REGISTRATION RIGHTS AGREEMENT
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This Registration Rights Agreement (this "Agreement") is made and entered
into as of May 28, 1996, by and among Sunbase Asia, Inc., a Nevada
corporation (the "Company"), and the person or entity set forth on the
signature page of this Agreement (the "Investor").
RECITALS
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Pursuant to a confidential private placement memorandum dated February 1,
1996 (the "Private Placement Memorandum"), the Investor has subscribed for
and has purchased shares of the Company's common stock, $.001 par value
(the "Shares").
The Company and the Investor desire to enter into a specific agreement
setting forth the terms and conditions upon which the Shares may be
registered under certain applicable law.
NOW, THEREFORE, in consideration of the mutual promises and covenants set
forth herein, the parties hereto agree as follows:
1. REGISTRATION RIGHTS
1.1 CERTAIN DEFINITIONS. As used in this Agreement, the
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following terms shall have the meanings set forth below:
(a) "Closing" means the date when all the Shares
have been delivered to the Investor.
(b) "Commission" means the Securities and Exchange
Commission or any other federal agency at the time administering the
Securities Act.
(c) "Exchange Act" means the Securities Exchange Act
of 1934, as amended, or any similar successor federal statute and the rules
and regulations thereunder, all as the same shall be in effect from time to
time.
(d) "Holder" means any Investor who holds
Registrable Securities and any holder of Registrable Securities to whom the
registration rights conferred by this Agreement have been transferred in
compliance with Section 1.8 hereof
(e) "Other Shareholders" means persons other than
Holders who, by virtue of agreements with the Company, are entitled or
permitted to include their securities in a registration hereunder.
(f) "Registrable Securities" means (i) the Shares
and (ii) any common stock issued as a dividend or other distribution with
respect to or in exchange for or in replacement of the Shares. However,
Registrable Securities shall not include any shares
Exhibit 10.20
of common stock of the Company for which a registration statement with the
Commission has become effective for the period set forth in Section 1.2,
which have been transferred to any person that is not an "Affiliate" (as
defined in the Exchange Act) of the Investor pursuant to Rule 144, or which
ceases to be outstanding.
(g) The terms "register," "registered" and
"registration" shall refer to a registration effected by preparing and
filing a registration statement in compliance with the Securities Act and
applicable rules and regulations thereunder, and the declaration or
ordering by the Commission of the effectiveness of such registration
statement.
(h) "Registration Expenses" means all expenses
incurred in effecting any registration pursuant to this Agreement,
including, without limitation, all registration, qualification, and filing
fees, printing expenses, escrow fees, listing and NASD fees, fees and
disbursements of counsel for the Company, blue sky fees and expenses, and
expenses of any regular or special audits or "cold comfort" letters
incident to or required by any such registration, but shall not include
Selling Expenses.
(i) "Rule 144" means Rule 144 as promulgated by the
Commission under the Securities Act as such rule may be amended from time
to time, or any similar successor rule that may be promulgated by the
Commission.
(j) "Rule 415" means Rule 415 as promulgated by the
Commission under the Securities Act, as such rule may be amended from time
to time, or any similar successor rule that may be promulgated by the
Commission.
(k) "Securities Act" means the Securities Act of
1933, as amended, or any similar successor federal statute and the rules
and regulations thereunder, all as the same shall be in effect from time to
time.
(l) "Selling Expenses" means all underwriting
discounts and selling commissions applicable to the sale of Registrable
Securities and fees and disbursements of counsel for any Holder.
1.2 REGISTRATION. The Company shall use its best efforts
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to file a registration statement within 30 days from Closing (and will,
in no event, file such statement later than 60 days from Closing) with
respect to the Registrable Securities under the Securities Act (including,
without limitation, filing post-effective amendments, appropriate
qualifications under applicable blue sky or other state securities laws,
and appropriate compliance with the Securities Act), and to thereafter
cause such registration statement to become effective for a period (the
"Registration Period") that ends on the earlier to occur of that date which
is: two years after the date of the Closing, the date of the expiration of
the holding period as described in Rule 144(d)(1), or that date on which
the Holders have completed the distribution described in the registration
statement relating thereto.
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The Company shall not be obligated to effect, or to take any
action to effect, any such registration pursuant to this Section 1.2 in any
particular jurisdiction in which the Company would be required to execute a
general consent to service of process in effecting such registration,
qualification, or compliance, unless the Company is already subject to
service in such jurisdiction and except as may be required by the
Securities Act.
The registration statement filed may include other
securities of the Company designated by the Company, and may include
securities of the Company being sold for the account of the Company.
1.3 EXPENSES OF REGISTRATION. All Registration Expenses
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incurred in connection with any registration, qualification or compliance
pursuant to Section 1.2 hereof shall be borne by the Company. All Selling
Expenses relating to securities registered shall be borne by the Holders of
such securities.
1.4 REGISTRATION PROCEDURES. With respect to a
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registration effected by the Company pursuant to Section 1.2 hereof, the
Company shall use its best efforts to:
(a) Keep such registration effective for the
Registration Period;
(b) Prepare and file with the Commission such
amendments and supplements to such registration statement and the
prospectus used in connection with such registration statement as may be
necessary to comply with the provisions of the Securities Act with respect
to the disposition of all securities covered by such registration
statement;
(c) Furnish such number of prospectuses and other
documents incident thereto, including any amendment of or supplement to the
prospectus, as a Holder from time to time may reasonably request.
(d) Notify each seller of Registrable Securities
covered by such registration statement at any time when a prospectus
relating thereto is required to be delivered under the Securities Act of
the happening of any event as a result of which the prospectus included in
such registration statement, as then in effect, include an untrue statement
of a material fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or
incomplete in the light of the circumstances then existing, and at the
request of any such seller, prepare and furnish to such seller a reasonable
number of copies of a supplement to or an amendment of such prospectus as
may be necessary so that, as thereafter delivered to the purchasers of such
shares, such prospectus shall not include an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or incomplete in
the light of the circumstances then existing;
(e) Cause all such Registrable Securities registered
pursuant hereunder to be listed on each securities exchange on which
similar securities issued by the Company are then listed;
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(f) Register or qualify all Registrable Securities
covered by such registration statement under such other United States state
securities or blue sky laws of such jurisdictions as each Holder shall
reasonably request, to keep such registration statement qualification in
effect for the period referred to in Section 1.2 hereof, and take any other
action which may be reasonably necessary or advisable to enable each Holder
to consummate the disposition in such jurisdictions of the securities owned
by each Holder, except that the Company shall not for any such purpose be
required to (i) qualify generally to do business as a foreign corporation
in any jurisdiction wherein it would not, but for the requirements of this
Section 1.4(f), be obligated to be so qualified, (ii) subject itself to
taxation in any such jurisdiction or (iii) consent to general service of
process in any such jurisdiction; and
(g) Otherwise comply with all applicable rules and
regulations of the Commission and not file any amendment or supplement to
such registration statement or prospectus to which a majority of the Holder
shall have reasonably objected in writing on the grounds that such
amendment or supplement does not comply in all material respects with the
requirements of the Securities Act or of the rules or regulations
thereunder, having been furnished with a copy thereof (other than with
respect to pricing amendment or a prospectus filed pursuant to Rule
424(b)(1) under the Securities Act) at least two business days prior to the
filing thereof.
1.5 INDEMNIFICATION.
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(a) The Company will indemnify each Holder, each of
its officers, directors and partners, legal counsel, and accountants and
each person controlling such Holder within the meaning of Section 15 of the
Securities Act, against all expenses, claims, losses, damages and
liabilities (or actions, proceedings or settlements in respect thereof)
arising out of or based on any untrue statement (or alleged untrue
statement) of a material fact contained in any prospectus, offering
circular, or other document (including any related registration statement,
notification, or the like) incident to any such registration,
qualification, or compliance, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or any violation
by the Company of the Securities Act or any rule or regulation thereunder
applicable to the Company and relating to action or inaction required of
the Company in connection with any such registration, qualification, or
compliance, and will reimburse each such Holder, each of its officers,
directors, partners, legal counsel, and accountants and each person
controlling such Holder, for any legal and any other expenses reasonably
incurred in connection with investigating and defending or settling any
such claim, loss, damage, liability, or action, provided that the Company
will not be liable in any such case to the extent that any such claim,
loss, damage, liability, or expense arises out of or is based on any untrue
statement or omission based upon written information furnished to the
Company by such Holder and stated to be specifically for use therein. It is
agreed that the indemnity agreement contained in this Section 1.5(a) shall
not apply to amounts paid in settlement of any such loss, claim, damage,
liability, or action if such settlement is effected without the consent of
the Company (which consent has not been unreasonably withheld).
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(b) Each Holder will, if Registrable Securities
held by him are included in the securities as to which such registration,
qualification, or compliance is being effected, indemnify the Company, each
of its directors, officers, partners, legal counsel, and accountants, each
other, such Holder and Other Shareholder, and each of their officers,
directors and partners, and each person controlling such Holder or Other
Shareholder, against all claims, losses, damages and liabilities (or
actions in respect thereof) arising out of or based on any untrue statement
(or alleged untrue statement) of a material fact contained in any such
registration statement, prospectus, offering circular, or other document,
or any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein
not misleading, and will reimburse the Company and such Holders, Other
Shareholders, directors, officers, partners, legal counsel, and
accountants, persons, underwriters, or control persons for any legal or any
other expenses reasonably incurred in connection with investigating or
defending any such claim, loss, damage, liability, or action, in each case
to the extent, but only to the extent, that such untrue statement (or
alleged untrue statement) or omission (or alleged omission) is made in such
registration statement, prospectus, offering circular, or other document in
reliance upon and in conformity with written information furnished to the
Company by such Holder and stated to be specifically for use therein;
provided, however, that the obligations of such Holder hereunder shall not
apply to amounts paid in settlement of any such claims, losses, damages, or
liabilities (or actions in respect thereof) if such settlement is effected
without the consent of such Holder (which consent shall not be unreasonably
withheld).
(c) Each party entitled to indemnification under
this Section 1.5 (the "Indemnified Party") shall give notice to the party
required to provide indemnification (the "Indemnifying Party") promptly
after such Indemnified Party has actual knowledge of any claim as to which
indemnity may be sought, and shall permit the Indemnifying Party to assume
the defense of such claim or any litigation resulting therefrom, provided
that counsel for the Indemnifying Party, who shall conduct the defense of
such claim or any litigation resulting therefrom, shall be approved by the
Indemnified Party (whose approval shall not unreasonably be withheld), and
the Indemnified Party may participate in such defense at such party's
expense, and provided further that the failure of any Indemnified Party to
give notice as provided herein shall not relieve the Indemnifying Party of
its obligations under this Section 1, except to the extent that the
Indemnifying Party is actually prejudiced by such failure to give notice.
Notwithstanding the foregoing, the Indemnified Party or Parties shall have
the right to employ its or their own counsel in any such case but the fees
and expenses of such counsel shall be at the expense of such Indemnified
Party or Parties unless (i) the employment of such counsel shall have been
authorized in writing by the Indemnifying Parties in connection with the
defense of such action at the expense of the Indemnifying Party or Parties,
(ii) the Indemnifying Party or Parties shall not have employed counsel
reasonably satisfactory to such Indemnified Party or Parties to have charge
of the defense of such action within a reasonable time after notice of the
commencement of the action or (iii) such Indemnified Party or Parties shall
have reasonably concluded that there may be defenses available to it or
them which are different from or additional to those available to one or
all of the Indemnifying Parties (in which case the Indemnifying Parties
shall not have the right to direct the defense of such action on behalf of
the Indemnified Party or Parties),
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in any of which events such fees and expenses of one additional counsel
shall be borne by Indemnifying Party or Parties. No Indemnifying Party, in
the defense of any such claim or litigation, shall, except with the consent
of each Indemnified Party, consent to entry of any judgment or enter into
any settlement that does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party of a release
from all liability in respect to such claim or litigation. Each Indemnified
Party shall furnish such information regarding itself or the claim in
question as an Indemnifying Party may reasonably request in writing and as
shall be reasonably required in connection with defense of such claim and
litigation resulting therefrom.
(d) If the indemnification provided for in this
Section 1.5 is unavailable to an Indemnified Party with respect to any
loss, liability, claim, damage, or expense referred to therein, then the
Indemnifying Party, in lieu of indemnifying such Indemnified Party
hereunder, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such loss, liability, claim, damage, or
expense in such proportion as is appropriate to reflect the relative fault
of the Indemnifying Party on the one hand and of the Indemnified Party on
the other in connection with the statements or omissions that resulted in
such loss, liability, claim, damage, or expense as well as any other
relevant equitable considerations. The relative fault of the Indemnifying
Party and of the Indemnified Party shall be determined by reference to,
among other things, whether the action in question, including any untrue or
alleged, untrue statement of a material fact or omission or alleged
omission to state a material fact, relates to information supplied by the
Indemnifying Party or by the Indemnified Party and the parties' relative
intent, knowledge, access to information, and opportunity to correct or
prevent such actions, statement or omission. The amount paid or payable by
a party as a result of the losses, claims, damages, liabilities and
expenses referred to above shall be deemed to include any legal or other
fees or expenses reasonably incurred by such party in connection with any
investigation or proceeding. The parties hereto agree that it would not be
just and equitable if contribution pursuant to this Section 1.5(d) 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
paragraph. No person guilty of fraudulent misrepresentation (within the
meaning of Section 10(f) of the Securities Act) shall be entitled to
contribution from any person.
If indemnification is available under this Section 1.5, the
Indemnifying Party or Parties shall indemnify each Indemnified Party or
Parties to the full extent provided herein without regard to the relative
fault of said Indemnifying Parties or Indemnified Parties or any other
equitable consideration provided for in this Section 1.5(d).
1.6 INFORMATION BY HOLDER. Each Holder of Registrable
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Securities shall furnish to the Company such information regarding such
Holder and the distribution proposed by such Holder as the Company may
reasonably request in writing and as shall be reasonably required in
connection with any registration, qualification, or compliance referred to
in this Section 1.
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1.7 RULE 144 REPORTING. With a view to making available
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the benefits of certain rules and regulations of the Commission that may
permit the sale of the Restricted Securities to the public without
registration, the Company agrees to use its best efforts to:
(a) Make and keep public information regarding the
Company available as those terms are understood and defined in Rule 144
under the Securities Act;
(b) File with the Commission 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;
(c) So long as a Holder owns any Restricted
Securities, furnish to Holder forthwith upon written request a written
statement by the Company as to its compliance with the reporting
requirements of Rule 144, a copy of the most recent annual or quarterly
report of the Company, and such other reports and documents so filed as a
Holder may reasonably request in availing itself of any rule or regulation
of the Commission allowing a Holder to sell any such securities without
registration.
1.8 TRANSFER OR ASSIGNMENT OF REGISTRATION RIGHTS. The
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rights to cause the Company to register securities granted to a Holder by
the Company under this Section 1 may be transferred or assigned by a
Holder, provided that the Company is given written notice at the time of or
within a reasonable time after said transfer or assignment, stating the
name and address of the transferee or assignee and identifying the
securities with respect to which such registration rights are being
transferred or assigned, and, provided further, that the transferee or
assignee of such rights assumes the obligations of such Holder under this
Agreement by a written agreement reasonably acceptable to the Company.
1.9 "MARKET STAND-OFF" AGREEMENT. If requested by the
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Company and an underwriter of common stock (or other securities) of the
Company, a Holder shall not sell or otherwise transfer or dispose of any
Registrable Securities held by such Holder during such period, not
exceeding 90 days, following the effective date of the registration
statement of the Company covering such underwritten offering filed under
the Securities Act specified by the Company; provided that foregoing
restriction shall apply only if (a) each director and executive officer of
the Company agrees to a similar restriction on the sale of his or her
shares, and (b) there are no shareholders selling shares in the
underwritten public offering unless the Holders are also offered the
opportunity to sell their Registrable Securities in the underwritten public
offering. The Registration Period shall not include the period during
which foregoing stand-off obligations are in effect.
The obligations described in this Section 1.9 shall not apply
to a registration relating solely to employee benefit plans on Form S-1 or
Form S-8 or similar forms that may be promulgated in the future, or a
registration relating solely to a Commission Rule 145 transaction on Form
S-4 or similar forms that may be promulgated in the future.
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1.10 DELAY OF REGISTRATION. No Holder shall have any right
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to take any action to restrain, enjoin, or otherwise delay any registration
as the result of any controversy that might arise with respect to the
interpretation or implementation of this Agreement.
2. MISCELLANEOUS
2.1 GOVERNING LAW. This Agreement shall be governed in
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all respects by the laws of the state of California, as if entered into by
and between California residents exclusively for performance entirely
within California.
2.2 SUCCESSORS AND ASSIGNS. Except as otherwise expressly
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provided herein, the provisions hereof shall inure to the benefit of, and
be binding upon, the successors, assigns, heirs, executors and
administrators of the parties hereto.
2.3 ENTIRE AGREEMENT; AMENDMENT; WAIVER. This Agreement
-----------------------------------
constitutes the full and entire understanding and agreement between the
parties with regard to the subjects hereof. Neither this Agreement nor any
term hereof may be amended, waived, discharged or terminated, except by a
written instrument signed by the Company and the Investor.
2.4 NOTICES, ETC. All notices and other communications
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required or permitted hereunder shall be in writing and shall be mailed by
United States first-class mail, postage prepaid, or delivered personally by
hand or nationally recognized courier addressed (a) if to Investor, as
indicated on the signature page of this Agreement, or at such other address
as such Investor or permitted assignee shall have furnished to the Company
in writing, or (b) if to the Company, Sunbase Asia, Inc., 19/F First
Pacific Centre, 51-57 Gloucester Road, Wanchai, Hong Kong, or at such other
address as the Company shall have furnished to Investor in writing. All
such notices and other written communications shall be effective on the
date of mailing or delivery.
2.5 RIGHTS; SEVERABILITY. Unless otherwise expressly
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provided herein, a Holder's rights hereunder are several rights, not rights
jointly held with any of the other Holders. In case any provision of the
Agreement shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any
way be affected or impaired thereby.
2.6 INFORMATION CONFIDENTIAL. Each Holder acknowledges
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that the information received by them pursuant hereto may be confidential
and for its use only, and it will not use such confidential information in
violation of the Exchange Act or reproduce, disclose or disseminate such
information to any other person (other than its employees or agents having
a need to know the contents of such information, and its attorneys), except
in connection with the exercise of rights under this Agreement, unless the
Company has made such information available to the public generally or such
Holder is required to disclose such information by a governmental body.
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2.7 TITLES AND SUBTITLES. The titles of the paragraphs
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and subparagraphs of this Agreement are for convenience of reference only
and are not to be considered in construing this Agreement.
2.8 COUNTERPARTS. This Agreement may be executed in any
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number of counterparts, each of which shall be an original, but all of
which together shall constitute one instrument.
IN WITNESS WHEREOF, the parties hereto have executed this
registration rights agreement effective as of the day and year first above
written.
COMPANY:
SUNBASE ASIA, INC.
By: ________________________________
Name: ______________________________
Title: ___________________
INVESTOR:
By: ________________________________
Name:_______________________________
Title:____________________
Address:____________________________
____________________________________
____________________________________
By:_________________________________
Name:_______________________________
Title:____________________
Address:____________________________
____________________________________
____________________________________
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