EXHIBIT 10.3
EXHIBIT 10.3 Registration Rights Agreement dated as of March 15, 2000 between
the Company and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of March 15, 2000 (this "Agreement"),
among MCLAREN AUTOMOTIVE GROUP, INC., a Delaware corporation (the "Company"),
and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ (the "Investor").
Pursuant to the Stock Purchase Agreement, dated as of the date hereof, between
the Investor and the Company (the "Purchase Agreement"), the Company has agreed
to issue and sell to the Investor shares of its Common Stock and a Warrant.
In order to induce the Investor to enter into the Purchase Agreement, the
Company has agreed to provide the registration rights set forth in this
Agreement.
In consideration of the foregoing and the covenants and agreements contained
herein, the parties hereto, intending to be legally bound hereby, agree as
follows:
1. Definitions.
As used herein, unless the context otherwise requires or unless otherwise
defined, the following terms have the following respective meanings:
"Affiliate": The meaning set forth in Rule 12b-2 under the Exchange Act (as in
effect on the date of this Agreement).
"Agreement": As defined in the first paragraph hereof.
"Blue Sky Filing": As defined in Section 2.7.
"Commission": The Securities and Exchange Commission or any other federal agency
at the time administering the Securities Act.
"Common Stock": The Company's common stock, $.00001 par value, such term to
include any stock into which such Common Stock shall have been changed or any
stock resulting from any reclassification of such Common Stock, and all other
stock of any class or classes (however designated) of the Company the holders of
which have the right, without limitation as to amount, either to all or to a
share of the balance of current dividends and liquidating dividends after the
payment of dividends and distributions on any shares entitled to preference.
"Company": As defined in the first paragraph hereof.
"Exchange Act": The Securities Exchange Act of 1934, as amended.
"Indemnitees": As defined in Section 2.7.
"Investor": As defined in the first paragraph hereof.
"Investor Affiliate": As defined in Section 7.
"Loss": As defined in Section 2.7.
"Person": A corporation, an association, a partnership, an organization, a
business, an individual, a government or political subdivision thereof or a
governmental agency.
"Purchase Agreement": As defined in the second paragraph hereof.
"Registrable Securities": Any (i) shares of Common Stock; (ii) shares of Common
Stock issued upon exercise of the Warrant and (iii) shares of Common Stock
issued or issuable with respect to any such Common Stock by way of stock
dividend or stock split or in connection with a combination of shares,
recapitalization, merger,
consolidation or other reorganization or otherwise. As to any particular
Registrable Securities, such securities shall cease to be Registrable Securities
when (a) a registration statement with respect to the sale of such securities
shall have become effective under the Securities Act and such securities shall
have been disposed of in accordance with such registration statement, (b) such
securities shall have been sold pursuant to Rule 144 (or any successor
provision) under the Securities Act or are eligible for sale under Rule 144 (k)
(or any successor provision) (c) such securities shall have been otherwise
transferred to a person who is not an Investor Affiliate of the Investor; or (d)
such securities shall have ceased to be outstanding.
"Registration Expenses": All expenses incident to the Company's performance of
or compliance with this Agreement, including, without limitation, all
registration, filing and NASD fees, all fees and expenses of complying with
securities or blue sky laws, all fees and expenses of listing the Registrable
Securities being registered on any securities exchange, all word processing,
duplicating and printing expenses, messenger and delivery expenses, the fees and
disbursements of counsel for the Company and of its independent public
accountants, including the expenses of any special audits or "comfort" letters
required by or incidental to such performance and compliance, all expenses
incurred by the Investor for its own counsel but excluding any and all selling
expenses relating to the Registrable Securities including underwriting
discounts, non-accountable expenses allowances and commissions, if any;
"Securities Act": The Securities Act of 1933, as amended.
"Warrant": The Warrant issued to the Investor pursuant to the Purchase
Agreement.
2. REGISTRATION UNDER SECURITIES ACT.
2.1 Demand Registration.
(a) -Request. At any time beginning 180 days after the date
hereof, two times only, (but only one time if the Company effects the
registration of the Registrable Securities on Form S-3 or any successor form
that permits a "shelf" registration), upon the written request of holders of at
least 25% of the Registrable Securities, that the Company, effect the
registration under the Securities Act of all or part of the Registrable
Securities, the Company shall promptly give written notice of such request to
all registered holders of Registrable Securities, and thereupon the Company
shall use its best commercially reasonable efforts to effect the registration
under the Securities Act of the Registrable Securities that the Company has been
so requested to register by all such holders for disposition in accordance with
the intended method of disposition stated in such request. Promptly after
receipt of such request, the Company shall give notice thereof to all other
securityholders of the Company, if any, that are entitled to participate in such
registration. The Company shall file the registration statement requested
pursuant to this subsection (a) not later than 30 days following such request,
subject to Section 2.6, and shall use its best commercially reasonable efforts
to have such registration statement declared effective as soon as possible after
the filing thereof.
(b) Underwriting . If the Registration Statement is for an
underwritten offering for Common Stock of the Company, the right of the Investor
to include all or a portion of the Registrable Securities in a registration
pursuant to this Section 2 shall be conditioned upon the Investor's
participation in such underwriting and the inclusion of the Registrable
Securities in the underwriting to the extent provided herein. If the Investor
proposes to distribute the Registrable Securities through such underwriting, it
shall enter into an underwriting agreement in customary form with the managing
underwriter or underwriter(s) selected for such underwriting. Notwithstanding
any other provision of this Agreement, if the managing underwriter determines in
good faith that marketing factors require a limitation of the number of shares
to be underwritten, then the Company and the Investor shall determine the number
of shares each party shall include in such underwriting. If the Investor
disapproves of the terms of any such underwriting, the Investor may elect to
withdraw therefrom by written notice to the Company and the underwriter,
delivered not later than 10 days prior to the date the Registration Statement is
filed with the Commission. Any Registrable Securities excluded or
withdrawn from such underwriting shall be excluded and withdrawn from the
registration.
(c) -Registration Statement Form. Registrations under this
Section 2.1 shall be on such appropriate registration form of the Commission (i)
as shall be selected by the Company and as shall be reasonably acceptable to
holders of a majority of the Registrable Securities proposed to be sold and (ii)
as shall permit the disposition of such Registrable Securities in accordance
with the intended method or methods of disposition.
(d) -Expenses. The Company shall pay all Registration Expenses
in connection with any registration requested pursuant to this Section 2.1.
(e) -Effective Registration Statement. A registration
requested pursuant to this Section 2.1 shall not be deemed to have been effected
and shall not be considered the demand registration which may be requested
pursuant to subsection (a) of this Section 2.1 unless (A) a registration
statement with respect thereto has become effective, (B) such registration
statement has remained effective for the later to occur of the following: (i)
two years from the effective date of the registration statement or (ii) the date
such registered securities cease to be Registrable Securities and (C) such
registration statement has not become subject to any stop order, injunction or
other order or requirement of the Commission or other governmental agency or
court for any reason or such registration statement has become effective within
30 days thereafter.
2.2 Incidental Registration.
(a) -Right to Include Registrable Securities. If the Company at any time
proposes to register any of its securities under the Securities Act by
registration on Forms ▇-▇, ▇-▇ or S-3 or any successor or similar form(s),
whether or not for sale for its own account, it shall give prompt written notice
to all holders of Registrable Securities of its intention to do so and of such
holders' rights under this Section 2.2. Upon the written request of any such
holder specifying the Registrable Securities intended to be disposed of by such
holder, made within 15 days after the receipt of any such notice, which request
shall specify the Registrable Securities intended to be disposed of by such
holder, the Company shall use its best commercially reasonable efforts to
include in the registration under the Securities Act all Registrable Securities
which the Company has been so requested to register by the holders thereof, to
the extent requisite to permit the disposition of such Registrable Securities to
be so registered. No registration effected under this Section 2.2 shall relieve
the Company of its obligation to effect any registration upon request under
Section 2.1, nor shall it be deemed to have been effected pursuant to Section
2.1. The Company shall pay all Registration Expenses in connection with each
registration of Registrable Securities requested pursuant to this Section 2.2.
The Company shall have the right to withdraw or cancel any registration under
this Section 2.2 in its sole discretion at any time, provided, however, that the
Investor shall retain all registration rights pursuant to this Section 2.2.
(b) -Priority in Incidental Registrations. In a registration pursuant to this
Section 2.2 involving an underwritten offering, whether or not for sale for the
account of the Company, if the managing underwriter of such underwritten
offering shall inform the Company by letter of its belief that the number of
securities requested by stockholders to be included in such registration would
substantially interfere with its ability to effect such offering in accordance
with the intended method thereof (such letter to state the basis of such belief
and the approximate number of such securities that may be distributed without
such effect), then the Company may, upon written notice to all holders of such
securities, reduce the number of Registrable Securities requested to be included
in such registration (if and to the extent stated by such managing underwriter
to be necessary to eliminate such effect) and, if such reduction is not
sufficient to eliminate such effect, then reduce pro rata (if and to the extent
stated by such managing underwriter to be necessary to eliminate such effect)
the number of Registrable Securities requested to be registered by the holders
of the Registrable Securities, on the one hand, and the holders of other
securities of the Company (whether issued before or after the date hereof), on
the other hand, in proportion (as nearly as practicable) to the amount of
Registrable Securities owned by the holders thereof participating in such
registration, on the one hand, and the amount of other securities of the Company
owned by the holders thereof participating in such registration, on the other
hand, so that the aggregate number of securities included in such registration
shall be equal to the number of shares stated in such managing underwriter's
letter; provided, however, that to the extent the Company has granted
"piggyback" registration rights to other holders of its securities prior to the
date hereof and such registration rights do not permit the Company to comply
with this provision, in the reasonable opinion of the Company's counsel, to the
extent such holders request registration of their securities, the Company will
use its best commercially reasonable efforts to achieve as close a result as is
possible to that intended by this Section 2.2 (b) without breaching such other
agreements. The number of securities to be included in such registration by the
holders of Registrable Securities shall be apportioned among all holders thereof
participating in the registration in proportion (as nearly as practicable) to
the amount of Registrable Securities owned by each holder thereof or as they may
otherwise agree. The number of securities to be included in such registration by
the holders of other securities of the Company shall be apportioned among all
holders thereof participating in the registration in proportion (as nearly as
practicable) to the amount of other securities owned by each holder thereof or
as they may otherwise agree.
2.3 Registration Procedures. In connection with the Company's obligations
pursuant to Sections 2.1, and 2.2, the Company and where applicable, the
Investor, will as expeditiously as possible: (a) in the case of a registration
pursuant to Section 2.1, prepare and file with the Commission a registration
statement or registration statements on any appropriate form under the
Securities Act and use its best efforts to cause such registration statement to
become effective and to remain continuously effective for so long as the selling
holders of the Registrable Securities shall request (but in no event longer than
the period set forth in 2.1(e)(B);
(b) in the case of a registration pursuant to Section 2.1, prepare and file with
the Commission such amendments and post-effective amendments to a registration
statement as may be necessary to keep such registration statement effective for
the applicable period; cause the related prospectus to be supplemented by any
required prospectus supplement, and as so supplemented to be filed pursuant to
the Securities Act, provided that prior to filing any such amendments or
supplements or any documents that would be incorporated by reference in such
registration statement (filed pursuant to Section 2.1 or 2.2 hereof), the
Company shall furnish to the Investor, its counsel and the underwriters, if any,
copies of all such documents proposed to be filed (other than documents filed
under the Exchange Act), and the Company shall consider all reasonable requests
by the Investor or the underwriters for modifications of any such amendments,
supplements or documents incorporated by reference; and the Company and the
Investor will comply with the provisions of the Securities Act with respect to
the disposition of all Registrable Securities covered by such registration
statement (including Regulation M and any similar successor regulations) during
the applicable period in accordance with the intended methods of disposition by
the sellers thereof set forth in such registration statement or supplement to
such prospectus;
(c) notify the selling holders of Registrable Securities, and the managing
underwriters, if any, as promptly as practicable, and (if requested by any such
Person) confirm such advice in writing, (i) when a prospectus or any prospectus
supplement or post-effective amendment has been filed, and, with respect to a
registration statement or any post-effective amendment, when it has become
effective, (ii) of any request by the Commission for amendments or supplements
to a registration statement or related prospectus or for additional information,
(iii) of the issuance by the Commission of any stop order suspending the
effectiveness of a registration statement or the initiation of any proceedings
for that purpose, (iv) if at any time the representations and warranties of the
Company made as contemplated by subsection (k) below cease to be true and
correct, (v) of the receipt by the Company of any notification with respect to
the suspension of the qualification of any of the Registrable Securities for
sale in any jurisdiction or the initiation of any proceeding for such purpose,
(vi) of the happening of any event that requires the making of any changes in a
registration statement or related prospectus so that such documents will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading and (vii) of the Company's
reasonable determination that a post-effective amendment to a registration
statement would be appropriate;
(d) in the case of a registration pursuant to Section 2.1, make every reasonable
effort to obtain the withdrawal of any order suspending the effectiveness of a
registration statement, or the lifting of any suspension of the qualification of
any of the Registrable Securities for sale in any jurisdiction, as soon as
practicable;
(e) in the case of a registration pursuant to Section 2.1, if requested in a
timely manner by the managing underwriters, as promptly as practicable
incorporate in a prospectus supplement or post-effective amendment such
information as the managing underwriters and the holders of Registrable
Securities being sold in connection with an underwritten offering agree should
be included therein relating to the sale and distribution of Registrable
Securities, including, without limitation, information with respect to the
number of Registrable Securities being sold to such underwriters, the purchase
price being paid therefor by such underwriters and with respect to any other
terms of the offering of the Registrable Securities to be sold in such offering;
make all required filings of such prospectus supplement or post-effective
amendment as soon as practicable after being notified of the matters to be
incorporated in such prospectus supplement or post-effective amendment; and
supplement or make amendments to any registration statement with respect to
information relating to any holder or the terms of the sale or offering of the
Registrable Securities if requested in a timely manner in writing by any holder
of Registrable Securities covered by such registration statement or any
underwriter of such Registrable Securities;
(f) furnish to the lead managing underwriter and each holder of Registrable
Securities selling Registrable Securities thereunder, without charge, at least
one signed copy of the registration statement or statements and any
post-effective amendment thereto, and to each other selling holder of
Registrable Securities, at least one conformed copy thereof, including financial
statements and schedules, all documents incorporated therein by reference and
all exhibits (including those incorporated by reference);
(g) deliver to each holder of Registrable Securities and the underwriters, if
any, without charge, as many copies of the prospectus or prospectuses (including
each preliminary prospectus) and any amendment or supplement thereto as such
Persons may reasonably request;
(h) in the case of a registration pursuant to Section 2.1, prior to any public
offering of Registrable Securities, use its best commercially reasonable efforts
to register or qualify or cooperate with the selling holders of Registrable
Securities, the underwriters, if any, and their respective counsel in connection
with the registration or qualification of such Registrable Securities for offer
and sale under the securities or blue sky laws of such jurisdictions as any
selling holder or underwriter reasonably requests in writing, keep each such
registration or qualification effective during the period such registration
statement is required to be kept effective and do any and all other acts or
things necessary or advisable to enable the disposition in such jurisdictions of
the Registrable Securities covered by the applicable registration statement;
provided that the Company shall not be required to qualify generally to do
business in any jurisdiction where it is not then so qualified or to take any
action which would subject it to general service of process in any such
jurisdiction where it is not then so subject;
(i) in the case of a registration pursuant to Section 2.1, cooperate with the
selling holders of Registrable Securities and the managing underwriters, if any,
to facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be sold and not bearing any restrictive legends unless
required by applicable law; and enable such Registrable Securities to be in such
denominations and registered in such names as the managing underwriters may
request at least two business days prior to the closing of any sale of
Registrable Securities to the underwriters; provided that the Company receive
such request in writing not less than 10 days prior to such closing;
(j) in the case of a registration pursuant to Section 2.1, upon the occurrence
of any event contemplated by clause (c)(vi) above, prepare a supplement or
post-effective amendment to the applicable registration statement or related
prospectus
or any document incorporated therein by reference or file any other required
document so that, as thereafter delivered to the selling holders of the
Registrable Securities, such prospectus will not contain any untrue statement of
a material fact or omit to state any material fact necessary to make the
statements therein not misleading;
(k) in the case of a registration pursuant to Section 2.1, enter into such
agreements (including an underwriting agreement) and take all such other
reasonable actions in connection therewith in order to expedite or facilitate
the disposition of such Registrable Securities and in connection therewith, when
an underwriting agreement is entered into and when the registration is an
underwritten registration, (i) make such representations and warranties to the
underwriters with respect to the registration statement, prospectus and
documents incorporated by reference, if any, in form, substance and scope as are
customarily made by issuers in similar offerings; (ii) obtain opinions of
counsel to the Company (which may be the general counsel) addressed to the
underwriters and updates thereof in the form, scope and substance as are
customary in similar offerings; (iii) enter into an underwriting agreement in
form, scope and substance as is customary in underwritten offerings; (iv)
furnish a signed counterpart, addressed to such underwriters, of a "comfort"
letter, dated the effective date of such registration statement (and dated the
date of the closing under the underwriting agreement), signed by the independent
public accountants who have certified the Company's financial statements
included in such registration statement, covering the matters with respect to
such registration statement (and the prospectus included therein) and with
respect to events subsequent to the date of such financial statements, as are
customarily covered in accountants' letters delivered to the underwriters in
underwritten public offerings of securities, (v) if an underwriting agreement is
entered into, the same shall set forth in full the indemnification provisions
and procedures of Section 2.7 with respect to all parties to be indemnified
pursuant to such section, with such other indemnification provisions as are
customary and acceptable to the underwriters, the holders of a majority of the
Registrable Securities proposed to be sold and the Company; and (vi) the Company
shall deliver such documents and certificates as may reasonably be requested by
the managing underwriters, if any, to evidence compliance with this paragraph
(k) and with any customary conditions contained in the underwriting agreement.
The above shall be done at each closing under such underwriting or as and to the
extent required thereunder;
(l) otherwise use its best commercially reasonable efforts to comply with all
applicable rules and regulations of the Commission and make generally available
to its security holders earnings statements satisfying the provisions of Section
11(a) of the Securities Act no later than 90 days after the end of any 12-month
period (i) beginning with the first day of the Company's first fiscal quarter
next succeeding each sale of Registrable Securities after the effective date of
a registration statement and (ii) beginning with the first day of the Company's
first fiscal quarter next succeeding any fiscal quarter in which Registrable
Securities are sold to underwriters in a firm or best efforts underwriting
offering, which statements shall cover such 12-month periods;
(m) use its best commercially reasonable efforts to cause all such Registrable
Securities to be listed on each securities exchange, if any, on which securities
of the class then being registered are listed; and
(n) provide and cause to be maintained a transfer agent and registrar for all
Registrable Securities covered by such registration statement from and after a
date not later than the effective date of such registration statement.
The Company may require each holder of Registrable Securities as to which any
registration is being effected to promptly furnish to the Company such
information regarding such holder and the distribution of such Registrable
Securities as the Company may from time to time reasonably request in writing in
order to comply with the Securities Act. Each holder of Registrable Securities
as to which any registration is being effected agrees to notify the Company as
promptly as practicable of any inaccuracy or change in information previously
furnished by such holder to the Company or of the happening of any event as a
result of which any prospectus relating to such registration contains an untrue
statement of a material fact regarding such holder or the distribution of such
Registrable Securities or omits to state any material fact regarding such holder
or the distribution of such
Registrable Securities required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, and to promptly furnish to the Company any additional
information required to correct and update any previously furnished information
or required so that such prospectus shall not contain, with respect to such
holder or the distribution of such Registrable Securities, an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
Each holder of Registrable Securities agrees that, upon receipt of any notice
from the Company of the happening of any event of the kind described in Section
2.3(c)(ii), (iii), (v), (vi) or (vii), such holder will forthwith discontinue
disposition of such Registrable Securities covered by such registration
statement or prospectus until such holder's receipt of the copies of the
supplemented or amended prospectus relating to such registration statement or
prospectus, or until it is advised in writing by the Company that the use of the
applicable prospectus may be resumed, and has received copies of any additional
or supplemental filings that are incorporated by reference in such Prospectus,
and, if so directed by the Company, such holder will deliver to the Company (at
the Company's expense) all copies, other than permanent file copies then in such
holder's possession, of the prospectus covering the Registrable Securities at
the time of receipt of such notice.
2.4 Underwritten Offerings. In the case of any underwritten offering requested
pursuant to Section 2.1, the holders of a majority of the Registrable Securities
proposed to be sold shall select the investment banking firm or firms, which
shall be reasonably satisfactory to the Company. The Company shall enter into an
underwriting agreement which shall contain, customary representations and
warranties and shall be reasonably satisfactory in form and substance to the
holders of a majority of the Registrable Securities proposed to be sold.
If the Company at any time proposes to register any of its securities under the
Securities Act as contemplated by Section 2.2 and such securities are to be
distributed by or through one or more underwriters, the Company shall select the
investment banking firm or firms in its sole discretion and the holders of
Registrable Securities to be distributed therein shall be parties to the
underwriting agreement between the Company and the underwriters.
2.5 Preparation; Reasonable Investigation. In connection with the preparation
and filing of each registration statement under the Securities Act pursuant to
this Agreement, the Company shall give the selling holders of Registrable
Securities, their underwriters, and their respective counsel and accountants, a
reasonable opportunity to participate in the preparation of such registration
statement, each prospectus included therein or filed with the Commission, and
each amendment thereof or supplement thereto (other than documents filed under
the Exchange Act and incorporated by reference therein), and shall give each of
them such access to its books and records and such opportunities to discuss the
business of the Company with its officers and the independent public accountants
who have certified its financial statements as shall be necessary, in the
opinion of such holders' and such underwriters' respective counsel, to conduct a
reasonable investigation within the meaning of the Securities Act.
2.6 Limitations, Conditions and Qualifications to Obligations Under Registration
Covenants. The obligations of the Company under Section 2.1 to use its best
commercially reasonable efforts to cause the Registrable Securities to be
registered under the Securities Act are subject to each of the following
limitations, conditions and qualifications:
(a) The Company shall be entitled to postpone the filing or effectiveness of any
registration statement otherwise required to be prepared and filed by it
pursuant to Section 2.1 for a reasonable period of time (but not exceeding 60
days) if the Company determines, in its reasonable judgment, that such
registration and offering, or such offers and sales, would interfere with any
financing, acquisition, corporate reorganization or other material transaction
involving the Company or any of its Affiliates or would require the Company to
disclose material non-public information. The Company shall promptly give the
requesting holders of Registrable Securities written notice of such
determination, containing a general statement of the reasons
for such postponement and an approximation of the anticipated delay. If the
Company shall so postpone the filing of a registration statement, the requesting
holders of Registrable Securities shall have the right to withdraw the request
for registration by giving written notice to the Company within 30 days (or
within the period of postponement if such period is less than 30 days) after
receipt of the notice of postponement in the event of such withdrawal, such
request shall not be deemed a request for registration pursuant to Section 2.1
hereof.
(b) No holder of Registrable Securities may participate in any underwritten
offering hereunder unless such holder (i) agrees to sell such holder's
Registrable Securities on the basis provided in any underwriting arrangements
approved by the persons entitled hereunder to approve such arrangements and (ii)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements.
2.7 Indemnification.
(a) -Indemnification by the Company. In the event of any registration of
Registrable Securities, the Company shall indemnify, defend and hold harmless
the holder of any Registrable Securities that are covered by such registration
statement, each other Person who participates as an underwriter in the offering
or sale of such securities and each person who controls any such holder or
underwriter within the meaning of the Securities Act, and each of the respective
partners, officers, directors, employees and agents of the foregoing in their
respective capacities as such (the "Indemnitees"), to the full extent lawful,
from and against any and all actions, suits, claims, proceedings, costs,
damages, judgments, amounts paid in settlement and expenses (including, without
limitation, reasonable attorneys' fees and disbursements), whether joint or
several (collectively, a "Loss"), to which any such Indemnitee may become
subject under the Securities Act or any other statute or common law, insofar as
any such Loss may arise out of or be based upon (i) any untrue statement or
alleged untrue statement of any material fact contained in any registration
statement under which such securities were registered, any preliminary, final or
summary prospectus contained therein, or any amendment or supplement thereto, or
in any filing made in connection with the qualification of the offering under
blue sky or other securities laws of jurisdictions in which the Registrable
Securities are offered ("Blue Sky Filing"), or the omission or alleged omission
to state therein a material fact required to be stated therein or necessary in
order to make the statements therein not misleading or (ii) any violation by the
Company of any federal, state or common law, rule or regulation applicable to
the Company and relating to action required of or inaction by the Company in
connection with any such registration, and the Company will defend each
Indemnitee in connection with investigating or defending such Loss and provide
each Indemnitee with counsel reasonably acceptable to such Indemnitee or, if the
Company fails to defend each Indemnitee on a timely basis, as set forth in
Section 2.7(c), reimburse each Indemnitee for any legal or other expenses
reasonably incurred in connection with investigating or defending such Loss;
provided, however, that such indemnification covenant shall not (i) apply to any
Loss arising out of, or based upon, any such untrue statement or alleged untrue
statement, or any such omission or alleged omission, if such statement or
omission was made in reliance upon and in conformity with written information
furnished to the Company by or on behalf of such Indemnitee specifically stating
that it is for use in connection with preparation of the registration statement,
any preliminary prospectus or final prospectus contained in the registration
statement, any such amendment or supplement thereto or any Blue Sky Filing or
(ii) inure to the benefit of any underwriter or person controlling such
underwriter to the extent that any such Loss arises out of such Indemnitee's
failure to send or give a copy of the final prospectus, as the same may be then
supplemented or amended, to the Person asserting an untrue statement or alleged
untrue statement or omission or alleged omission at or prior to the written
confirmation of the sale of Registrable Securities to such Person if such
statement or omission was corrected in such final prospectus.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of any Indemnitee and shall survive the
transfer of such securities by any Indemnitee. In no event shall any indemnity
paid by the Company to any indemnified party pursuant to this Section 2.7(a) or
otherwise exceed the net proceeds received by the Investor in such offering.
(b) -Indemnification by the Holders of Registrable Securities . As a condition
to including any Registrable Securities in any registration statement filed
pursuant to Section 2.1 or 2.2, the Company shall have received an undertaking
satisfactory to
it from each prospective seller of such Registrable Securities to indemnify,
defend and hold harmless (in the same manner and to the same extent as set forth
in subsection (a) of this Section 2.7) the Company, each other person who
participates as an underwriter in the offering or sale of such securities and
each person who controls any such holder or underwriter within the meaning of
the Securities Act, and each of their respective partners, officers, directors,
employees and agents, and each other person, if any, who controls the Company
within the meaning of the Securities Act, with respect to 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 Blue Sky Filing, 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 furnished to the Company by such seller 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 of such securities by such seller. In no
event shall any indemnity paid by any seller to the Company pursuant to this
Section 2.7(b) or otherwise exceed the net proceeds received by such seller in
such offering.
(c) Indemnification Procedure. Any party entitled to indemnification
under this Section 2.7 (the "indemnified party") will give prompt written notice
(the "Notice") to the other party (the "indemnifying party") of any matters
giving rise to a claim for indemnification; provided, that the failure of
indemnified party to indemnification hereunder to give notice as provided herein
shall not relieve the indemnifying party of its obligations under this Section
2.7 except to the extent that the indemnifying party is actually prejudiced by
such failure to give notice. In case any action, proceeding or claim is asserted
against the indemnified party in respect of which indemnification is sought
hereunder, the indemnifying party shall be entitled to participate in and to
assume the defense thereof with counsel reasonably satisfactory to the
indemnified party. In the event that the indemnifying party advises the
indemnified party that it will contest such a claim for indemnification
hereunder, or fails, within thirty (30) days of receipt of the Notice to notify,
in writing, the indemnified party of its election to defend, settle or
compromise, at its sole cost and expense, any action, proceeding or claim (or
discontinues its defense at any time after it commences such defense), then the
indemnified party may, at its option, defend, settle or otherwise compromise or
pay such action or claim. In any event, unless and until the indemnifying party
elects in writing to assume and does so assume the defense of any such claim,
proceeding or action, the indemnified party's costs and expenses arising out of
the defense, settlement or compromise of any such action, claim or proceeding
shall be losses subject to indemnification hereunder. The indemnified party
shall cooperate fully with the indemnifying party in connection with any
negotiation or defense of any such action or claim by the indemnifying party and
shall furnish to the indemnifying party all information reasonably available to
the indemnified party which relates to such action or claim. The indemnifying
party shall keep the indemnified party fully apprised at all times as to the
status of the defense or any settlement negotiations with respect thereto. If
the indemnifying party elects to defend any such action or claim, then the
indemnified party shall be entitled to participate in such defense with counsel
of its choice. The indemnifying party shall not be liable for any settlement of
any action, claim or proceeding effected without its prior written consent.
Notwithstanding anything in this Section 2.7 to the contrary, the indemnifying
party shall not, without the indemnified party's prior written consent, settle
or compromise any claim or consent to entry of any judgment in respect thereof
which imposes any future obligation on the indemnified party or which does not
include, as an unconditional term thereof, the giving by the claimant or the
plaintiff to the indemnified party of a release from all liability in respect of
such claim. The indemnification required by this Section 2.7 for an action or
claim brought by a third party shall be made by periodic payments of the amount
thereof during the course of investigation or defense, as and when bills are
received for expenses related to the legal defense or investigation, so long as
the indemnified party irrevocably agrees to refund such moneys if it is
ultimately determined by a court of competent jurisdiction that such party was
not entitled to indemnification. The indemnity agreements contained herein shall
be in addition to (a) any cause of action or similar rights of the indemnified
party against the indemnifying party or
others, and (b) any liabilities the indemnifying party may be subject pursuant
to the law.
2.9 Registration Expenses. All Registration Expenses, shall be borne by the
Company whether or not any registration statement becomes effective. The Company
shall, in any event, pay its internal expenses (including, without limitation,
all salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit, the fees and expenses
incurred in connection with the listing of the securities to be registered on
any securities exchange and the fees and expenses of any Person, including
special experts, retained by the Company.
3. -Amendments and Waivers. This Agreement may be amended with the consent of
the Company and the Company may take any action herein prohibited, or omit to
perform any act herein required to be performed by it, only if the Company shall
have obtained the written consent to such amendment, action or omission to act,
of the holders of a majority of the amount of Registrable Securities then
outstanding. Each holder of any Registrable Securities at the time or thereafter
outstanding shall be bound by any consent authorized by this Section 3, whether
or not such securities shall have been marked to indicate such consent.
4. -Registration Rights. The Company covenants that it will not grant any right
of registration under the Securities Act relating to any of its shares of
capital stock or other securities to any Person other than pursuant to this
Agreement unless the rights so granted to such other Person, except as provided
herein, do not limit or restrict the Investor's rights hereunder.
5. -Nominees for Beneficial Owners. In the event that any Registrable Securities
are held by a nominee for the beneficial owner thereof, such beneficial owner
may, at its election and upon notice to the Company, be treated as the holder of
such securities for purposes of any request or other action by any holder or
holders of securities pursuant to this Agreement or any determination of any
number or percentage of shares of securities held by any holder or holders of
securities contemplated by this Agreement. If the beneficial owner of any
Registrable Securities so elects, the Company may require assurances reasonably
satisfactory to it of such owner's beneficial ownership of such Registrable
Securities.
6. Notices. Any notice or demand that is required or provided to be given under
this Agreement shall be deemed to have been sufficiently given and received for
all purposes when delivered by hand, facsimile transmission or courier, or five
days after being sent by certified or registered mail, postage and charges
prepaid, return receipt requested, to the following addresses:
If to the Company: McLaren Automotive Group, Inc.
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Attention: ▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇ Hill PLC
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Attention: ▇▇▇▇ ▇. ▇▇▇▇, ▇▇., Esq.
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Investor: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇ ▇▇▇▇▇▇ LLP
The Chrysler Building
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Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to any other holder of Registrable Securities, at such address set forth in
the Company's records, or with respect to any party hereto, at any other address
designated in writing in accordance with the provisions of this Section 6.
7. -Assignment. This Agreement shall be binding upon and inure to the benefit of
and be enforceable by the parties hereto and their respective successors and
assigns. The rights or any portion thereof of the Investor herein may not be
assigned by the Investor without the written consent of the Company except that
such rights may be assigned by the Investor at its sole discretion (and
thereupon by such assignee) without the consent of the Company to (a) an
Investor Affiliate (as defined below); provided, however, that (A) the Company
is given prior written notice by the assignor stating the name and address of
the permitted assignee and identifying the Registrable Securities with respect
to which such rights are being assigned, and (B) such assignee agrees in writing
to be bound by the terms of this Agreement. For purposes of this Section 7, an
"Investor Affiliate" is any Person controlled by or under common control with
the Investor.
8. -Descriptive Headings. The descriptive headings of the several sections and
paragraphs of this Agreement are inserted for reference only and shall not limit
or otherwise affect the meaning hereof.
9. -Governing Law. The validity and interpretation of this Agreement shall be
governed by, and construed and enforced in accordance with, the laws of the
State of New York, without giving effect to the principles of conflicts of law
thereof;.
10. -Counterparts. This Agreement may be executed simultaneously in any number
of counterparts, each of which shall be deemed an original, but all such
counterparts shall together constitute one and the same instrument.
[END OF PAGE]
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and
delivered as of the date first above written.
MCLAREN AUTOMOTIVE GROUP INC.
By:/s/ Wiley ▇. ▇▇▇▇▇
Name: Wiley ▇. ▇▇▇▇▇
Title: President
INVESTOR
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
