REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement ("Agreement") is entered into as of this
_____ day of February, 2002, between SLW Enterprises Inc., a Washington
corporation ("Issuer"), and the undersigned ("Permitted Right Holder").
WHEREAS, Issuer has undertaken to issue shares of its common stock to
Permitted Right Holder; and
WHEREAS, Issuer has agreed to give Permitted Right Holder registration
rights as set forth below.
NOW, THEREFORE, in consideration of the mutual promises, representations,
warranties, covenants and conditions set forth in this Agreement, the parties
mutually agree as follows:
1. DEFINITIONS. As used in this Agreement the following terms shall
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have the following respective meanings:
1.1 "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
1.2 "PERMITTED RIGHT HOLDER" and "PERMITTED RIGHT HOLDERS" means
any subscriber who purchased the common stock of Issuer through the Private
Placement Offering.
1.3 "PRIVATE PLACEMENT OFFERING" means the private placement
offering by Issuer of up to 1,500,000 shares of its common stock, par value
$0.0001 per share, commencing on February 20, 2002 and closing contingent upon
the closing of the Voluntary Share Exchange Agreement between HiEnergy
Microdevices, Inc. and Issuer on or before March 31, 2002.
1.4 "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
effectiveness of such registration statement or document.
1.5 "REGISTRABLE SECURITIES" means any shares of its common stock
issued by Issuer to Permitted Right Holders pursuant to the Private Placement
Offering.
1.6 "REGISTRATION EXPENSES" shall mean all expenses incurred by
Issuer in complying with Section 2 hereof, including, without limitation, all
registration and filing fees, printing expenses, fees and disbursements of
counsel for Issuer, reasonable fees and disbursements of a special counsel for
the Permitted Right Holders up to $10,000, blue sky fees and expenses and the
expense of any special audits incident to or required by any such registration
(but excluding the compensation of regular employees of Issuer which shall be
paid in any event by Issuer).
1.7 "SEC" means the Securities and Exchange Commission.
SLW ENTERPRISES INC. - REGISTRATION RIGHTS AGREEMENT
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1.8 "SECURITIES ACT" shall mean the Securities Act of 1933, as
amended.
1.9 "SELLING EXPENSES" shall mean all underwriting discounts and
selling commissions applicable to the sale.
2. TYPES OF REGISTRATION RIGHTS
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2.1 DEMAND
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(a) REQUEST FOR REGISTRATION. If Issuer shall receive a
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written request from one or more Permitted Right Holders that Issuer file a
registration statement under the Securities Act covering the registration of at
least a majority of the Registrable Securities then outstanding (or a lesser
percent if the anticipated aggregate offering price, net of underwriting
discounts and commissions would exceed $10,000,000), then Issuer shall use its
best efforts to effect, as soon as practicable, the registration under the
Securities Act of all Registrable Securities that the Permitted Right Holders
request to be registered.
(b) REQUEST FOR UNDERWRITING. If the Permitted Right Holders
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intend to distribute the Registrable Securities covered by their request by
means of an underwriting, they shall so advise Issuer as part of their request
made pursuant to this Section 2.1. The Permitted Right Holders shall enter into
an underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting by Issuer. Notwithstanding any other provision
of this Section 2.1, if the underwriter advises Issuer that marketing factors
require a limitation of the number of securities to be underwritten (including
Registrable Securities), then Issuer shall exclude or withdraw the number of
Registrable Securities from the registration accordingly.
2.2 PIGGYBACK
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(a) If Issuer at any time proposes for any reason to register
its common stock under the Securities Act (other than on Form S-4 or Form S-8
promulgated under the Securities Act or any successor forms thereto), it shall
promptly give written notice to each Permitted Right Holder of its intention so
to register its common stock and, upon the written request, given within 10
business days after delivery of any such notice by Issuer, of any Permitted
Right Holder to include in such registration Registrable Securities (which
request shall specify the number of Registrable Securities proposed to be
included in such registration), Issuer shall use its commercially reasonable
best efforts to cause all such Registrable Securities to be included in such
registration on the same terms and conditions as the securities otherwise being
sold in such registration; provided that if, at any time after written notice of
its intention to register any offering of securities and prior to the effective
date of the registration statement filed in connection with such registration,
Issuer will determine for any reason either not to register or to delay
registration of such securities, Issuer may, at its election, give written
notice of such determination to each Permitted Right Holder and, thereon, (i) in
the case of a determination not to register, will be relieved of this obligation
to register any Registrable Securities in connection with such registration (but
not from the obligation to pay the Registration Expenses in connection
therewith), and (ii) in the case of a determination to delay registering, will
be permitted to delay registering any Registrable Securities, for the same
SLW ENTERPRISES INC. - REGISTRATION RIGHTS AGREEMENT
PAGE 2
period as the delay in registering such other securities. The right provided the
Permitted Right Holders of the Registrable Securities pursuant to this section
will be exercisable at their sole discretion upon the execution of this
Agreement.
(b) If the managing underwriter of an underwritten offering
under Section 2.2(a) informs Issuer and the Permitted Right Holders of its
belief that the inclusion of all Registrable Securities proposed to be included
in such registration would interfere with the successful marketing (including
pricing) of the shares proposed to be registered by Issuer, then Issuer will
include in such registration, to the extent of the number which Issuer is
advised can be sold in the offering: first, securities proposed by Issuer to be
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sold for its own account; and second, the Registrable Securities requested to be
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included in the registration, pro rata based upon the number of shares of such
securities so proposed to be sold and so requested to be included; provided,
however, the Permitted Right Holders will have priority to all shares sought to
be included by officers and directors of Issuer as well as holders of ten
percent (10%) or more of Issuer's common stock.
3. PROCEDURE
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3.1 OBLIGATIONS OF ISSUER. Whenever required to effect the
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registration of any Registrable Securities under Sections 2.1 or 2.2, Issuer
shall, as expeditiously as possible:
(a) prepare and file with the SEC a registration statement or
amendments thereto, to effect such registration (including such audited
financial statements as may be required by the Securities Act or the rules and
regulations promulgated thereunder) and thereafter use its commercially
reasonable best efforts to cause a registration statement that registers such
Registrable Securities to become and remain effective for 180 days or until the
Permitted Right Holders have completed the distribution related thereto,
whichever occurs first. If requested by the Permitted Right Holders, Issuer
shall file, cause to become effective or maintain the effectiveness of any
registration statement that contemplates a distribution of securities on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act and
subject to the same time contraints as provided in the preceding sentence.
(b) prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to comply with the provisions of the Securities
Act with respect to the disposition of all securities covered by such
registration statement for the period set forth in paragraph (a) above.
(c) notify, in writing, each Permitted Right Holder promptly
(A) of the receipt by Issuer of any notification with respect to any comments by
the SEC with respect to such registration statement or prospectus or any
amendment or supplement thereto or any request by the SEC for the amending or
supplementing thereof or for additional information with respect thereto, (B) of
the receipt by Issuer of any notification with respect to the issuance by the
SEC of any stop order suspending the effectiveness of such registration
statement or prospectus or any amendment or supplement thereto or the initiation
or threatening of any proceeding for that purpose and (C) of the receipt by
SLW ENTERPRISES INC. - REGISTRATION RIGHTS AGREEMENT
PAGE 3
Issuer of any notification with respect to the suspension of the qualification
of such Registrable Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose;
(d) use its best efforts to register or qualify such
Registrable Securities under such other securities or "blue sky" laws of such
jurisdictions as each Permitted Right Holder reasonably requests and do any and
all other acts and things which may be reasonably necessary or advisable to
enable the Permitted Right Holders to consummate the disposition in such
jurisdictions of the Registrable Securities owned by such Permitted Right
Holders; provided, however, that Issuer will not be required to qualify
generally to do business, subject itself to general taxation or consent to
general service of process in any jurisdiction where it would not otherwise be
required so to do but for this paragraph;
(e) furnish to each Permitted Right Holder such number of
copies of a summary prospectus or other prospectus, including a preliminary
prospectus, in conformity with the requirements of the Securities Act, and such
other documents as such Permitted Right Holder may reasonably request in order
to facilitate the public sale or other disposition of such Registrable
Securities;
(f) make available for inspection by any Permitted Right
Holder, any underwriter participating in any disposition pursuant to such
registration statement and any attorney, accountant or other agent retained by
any such Permitted Right Holder or underwriter (collectively, the "Inspectors"),
all pertinent financial and other records, pertinent corporate documents and
properties of Issuer (collectively, the "Records"), as shall be reasonably
necessary to enable them to exercise their due diligence responsibility, and
cause Issuer's officers, directors and employees to supply all information
(together with the Records, the "Information") reasonably requested by any such
Inspector in connection with such registration statement. Any of the Information
which Issuer determines in good faith to be confidential, and of which
determination the Inspectors are so notified, shall not be disclosed by the
Inspectors unless (A) the disclosure of such Information is necessary to avoid
or correct a misstatement or omission in the registration statement, (B) the
release of such Information is ordered pursuant to a subpoena or other order
from a court of competent jurisdiction or (C) such Information has been made
generally available to the public without breach of any duty of confidentiality.
The Permitted Right Holders agree that they will, upon learning that disclosure
of such Information is sought in a court of competent jurisdiction, give notice
to Issuer and allow Issuer, at Issuer's expense, to undertake appropriate action
to prevent disclosure of the Information deemed confidential;
(g) use its commercially reasonable best efforts to list all
Registrable Securities covered by the registration statement on any securities
exchange on which any of the Registrable Securities are then listed; and
(h) use its commercially reasonable best efforts to take all
other steps necessary to effect the registration of such Registrable Securities
contemplated hereby.
3.2 EXPENSES OF REGISTRATION. Except as specifically provided
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herein, all Registration Expenses incurred in connection with any registration,
qualification or compliance pursuant to Sections 2.1 or 2.2 herein shall be
borne by Issuer. All Selling Expenses incurred in connection with any
SLW ENTERPRISES INC. - REGISTRATION RIGHTS AGREEMENT
PAGE 4
registration, qualification or compliance pursuant to Sections 2.1 or 2.2 shall
be borne by the Permitted Right Holders. Issuer shall not, however, be required
to pay the Registration Expenses of any registration proceeding begun pursuant
to Sections 2.1 or 2.2, the request of which has been subsequently withdrawn by
the Permitted Right Holders unless the withdrawal is based upon material adverse
information concerning Issuer of which the Permitted Right Holders were not
aware at the time of such request. If the Permitted Right Holders are required
to pay the Registration Expenses of a withdrawn offering pursuant to the
preceding sentence, until such time as all the expenses have been paid to Issuer
in full, the Permitted Right Holders shall forfeit their right pursuant to
Section 2.1 to demand registration and their right pursuant to Section 2.2 to
participate in piggyback registration. If Issuer is required to pay the
Registration Expenses of a withdrawn offering, then the Permitted Right Holders
shall not forfeit their right pursuant to Section 2.1 to demand registration or
their right pursuant to Section 2.2 to participate in piggyback registration.
3.3 COUNSEL FEES. In connection with any registration of an
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offering under this Section 3, if there is more than one Permitted Right Holder,
the Permitted Right Holders shall designate one counsel for the Permitted Right
Holders who shall be authorized to represent the interests of the Permitted
Right Holders with respect to Issuer and the underwriter in connection with the
offering. If the Permitted Right Holders are unable to designate one counsel
after a period of 30 days, Issuer may solicit suggestions for such counsel from
the Permitted Right Holders (no more than one suggestion per Permitted Right
Holder), and select one counsel from among those suggested, and the selection of
such counsel shall be binding on the Permitted Right Holders. The fees and
expenses of counsel for the Permitted Rights Holders up to $10,000 shall be paid
by Issuer.
3.4 RIGHT TO DEFER REGISTRATION. Issuer shall not be required to
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effect a registration pursuant to Sections 2.1 or 2.2 if Issuer shall furnish to
the Permitted Right Holders a certificate signed by the Chairman of the Board
stating that in the good faith judgment of the Board of Directors of Issuer, it
would be materially detrimental to Issuer and its shareholders for such
registration statement to be effected at such time, in which event Issuer shall
have the right to defer such filing for a period of not more than one hundred
twenty (120) days after receipt of the request pursuant to Section 2.1 or 2.2;
provided that such right to delay a request shall be exercised by Issuer not
more than once in any twelve (12) month period.
4. TERMINATION OF REGISTRATION RIGHTS. All registration rights granted
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under this Agreement, and all notices required under this Agreement, shall
terminate and be of no further force and effect on the date that is one year
after the first issuance to Permitted Right Holder of Registrable Securities
through the Private Placement Offering.
5. REQUESTS FOR INFORMATION. The Permitted Right Holders hereby agree
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to promptly furnish Issuer with any and all written information concerning the
Permitted Right Holders that Issuer reasonably requests in order to (1) prepare
the registration statements and (2) conduct such other due diligence as may be
necessary for Issuer to satisfy or respond to any regulatory or governmental
requirements or requests. The Permitted Right Holders agree to provide true,
SLW ENTERPRISES INC. - REGISTRATION RIGHTS AGREEMENT
PAGE 5
complete and accurate information based on a diligent review of appropriate
records as would be conducted by a prudent man in the management of his own
property. The Permitted Right Holders understand that Issuer may incorporate
some or all of such information into the foregoing documents or may determine
based on such information that certain disclosures are not required, and that
Issuer will depend on the Permitted Right Holders to provide true, complete and
accurate information.
6. DELAY OF REGISTRATION. The Permitted Right Holders shall not have
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the right to obtain or seek an injunction restraining or otherwise delaying any
such registration as the result of any controversy that might arise with respect
to the interpretation or implementation of this Agreement.
7. INDEMNIFICATION. In the event any Registrable Securities are
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included in a registration statement under Section 2:
7.1 Issuer agrees to indemnify and hold harmless each Permitted
Right Holder and each person, if any, who controls a Permitted Right Holder
within the meaning of the Securities Act against any losses, claims, damages or
liabilities, joint or several (which shall, for all purposes of this Agreement,
include, but not be limited to, all reasonable costs of defense and
investigation and all reasonable attorneys' fees), to which a Permitted Right
Holder may become subject under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the registration statement, or 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; provided, however, that
Issuer will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission in any of the
above-mentioned documents in reliance upon, and in conformity with, written
information furnished to Issuer by a Permitted Right Holder specifically for use
in the preparation thereof. This indemnity agreement will be in addition to any
liability that Issuer may otherwise have.
7.2 Each Permitted Right Holder agrees that it will indemnify and
hold harmless Issuer, and each officer, director of Issuer or person, if any,
who controls Issuer within the meaning of the Securities Act, against any
losses, claims, damages or liabilities (which shall, for all purposes of this
Agreement, include, but not be limited to, all reasonable costs of defense and
investigation and all reasonable attorneys' fees) to which Issuer or any such
officer, director or controlling person may become subject under the Securities
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in the registration
statement, or amendments or supplements thereto, or arise out of or are based
upon the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, but in each case only to the extent that such untrue statement or
alleged untrue statement or omission or alleged omission was made the
registration statement or amendments or supplements thereto in reliance upon and
in conformity with, written information furnished to Issuer by Permitted Right
Holders specifically for use in the preparation thereof. This indemnity
agreement will be in addition to any liability that the Permitted Right Holders
may otherwise have.
SLW ENTERPRISES INC. - REGISTRATION RIGHTS AGREEMENT
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7.3 Promptly after receipt by an indemnified party under this
Section 7.3 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 7, notify the indemnifying party of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve the
indemnifying party from any liability that it may have to any indemnified party
except to the extent of actual prejudice demonstrated by the indemnifying party.
In case any such action is brought against any indemnified party, and the
indemnified party notifies the indemnifying party of the commencement thereof,
the indemnifying party will be entitled to participate in, and, to the extent
that it may wish, jointly with any other indemnifying party similarly notified,
assume the defense thereof, subject to the provisions herein stated and after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party will not be liable to such
indemnified party under this Section 7 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation, unless the indemnifying
party shall not pursue the action to its final conclusion. The indemnified
party shall have the right to employ separate counsel in any such action and to
participate in the defense thereof, but the fees and expenses of such counsel
shall not be at the expense of the indemnifying party if the indemnifying party
has assumed the defense of the action with counsel reasonably satisfactory to
the indemnified party. No settlement of any action against an indemnified party
shall be made without the prior written consent of the indemnified party, which
consent shall not be unreasonably withheld.
7.4 All fees and expenses of the indemnified party (including
reasonable costs of defense and investigation in a manner not inconsistent with
this Section and all reasonable attorneys' fees and expenses), shall be paid to
the indemnified party, as incurred, within ten (10) days of written notice
thereof to the indemnifying party; provided, that the indemnifying party may
require such indemnified party to undertake to reimburse all such fees and
expenses to the extent it is finally judicially determined that such indemnified
party is not entitled to indemnification hereunder.
8. CONTRIBUTION. In order to provide for just and equitable
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contribution under the Securities Act or otherwise arising out of or based upon
any untrue statement or alleged untrue statement of any material fact contained
in a registration statement under Section 2, or amendments or supplements
thereto, or arising out of or based upon the omission or the alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading in any case in which (i) the indemnified
party makes a claim for indemnification pursuant to Section 7 hereof but it is
judicially determined (by the entry of a final judgment or decree by a court of
competent jurisdiction and the expiration of time to appeal or the denial of the
last right of appeal) that such indemnification may not be enforced in such case
notwithstanding the fact that the express provisions of Section 7 hereof provide
for indemnification in such case, or (ii) contribution under the Securities Act
or otherwise may be required on the part of any indemnified party, in either
such case Issuer and Permitted Right Holders shall contribute to the aggregate
losses, claims, damages or liabilities to which they may be subject (which
shall, for all purposes of this Agreement, include, but are not limited to, all
reasonable costs of defense and investigation and all reasonable attorneys'
fees), in either such case (after contribution from others) on the bases of
relative fault as well as any other relevant equitable considerations. The
relative fault shall be determined by reference to, among other things, whether
SLW ENTERPRISES INC. - REGISTRATION RIGHTS AGREEMENT
PAGE 7
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
Issuer on the one hand or the Permitted Right Holders on the other hand, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. Issuer and the Permitted Right
Holders agree that it would not be just or equitable if contribution pursuant to
this Section 8 were determined by pro rata allocation or by any other method of
allocation that does not take account of the equitable considerations referred
to in this Section 8. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions in respect
thereof) referred to above in this Section 8 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. 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 such fraudulent misrepresentation.
9. MISCELLANEOUS
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9.1 APPLICABLE LAW. This Agreement and all rights hereunder shall
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be governed by, and interpreted in accordance with, the laws of the State of
California, without regard to the conflicts of laws provisions thereof. The
parties hereby submit to the nonexclusive jurisdiction of the courts of the
State of California and of the federal district courts in California with
respect to any action or legal proceeding commenced by any person or entity
relating to or arising out of this Agreement. The parties consent to the service
of process in any such action or legal proceeding by means of registered or
certified mail, return receipt requested, in care of the address set forth below
on the signature page or such other address as a party shall furnish in writing
to the other.
9.2 COUNTERPARTS AND FACSIMILE SIGNATURE. This Agreement may be
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signed in counterparts, all of which when taken together shall constitute a
single executed document. Signatures transmitted by facsimile shall be deemed
valid execution of this Agreement binding on the parties.
9.3 ENTIRE AGREEMENT; AMENDMENT. This Agreement constitutes the
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entire agreement among the parties concerning the subject matter of this
Agreement, and it supersedes any prior oral or written agreements between the
parties. A separate writing may inform the construction of the provisions of
this Agreement if expressly called for by the terms of this Agreement. This
Agreement may not be amended except by a written agreement signed by the party
against which enforcement is sought.
9.4 WAIVER. The failure of a party to insist upon strict
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adherence to any term of this Agreement on any occasion shall not be considered
a waiver thereof or deprive that party of the right thereafter to insist upon
strict adherence to that term or any other term of this Agreement.
9.5 ASSIGNMENT. Subject to the limitations below, this Agreement
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shall inure to the benefit of and be binding upon the parties hereto and their
respective successors and assigns. The rights to cause Issuer to register
Registrable Securities pursuant to this Agreement may be not be assigned by
Permitted Right Holders.
SLW ENTERPRISES INC. - REGISTRATION RIGHTS AGREEMENT
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9.6 HEADINGS. The section headings contained in this Agreement
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are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
9.7 NOTICES. All notices shall be in writing and shall be deemed
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to have been sufficiently given or served (i) immediately, when personally
delivered, (ii) within three (3) days after being deposited in the United States
mail, by registered or certified mail, or (iii) within one (1) day after being
deposited with a reputable overnight mail carrier which provides delivery of
such mail to be traced, addressed as indicated on the signature pages below. No
change of address shall be valid unless it is communicated in writing to the
other party in accordance with this Section 9.7.
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SLW ENTERPRISES INC. - REGISTRATION RIGHTS AGREEMENT
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IN WITNESS WHEREOF, the undersigned have executed and delivered this
Agreement as of the date first written above.
SLW ENTERPRISES INC., a Washington corporation
By:
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Name: ▇▇▇▇▇ ▇▇▇▇▇
Its: President
Address: 4015 Palm-Aire West, #1002
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▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
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PERMITTED RIGHT HOLDER:
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By:
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Print Name:
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Its (title if applicable):
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Address:
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SLW ENTERPRISES INC. - REGISTRATION RIGHTS AGREEMENT
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