REGISTRATION RIGHTS FOR REGISTRABLE SECURITIES
This REGISTRATION RIGHTS AGREEMENT dated as of April __, 2001 is
made and entered into by and between Tengtu International Corp., a Delaware
corporation (the "COMPANY"), and [_____] (the "INVESTOR").
WHEREAS, the Investor has agreed to purchase from the Company,
and the Company has agreed to issue to the Investor, shares of the Company's
$.01 par value per share common stock (the "COMMON STOCK"), pursuant to a Stock
Purchase Agreement dated the date hereof (the "PURCHASE AGREEMENT") by and
between the Company and the Investor, who is part of a group of investors (the
"INVESTORS") participating in the purchase of a total of up to 13,166,677shares
of Common Stock for an aggregate purchase price of up to $3,950,000;
WHEREAS, in order to induce Investors to enter into the Purchase
Agreement, and as a condition precedent to the closing thereof, the Purchase
Agreement requires that the Company enter into this Agreement;
WHEREAS, Orion Capital Incorporated ("ORION") is the holder of a
Convertible Promissory Note of the Company with registration rights pursuant to
the Registration Rights for Registrable Securities dated March 2, 2001, and a
note with warrants attached which is being amended to a Convertible Promissory
Note, which is convertible into Common Stock at $0.30 per share, that it intends
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to convert both notes into a total of approximately 6,670,000 shares of Common
Stock concurrently herewith at a conversion price of $0.30 per share (the
"CONVERSION"), which is equal to the price per share paid by the Investors
pursuant to the Purchase Agreement; and
WHEREAS, in order to induce Orion to enter into the Conversion,
all Common Stock received by Orion pursuant to the Conversion shall be deemed to
constitute Registrable Securities for purposes of this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
SECTION 1. REQUESTED REGISTRATIONS.
(a) REGISTRATION REQUESTS.
(i) INITIAL REGISTRATION REQUEST. On a date to be determined by
the Company but in any event no later than thirty (30) days following the last
closing under the Purchase Agreement, the Company shall be deemed to have
received a written request for a Requested Registration (as defined below) from
the Investors and Orion with respect to all Registrable Securities in their
possession.
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(ii) The Company may include in such registration other
securities of the same class as the Registrable Securities for sale for its own
account or for the account of any other Person. Neither the Company nor any of
its shareholders shall have the right to include any of the Company's securities
(other than Registrable Securities) in a registration statement to be filed as
part of a Requested Registration unless (i) such securities are of the same
class as the Registrable Securities, (ii) the holders of a majority of the
Registrable Securities covered by such registration statement consent to such
inclusion in writing, unless the Company is required to include such securities
pursuant to a pre-existing agreement and (iii) if such Requested Registration is
an underwritten offering, the Company or such shareholders, as applicable, agree
in writing to sell, subject to PARAGRAPH (D), their securities on the same terms
and conditions as apply to the Registrable Securities being sold. If any
shareholders of the Company (other than the holders of Registrable Securities in
such capacity) register securities of the Company in the Requested Registration
in accordance with this Section, such holders shall pay the fees and expenses of
their counsel and their PRO RATA share, on the basis of the respective amounts
of the securities included in such registration on behalf of each such Owner, of
the Registration Expenses if the Registration Expenses for such registration are
not paid by the Company for any reason. (b) REGISTRATION STATEMENT FORM. The
Company may, if permitted by law, effect any Requested Registration by the
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filing of a registration statement on the applicable form. It is intended that
this be deemed a "shelf registration" permitting the Owners of the Registrable
Securities to sell from time to time so long as the Registration Statement
remains in effect or is kept current.
(c) REGISTRATION EXPENSES. The Company will pay all Registration
Expenses incurred in connection with the Requested Registration.
SECTION 2. REGISTRATION PROCEDURES. If and whenever the Company
is required to use its best efforts to effect the registration of any
Registrable Securities under the Act pursuant to SECTION 1 or SECTION 2, the
Company will use its best efforts to effect the registration to permit the
record owners of the Registrable Securities to sell in accordance with the
provisions of the Act. Without limiting the foregoing, the Company in each such
case will, as expeditiously as possible:
(a) prepare and file with the Commission (in the case of a
Requested Registration, not later than forty-five (45) days after the
Registration Request as defined in Section 1(a)(i) the requisite registration
statement to effect such registration and use its best efforts to cause such
registration statement to become effective as soon as possible, PROVIDED THAT as
far in advance as practical before filing such registration statement or any
amendment thereto, the Company will furnish to the owners of the Registrable
Securities or their designees (the "Owners") copies of reasonably complete
drafts of all such documents proposed to be filed (including exhibits) and will
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consider in good faith comments with respect to any such drafts made by the
Owners and, without limiting the foregoing, any such Owner shall have the
opportunity to object to any information pertaining solely to such Owner that is
contained therein and the Company will make the corrections reasonably requested
by such Owner with respect to such information prior to filing any such
registration statement or amendment;
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and any prospectus used in connection
therewith as may be necessary to maintain the effectiveness of such registration
statement and to comply with the provisions of the Act with respect to the
disposition of all Registrable Securities covered by such registration
statement, in accordance with the intended methods of disposition thereof, until
the earlier of (i) such time as all of such securities have been disposed of in
accordance with the intended methods of disposition by the seller or sellers
thereof set forth in such registration statement and (ii) one hundred eighty
(180) days after such registration statement becomes effective;
(c) promptly notify each Owner:
(i) when such registration statement or any prospectus used
in connection therewith, or any amendment or supplement
thereto, has been filed and, with respect to such
registration statement or any post-effective amendment
thereto, when the same has become effective;
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(ii) of any written comments from the Commission with
respect to any filing and of any written request by the
Commission for amendments or supplements to such
registration statement or prospectus;
(iii) of the notification to the Company by the Commission
of its initiation of any proceeding with respect to the
issuance by the Commission of, or of the issuance by
the Commission of, any stop order suspending the
effectiveness of such registration statement; and
(iv) of the receipt by the Company of any notification with
respect to the suspension of the qualification of any
Registrable Securities for sale under the applicable
securities or blue sky laws of any jurisdiction;
(d) furnish to each seller of Registrable Securities covered by
such registration statement such number of conformed copies of such registration
statement and of each amendment and supplement thereto (in each case including
all exhibits and documents incorporated by reference), such number of copies of
the prospectus contained in such registration statement (including each
preliminary prospectus and any summary prospectus) and any other prospectus
filed under Rule 424 promulgated under the Act relating to such Owner's
Registrable Securities, and such other documents, as such seller may reasonably
request to facilitate the disposition of its Registrable Securities;
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(e) use its best efforts to register or qualify all Registrable
Securities covered by such registration statement under such other securities or
blue sky laws of such jurisdictions as each Owner shall reasonably request, to
keep such registration or qualification in effect for so long as such
registration statement remains in effect, and take any other action which may be
reasonably necessary or advisable to enable such Owner to consummate the
disposition in such jurisdictions of the Registrable Securities owned by such
Owner, except that the Company shall not for any such purpose be required (i) to
qualify generally to do business as a foreign corporation in any jurisdiction
wherein it would not but for the requirements of this PARAGRAPH (E) be obligated
to be so qualified, (ii) to subject itself to taxation in any such jurisdiction
solely by reason of such registration or qualification or (iii) to consent to
general service of process in any jurisdiction;
(f) furnish to each Requesting Owner a signed counterpart,
addressed to such Owner (and the underwriters, if any), of
(i) an opinion of counsel for the Company, dated the
effective date of such registration statement (or, if
such registration includes an underwritten Public
Offering, dated the date of any closing under the
underwriting agreement), and
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(ii) a "comfort" letter, dated the effective date of such
registration statement (and, if such registration
includes an underwritten Public Offering, dated the
date of any closing under the underwriting agreement),
signed by the independent public accountants who have
certified the Company's financial statements included
in such registration statement,in each case covering
substantially the same matters with respect to such
registration statement (and the prospectus included
therein) and, in the case of the accountants' letter,
with respect to events subsequent to the date of such
financial statements, as are customarily covered in
opinions of issuer's counsel and in accountants'
letters delivered to the underwriters in underwritten
public offerings of securities;
(g) notify each Owner covered by such registration statement, at
any time when a prospectus relating thereto is required to be delivered under
the Act, of the happening of any event as a result of which any prospectus
included in such registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and at the request of
any such Owner promptly prepare and furnish to such Owner 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 securities, such
prospectus shall not include an untrue statement of a material fact or omit to
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state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading;
(h) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make available to its
securityholders, as soon as reasonably practicable, an earnings statement
covering the period of at least twelve (12) months, but not more than eighteen
(18) months, beginning with the first full calendar month after the effective
date of such registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Act and Rule 158 promulgated thereunder (or
any successor provision);
(i) provide a transfer agent and registrar for all Registrable
Securities covered by such registration statement not later than the effective
date of such registration statement; and
(j) use its best efforts to cause all Registrable Securities
covered by such registration statement to be listed, upon official notice of
issuance, on any securities exchange on which any of the securities of the same
class as the Registrable Securities are then listed. The Company may require
each Owner of Registrable Securities as to which any registration is being
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effected to, and each such Owner, as a condition to including Registrable
Securities in such registration, shall furnish the Company with such information
and affidavits regarding such Owner and the distribution of such securities as
the Company may from time to time reasonably request in writing in connection
with such registration.
Each Owner of Registrable Securities agrees by acquisition of
such Registrable Securities that upon receipt of any notice from the Company of
the happening of any event of the kind described in PARAGRAPH (G), such Owner
will forthwith discontinue such Owner's disposition of Registrable Securities
pursuant to the registration statement relating to such Registrable Securities
until such Owner's receipt of the copies of the supplemented or amended
prospectus contemplated by PARAGRAPH (G) and, if so directed by the Company,
will deliver to the Company (at the Company's expense) all copies, other than
permanent file copies, then in such Owner's possession of the prospectus
relating to such Registrable Securities current at the time of receipt of such
notice. In the event the Company shall give any such notice, the period referred
to in PARAGRAPH (B) shall be extended by a number of days equal to the number of
days during the period from and including the giving of notice pursuant to
PARAGRAPH (G) and to and including the date when each Owner of any Registrable
Securities covered by such registration statement shall receive the copies of
the supplemented or amended prospectus contemplated by PARAGRAPH (G).
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SECTION 3. INDEMNIFICATION.
(a) INDEMNIFICATION BY THE COMPANY. The Company shall, to the
full extent permitted by law, indemnify and hold harmless each seller of
Registrable Securities included in any registration statement filed in
connection with a Requested Registration its general or limited partners,
directors, officers, employees, agents and each other Person, if any, who
controls any such seller within the meaning of the Act, against any losses,
claims, damages, expenses or liabilities, joint or several (together, "LOSSES"),
to which such seller or any such partner, director, officer, employee, agent or
controlling Person may become subject under the Act or otherwise, insofar as
such Losses (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any such registration
statement, any preliminary prospectus, final prospectus or summary prospectus
contained therein, or any amendment or supplement thereto, or any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein (in the case of a prospectus, in the
light of the circumstances under which they were made) not misleading, and the
Company will reimburse such seller and each such partner, director, officer,
employee, agent and controlling Person for any legal or any other expenses
reasonably incurred by them in connection with investigating or defending any
such Loss (or action or proceeding in respect thereof); PROVIDED THAT the
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Company shall not be liable in any such case to the extent that any such Loss
(or action or proceeding in respect thereof) arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in any such registration statement, preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by such seller.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of such seller or any such partner, director,
officer, employee, agent or controlling Person, and shall survive the transfer
of such securities by such seller.
(b) INDEMNIFICATION BY THE SELLERS. Each Owner of Registrable
Securities which are included or are to be included in any registration
statement filed in connection with the Requested Registration, as a condition to
including Registrable Securities in such registration statement, shall, to the
full extent permitted by law, indemnify and hold harmless the Company, its
directors, officers, employees, agents and each other Person, if any, who
controls the Company within the meaning of the Act, against any Losses to which
the Company or any such director, officer, employee, agent or controlling Person
may become subject under the Act or otherwise, insofar as such Losses (or
actions or proceedings, whether commenced or threatened, in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in any such registration statement, any
preliminary prospectus, final prospectus or summary prospectus contained
therein, or any amendment or supplement thereto, or
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any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein (in the case of a
prospectus, in the light of the circumstances under which they were made) not
misleading, if such untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon written information furnished to the
Company by such seller or seller's agent, preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement; PROVIDED, HOWEVER, that
the obligation to provide indemnification pursuant to this SECTION 3(B) shall be
several, and not joint and several, among such indemnifying parties on the basis
of the number of Registrable Securities included in such registration statement
and the aggregate amount which may be recovered from any Owner of Registrable
Securities pursuant to the indemnification provided for in this SECTION 3(B) in
connection with any registration and sale of Registrable Securities shall be
limited to the total proceeds received by such Owner from the sale of such
Registrable Securities. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of the Company or any such
director, officer, employee, agent or controlling Person and shall survive the
transfer of such securities by such seller.
(c) NOTICES OF CLAIMS, ETC. Promptly after receipt by an
indemnified party of notice of the commencement of any action or proceeding
involving a claim referred to in the preceding PARAGRAPH (A) OR (B), such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party pursuant to such paragraphs, give
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written notice to the latter of the commencement of such action, PROVIDED THAT
the failure of any indemnified party to give notice as provided herein shall not
relieve the indemnifying party of its obligations under the preceding PARAGRAPHS
(A) OR (B), except to the extent that the indemnifying party is materially
prejudiced by such failure to give notice. In case any such action is brought
against an indemnified party, the indemnifying party shall be entitled to
participate in and to assume the defense thereof, jointly with any other
indemnifying party similarly notified to the extent that it may wish, with
counsel reasonably satisfactory to such indemnified party, and after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party shall not be liable to such
indemnified party for any legal or other expenses subsequently incurred by the
latter in connection with the defense thereof other than reasonable costs of
investigation; PROVIDED THAT the indemnified party may participate in such
defense at the indemnified party's expense; and PROVIDED, FURTHER, that the
indemnified party or indemnified parties shall have the right to employ one
counsel to represent it or them if, in the reasonable judgment of the
indemnified party or indemnified parties, it is advisable for it or them to be
represented by separate counsel by reason of having legal defenses which are
different from or in addition to those available to the indemnifying party, and
in that event the reasonable fees and expenses of such one counsel shall be paid
by the indemnifying party. If the indemnifying party is not entitled to, or
elects not to, assume the defense of a claim, it will not be obligated to pay
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the fees and expenses of more than one counsel for the indemnified parties with
respect to such claim, unless in the reasonable judgment of any indemnified
party a conflict of interest may exist between such indemnified party and any
other indemnified parties with respect to such claim, in which event the
indemnifying party shall be obligated to pay the fees and expenses of such
additional counsel for the indemnified parties or counsels. No indemnifying
party shall consent to entry of any judgment or enter into any settlement
without the consent of the indemnified party which 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. No indemnifying party shall be subject to any liability for any
settlement made without its consent, which consent shall not be unreasonably
withheld.
(d) CONTRIBUTION. If the indemnity and reimbursement obligation
provided for in any paragraph of this Section is unavailable or insufficient to
hold harmless an indemnified party in respect of any Losses (or actions or
proceedings in respect thereof) referred to therein, then the indemnifying party
shall contribute to the amount paid or payable by the indemnified party as a
result of such Losses (or actions or proceedings in respect thereof) in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party on the one hand and the indemnified party on the other hand in connection
with statements or omissions which resulted in such Losses, as well as any other
relevant equitable considerations. The relative fault shall be determined by
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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 indemnifying party or the indemnified
party and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission. The parties
hereto agree that it would not be just and equitable if contribution pursuant to
this paragraph were to be determined by PRO RATA allocation or by any other
method of allocation which does not take account of the equitable considerations
referred to in the first sentence of this paragraph. The amount paid by an
indemnified party as a result of the Losses referred to in the first sentence of
this paragraph shall be deemed to include any legal and other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any Loss which is the subject of this paragraph.
No indemnified party guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from the indemnifying party if the indemnifying party was not
guilty of such fraudulent misrepresentation.
(e) OTHER INDEMNIFICATION. Indemnification similar to that
specified in the preceding paragraphs of this Section (with appropriate
modifications) shall be given by the Company and each seller of Registrable
Securities with respect to any required
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registration or other qualification of securities under any Federal or state law
or regulation of any Governmental or Regulatory Authority other than the Act.
The provisions of this Section shall be in addition to any other rights to
indemnification or contribution which an indemnified party may have pursuant to
law, equity, contract or otherwise.
SECTION 4. COVENANTS RELATING TO REGULATION S. The Company will
file reports in compliance with the Exchange Act, will comply with all rules and
regulations of the Commission applicable in connection with the use of
Regulation S and take such other actions and furnish such Owner with such other
information as such Owner may request in order to avail itself of such
regulation of the Commission allowing such Owner to sell any Registrable
Securities without registration, and will, at its expense, forthwith upon the
request of any Owner of Registrable Securities, deliver to such Owner a
certificate, signed by the Company's principal financial officer, stating (a)
the Company's name, address and telephone number (including area code), (b) the
Company's IRS identification number, (c) the Company's Commission file number,
(d) the number of shares of each class of stock outstanding as shown by the most
recent report or statement published by the Company, and (e) whether the Company
has filed the reports required to be filed under the Exchange Act for a period
of at least ninety (90) days prior to the date of such certificate and in
addition has filed the most recent annual report required to be filed
thereunder.
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SECTION 5. OTHER REGISTRATION RIGHTS.
(a) NO EXISTING AGREEMENTS. The Company represents and warrants
to the Investor and Orion that there is not in effect on the date hereof any
agreement by the Company pursuant to which any Owners of securities of the
Company have a right to cause the Company to register or qualify such securities
under the Act or any securities or blue sky laws of any jurisdiction, except the
Registration Rights for Registrable Securities dated March 2, 2001 in favor of
Orion and the Investor Rights Agreement dated December 20, 1999 in favor of Top
Eagle Holdings Limited. The Company represents and warrants that it has been
advised by Orion that its rights to register are being cancelled because Orion
is including its shares of Common Stock under the Registration Rights for
Registrable Securities dated March 2, 2001, in its favor, as a party to this
Agreement and that the shares of Top Eagle Holdings Limited, issuable upon
conversion of the Convertible Debenture dated December 20, 1999, have already
been exercised and included in an existing registration statement, which is
still in effect.
SECTION 6. DEFINITIONS.
(a) Except as otherwise specifically indicated, the following
terms will have the following meanings for all purposes of this Agreement:
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"ACT" means the Securities Act of 1933, as amended, and the rules
and regulations promulgated thereunder.
"BOARD OF DIRECTORS" means the Board of Directors of the Company.
"COMMISSION" means the United States Securities and Exchange
Commission, or any successor governmental agency or authority.
"COMMON STOCK" means the Common Stock, par value $.01 per share,
of the Company, as constituted on the date hereof, and any stock into which such
Common Stock shall have been changed or any stock resulting from any
reclassification of such Common Stock.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"NASD" means the National Association of Securities Dealers.
"PERSON" means any natural person, corporation, general
partnership, limited partnership, proprietorship, other business organization,
trust, union or association.
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"PUBLIC OFFERING" means any offering of Common Stock to the
public, either on behalf of the Company or any of its shareholders, pursuant to
an effective registration statement under the Act.
"REGISTRATION EXPENSES" means all expenses incident to the
Company's performance of or compliance with its obligations under this Agreement
to effect the registration of Registrable Securities in a Requested
Registration, including without limitation, all registration, filing, securities
exchange listing and NASD fees, all registration, filing, qualification and
other fees and expenses of complying with securities or blue sky laws, all word
processing, duplicating and printing expenses, messenger and delivery expenses,
the fees and disbursements of counsel for the Company and of its independent
public accountants, including the expenses of any special audits or "cold
comfort" letters required by or incident to such performance and compliance,
premiums and other costs of policies of insurance against liabilities arising
out of the Public Offering of the Registrable Securities being registered and
any fees and disbursements of underwriters customarily paid by issuers or
sellers of securities, but excluding underwriting discounts and commissions, the
fees and disbursements of counsel retained by the Owners of the Registrable
Securities being registered and transfer taxes, if any, in respect of
Registrable Securities, which shall be payable by each Owner thereof, PROVIDED
THAT, in any case where Registration Expenses are not to be borne by the
Company, such expenses shall not include salaries of the Company personnel or
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general overhead expenses of the Company, auditing fees, premiums or other
expenses relating to liability insurance required by underwriters of the Company
or other expenses for the preparation of financial statements or other data
normally prepared by the Company in the ordinary course of its business or which
the Company would have incurred in any event.
"REGISTRABLE SECURITIES" means (i) shares of Common Stock issued
to the Investors under the Purchase Agreement and to Orion in connection with
the Conversion, and (ii) any additional shares of Common Stock issued or
distributed by way of a dividend, stock split or other distribution in respect
of shares of Common Stock referred to in CLAUSE (I), or acquired by way of any
rights offering or similar offering made in respect of shares of Common Stock
referred to in CLAUSE (I). As to any particular Registrable Securities, once
issued such securities shall cease to be Registrable Securities when (i) a
registration statement with respect to the sale of such securities shall have
become effective under the Act and such securities shall have been disposed of
in accordance with such registration statement, (ii) they shall have been
distributed to the public pursuant to Regulation S or (iii) they shall have
ceased to be outstanding.
"REGULATION S" means Regulation S promulgated by the Commission
under the Act, and any successor provision thereto.
"TRANSFEREE" means all Persons acquiring shares of Common Stock
from Investor, Orion or from a Transferee thereof.
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SECTION 7. MISCELLANEOUS.
(a) NOTICES. All notices and other communications provided for
herein shall be in writing and shall be delivered by hand or overnight courier
service, mailed by certified or registered mail or sent by facsimile, as
follows:
If to the Company:
c/x Xxxxx & Associates, P.C.
00 Xxxx 00xx Xxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxx, Esq.
Facsimile No: 000-000-0000
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If to:
Attention:
Facsimile No.:
If to:
Attn:
Facsimile No.:
If to:
Attn:
Facsimile No.:
Except as otherwise provided in this Agreement, all such communications shall be
deemed to have been duly given when transmitted by telecopier or e-mail to the
designated recipient. Any party hereto may change its designee and address or
facsimile number for that designee for notices and other communications
hereunder by notice to the other parties hereto.
(b) ENTIRE AGREEMENT. This Agreement supersedes all prior
discussions and agreements between the parties with respect to the subject
matter hereof, and contains the sole and entire agreement between the parties
hereto with respect to the subject matter hereof.
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(c) AMENDMENT. This Agreement may be amended, supplemented or
modified only by a written instrument (which may be executed in any number of
counterparts) duly executed by or on behalf of each of the Company and the
Owners of two-thirds (2/3) or more of the Registrable Securities then
outstanding or subject to issuance.
(d) WAIVER. Subject to PARAGRAPH (E), any term or condition of
this Agreement may be waived at any time by the party that is entitled to the
benefit thereof, but no such waiver shall be effective unless set forth in a
written instrument duly executed by or on behalf of the party waiving such term
or condition. No waiver by any party of any term or condition of this Agreement,
in any one or more instances, shall be deemed to be or construed as a waiver of
the same term or condition of this Agreement on any future occasion.
(e) CONSENTS AND WAIVERS BY OWNERS. Any consent of the Owners of
Registrable Securities pursuant to this Agreement, and any waiver by the Owners
of Registrable Securities of any provision of this Agreement, shall be in
writing (which may be executed in any number of counterparts) and may be given
or taken by the Owners of Registrable Securities of two-thirds (2/3) or more of
the Registrable Securities then outstanding or subject to issuance, and any such
consent or waiver so given or taken will be binding on all the Owners.
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(f) NO THIRD PARTY BENEFICIARY. The terms and provisions of this
Agreement are intended solely for the benefit of each party hereto and their
respective successors or permitted assigns, and it is not the intention of the
parties to confer third-party beneficiary rights upon any other Person other
than any Person entitled to indemnification under SECTION 3.
(g) SUCCESSORS AND ASSIGNS. The registration rights contained in
this Agreement shall be transferable by any Owner of Registrable Securities to
any Person that acquires Registrable Securities from such Owner (excluding any
Person that acquires such Registrable Securities in a transaction pursuant to
which such securities cease to be Registrable Securities).
(h) HEADINGS. The headings used in this Agreement have been
inserted for convenience of reference only and do not define or limit the
provisions hereof.
(i) INVALID PROVISIONS. If any provision of this Agreement is
held to be illegal, invalid or unenforceable under any present or future law,
and if the rights or obligations of any party hereto under this Agreement will
not be materially and adversely affected thereby, (i) such provision will be
fully severable, (ii) this Agreement will be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part hereof,
(iii) the remaining provisions of this Agreement will remain in full force and
effect and will not be affected by the illegal, invalid or unenforceable
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provision or by its severance herefrom and (iv) in lieu of such illegal, invalid
or unenforceable provision, there will be added automatically as a part of this
Agreement a legal, valid and enforceable provision as similar in terms to such
illegal, invalid or unenforceable provision as may be possible.
(j) REMEDIES. Except as otherwise expressly provided for herein,
no remedy conferred by any of the specific provisions of this Agreement is
intended to be exclusive of any other remedy, and each and every remedy shall be
cumulative and shall be in addition to every other remedy given hereunder or now
or hereafter existing at law or in equity or by statute or otherwise. The
election of any one or more remedies by any party hereto shall not constitute a
waiver by any such party of the right to pursue any other available remedies.
Damages in the event of breach of this Agreement by any party
hereto or any of their respective successors or permitted assigns would be
difficult, if not impossible, to ascertain, and it is therefore agreed that each
such Person, in addition to and without limiting any other remedy or right it
may have, will have the right to an injunction or other equitable relief in any
court of competent jurisdiction, enjoining any such breach, and enforcing
specifically the terms and provisions hereof and each party hereto, on its own
behalf and behalf of its respective successors and permitted assigns, hereby
waives any and all defenses it may have on the ground of lack of jurisdiction or
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competence of the court to grant such an injunction or other equitable relief.
The existence of this right will not preclude any such Person from pursuing any
other rights and remedies at law or in equity which such Person may have.
(k) GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
(l) COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first written above.
TENGTU INTERNATIONAL CORP.
By:
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Name: PAK XXXX XXXXX
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Title: CHIEF EXECUTIVE OFFICER
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Investor:
By:
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Name:
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Title:
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