EXHIBIT 6.12
REGISTRATION RIGHTS AGREEMENT
OF
TOTAL FILM GROUP, INC.
Agreement made as of the _____ day of November 1999, by and among
Total Film Group, Inc., a Delaware corporation currently having its office
and principal place of business at 0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000,
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000 (the "Corporation"), and each party hereto
purchasing a warrant to purchase common stock of the Corporation (each of the
last named persons shall hereinafter be referred to individually as a
"Holder" and collectively as the "Holders").
WHEREAS, upon the closing of the offering of up to $200,000 of the
Warrants (as defined below) pursuant to the Confidential Private Placement
Memorandum of the Corporation and Total China, Inc. dated October 29, 1999
(the "Offering"), as defined in the Offering (the "Effective Date"), the
Holders will collectively own warrants to purchase up to 200,000 shares of
common stock, $1.00 par value per share, of the Corporation (shares of such
common stock, together with shares of common subsequently acquired by the
parties, being referred to as the Shares and collectively as the "Stock") at
an exercise price of $3.75 per share exercisable during a period of three
years from the date of the Effective Date (the 'Warrants");
WHEREAS, upon the Effective Date, the Corporation and the Holders
desire to provide for certain registration rights for the Stock of the
Corporation or any interest therein now or hereafter owned by the Holders;
NOW, THEREFORE, effective upon the Effective Date, in consideration
of the mutual covenants and conditions herein contained, each of the parties
hereby agrees as follows:
1. Piggyback and Demand Registration Rights.
1.1 (a) If the Corporation shall propose to file a registration
statement under the Securities Act of 1933, as amended (the "Securities
Act"), at any time during the 36-month period after the Effective Date,
either on its own behalf or that of any of its shareholders for an offering
of shares of the capital stock of the Corporation (including shares to be
issued pursuant to the exercise of any warrants, including the Warrants) for
cash or securities, the Corporation shall give written notice as promptly as
possible of such proposed registration to each Holder and shall use
reasonable efforts to include such number or amount of shares of the Stock
owned by such Holders (including shares to be issued pursuant to the exercise
of any warrants, including the Warrants) (each a "Seller" or "Registering
Holder" and collectively, the "Sellers" or "Registering Holders") in such
registration statement as such Seller or Sellers shall request within 10 days
after receipt of such notice from the Corporation, provided, that (A) each
Seller furnishes the Company with a written notice of its irrevocable
exercise of the Warrants in whole or in part within 10 days after the receipt
of such notice from the Corporation, (B) if shares of the Stock are being
offered
by the Corporation in an underwritten offering, any shares of the Stock
proposed to be included in the registration statement on behalf of such
Seller(s) shall be included in the underwriting offering on the same terms
and conditions as the Stock being offered by the Corporation, and (C) each
Seller shall be entitled to include such number of shares of the Stock owned
by such Seller in such registration statement, one time only during the
applicable period set forth herein, so that the proportion of shares of the
Stock of each Seller to be included in such registration statement to the
total number of shares of the Stock owned by him is equal to the proportion
that the number of shares of the Stock of all Sellers to be included in such
registration statement bears to the total number of shares of the Stock owned
by all Sellers (except that each Seller shall have the right not to exercise
such piggyback registration right set forth herein once, in which case such
Seller shall have the right set forth in this Section 1.1 with respect to the
next succeeding registration statement described in this Section 1.1 proposed
to be filed by the Corporation during such 36- month period); and provided
further, that (i) the Corporation shall not be required to include such
number or amount of shares owned by such Seller(s) in any such registration
statement if it relates solely to securities of the Corporation to be issued
pursuant to a stock option or other employee benefit plan, (ii) the
Corporation may, as to an offering of securities of the Corporation by the
Corporation, withdraw such registration statement at its sole discretion and
without the consent of any Seller and abandon such proposed offering and
(iii) the Corporation shall not be required to include such number of shares
of the Stock owned by such Seller in such registration statement if the
Corporation is advised in writing by its underwriter or investment banking
firm that it reasonably believes that the inclusion of such Seller's shares
would have an adverse effect on the offering, provided that if such
limitation is imposed, the effects of such limitation shall be allocated
among the Sellers pro rata in proportion to the number of shares of the Stock
as to which such Sellers have requested inclusion therein.
(b) A registration filed pursuant to this Section 1.1(a)
shall not be deemed to have been effected unless the registration statement
related thereto (i) has become effective under the Securities Act and (ii)
has remained effective for a period of at least nine months (or such shorter
period of time in which all of the Stock registered thereunder has actually
been sold thereunder); provided, however, that if, after any registration
statement filed pursuant to Section 1.1(a) becomes effective and prior to the
time the registration statement has been effective for a period of at least
nine months, such registration statement is interfered with by any stop
order, injunction or other order or requirement of the Commission or other
governmental agency or court solely due to actions or omissions to act of the
Corporation, such registration statement shall not be considered one of the
registrations applicable pursuant to Section 1.1(a).
1.2 Delay or Suspension of Registration. Notwithstanding any other
provision of this Section to the contrary, if the Corporation shall furnish
to the Holder or Holders:
(a) certificate signed by the President of the Corporation
stating that, in the good faith judgment of a majority of the members of the
entire Board of Directors of the Corporation, it would adversely and
materially affect the Corporation's ability to enter into an agreement with
respect to, or to consummate, a bona fide material transaction to which it is
or would be a party, or the Corporation has a plan to register Stock to be
sold for its own account
within a 90-day period after the filing of the registration statement under
Section 1(a), for the Corporation to use its reasonable best efforts to
effect the registration of the Stock; or
(b) both (A) a certificate signed by the President of the
Corporation stating that, in the good faith judgment of a majority of the
members of the entire Board of Directors of the Corporation, a material fact
exists which the Corporation has a bonafide business purpose for preserving
as confidential and (B) an opinion of counsel to the Corporation to the
effect that the registration by the Corporation (following the offer or sale
by the Holder or Holders of the Stock pursuant to an effective registration
statement would require disclosure of the material fact which is referenced
in the President's certificate required under Section 1 .2(b)(A) and which,
in such counsel's opinion, is not otherwise required to be disclosed, then
the Corporation's obligations pursuant to Section 1.1 with respect to any
such registration shall be deferred or offers and sales of the Stock by the
Holder or Holders shall be suspended, as the case may be, until the earliest
of (1) the date on which, as applicable (a) the Corporation's use of
reasonable best efforts to effect the registration of the Stock would no
longer have such a material adverse effect or (b) the material fact is
disclosed to the public or ceases to be material; (2) 135 days from the date
of receipt by the Holder or Holders of the materials referred to in Section
1.2(a) and (b) above; and (3) such time as the Corporation notifies the
Holder or Holders that it has resumed use of its reasonable best efforts to
effect registration of the Stock or that offers and sales of Stock pursuant
to an effective registration statement may be resumed, as the case may be. A
particular material transaction to which the Corporation is or would be a
party or a particular material fact shall not give rise to more than one
deferral or suspension notice by the Corporation pursuant to the provisions
of this Section 1.2.
1.3 In connection with any registration or qualification pursuant to
the provisions of this Article I, all Sellers, and the Corporation shall,
except as prohibited under the blue sky or securities laws of any
jurisdiction under which a registration or qualification is being effected,
pay (pro rata based on the relative number of shares included in such
registration) all of the fees and expenses, which shall not include fees and
expenses of legal counsel for any Seller and any underwriting or selling
discounts, fees, commissions or similar charges with respect to the shares of
Stock as to which registration is requested; provided, however, that in the
event the Corporation shall have incurred out-of-pocket expenses in
connection with the preparation of any registration statement which shall be
withdrawn prior to its effective date at the request of a Seller, such Seller
shall promptly reimburse the Corporation for all out-of-pocket expenses
including, without limitation, attorneys' fees and expenses, accounting costs
and all fees and expenses relating to blue sky filings incurred by the
Corporation in connection with such preparation (including any filing
thereof; and provided further. However, that the Corporation shall not be
required in the case of any registration hereunder to make blue sky filings
in more than 10 states.
1.4 (a) In each case of registration of shares of Stock under the
Securities Act pursuant to these registration provisions, the Corporation
shall unconditionally indemnify and hold harmless each of the Sellers, each
underwriter (as defined in the Securities Act), and each person who controls
any such underwriter within the meaning of Section 15 of the Securities Act
or Section 20(a) of the Securities Exchange Act of 1934 (the Sellers and each
such underwriter, and each such person who controls any such underwriter
being referred to for purposes of this Section
1.4, as an "Indemnified Person") from and against any and all losses, claims,
damages, liabilities and expenses arising out of or based upon any untrue
statement or alleged untrue statement of a material fact contained in any
registration statement under which such shares of the Stock were registered
under the Securities Act, any prospectus or preliminary prospectus contained
therein or any amendment or supplement thereto (including, in each case, any
documents incorporated by reference therein), or arising out of 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, except
insofar as such losses, claims, damages, liabilities or expenses arise out of
any such untrue statement or omission or alleged untrue statement or omission
based upon information relating to any of the Sellers or any underwriter and
furnished to the Corporation or the Registering Holder, as the case may be,
in writing by any of the Sellers or such underwriter expressly for use
therein; provided that the foregoing indemnification with respect to a
preliminary prospectus shall not inure to the benefit of any underwriter (or
to the benefit of any person controlling such underwriter) from whom the
person asserting any such losses, claims, damages, liabilities or expenses
purchased shares of the Stock to the extent such losses, claims, damages or
liabilities result from the fact that a copy of the final prospectus had not
been sent or given to such person at or prior to written confirmation of the
sale of such shares to such person.
(b) In each case of a registration of shares of the Stock
under the Securities Act pursuant to these registration provisions, each of
the Sellers participating in the registration, severally and not jointly,
shall unconditionally indemnify and hold harmless the Corporation (and its
directors and officers) each underwriter and each person, if any, who
controls the Corporation or such underwriter within the meaning of Section 15
of the Securities Act of Section 20(a) of the Securities Exchange Act of
1934, to the same extent as the foregoing indemnity from the Corporation to
the Sellers but only with reference to information relating to such Seller
and furnished to the Corporation by such Seller for use in the registration
statement, any prospectus or preliminary prospectus contained therein or any
amendment or supplement thereto. Each Seller will use all reasonable efforts
to cause any underwriters of shares of Stock to be sold by any of the Sellers
to indemnify the Corporation on the same terms as the sellers agree to
indemnify the Corporation or the Registering Holder, as the case may be, but
only with reference to information furnished in writing by such underwriter
for use in the registration statement.
(c) In case any action or proceeding shall be brought
against or instituted which involves any Indemnified Person, such Indemnified
Person shall promptly notify the person against whom such indemnity may be
sought (the "Indemnifying Person") in writing and the Indemnifying Person
shall retain counsel reasonably satisfactory to the Indemnified Person to
represent the Indemnified Person and any others the Indemnifying Person may
designate in such proceeding and shall pay the fees and disbursements of such
counsel related to such proceeding. In any such action or proceeding; any
Indemnified Person shall have the right to obtain its own counsel, but the
fees and expenses of such counsel shall be at the expense of such Indemnified
Person unless (i) the Indemnifying Person has agreed to the retention of such
counsel at its expense or (ii) the named parties to any such action or
proceeding include both the Indemnifying Person and the Indemnified Person,
and the Indemnified Person has been advised by counsel that there may be one
or more defenses available to such Indemnified Person which are different
from or additional to those available to the Indemnifying Person (in which
case, if the Indemnified
Person notifies the Indemnifying Person that it wishes to employ separate
counsel at the expense of the Indemnifying Person, the Indemnifying Person
shall not have the right to assume the defense of such action or proceeding
on behalf of such Indemnified Person). It is understood that the Indemnifying
Person shall not be liable for the fees and expenses of more than one
separate firm of attorneys at any time for all such similarly situated
Indemnified Persons. The Indemnifying Person shall not be liable for any
settlement of any action or proceeding effected without its written consent.
(d) In the event the indemnifications provided for in this
Article V are unavailable or insufficient, then the Sellers shall each
contribute to the amount paid or payable as a result of such losses, claims,
damages, liabilities, actions and expenses in such proportion as is
appropriate to reflect (A) the relative benefits received by each Seller and
(B) the relative fault of each Seller.
(e) Notwithstanding anything in this Article V to the
contrary, the Corporation shall not be liable to any Seller for any losses,
claims, damages or liabilities arising out of or caused by (A) any reasonable
delay (I) in filing or processing any registration statement or any
preliminary or final prospectus, amendment or supplement thereto after the
inclusion of such Seller's Stock in such registration statement, or (2) in
requesting such registration statement be declared effective by the
Commission and (B) the failure of the Commission for any reason to declare
effective any registration statement.
2. MISCELLANEOUS.
2.1 Notices. All notices or other communications required or
permitted to be given pursuant to this Agreement shall be in writing and
shall be considered as duly given on (a) the date of delivery, if delivered
in person, by nationally recognized overnight delivery service or by
facsimile or (b) three days after mailing if mailed from within the
continental United States by registered or certified mail, return receipt
requested to the party entitled to receive the same, if to the Corporation,
Total Film Group, Inc., 0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxx Xxxxx,
Xxxxxxxxxx 00000 ,with a copy to Law Offices of Xxxxxxx X. Field, 000 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx, Attn: Xxxxxxx X. Field, Esq.; and if to any
Holder, at his or its address as set forth in the books and records of the
Corporation. Any party may change his or its address by giving notice to the
other party stating his or its new address. Commencing on the 10th day after
the giving of such notice, such newly designated address shall be such
party's address for the purpose of all notices or other communications
required or permitted to be given pursuant to this Agreement.
2.2 Governing Law. This Agreement and the rights of the parties
hereunder shall be governed by and construed in accordance with the laws of
the State of California, without regard to its conflicts of law principles.
All parties hereto (i) agree that any legal suit, action or proceeding
arising out of or relating to this Agreement shall be instituted only in a
federal or state court in Los Angeles, California, (ii) waive any objection
which they may now or hereafter have to the laying of the venue of any such
suit, action or proceeding, and (iii) irrevocably submit to the jurisdiction
of any federal or state court in Los Angeles, California, in any such suit,
action or
proceeding, but such consent shall not constitute a general appearance or be
available to any other person who is not a party to this Agreement. All
parties hereto agree that the mailing of any process in any suit, action or
proceeding in accordance with the notice provisions of this Agreement shall
constitute personal service thereof.
2.3 Entire Agreement: Waiver of Breach. This Agreement constitutes
the entire agreement among the parties and supersedes any prior agreement or
understanding among them with respect to the subject matter hereof, and it
may not be modified or amended in any manner other than as provided herein;
and no waiver of any breach or condition of this Agreement shall be deemed to
have occurred unless such waiver is in writing, signed by the party against
whom enforcement is sought, and no waiver shall be claimed to be a waiver of
any subsequent breach or condition of a like or different nature.
2.4 Binding Effect: Assignability. This Agreement and all the terms
and provisions hereof shall be binding upon and shall inure to the benefit of
the parties and their respective heirs, successors and permitted assigns.
This Agreement and the rights of the parties hereunder shall not be assigned
except with the written consent of all parties hereto.
2.5 Captions. Captions contained in this Agreement are inserted only
as a matter of convenience and in no way define, limit or extend the scope or
intent of this Agreement or any provision hereof
2.6 Number and Gender. Wherever from the context it appears
appropriate, each term stated in either the singular or the plural shall
include the singular and the plural, and pronouns stated in either the
masculine, the feminine or the neuter gender shall include the masculine,
feminine and neuter.
2.7 Severability. If any provision of this Agreement shall be held
invalid or unenforceable, such invalidity or unenforceability shall attach
only to such provision and shall not in any manner affect or render invalid
or unenforceable any other severable provision of this Agreement, and this
Agreement shall be carried out as if any such invalid or unenforceable
provision were not contained herein.
2.8 Amendments. This Agreement may not be amended except in writing
signed by all of the parties hereto.
2.9 Compliance with Securities Laws. Commencing with the Effective
Date, the Corporation will use its best efforts to comply thereafter with the
applicable provisions of the Securities Act and the Securities Exchange Act
of 1934.
2.10 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original but all of which
shall constitute one and the same instrument. In addition, this Agreement may
contain more than one counterpart of the signature page and this Agreement
may be executed by the affixing of such signature pages executed by the
parties to one copy of the Agreement; all of such counterpart signature pages
shall be read as though one, and
they shall have the same force and effect as though all of the signers had
signed a single signature page.
IN WITNESS WHEREOF, the undersigned have executed this Agreement on
the date first above written.
TOTAL FILM GROUP, INC.
By: /s/ Xxxxxx Xxxxx, President
NUMBER OF WARRANTS HOLDERS
By:
----------------------------- -----------------------------
Schedule of Holders
Number of
Date Warrants Name
11/17/99 9,090 Xxxxx Xxxxxx
11/5/99 2,411 Xxxxxxx Xxxx
11/11/99 2,273 Xxxxxxx X. Xxxxxxxx
11/11/99 2,225 Xxxxx Xxxx
4,545 Xxxxxxx Xxxxxxx
13,635 Xxxxxxx Xxxxxxx, Xx.
11/10/99 2,411 Xxxxxxx X. Xxxxxx
11/11/99 4,545 Xxxxx du Boef
11/11/99 40,000 Xxxxxxxx Xxxxxx
11/11/99 2,273 Xxxxx Xxxxxx
11/11/99 2,273 Xxxxxx Xxxxx
11/11/99 2,273 Xxxx City Anesthesia Medical Group
Money Purchase and Profit
Sharing Pension Trust
11/11/99 2,273 Xxxxxxx X. Xxxxxx
11/11/99 2,273 Xxxxxxx X. Xxxxxxx, A Professional
Corp. Profit Sharing Plan
11/11/99 2,273 Xxxxxx X. Xxxxxx
11/11/99 10,000 Xxxx X. Xxxxxx
11/11/99 2,273 Xxxxxxx X. Xxxxxxxxx, A Professional
Corp. Profit Sharing Plan
11/11/99 2,273 Xxxxxx Xxxxxx
2,273 Xxxxxxx Xxxxxx
11/11/99 2,273 Einav Xxxxx Xxxxx
11/11/99 2,273 Xxxxxxx X. Mille
11/11/99 2,500 Xxxxxx X. Xxxxxxx
11/11/99 2,273 Xxxxxx Xxxxxx
11/11/99 2,500 Xxxx Xxxxxxxx
4,545 Xxx Xxxxxxx
11/11/99 4,545 Xxxxx Xxxxx
11/11/99 9,090 Xxxxxx Xxxx
11/12/99 2,273 Xxxxxx Xxxxxx
11/11/99 4,545 Xxxxx Xxxxxxxxxx
11/11/99 2,273 Xxxxxx Xxxxxxxx
11/11/99 2,273 Xxxxx Schwuartzman
11/11/99 4,545 Xxxxxx X. Xxxxx
11/11/99 2,273 Xxxxxx and Xxxxxxxxx Xxxxxxxx
11/11/99 2,273 Xxx Xxxxxx Starr
11/11/99 2,273 Xxxxxxx Xxxxx
11/11/99 2,273 Xxxxxxxx & Associates, Inc.
11/8/99 6,818 Xxxxxxxx Family Partners
11/16/99 2,500 Swan Alley (Nominees) Limited
5,000 Xxxxxxx X. Xxxxxx
11/11/99 10,000 Xxxxx X. Zacky
11/11/99 9,090 Xxxxxxxx Xxxx
