EXHIBIT 10.4
EXHIBIT 10.4 Registration Rights Agreement dated as of March 15, 2000 between
the Company and Xxxxxx X. Xxxxxx
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made as of the
17th day of April, 2000, by and between McLAREN AUTOMOTIVE GROUP, INC., a
Delaware corporation (the "Company"), and XXXXXX X. XXXXXX, TRUSTEE OF THE
XXXXXX X. XXXXXX LIVING TRUST DATE MARCH 6, 1998, located at 00000 Xxxxxx Xxxx,
Xxxxxxx, Xxxxxxxx 00000 (the "Purchaser").
RECITALS:
A. The Purchaser is the purchaser of Four Hundred Thousand (400,000) shares of
Common Stock (as defined below) pursuant to a Subscription Agreement dated as of
April 17, 2000, by and between the Purchaser and the Company (the "Subscription
Agreement").
B. The Purchaser has the right to purchase an additional Two Hundred Thousand
(200,000) shares of Common Stock pursuant to two Warrants each dated as of April
17, 2000, by and between the Purchaser and the Company (the "Warrant").
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. 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 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 it is
therefore essential to defer the filing of such registration statement, 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
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 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, 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. 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 offer and sale of Registrable Securities held
by the Purchaser under the Securities Act, 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) The Company may require, as a condition to including any
Registrable Securities to be offered by the Purchaser in any registration
statement filed pursuant to this Section 10, that the Company shall have
received an agreement from the Purchaser to be bound by the terms of this
Section 10, including an undertaking reasonably satisfactory to it from the
Purchaser, to indemnify and hold 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
between Georgia residents 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 AUTOMOTIVE GROUP, INC.
By:/s/ Wiley X. XxXxx
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Wiley X. XxXxx, President
/s/ Xxxxxx X. Xxxxxx
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XXXXXX X. XXXXXX, TRUSTEE OF THE
XXXXXX X. XXXXXX LIVING TRUST DATED
MARCH 6, 1998
