sale of any
Registrable Securities to the purchaser thereof.
6.2. Legal Expenses. In connection with each Demand Registration and
each Piggyback Registration, the Company shall reimburse the holders of
Registrable Securities for the reasonable fees and disbursements of one special
counsel.
6.3. Other Expenses. To the extent Registration Expenses are not
required to be paid by the Company, each holder of securities included in any
registration pursuant to this Agreement shall pay those Registration Expenses
allocable to the registration of such holder's securities so included, and any
Registration Expenses not so allocable shall be borne by all sellers of
securities included in such registration in proportion to the aggregate selling
price of the securities to be so registered.
Section 7. Indemnification.
7.1. Company Indemnification. The Company agrees to indemnify and hold
harmless, to the maximum extent permitted by law, each holder of the Registrable
Securities, its officers, directors, employees, agents, and each Person who
controls each holder of the Registrable Securities (within the meaning of the
Securities Act) from and against all losses, claims, damages, liabilities and
expenses caused by any untrue or alleged untrue statement of material fact
contained in any registration statement, prospectus, preliminary prospectus, or
any amendment thereof or supplement thereto or any omission or alleged omission
of a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as the same are caused by, or
contained in any information furnished in writing to the Company or any
underwriter by, such holder expressly for use therein or by such holder's
failure to deliver a copy of the registration statement or prospectus or any
amendments or supplements thereto after the Company has furnished such holder
with a sufficient number of copies of the same. In connection with an
underwritten offering, the Company shall indemnify such underwriters, their
officers and directors, and each Person who controls such underwriters (within
the meaning of the Securities Act) to the same extent as provided above with
respect to the indemnification of the holders of Registrable Securities. The
reimbursement required by this Section 7.1 shall be made by periodic payments
within five days of the date on which the Company shall receive bills or
invoices therefor.
7.2. Holder Indemnification. In connection with any registration
statement in which any holder of Registrable Securities is participating, such
holder shall furnish to the Company in writing such information and affidavits
as the Company reasonably requests for use in connection with any such
registration statement or prospectus and, to the extent permitted by law, shall
indemnify and hold harmless the Company, its officers, directors, employees,
agents, and each Person who controls the Company (within the meaning of the
Securities Act) from and against any losses, claims, damages, liabilities, and
expenses resulting from any untrue or alleged
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untrue statement of material fact contained in the registration statement,
prospectus, preliminary prospectus, or any amendment thereof, or supplement
thereto or any omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements therein not misleading, but
only to the extent that such untrue statement or omission is contained in any
information or affidavit so furnished in writing by such holder; provided that
the obligation to indemnify shall be individual to such holder and shall be
limited to the net amount of proceeds received by such holder from the sale of
Registrable Securities pursuant to such registration statement. The
reimbursement required by this Section 7.2 shall be made by periodic payments
within five days of the date on which such holder shall receive bills or
invoices therefor.
7.3. Resolution of Claims. Any Person entitled to indemnification
hereunder shall: (a) give prompt written notice to the indemnifying party of any
claim with respect to which it seeks indemnification; and (b) unless in such
indemnified party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist with respect to such claim,
permit such indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party. If such defense is assumed,
the indemnifying party shall not be subject to any liability for any settlement
made by the indemnified party without its consent, which shall not be
unreasonably delayed, withheld, or conditioned. An indemnifying party who is not
entitled to, or elects not to, assume the defense of a claim shall not be
obligated to pay the fees and expenses of more than one counsel for all parties
indemnified by such indemnifying party with respect to such claim, unless in the
reasonable judgment (with written advice of counsel) of any indemnified party a
conflict of interest may exist between such indemnified party and any other of
such indemnified parties with respect to such claim.
7.4. Survival; Contribution. The indemnification provided shall be a
continuing right to indemnification with respect to sales of Registrable
Securities and shall survive the registration and sale of any securities by any
Person and the expiration or termination of this Agreement. The indemnification
provided under this Agreement shall remain in full force and effect regardless
of any investigation made by, or on behalf of, the indemnified party or any
officer, director, or controlling Person of such indemnified party. Each
indemnifying party also agrees to make such provisions, as are reasonably
requested by any indemnified party, for contribution to such party in the event
indemnification is unavailable for any reason; provided, however, that the
amount of such contribution shall reflect the relative fault of the indemnifying
party and the indemnified party. The relative fault of the indemnifying party
and the indemnified party shall be determined with reference to, among other
things, whether information was supplied by the indemnifying party or
indemnified party, and the parties' relative intent, knowledge, access to
information, and opportunity to correct or prevent any event giving rise to a
claim for indemnification or contribution. No Person guilty of fraudulent
misrepresentation (with the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.
Section 8. Participation in Underwritten Registrations. No holder of
the Registrable Securities may participate in any registration hereunder that is
underwritten unless such holder: (a) agrees to sell such holder's securities on
the basis provided in any underwriting arrangements approved by the Person or
Persons entitled hereunder to approve such arrangements; and (b) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
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agreements, and other documents required under the terms of such underwriting
arrangements; provided that no holder shall be required to make any
representations or warranties to the Company or the underwriters other than
representations and warranties regarding such holder and such holder's intended
method of distribution.
Section 9. Transfer of Registration Rights. The rights granted
hereunder to cause the Company to register Registrable Securities may be
transferred or assigned either: (a) in connection with a transfer or assignment
of Registrable Securities; or (b) to an Affiliate of the holder of Registrable
Securities. For purposes of determining the number of shares of Registrable
Securities held by a partnership or limited liability company, the holdings of
the partnership or limited liability company shall be aggregated together and
with the holdings of its partners or members or retired partners or retired
members, and each of their respective transferees and assignees (including
spouses, siblings, lineal descendants, and ancestors who acquire Registrable
Securities by gift, will, or intestate succession).
Section 10. Current Public Information; Rule 144A. At all times, the
Company shall file, on a timely basis, all reports required to be filed by it
under the Securities Act, the Securities Exchange Act, and the rules and
regulations adopted by the Securities and Exchange Commission thereunder, and
shall take such further action as a majority of the holders of the Registrable
Securities may reasonably request, to the extent required to enable such holders
to sell Preferred Stock or Registrable Securities pursuant to: (a) Rule 144 and
144A adopted by the Securities and Exchange Commission under the Securities Act
(as such rules may be amended from time to time) or any similar rules or
regulations hereafter adopted by the Securities and Exchange Commission; or (b)
a registration statement on Form S-2 or S-3 (if the Company is then able to use
such form) or any similar registration form hereafter adopted by the Securities
and Exchange Commission. Upon the request of the majority of the holders of the
Registrable Securities, the Company shall promptly supply such holders or its
respective prospective transferees with all information regarding the Company
required to be delivered in connection with a transfer pursuant to Rule 144A
under the Securities Act (or any similar provision then in force).
Section 11. No Conflict. The Company hereby represents and warrants to
the Purchaser that the rights granted to the holders of the Registrable
Securities under this Agreement do not conflict with any other rights granted by
the Company.
Section 12. Miscellaneous.
12.1. Adjustments Affecting Registrable Securities. The Company shall
not take any action, or permit any change to occur, with respect to its
securities that would adversely affect the ability of the holders of the
Registrable Securities to include such Registrable Securities in a registration
undertaken pursuant to this Agreement or which would adversely affect the
marketability of such Registrable Securities in any such registration
(including, without limitation, effecting a stock split or a combination of
shares).
12.2. Remedies. Each holder of the Registrable Securities shall have
all rights and remedies set forth in this Agreement, the Certificate of
Incorporation, and all of the rights that such holder has under any law. Any
Person having any rights under any provision of this
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Agreement shall be entitled to enforce such rights specifically, without posting
a bond or other security, to recover damages by reason of any breach of any
provision of this Agreement and to exercise all other rights granted by law.
12.3. Consent to Amendments; Waiver. Except as otherwise expressly
provided herein, the provisions of this Agreement may be amended only by a
written instrument signed by the Company and the holders of a majority of the
Registrable Securities. No other course of dealing between the Company and any
holder of the Registrable Securities or any delay in exercising any rights
hereunder, under the Company's Certificate of Incorporation, or otherwise shall
operate as a waiver of any rights of any holder of the Registrable Securities.
The failure of any party to enforce any of the provisions of this Agreement
shall not be construed as a waiver of such provisions and shall not affect the
right of such party thereafter to enforce each and every provision of this
Agreement in accordance with its terms. For purposes of this Agreement, shares
of Registrable Securities held by the Company or any of its Subsidiaries shall
not be deemed to be outstanding.
12.4. Successors and Assigns. Except as otherwise expressly provided
herein, all covenants and agreements contained in this Agreement by, or on
behalf of, any of the parties hereto shall bind and inure to the benefit of the
respective successors and assigns of the parties hereto irrespective of whether
so expressed. In addition, and irrespective of whether any express assignment
has been made, the provisions of this Agreement that are for the benefit of each
holder of Registrable Securities as a purchaser or holder of Registrable
Securities are also for the benefit of, and enforceable by, any subsequent
holder of such Registrable Securities, provided that such subsequent holder
shall become a party hereto.
12.5. Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.
12.6. Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, any one of which need not contain the signatures of
more than one party, but all such counterparts taken together shall constitute
one and the same Agreement.
12.7. Descriptive Headings. The descriptive headings of this Agreement
are inserted for convenience only and do not constitute a part of this
Agreement.
12.8. Notices. Any notice, request, instruction, or other document to
be given hereunder shall be in writing and shall be deemed to have been given:
(a) two days after receipt, if given by courier; (b) upon receipt, if given in
person; (c) on the date of transmission, if sent by telex, facsimile, or other
wire transmission; or (d) five days after being deposited in the mail, certified
or registered mail, postage prepaid, as follows:
If to the Company:
Universal Automotive Industries, Inc.
00000 Xxxxx Xxxxxxx Xxxxxx
00
00
Xxxxx, Xxxxxxxx 00000
Attn: President
Facsimile: 000-000-0000
with a copy (which shall not constitute notice) to:
Xxxxxxx & Xxxxxxxx, Ltd.
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxxx Xxxxxxxxx
Facsimile: 000-000-0000
If to the Purchaser:
Venture Equities Management, Inc.
0000 Xxxxxxx Xxxxx, Xxxxx X-0
Xxxx Xxxx, Xxxxxxxx 00000
Attn: Pin Ni
Facsimile: 000-000-0000
with a copy (which shall not constitute notice) to:
Barack Xxxxxxxxxx Xxxxxxxxxx Xxxxxxx & Xxxxxxxxx
000 Xxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxxxx Xxxxxx
Facsimile: 000-000-0000
or to such other address or to the attention of such other Person as the
recipient party has specified by prior written notice to the sending party.
12.9. No Third-Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any Person other than the Company, the holders of the
Registrable Securities, and their respective successors and permitted assigns.
12.10. Entire Agreement. This Agreement (including the documents
referred to herein) constitutes the entire agreement among the parties and
supersedes all prior understandings, agreements, arrangements, or
representations by or among the parties, written or oral, that may have related
in any manner to the subject matter hereof, including, without limitation, that
certain Letter of Intent by and between the Company and Wanxiang America
Corporation, as amended.
12.11. Construction. The language used in this Agreement will be deemed
to be the language chosen by the parties to express their mutual intent, and no
rule of strict construction will be applied against any party. Any reference to
any federal, state, local, or foreign statute or law, statute, rule, or
regulation will be deemed also to refer to all rules and regulations promulgated
thereunder, unless the context requires otherwise. The use of the words
"including" means "including without limitation." All references to
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sections, exhibits, and schedules are to sections, exhibits, and schedules to
this Agreement. All words used in this Agreement shall be construed to be of
such gender or number as the circumstances require.
12.12. Governing Law. This Agreement shall be governed by, and
construed and enforced in accordance with, the substantive laws of the State of
Illinois, without regard to the conflicts of laws principles thereof.
12.13. Submission to Jurisdiction. Each of the parties to this
Agreement submits to the jurisdiction of any state or federal court sitting in
Chicago, Illinois, in any action or proceeding arising out of or relating to
this Agreement, agrees that all claims in respect of the action or proceeding
may be heard and determined in any such court, and agrees not to bring any
action or proceeding arising out of, or relating to, this Agreement in any other
court. Each of the parties to this Agreement waives any defense of inconvenient
forum to the maintenance of any action or proceeding so brought and waives any
bond, surety, or other security that might be required of any other party with
respect thereto.
12.14. Attorneys' Fees. In the event of any action, arbitration, or
suit based upon or arising out of any actual or alleged breach by any party of
any representation, warranty, covenant, or agreement in this Agreement, the
prevailing party shall be entitled to recover its reasonable attorneys' fees and
expenses of such action, arbitration, or suit from the other party, in addition
to any other relief ordered by any proper arbitration proceeding or court.
12.15. Waiver of Jury Trial. BECAUSE DISPUTES ARISING IN CONNECTION
WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED
BY AN EXPERIENCED AND EXPERT PERSON, AND THE PARTIES WISH APPLICABLE STATE AND
FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT
THEIR DISPUTES BE RESOLVED BY A JUDGE. THEREFORE, TO ACHIEVE THE BEST
COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE
PARTIES HERETO WAIVE ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, SUIT, OR
PROCEEDING BROUGHT TO ENFORCE OR DEFEND ANY RIGHTS OR REMEDIES UNDER THIS
AGREEMENT.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have executed this Registration
Agreement as of the date first written above.
UNIVERSAL AUTOMOTIVE INDUSTRIES, INC.
By:
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Its:
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VENTURE EQUITIES MANAGEMENT, INC.
By:
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Its:
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