REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT dated as of
July 22, 1997 between VECTOR AEROMOTIVE CORPORATION, a
Nevada corporation (the "Company"), and TRADELINK
INTERNATIONAL LIMITED, a Bahamian Company ("TIL").
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 July 22, 1997, between the Company and TIL (the
"Share Purchase Agreement")(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, 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 TIL 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.
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 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 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.
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 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 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 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.
Section 8. Miscellaneous.
(a) Binding Effect. This Agreement shall be
binding upon and shall inure to the benefit of the original
parties to this Agreement and each person who becomes a
party to this Agreement, 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 TIL 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 TIL.
(f) Governing Law. This Agreement and the
rights and remedies of the parties to this Agreement 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/ Xxxxx Xxxxx Xxxx
Name: Xxxxx Xxxxx Xxxx
Title: President
TRADELINK INTERNATIONAL LIMITED
By: /s/ X. X. Xxxxxxx
Name: X. X. Xxxxxxx
Title: President & General Manager
