REGISTRATION RIGHTS AGREEMENT
THIS
REGISTRATION RIGHTS AGREEMENT
(this
“Agreement”), is made as of January 16, 2008, by and between NANOSENSORS,
INC.,
a
Nevada corporation (the “Company”), and the Securityholders of the Company who
have signed the signature pages hereto (the “Securityholders”).
The
Securityholders and CUCHULAINN
HOLDINGS, INC., a Panamanian corporation (“Holdings”)
entered into the Old Registration Rights Agreement, relating to the registration
of the shares of Holdings Common Stock acquired by the Securityholders in
connection with a Private Placement that closed on or around November 20,
2007.
Section
2(g)(i) of the Merger Agreement provides that the Old Registration Agreement
will be replaced by this Agreement.
The
Company has agreed to use its reasonable efforts to register the Registrable
Securities under the Securities Act and applicable state securities laws for
holders of Registrable Securities.
NOW,
THEREFORE,
in
consideration of the premises and the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which
are
hereby acknowledged, the Company and the Securityholders agree as
follows:
ARTICLE
1 - DEFINITIONS
1.1 Definitions.
As used
in this Agreement, the following terms shall have the following
meanings:
(a) “Agreement”
has the meaning set forth in the preamble hereto.
(b) “Acquisition”
means CUCHULAINN
ACQUISITION INC.,
a
Panamanian corporation.
(c) “Business
Day” means any day other than a Saturday, a Sunday or a day on which the New
York Stock Exchange or banking institutions in the State of New York are
authorized or required by law or other governmental action to close.
(d) “Common
Stock” means the common stock, par value $0.001 per share, of the Company.
(e) “Exchange”
means any transaction in or by virtue of which the Registrable Securities are
exchanged, converted into or otherwise become other securities of the Company
or
the securities of any other issuer, and includes, without limitation, a merger,
consolidation, combination of shares into a lesser number of shares, a
subdivision of shares into a greater number of shares and reclassification,
except as otherwise provided in the Warrant.
(f) “Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules
and
regulations promulgated thereunder, or any similar successor statute, as each
may be in effect from time to time.
(g) “Holdings
Common Stock” means the common stock of Holdings.
(h) “Holdings
Warrants” means the warrants delivered by Holdings to the Securityholders issued
in connection with the Private Placement that conferred upon the Securityholders
the right to purchase one-half (1/2) share of Holdings Common Stock on the
terms
and conditions set forth therein.
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(i) “Merger”
means the merger of Holdings with and into Acquisition pursuant to the
provisions of the Merger Agreement.
(j) “Merger
Agreement” means the Agreement and Plan of Merger, dated as of November 27,
2007, by and among the Company, Acquisition and Holdings, as
amended.
(k) “Old
Registration Rights Agreement” means the Registration Rights Agreement between
Holdings and the Securityholders, issued in connection with the Private
Placement, whereunder Holdings agreed to register the Holdings Common Stock
issued to the Securityholders in the Private Placement, the
Warrants and the shares of Holdings Common Stock underlying the Warrants, on
the
terms and conditions set forth therein.
(l) “Private
Placement” means the private placement of units of Holdings’ securities, each of
which comprised one share of Holdings Common Stock and one Holdings Warrant,
which closed on or around November 20, 2007, relating to 6,200,000 units
comprising a total of 6,200,000 shares of Holdings Common Stock and Holdings
Warrants to purchase an additional 3,100,000 shares of Holdings Common Stock.
(m) “Register,”
“registered,” and “registration” refer to a registration effected by
preparing
and filing the Registration Statement or Registration Statements in compliance
with the Securities Act and the declaration or ordering of effectiveness of
such
Registration Statement or Statements by the SEC.
(n) “Registrable
Securities” means collectively: (i) the Shares;
(ii)
the Warrant Shares and (iii) the Warrant; provided,
however,
that
the Shares and the Warrant Shares shall be treated as Registrable Securities
only if and for so long as they have not been (A) sold to or through a
broker or dealer or underwriter in a public distribution, or (B) sold in a
transaction exempt from the registration and prospectus delivery requirements
of
the Securities Act under Section 4(1) thereof, in the case of either clause
(A)
or clause (B) in such a manner that, upon the consummation of such sale, all
transfer restrictions and restrictive legends with respect to such shares are
removed upon the consummation of such sale. For the avoidance of doubt,
“Registrable Securities” does not include any unexercised option(s), warrant(s)
for the purchase of any securities of the Company or shares of the Series A
Preferred Stock, but shall include any securities received upon an
Exchange.
(o) “Registration
Period” means the period that shall commence when the Registration Statement
becomes effective and shall end when all of the Registrable Securities have
been
sold pursuant to such Registration Statement.
(p) “Registration
Statement” means a registration statement on Form SB-2, or another
suitable form permitted by the SEC, filed by the Company under the Securities
Act, that pertains to the registration of the Shares and the Warrant Shares,
among others, subject to the provisions of this Agreement, as
applicable.
(q) “Scheduled
Filing Date” means October 31, 2008.
(r) “SEC”
means the United States Securities and Exchange Commission.
(s) “Securities
Act” means the Securities
Act of 1933, as amended, and the rules and regulations thereunder, or any
similar successor statute as each may be in effect from time to
time.
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(t) “Selling
Securityholders” means the Securityholders in their capacities as persons who
are participating in any registration of Registrable
Securities pursuant to this Agreement.
(u) “Series
A
Preferred Stock” means the
series of preferred stock, par value $0.001 per share, of the Company,
denominated “Series A Convertible Preferred Stock.”
(v) “Shares”
means the shares of Common Stock acquired by the Securityholders upon conversion
of the shares of Series A Preferred Stock that are subject to this Agreement
and
any securities of any issuer which the Securityholders shall receive as a result
of an Exchange.
(w) “Warrants”
means the Common Stock Purchase Warrants delivered by the Company to the
Securityholders pursuant to Section 2(g)(i) of the Merger Agreement in exchange
for the Holdings Warrants held by the Securityholders.
(x) “Warrant
Shares” means the shares of Common Stock underlying the Warrants and any
securities of any issuer which shall underlie the Warrants as the result of
an
Exchange.
ARTICLE
2 - REGISTRATION
2.1 Registration.
The
Company hereby agrees that, after the conversion of the Series A Preferred
Stock
into shares of Common Stock, it will use its reasonable efforts to file with
the
SEC a Registration Statement by the Scheduled Filing Date with respect to all
of
the Registrable Securities.
ARTICLE
3 - OBLIGATIONS OF THE COMPANY
In
connection with the registration of the Registrable Securities, the Company
shall have the following obligations:
3.1 Availability
of Registration Statement.
The
Company shall use its reasonable efforts
to prepare and file with the SEC the Registration Statement required by Article
2 and use its reasonable efforts to cause such Registration Statement to become
effective and, once effective, to continue to be effective throughout the
Registration Period.
3.2
Amendments to Registration Statement. The Company shall use its reasonable
efforts
to prepare and file with the SEC such amendments (including post-effective
amendments) and supplements to a Registration Statement and the prospectus
used
in connection with the Registration Statement as may be necessary to keep any
effective Registration Statement effective and such prospectus available for
use
at all times during the Registration Period (including, without limitation,
amendments and supplements necessary in connection with a change in the “Plan of
Distribution” section in any Registration Statement or prospectus) and, during
such period, comply with the provisions of the Securities Act with respect
to
the disposition of all Registrable Securities covered by the Registration
Statement until the termination of the Registration Period. The Company shall
use its reasonable efforts to cause any such amendment and/or new Registration
Statement to become effective as soon as practicable following the filing
thereof.
3.3
Information. Upon written request, the Company shall furnish to any Selling
Securityholder
and its legal counsel, promptly after the same is prepared and publicly
distributed, filed with the SEC, or received by the Company, one copy of the
Registration Statement and any amendment thereto, and such number of copies
of
each prospectus, including each preliminary prospectus, and all amendments
and
supplements thereto, and such other documents as such Selling Securityholders
may reasonably request in order to facilitate the disposition of the Registrable
Securities. The Company shall promptly notify all Selling Securityholders of
the
effectiveness of any Registration Statement or post-effective amendments
thereto.
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3.4 Blue
Sky.
The Company shall (a) register and qualify the Registrable Securities
covered
by any Registration Statement under the securities laws of such jurisdictions
in
the United States as each Selling Securityholder who holds any such Registrable
Securities reasonably requests, (b) prepare and file in those jurisdictions
such
amendments (including post-effective amendments) and supplements to such
registrations and qualifications as may be necessary to maintain the
effectiveness thereof and availability for use during the Registration Period,
(c) take such other actions as may be reasonably necessary to maintain such
registrations and qualifications in effect at all times during the Registration
Period, and (d) take all other actions reasonably necessary or advisable to
qualify the Registrable Securities for sale in such jurisdictions; provided,
however,
that the
Company shall not be required in connection therewith or as a condition thereto
to (i) qualify to do business in any jurisdiction where it would not otherwise
be required to qualify but for this Section 3.4, (ii) subject itself to general
taxation in any such jurisdiction or (iii) file a general consent to service
of
process in any such jurisdiction.
3.5 Limitations
on Subsequent Registration Rights.
From
and after the date of this Agreement, the Company shall not enter into any
agreement granting any holder or prospective holder of any securities of the
Company registration rights with respect to such securities without the prior
written consent of the holders of more than 50% of the Registrable Securities
then outstanding, unless such new registration rights, including standoff
obligations, are subordinate to the rights of the Securityholders
hereunder.
3.6 Correction
of Statements or Omissions. As soon as practicable after becoming aware
of
any event, of which the Company has actual knowledge, as a result of which
the
prospectus included in a Registration Statement, as then in effect, includes
an
untrue statement of a material fact or fails to state a material fact required
to be stated therein or necessary to make the statements therein not misleading,
the Company shall publicly announce or notify all Selling Securityholders of
the
happening of such event, and shall use commercially reasonable efforts as soon
as possible to (but in any event it shall within five (5) Business Days or
three
(3) Business Days of the receipt by the Company from its accountants of
financial information required to correct such untrue statement or omission,
as
applicable) prepare a supplement or amendment to the Registration Statement
(and
make all required filings with the SEC and all applicable state securities
or
blue sky commissions) to correct such untrue statement or omission if not
otherwise satisfied through the filing of a report to the SEC or otherwise
pursuant to applicable securities laws (but such supplement or amendment or
other filing shall not be required if, notwithstanding the Company’s
commercially reasonable efforts so to prepare and file such supplement,
amendment or other filing, such supplement, amendment or other filing is no
longer required by applicable law to correct such untrue statement or omission
because such untrue statement or omission no longer exists); and the Company
shall simultaneously (and thereafter as requested) deliver such number of copies
of such supplement or amendment to each Selling Securityholder (or other
applicable document) as such Securityholder may request in writing.
3.7 Stop
Orders. The Company shall use commercially reasonable efforts to prevent
the
issuance of any stop order or other suspension of effectiveness of a
Registration Statement, and, if such an order is issued, to obtain the
withdrawal of such order at the earliest practicable time, and the Company
shall
immediately notify all Selling Securityholders and, in the event of an
underwritten offering, the managing underwriter(s), of the issuance of such
order and the resolution thereof.
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3.8 SEC
Comments. The Company will adequately respond to SEC’s comments to the
Registration Statement
within ten (10) Business Days after receipt thereof to the extent practicable
and if not practicable, as quickly as possible acting with diligence, and
thereafter request effectiveness of the Registration Statement within five
(5)
Business Days of receipt of a “no review” or “no further comments”
notification.
3.9 Inspection
of Records.
The
Company shall provide each Selling Securityholder, and any underwriter who
may
participate in the distribution of Registrable Securities, and their respective
representatives, the opportunity to conduct a reasonable inquiry of the
Company’s financial and other records during normal business hours and make
available its officers, directors and employees for questions regarding
information which the Selling Securityholders and any such underwriter may
reasonably request in connection with the Registration Statement; provided,
however,
that
the Selling Securityholders and any such underwriter shall hold in confidence
and shall not make any disclosure of any record or other information which
the
Company determines in good faith to be confidential, and of which determination
the inspectors are so notified in writing, unless (a) the disclosure of such
records is necessary to avoid or correct a misstatement or omission in any
Registration Statement, (b) the release of such records is ordered pursuant
to a
subpoena or other order from a court or government body of competent
jurisdiction or is otherwise required by applicable law or legal process, or
(c)
the information in such records has been made generally available to the public
other than by disclosure in violation of this or any other agreement (to the
knowledge of the relevant inspector).
3.10 Information
Respecting Selling
Securityholders.
At
least 10 days prior to the first anticipated filing date of a Registration
Statement, the Company shall notify each Selling Securityholder of the
information the Company requires from each such Selling Securityholder in
connection with the preparation of the Registration Statement. The Company
shall
hold in confidence and not make any disclosure of non-public information
concerning any Selling
Securityholder provided
to the Company by such Selling
Securityholder
unless
(a) disclosure of such information is necessary to comply with federal or state
securities laws, rules, statutes or regulations, (b) the disclosure of such
information is necessary to avoid or correct a misstatement or omission in
any
Registration Statement or other public filing by the Company, (c) the release
of
such information is ordered pursuant to a subpoena or other order from a court
or governmental body of competent jurisdiction or is otherwise required by
applicable law or legal process, (d) such information has been made
generally available to the public other than by disclosure in violation of
this
or any other agreement, or (e) such Securityholder consents to the form and
content of any such disclosure. The Company agrees that it shall, upon learning
that disclosure of such information concerning any Selling
Securityholder
is
sought in or by a court or governmental body of competent jurisdiction in or
through other means, give prompt notice to such Securityholder prior to making
such disclosure, and allow such Selling
Securityholder,
at its
expense, to undertake appropriate action to prevent disclosure of, or to obtain
a protective order for, such information.
3.11 Listing.
The
Company shall use commercially reasonable efforts to cause the listing and
the
continuation of listing of all the Common Stock covered by any Registration
Statement on each securities exchange or quotation system upon which any other
securities of the Company is then listed or quoted.
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3.12 Transfer
Agent.
The
Company shall act as transfer agent for all securities subject to this Agreement
other than Common Stock.
3.13 Delivery
of Certificates; Opinions of Counsel.
The
Company shall cooperate with any and all Selling Securityholders who hold
Registrable Securities being offered and the managing underwriter or
underwriters, if any, to facilitate the timely preparation and delivery of
certificates (not bearing any restrictive legends) representing Registrable
Securities to be offered pursuant to the Registration Statement and enable
such
certificates to be in such denominations or amounts, as the case may be, as
such
Selling Securityholders or the managing underwriter or underwriters, if any,
may
reasonably request and registered in such names as such Selling Securityholders
or the managing underwriter or underwriters, if any, may request, and, upon
the
written request of the transfer agent for the Company or the managing
underwriter or underwriters, as applicable, within two (2) Business Days of
such
request, the Company shall cause legal counsel selected by the Company to
deliver to the transfer agent or the managing underwriter or underwriters,
as
applicable, and the Selling Securityholders an opinion (a “Transfer Opinion”) of
such counsel in a form reasonably acceptable to the transfer agent or managing
underwriter or underwriters, as applicable, and the Selling Securityholders.
Such opinion shall include, without limitation, opinions to the effect that
(i)
the Registration Statement has become effective under the Securities Act and
no
order suspending the effectiveness of the Registration Statement, preventing
or
suspending the use of the Registration Statement, any preliminary prospectus,
any final prospectus, or any amendment or supplement thereto has been issued,
nor has the SEC or any securities or blue sky authority of any jurisdiction
instituted or threatened to institute any proceedings with respect to such
an
order, (ii) all of the Registrable Securities covered by such Registration
Statement may be sold or otherwise transferred pursuant to the Plan of
Distribution set forth in the prospectus forming a part of the Registration
Statement, and (iii) the Registration Statement and each prospectus forming
a
part thereof (including each preliminary prospectus), and any amendment or
supplement thereto, complies as to form with the Securities Act. Such Transfer
Opinion shall also state the jurisdictions in which the Registrable Securities
have been registered or qualified for sale.
3.14 Compliance
with Laws.
The
Company shall comply with all applicable laws related to the Registration
Statement and offering and sale of securities covered by the Registration
Statement and all applicable rules and regulations of governmental authorities
in connection therewith (including, without limitation, the Securities Act
and
the Exchange Act).
ARTICLE
4 - OBLIGATIONS OF THE SELLING SECURITYHOLDERS
4.1 Obligations
of the Selling
Securityholders.
By
electing to participate in any registration
of Registrable Securities as a Selling Securityholder, each Selling
Securityholder agrees as follows:
(a) Information
Concerning Securityholders; Cooperation.
The
Selling Securityholder shall cooperate with the Company in connection with
the
preparation and filing of any Registration Statement, and, for as long as the
Company is obligated to keep any such Registration Statement effective, such
Selling Securityholder will provide to the Company, in writing, for use in
the
Registration Statement, all information regarding the Registrable Securities
held by such Selling Securityholder, the intended method of distribution of
such
Registrable Securities and such other information as may be necessary to enable
the Company to prepare the Registration and prospectus covering the Registrable
Securities and to maintain the currency and effectiveness thereof. The Selling
Securityholder shall deliver to the Company the information requested by it
pursuant to the first sentence of Section 3.10 within five (5) days of request
therefor or shall be excluded from such registration.
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(b) SEC
Comments.
The
Selling Securityholder agrees to use reasonable efforts to cooperate
with
the
Company (at the Company’s expense) in responding to comments of the staff of the
SEC relating to the Selling
Securityholder.
(c) Suspension
of Offering or Distribution.
If,
upon notice from the Company of the happening of any of the events specified
in
Sections 3.6 or 3.7, the Company requires the suspension by the Selling
Securityholder of the distribution of any of the Registrable Securities, the
Selling Securityholder shall cease offering or distributing the Registrable
Securities until such time as the Company notifies such Selling Securityholder
that offering and distribution of the Registrable Securities may
recommence.
(d)
Each
Selling Securityholder agrees not to take any action to cause such Selling
Securityholder to become a registered broker-dealer, as defined under the
Exchange Act.
(e)
Each
Selling Securityholder covenants and agrees that such holder will comply with
the prospectus delivery requirements of the Securities Act as applicable to
it
in connection with sales of Registrable Securities pursuant to a Registration
Statement.
ARTICLE
5 - EXPENSES OF REGISTRATION
5.1 Expenses.
With
respect to each registration of Registrable Securities hereunder, all
expenses of the Selling Securityholders (other than underwriting discounts
and
commissions and transfer taxes), including, without limitation, the reasonable
fees and disbursements of one attorney representing all of the Selling
Securityholders in connection with the consummation of the transactions
contemplated by this Agreement, all registration, listing and qualification
fees
(including applicable state securities or Blue Sky laws), printers’ and
accountants’ fees, the fees and disbursements of counsel for the Company, and
Securities Act liability insurance, if the Company so desires such insurance,
shall be borne by the Company.
ARTICLE
6 - INDEMNIFICATION
In
the
event that any Registrable Securities are included in a Registration Statement
under this Agreement:
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6.1 Indemnification
by the Company.
The
Company will indemnify, hold harmless and defend (a) the Selling
Securityholders, (b) each
underwriter of Registrable Securities and (c) the
directors, officers, partners, members, employees, agents and persons who
control each of such Selling Securityholders within the meaning of Section
15 of
the Securities Act or Section 20 of the Exchange Act, if any (each of the
persons named in clauses (a), (b) and (c) being a “Company Indemnified Person”),
against any losses, claims, damages, liabilities or expenses (collectively,
together with actions, proceedings or inquiries whether or not in any court,
before any administrative body or by any regulatory or self-regulatory
organization, whether commenced or threatened, in respect thereof, “Claims”) to
which any of them may become subject insofar as such Claims arise out of or
are
based upon: (i) any untrue statement or alleged untrue statement of a
material fact contained in a Registration Statement or the omission or alleged
omission to state therein a material fact required to be stated or necessary
to
make the statements therein not misleading, (ii) any untrue statement or
alleged untrue statement of a material fact contained in any preliminary
prospectus if used prior to the effective date of such Registration Statement,
or contained in the final prospectus (as amended or supplemented, if the Company
files any amendment thereof or supplement thereto with the SEC) or the omission
or alleged omission to state therein any material fact necessary to make the
statements made therein, in light of the circumstances under which the
statements therein were made, not misleading, or (iii) any violation or
alleged violation by the Company of the Securities Act, the Exchange Act, any
other law, including, without limitation, any state securities law, or any
rule
or regulation thereunder relating to the offer or sale of the Registrable
Securities (the matters in the foregoing clauses (i) through (iii) being,
collectively, “Violations”). The Company shall reimburse each Company
Indemnified Person, as such expenses are incurred and are due and payable,
for
any reasonable legal fees and other reasonable expenses incurred by them in
connection with investigating or defending any such Claim within twenty (20)
Business Days of written notice thereof; provided that each Company Indemnified
Person shall promptly reimburse the Company within two (2) Business Days for
that portion of such fees and expenses applicable to such actions for which
such
Indemnified Person is judicially determined to be not entitled to
indemnification hereunder. Notwithstanding anything to the contrary contained
herein, the Company shall not be required to indemnify or hold harmless a
Company Indemnified Person (A) with respect to a Claim arising out of or based
upon (1) any violation of federal or state securities laws, rules or regulations
committed by such Company Indemnified Person (or any person who controls it
or
any agent, broker-dealer or underwriter engaged by it) or in the case of a
non-underwritten offering, any failure by such Company Indemnified Person to
give any purchaser of Registrable Securities at or prior to the written
confirmation of such sale, a copy of the most recent prospectus, (2) an untrue
or alleged untrue statement or omission or alleged omission contained in any
Registration Statement or prospectus which statement or omission was made in
reliance upon and in conformity with written information provided by or on
behalf of such Company Indemnified Person specifically for use or inclusion
in
the Registration Statement or any prospectus, (3) any prospectus used after
such
time as the Company advised such Company Indemnified Person that the filing
of a
post-effective amendment or supplement thereto was required, except the
prospectus as so amended or supplemented, or (4) any prospectus used after
such
time as the Company’s obligation to keep the Registration Statement effective
and current has expired or been suspended hereunder, provided, that the Company
has so advised such Company Indemnified Person; (B) shall not apply to amounts
paid in settlement of any Claim if such settlement is effected without the
prior
written consent of the Company, which consent shall not be unreasonably
withheld; and (C) with respect to any preliminary prospectus, shall not inure
to
the benefit of a Company Indemnified Person if the untrue or alleged untrue
statement or omission or alleged omission of material fact contained in the
preliminary prospectus was corrected on a timely basis in the prospectus, as
then amended or supplemented, if such corrected prospectus was timely made
available by the Company pursuant to Section 3.6 hereof, and such Company
Indemnified Person was promptly advised in writing not to use the incorrect
prospectus prior to the use giving rise to a Claim and such Company Indemnified
Person, notwithstanding such advice, used it. Such indemnity shall remain in
full force and effect regardless of any investigation made by or on behalf
of
the Company Indemnified Person and shall survive the transfer of the Registrable
Securities by any of the Securityholders pursuant to Article 10.
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6.2 Indemnification
by Selling Securityholders. The Selling Securityholders shall indemnify, hold
harmless and defend,
to the same extent and in the same manner set forth in Section 6.1, the Company,
each of its directors, each of its officers who signs the Registration
Statement, its employees, agents and persons, if any, who control the Company
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, any other person selling securities pursuant to the Registration
Statement, any underwriter of securities covered by such Registration Statement,
together with its directors, officers and members, and any person who controls
such other person selling securities or underwriter within the meaning of the
Securities Act or the Exchange Act (each, a “Securityholder Indemnified Person”
and collectively with a Company Indemnified Person, an “Indemnified Person”),
against any Claim to which any of them may become subject, under the Securities
Act, the Exchange Act or otherwise, insofar as such Claim arises out of or
is
based upon any Violation, in each case to the extent (and only to the extent)
that such Violation occurs in reliance upon and in conformity with written
information furnished to the Company by such Selling
Securityholders expressly
for use in connection with such Registration Statement; and such Selling
Securityholders will
reimburse any reasonable legal or other reasonable expenses ( within
twenty (20) Business Days of written notice thereof; provided that each Company
Indemnified Person shall promptly reimburse the Company within two (2) Business
Days for that portion of such fees and expenses applicable to such actions
for
which such Indemnified Person is judicially determined to be not entitled to
indemnification hereunder
as such
expenses are incurred and are due and payable) incurred by the Company in
connection with investigating or defending any such Claim; provided,
however,
that
the indemnity agreement contained in this Section 6.2 shall not apply to amounts
paid in settlement of any Claim if such settlement is effected without the
prior
written consent of such Selling
Securityholders,
which
consent shall not be unreasonably withheld. A Selling
Securityholder
shall be
liable under this Agreement (including this Section 6.2 and Article 7) for
only
that amount as does not exceed the net proceeds actually received by such
Selling
Securityholder
as a
result of the sale of Registrable Securities pursuant to such Registration
Statement. Such indemnity shall remain in full force and effect regardless
of
any investigation made by or on behalf of such Securityholder
Indemnified Person and shall survive the transfer of the Registrable Securities
by any of the Securityholders pursuant to Article 10. Notwithstanding anything
to the contrary contained herein, the indemnification agreement contained in
this Section 6.2 with respect to any preliminary prospectus shall not inure
to
the benefit of any Securityholder
Indemnified Person if the untrue or alleged untrue statement or omission or
alleged omission of material fact contained in the preliminary prospectus was
corrected on a timely basis in the prospectus, as then amended or supplemented,
and the Securityholder
Indemnified Person failed to utilize such corrected prospectus.
6.3 Notices.
Promptly after receipt by an Indemnified Person under
this Article 6 of notice of the commencement of any action (including, without
limitation, any governmental action), such Indemnified Person shall, if a Claim
in respect thereof is to be made against any indemnifying party under this
Article 6, deliver to the indemnifying party a written notice of the
commencement thereof, and the indemnifying party shall have the right (at its
expense) to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
and continue control of the defense thereof with counsel mutually satisfactory
to the indemnifying party and the Indemnified Person, as the case may be;
provided,
however,
that
such indemnifying party shall diligently pursue such defense and an indemnifying
party shall not be entitled to assume (or continue) such defense if the
representation by such counsel of the Indemnified Person and the indemnifying
party would be inappropriate due to actual or potential conflicts of interest
between such Indemnified Person and any other party represented by such counsel
in such proceeding or the actual or potential defendants in, or targets of,
any
such action include both the Indemnified Person and the indemnifying party,
and
any such Indemnified Person reasonably determines that there may be legal
defenses available to such Indemnified Person which are different from or in
addition to those available to such indemnifying party. Notwithstanding any
assumption of such defense and without limiting any indemnification obligation
provided for in Section 6.1 or 6.2, the Indemnified Person shall be entitled
to
be represented by counsel (at its own expense if the indemnifying party is
permitted to assume and continue control of the defense and otherwise at the
expense of the indemnifying party) and such counsel shall be entitled to
participate in such defense. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action shall not relieve such indemnifying party of any liability to the
Indemnified Person under this Article 6, except to the extent that the
indemnifying party is actually materially prejudiced in its ability to defend
such action.
9
ARTICLE
7 - CONTRIBUTION
7.1 Contribution.
To
provide for just and equitable contribution, if (i) an indemnified party makes
a
claim for indemnification pursuant to Section 6.1 or 6.2 (subject to the
limitations thereof) but it is found in a final judicial determination, not
subject to further appeal, that such indemnification may not be enforced in
such
case, even though this Agreement expressly provides for indemnification in
such
case, or (ii) any indemnified or indemnifying party seeks contribution under
the
Securities Act, the Exchange Act or otherwise, then the Company (including
for
this purpose any contribution made by or on behalf of any director of the
Company, any officer of the Company who signed any such Registration Statement,
and any controlling person of the Company within the meaning of Section 15
of
the Securities Act or Section 20(a) of the Exchange Act), as one entity, and
the
Selling Securityholders whose Registrable Securities are included in such
registration in the aggregate (including for this pur-pose any contribution
by
or on behalf of an indemnified party), as a second entity, shall contribute
to
the losses, liabilities, claims, damages, and expenses whatsoever to which
any
of them may be subject, on the basis of relevant equitable considerations such
as the relative fault of the Company and such Selling Securityholders in
connection with the facts which resulted in such losses, liabilities, claims,
damages, and expenses. The relative fault, in the case of an untrue statement,
alleged untrue statement, omission, or alleged omission, shall be
determined,
among
other things, by whether such statement, alleged statement, omission, or alleged
omis-sion relates to information supplied by the Company or by such Selling
Securityholders, and the parties’ relative intent, knowledge, access to
information, and opportunity to correct or prevent such statement, alleged
statement, omission, or alleged omission. Subject to the following sentence,
the
Company and the Selling
Securityholders agree
that it would be unjust and inequitable if the respective obligations of the
Company and the Selling Securityholders for contribution were determined by
pro
rata or per capita allocation of the aggregate losses, liabilities, claims,
damages, and expenses (even if the Selling Securityholders and the other
indemnified parties were treated as one entity for such purpose) or by any
other
method of allocation that does not reflect the equitable considerations referred
to in this Section 7.1. In no case shall any Selling Securityholder be
responsible for a portion of the contribution obligation imposed on all Selling
Securityholders in excess of the net proceeds actually received by such Selling
Securityholder as a result of the sale of Registrable Securities pursuant to
such Registration Statement. No person guilty of a fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled
to
contribution from any person who is not guilty of such fraudulent
misrepresentation. For purposes of this Section 7.1, each person, if any, who
controls any Selling Securityholder within the meaning of Section 15 of the
Securities Act or Section 20(a) of the Exchange Act and each officer, director,
partner, employee, agent, and counsel of each such Selling Securityholder or
control person shall have the same rights to contribution as such Selling
Securityholder or control person and each person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act or Section 20(a)
of the Exchange Act, each officer of the Company who signs the Registration
Statement, each director of the Company, and its or their respective counsel
shall have the same rights to contribution as the Company, subject in each
case
to the provisions of this Section 7.1. Anything in this Section 7.1 to the
contrary notwithstanding, no party shall be liable for contribution with respect
to the settlement of any claim or action effected without its written consent.
This Section 7.1 is intended to supersede any right to contribution under the
Securities Act, the Exchange Act or otherwise.
10
ARTICLE
8 - REPORTS UNDER THE EXCHANGE ACT
With
a
view to ensuring the availability of the benefits of certain rules and
regulations of the SEC which may at any time permit the sale of the Registrable
Securities to the public without registration, the Company,as a public company
whose securities are registered under the Securities Act and the Exchange Act
agrees to:
(a) Continue
to comply in all material respects with the provisions of the Securities Act
and
the Exchange Act, including without limitation the reporting requirements of
Rule 144 under the Securities Act ;
(b) File
with
the SEC in a timely manner all reports and other documents required of the
Company under the Securities Act and the Exchange Act (at any time after it
has
become subject to such reporting requirements); and
(c) So
long
as any of the Securityholders owns any Registrable Securities, to furnish to
them forthwith upon written request a written statement by the Company as to
its
compliance with the reporting requirements of said Rule 144 (at any time after
90 days after the effective date of the first registration statement filed
by
the Company for an offering of its securities to the general public), and of
the
Securities Act and the Exchange Act (at any time after it has become subject
to
such reporting requirements), a copy of the most recent annual or quarterly
report of the Company, and such other reports and documents of the Company
and
other information in the possession of or reasonably obtainable by the Company
as such Securityholders may reasonably request in availing itself of any rule
or
regulation of the SEC allowing any of them to sell any such securities without
registration.
ARTICLE
9 -AMENDMENT AND ASSIGNMENT OF REGISTRATION RIGHTS
9.1 Assignment
of Registration Rights.
The
rights of any Securityholder as to Registrable
Securities transferred by such Securityholder, including the right to have
the
Company register Registrable Securities pursuant to this Agreement, shall be
automatically assigned by such Securityholder to any transferee of all or any
portion of the Registrable Securities, whether such transfer occurs before
or
after the Registration Statement becomes effective, if: (a) such Securityholder
agrees in writing with the transferee or assignee to assign such rights, and
a
copy of such agreement is furnished to the Company within 10 days after such
assignment, (b) the Company is, within 10 days after such transfer or
assignment, furnished with written notice of (i) the name and address of
such transferee or assignee, and (ii) the securities with respect to which
such
registration rights are being transferred or assigned, (c) following such
transfer or assignment, the further disposition of such securities by the
transferee or assignee is restricted under the Securities Act or applicable
state securities laws, and (d) at or before the time the Company receives the
written notice contemplated by clause (b) of this sentence, the transferee
or
assignee agrees in writing for the benefit of the Company to be bound by all
of
the provisions contained herein. The rights of such Securityholder hereunder
with respect to any Registrable Securities retained by the Securityholder shall
not be assigned by virtue of the transfer of other Registrable
Securities.
11
9.2 Amendment
of Registration Rights.
Except
as expressly provided in this Agreement,
neither this Agreement nor any term hereof may be amended, waived, discharged
or
terminated other than by a written instrument signed by the party against whom
enforcement of any such amendment, waiver, discharge or termination is sought;
provided,
however,
that
holders of Registrable Securities may, by the favorable vote of more than 50%
of
the Registrable Securities and with the written consent of the Company, waive,
modify or amend on behalf of all holders, any provisions hereof, so long as
the
effect thereof will be that all such holders will be treated equally and the
Securityholder agrees to be bound by such vote or consent.
ARTICLE
10 - MISCELLANEOUS
10.1 Registered
Holders.
A
person or entity shall be deemed to be the holder (or a holder in interest)
of
Registrable Securities whenever such person or entity owns of record such
Registrable Securities. If the Company receives conflicting instructions,
notices or elections from two or more persons or entities with respect to the
same Registrable Securities, the Company shall act upon the basis of
instructions, notice or election received from the registered owner of such
Registrable Securities.
10.2 Notices,
Etc.
All
notices and other communications required or permitted under this Agreement
shall be sent by registered or certified mail, postage prepaid (if within the
United States of America), overnight courier, confirmed
facsimile or other electronic transmission or otherwise delivered by hand or
by
messenger, addressed (a) if to the Securityholder, at such Securityholder’s
address set forth on the signature page hereto or at such other address as
such
Securityholder shall have furnished to the Company in writing, (b) if to the
Company, at its offices at: NANOSENSORS, INC., 0000 Xxxxxxxx Xxxx., Xxxxxxx
Xxxx, XX 00000 , to the attention of “President” or at such other address as the
Company shall have furnished to the Securityholders in writing, or (c) if any
transferee or assignee of a Securityholder pursuant to Section 10.1, at such
address as such transferee or assignee shall have furnished to the Company
in
writing. Each such notice or other communication shall for all purposes of
this
Agreement be treated as effective or having been received or given, as
applicable, (i) when delivered if delivered personally, (ii) if sent by mail,
at
the earlier of its receipt or three Business Days after the registration or
certification thereof, (iii) if sent by overnight courier, one Business Day
(two
Business Days if notice is sent from one country to another) after the same
has
been deposited with a nationally recognized courier service, or (iv) when sent
by confirmed facsimile or other electronic transmission, on the day sent (if
a
Business Day) if sent during normal business hours of the recipient, and if
not,
then on the next Business Day (provided, that such facsimile or other electronic
transmission is followed by delivery via another method permitted by this
Section 10.2) and the receipt of the facsimile or other electronic transmission
can be verified.
10.3
Delays or Omissions.
Except
as expressly provided in this Agreement, no delay or omission to exercise any
right, power or remedy accruing to any Securityholder upon any breach or default
of the Company under this Agreement shall impair any such right, power or remedy
of such Securityholder nor shall it be construed to be a waiver of any such
breach or default, or an acquiescence therein, or of or in any similar breach
or
default thereafter occurring; nor shall any waiver of any single breach or
default be deemed a waiver of any other breach or default theretofore or
thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of any Securityholder of any breach or default under
this
Agreement, or any waiver on the part of any Securityholder of any provisions
or
conditions of this Agreement, must be in writing and shall be effective only
to
the extent specifically set forth in such writing. All remedies, either under
this Agreement or by law or otherwise afforded to any Securityholder shall
be
cumulative and not alternative.
12
10.4 Governing
Law; Jurisdiction; Waiver of Jury Trial.
This
Agreement shall be governed in all respects by the laws of the State of New
York
without giving effect to the conflicts of laws principles thereof. All suits,
actions or proceedings arising out of, or in connection with, this Agreement
or
the transactions contemplated by this Agreement shall be brought in any federal
or state court of competent subject matter jurisdiction sitting in New York,
New
York Each of the parties hereto by execution and delivery of this Agreement,
expressly and irrevocably (i) consents and submits to the personal
jurisdiction of any such courts in any such action or proceeding; (ii) consents
to the service of any complaint, summons, notice or other process relating
to
any such action or proceeding by delivery thereof to such party as set forth
in
Section 10.2 hereof; and (iii) waives any claim or defense in any such action
or
proceeding based on any alleged lack of personal jurisdiction, improper venue,
forum
non conveniens
or any
similar basis.
WAIVER
OF JURY TRIAL. EACH OF THE PARTIES BY EXECUTION AND DELIVERY OF THIS AGREEMENT
WAIVES TRIAL
BY JURY IN ANY ACTION OR PROCEEDING INVOLVING ANY MATTER (WHETHER SOUNDING
IN
TORT, CONTRACT, FRAUD OR OTHERWISE) IN ANY WAY ARISING OUT OF OR RELATING TO
THIS AGREEMENT.
10.5 Entire
Agreement; Amendment.
This
Agreement constitutes the full and entire understanding and agreement between
the parties with regard to the subject matter hereof and thereof and supersedes
all prior agreements and merge all prior discussions, negotiations, proposals
and offers (written
or oral) between them, and no party shall be liable or bound to any other party
in any manner by any representations, warranties, covenants or agreements except
as specifically set forth herein or therein. Except as expressly provided in
this Agreement, neither this Agreement nor any term hereof may be amended,
waived, discharged or terminated other than by a written instrument signed
by
the party against whom enforcement of any such amendment, waiver, discharge
or
termination is sought.
10.6 Successors
and Assigns.
Subject
to Article 9 hereof, the provisions of this Agreement shall inure to the benefit
of, and be binding upon, the permitted successors, assigns, heirs, executors
and
administrators of the parties to this Agreement, except that the Company may
not
assign this Agreement without the written consent of the holders of at least
50%
of the then outstanding Registrable Securities; provided
that,
the
Company shall not agree to or consummate any Exchange in
which
the Registrable Securities are to be exchanged, converted into or otherwise
become the securities of any other issuer, without procuring that such issuer
assume the liabilities of the Company hereunder, effective upon the consummation
of such Exchange on terms that are fair to the Securityholders.
13
10.7 Titles
and Subtitles.
The
headings in this Agreement are used for convenience of reference only and shall
not be considered in construing or interpreting this Agreement.
10.8
Counterparts.
This
Agreement may be executed in any number of counterparts, each of which shall
be
enforceable against the parties actually executing such counterparts, and all
of
which together shall constitute one instrument. This Agreement may be delivered
by facsimile, and facsimile signatures shall be treated as original signatures
for all applicable purposes.
10.9
Further Assurances.
Each
party shall do and perform, or cause to be done and performed, all such further
acts and things, and shall execute and deliver all such other agreements,
certificates, instruments and documents, as the other party may reasonably
request in order to carry out the intent and accomplish the purposes of this
Agreement and the consummation of the transactions contemplated
hereby.
10.10
Consents.
Unless
otherwise provided herein, all consents and other determinations to be made
pursuant to this Agreement shall be made on the basis of a majority in interest
(determined by number of securities) with respect to the Registrable
Securities.
10.11 Severability.
In the
event that any provision of this Agreement becomes or is declared by a court
of
competent jurisdiction to be illegal, unenforceable or void, this Agreement
shall continue in full force and effect without said provision.
10.12 No
Third Party Beneficiaries.
This
Agreement shall not confer any rights or remedies upon any person other than
the
parties hereto, each Securityholder, their permitted successors and assigns
and
parties eligible for indemnification under Article 6, and only in accordance
with the express terms of this Agreement.
10.13 Confidentiality
of Agreement, Press Releases and Public Announcements.
Except
as set forth below, the parties shall, and shall cause their officers, employees
and representatives to, treat and hold as confidential the existence and terms
of this Agreement at all times. No party shall issue any press release or make
any public announcement relating to the subject matter of this Agreement without
the prior written approval of the Company and the holders of at least 50% of
the
number of Registrable Securities; provided,
however,
that any
party may make any public disclosure it believes in good faith is required
by
applicable law (including applicable securities laws) or any listing or trading
agreement concerning its publicly-traded securities to make such disclosure
(in
which case the disclosing party will use its reasonable efforts to advise the
other parties in writing prior to making the disclosure).
10.14 Construction.
The
parties have participated jointly in the negotiation and drafting of this
Agreement. In the event an ambiguity or question of intent or interpretation
arises, this Agreement shall be construed as if drafted jointly by the parties
and no presumption or burden of proof shall arise favoring or disfavoring any
party by virtue of the authorship of any of the provisions of this Agreement.
Any reference to any federal, state, local or foreign statute or law shall
be
deemed also to refer to all rules and regulations promulgated thereunder and
any
applicable common law, unless the context requires otherwise. The word
“including” shall mean including without limitation and is used in an
illustrative sense rather than a limiting sense. Terms used with initial capital
letters will have the meanings specified, applicable to singular and plural
forms, for all purposes of this Agreement. Reference to any gender will be
deemed to include all genders and the neutral form.
14
10.15 Incorporation
of Exhibits, Annexes and Schedules.
The
Exhibits, Annexes and Schedules identified in this Agreement, if any, are
incorporated herein by reference and made a part hereof.
10.16 Termination
of Old Registration Rights Agreement.
The Old
Registration Rights Agreement is hereby terminated, without liability of any
party thereto to any other party thereto.
10.17 Independent
Nature of Selling Securityholders' Obligations and Rights.
The
obligations of each Selling Securityholder hereunder is several and not joint
with the obligations of any other Selling Securityholder hereunder, and no
Selling Securityholder shall be responsible in any way for the performance
of
the obligations of any other Selling Securityholder hereunder. The decision
of
each Selling Securityholder to purchase Securities has been made independently
of any other Selling Securityholder. Nothing contained herein or in any other
agreement or document delivered at any closing, and no action taken by any
Selling Securityholder pursuant hereto or thereto, shall be deemed to constitute
the Selling Securityholders as a partnership, an association, a joint venture
or
any other kind of entity, or create a presumption that the Selling
Securityholders are in any way acting in concert with respect to such
obligations or the transactions contemplated by this Agreement. Each Selling
Securityholder acknowledges that no other Selling Securityholder has acted
as
agent for such Selling Securityholder in connection with making its investment
hereunder and that no Selling Securityholder will be acting as agent of such
Selling Securityholder in connection with monitoring its investment in the
Securities or enforcing its rights under this Agreement and the Warrants. Each
Selling Securityholder shall be entitled to protect and enforce its rights,
including without limitation the rights arising out of this Agreement, and
it
shall not be necessary for any other Selling Securityholder to be joined as
an
additional party in any proceeding for such purpose.
[Remainder
of page left intentionally blank. Signature pages to follow.
15
IN
WITNESS WHEREOF,
the
parties have caused this Registration Rights Agreement to be duly executed
as of
the date first above written.
| COMPANY: | NANOSENSORS, INC. | |
| |
|
|
| Date: | By: | |
|
Name: Xxxxxx Xxxxx |
||
| Title: Interim President and CEO | ||
|
SECURITYHOLDERS:
|
|
|
HOCARI
TRUST*
|
Xxxxxxx
Xxxxx*
|
|
Xxxxx
Xxxxx*
|
SHADOW
TRADING LLC*
|
|
INVERSIONES
De
MARSEILLES, S.A.*
|
WINNIPEG
INVESTMENT INC.*
|
|
WINDWARD
ASSET MANAGEMENT, INC.*
|
INVERSIONES
XX
XXXXXXXXX, X.X.*
|
|
Xxxxx
Xxxxxx *
|
Xxxxxx
Xxxx*
|
|
INVERSIONES
LYONNAISE, S.A.*
|
SPECULUM
CORPORATION*
|
|
CYBER
ELECTRIC, INC.*
|
QUADPRO
LTD.*
|
|
TRINITY-DAGNY
CORPORATION*
|
DECADO
INTERNATIONAL S.A.*
|
|
Xxxxxxx
Xxxx*
|
Xxx
Xxxxxxx*
|
|
Sehba
Kudiya*
|
Xxxxx
Xxxxxxxxx*
|
|
Xxx
Xxxxxxx*
|
Xxxxx
Xxxx*
|
|
ROSSARD
INVESTMENTS, INC.
*
|
XXXXX
DEL SUR S.A.*
|
16
|
Xxxx
Xxxxxx*
|
Xxxxx
Xxxxxxxxx*
|
|
Xxxxxx
Xxxxxxxx*
|
Xxxxxx
Xxxxxxx*
|
|
Xxxxxx
Xxxxxx*
|
Xxxx
Xxxxxxxx*
|
|
THE
XXXXXXXXX FOUNDATION*
|
|
|
On
behalf of all of the foregoing Securityholders, this Registration
Rights
Agreement is
executed:
|
|
|
*By
|
|
|
Xxxxx
X. Xxxxxx
|
|
|
Agent
and Attorney-in-Fact
|
|
|
Xxxxx
X. Xxxxxx, Esq.
|
|
|
Casa
0, Xxxxx 0, Xxxxx Xxxxx
|
|
|
Xxx
Xxxxxxx, Xxxxxxxx of
Panama
|
17
