EXHIBIT 4.6
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement ("Agreement") is entered into as of the
19th day of August, 2002, between HiEnergy Technologies, Inc., a Washington
corporation (the "Company"), and Primoris Group Inc., an Ontario corporation
(the "Optionee")(together, the "parties").
WHEREAS, the Company has undertaken to issue and grant an option to the
Optionee to purchase 400,000 shares of its common stock; and
WHEREAS, the Company has agreed to give the Optionee 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 have
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the following respective meanings:
1.1 "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
1.2 "OPTION" means the nonqualified stock option granted to the Optionee by
the Company as provided in the Stock Option Agreement between the parties.
1.3 "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.
1.4 "REGISTRABLE SECURITIES" means any shares of common stock of the
Company underlying the Option or that have been issued to the Optionee by the
Company upon exercise of the Option and that cannot be sold pursuant to Rule
144.
1.5 "REGISTRATION EXPENSES" shall mean all expenses incurred by the Company
in complying with Section 2 hereof, including, without limitation, all
registration and filing fees, printing expenses, fees and disbursements of
counsel and accountants for the Company, 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 Company which shall be
paid in any event by Company).
1.6 "SEC" means the Securities and Exchange Commission.
1.7 "SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
1.8 "SELLING EXPENSES" shall mean all underwriting discounts and selling
commissions applicable to the sale.
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2. PIGGYBACK REGISTRATION RIGHTS
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2.1 Registration Rights. If the Company at any time proposes to
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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)
during the Exercise Term of the Option, the Company shall notify the Optionee in
writing at least fifteen (15) days prior to the filing of the registration
statement for purposes of a public offering of securities of the Company
(including, but not limited to, registration statements relating to secondary
offerings of securities of the Company, but excluding registration statements
relating to employee benefit plans or with respect to corporate reorganizations
or other transactions under Rule 145 of the Securities Act) and will afford the
Optionee an opportunity to include in each such registration statement during
the Exercise Term of the Option, subject to the terms and conditions set forth
in this Section 2, any of the Registrable Securities. The Company shall use its
commercially reasonable best efforts to cause 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, however, 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, the Company determines for any reason
either not to register or to delay registration of such securities, the Company
may, at its election, give written notice of such determination to the Optionee
and, thereon, (i) in the case of a determination not to register, will be
relieved of this obligation to register the 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 the Registrable
Securities, for the same period as the delay in registering such other
securities.
2.2 Underwriting. If the managing underwriter of an underwritten offering
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under Section 2.1 informs the Company and the Optionee 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 the Company, then the Company will
include in such registration, to the extent of the number which the Company is
advised can be sold in the offering: first, securities proposed by the Company
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to be sold for its own account; second, the shares of Company's common stock
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sold in private placements for cash during 2002, pro rata based upon the number
of shares of such securities so proposed to be sold and so requested to be
included; third, the Registrable Securities requested to be included in the
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registration; and fourth, the shares of the Company's common stock held by
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former shareholders of HiEnergy Microdevices, 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 Optionee will have priority to all shares
sought to be included by officers and directors of the Company as well as
holders of ten percent (10%) or more of the Company's common stock.
3. EXPENSES OF REGISTRATION. Except as specifically provided herein, all
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Registration Expenses incurred in connection with any registration,
qualification or compliance pursuant to Section 2 herein shall be borne by the
Company. All Selling Expenses incurred in connection with any registration,
qualification or compliance pursuant to Section 2 herein shall be borne by the
Optionee.
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4. REQUESTS FOR INFORMATION. The Optionee hereby agrees to promptly furnish
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the Company with any and all written information concerning the Optionee that
the Company reasonably requests in order to (1) prepare the registration
statements and (2) conduct such other due diligence as may be necessary for the
Company to satisfy or respond to any regulatory or governmental requirements or
requests. The Optionee agrees to provide true, 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 Optionee
understands that the Company 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 the Company will depend on the
Optionee to provide true, complete and accurate information.
5. TERMINATION OF REGISTRATION RIGHTS. All registration rights granted
under this Agreement, and all notices required under this Agreement, shall
terminate and be of no further force and effect on the earlier of (i) August 1,
2004 or (ii) the date that all of the shares underlying the Option have been
exercised and may be sold pursuant to Rule 144; provided, however, that if the
Consulting Agreement is terminated pursuant to Section 7.2 therein, all
registration rights granted herein shall immediately terminate.
6. INDEMNIFICATION. In the event any Registrable Securities are included in
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a registration statement under Section 2:
6.1 The Company agrees to indemnify and hold harmless the Optionee and each
person who controls the Optionee 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 the Optionee 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 the Company 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 the Company by the Optionee,
including any person who controls the Optionee, specifically for use in the
preparation thereof. This indemnity agreement will be in addition to any
liability that the Company may otherwise have.
6.2 The Optionee agrees that it will indemnify and hold harmless the
Company, and each person who controls the Company 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 the Company or any 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
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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
in the registration statement or amendments or supplements thereto in reliance
upon and in conformity with, written information furnished to the Company by the
Optionee specifically for use in the preparation thereof. This indemnity
agreement will be in addition to any liability that the Optionee may otherwise
have.
6.3 Promptly after receipt by an indemnified party under this Section 6 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 6, 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 6 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.
6.4 All fees and expenses of the indemnified party (including reasonable
costs of defense and investigation in a manner not inconsistent with this
Section 6 and all reasonable attorney 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.
7. CONTRIBUTION. In order to provide for just and equitable contribution
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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 6 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 6 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 the Company and the Optionee shall contribute to the aggregate losses,
claims, damages or liabilities to which they may be subject (which shall, for
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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 basis of relative fault
as well as any other relevant equitable considerations. 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 the Optionee on the other hand, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Optionee agree that it would not be
just or equitable if contribution pursuant to this Section 7 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 7. 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 7 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.
8. MISCELLANEOUS
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8.1 APPLICABLE LAW. This Agreement and all rights hereunder shall be
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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
in Section 8.7 or such other address as a party shall furnish in writing to the
other.
8.2 COUNTERPARTS AND FACSIMILE SIGNATURE. This Agreement may be signed in
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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.
8.3 ENTIRE AGREEMENT; AMENDMENT. This Agreement constitutes the entire
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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.
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8.4 WAIVER. The failure of a party to insist upon strict adherence to any
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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.
8.5 ASSIGNMENT. Subject to the limitations below, this Agreement shall
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inure to the benefit of and be binding upon the parties hereto and their
respective successors and assigns.
8.6 HEADINGS. The section headings contained in this Agreement are for
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reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
8.7 NOTICE. Any notice required or permitted to be given hereunder shall be
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given by hand delivery, facsimile transmission or by registered mail, postage
prepaid, addressed to the parties at their respective addresses as set forth
below. Any such notices given by hand delivery or by facsimile transmission
shall be deemed to have been received on the date of delivery or transmission
and if given by prepaid registered mail, shall be deemed to have been received
on the third (3rd) business day immediately following the date of mailing. The
parties shall be entitled to give notice of changes of addresses from time to
time in the manner hereinbefore provided for the giving of notice.
If for the Company: HiEnergy Technologies, Inc.
00 Xxxxxxx Xxxxx
Xxxxxx, XX 00000
Attn: President
Tel: 000.000.0000
Fax: 000.000.0000
If for the Optionee: Primoris Group Inc.
00 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX X0X 0X0
Tel: 000.000.0000
Fax: 000.000.0000
Such address may be changed from time to time by either party by providing
written notice to the other in the manner set forth above.
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IN WITNESS WHEREOF, the undersigned have executed and delivered this
Agreement as of the date first written above.
THE COMPANY:
HIENERGY TECHNOLOGIES, INC., a Washington corporation
By: /s/ Xxxxx Xxxxx
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Xxxxx Xxxxx, President and CEO
THE OPTIONEE:
PRIMORIS GROUP INC., an Ontario corporation
By: /s/ Xxxxxx Xxxxxxxx
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Xxxxxx Xxxxxxxx, President
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