EXHIBIT 10.4
ASSET PURCHASE AGREEMENT
This Agreement, dated as of July 12, 1997, is by and between Mac
Filmworks, Inc., ("MFI") a Texas corporation (the "Purchaser") and Delta
Equities Corporation ("DEC"), a Florida Corporation (the "Seller").
W I T N E S S E T H:
WHEREAS, Purchaser desires to purchase certain of Seller's assets
subject to the terms and conditions set forth herein and Seller desires to
sell those assets to Purchaser; and
WHEREAS, Seller has the power and authority to enter into and carry out
the terms of this Agreement;
NOW, THEREFORE, in consideration of the mutual representations,
warranties and covenants herein contained, and on the terms and subject to
the conditions herein set forth, the parties hereto hereby agree as follows:
ARTICLE I
Purchase and Sale
1.01. Sale and Purchase of Assets. Subject to and upon the terms and
conditions contained herein, at the Closing (as hereinafter defined), Seller
shall sell, transfer, assign, convey and deliver to Purchaser, free and
clear of all liens, claims and encumbrances, and Purchaser shall purchase,
accept and acquire from Seller, the following:
(i) One Hundred Thirty-Two (132) English-language feature film
master recordings, all in 35 mm, 16 mm, 1-inch and or 3/4-inch
video masters, color or black and white, and further described
as "movie elements for video masters" and suitable for
conversion to 1-inch video format, as listed in Exhibit "A"
hereto, and Seller's rights in the underlying contracts, and all
rights owned or controlled by Seller for the exploitation and
other use of such master recordings pertaining thereto together
with the exclusive right, title and interest in and possession
of all such master recordings;
(ii) All available collateral materials, including without
limitation, trailers, scripts, still photographs, posters and
press kits relative to the film master listed in (i) above.
(iii) Any copyrights, copyright registrations, copyright registration
applications, trademarks, trademark registrations, trademark
registration applications and trade names related to film
masters, trailers, scripts, still photographs, posters and press
kits owned or controlled by Seller and all renewals thereof (it
being agreed the company and its assigns shall be obligated to
assign and transfer copyright renewals to such transferred
copyrights to Purchaser without further consideration to the
extent such renewals or the right thereto are owned by Company
on the Closing Date); and
(iv) Any agreements with current actors, producers and directors
("Artists' Contracts").
All of the assets described in Subsections (i) through (iv) above are
hereinafter collectively referred to as the "Assets."
1.02. Excluded Assets. Notwithstanding any other provision hereof,
assets of Seller not listed in Section 1.01 shall not be conveyed to
Purchaser.
1.03. Closing. The closing of the transactions contemplated hereby
(the "Closing") shall occur on __________________, 1997 (the "Closing
Date"), in the offices of _________
___________________________________________________________, or at such
other time and place as shall be mutually agreed to in writing by the
parties hereto. The Closing shall commence at 10:00 a.m., local time, on
the Closing Date and proceed promptly to conclusion.
1.04. Purchase Price.
(a) The total purchase price for the Assets (the "Total Purchase
Price") shall be Thirty- three Thousand Dollars ($33,000) cash, of which a
deposit of Three Thousand Dollars ($3,000) has already been paid, and the
issuance of 5,280 shares MFI restricted common stock.
(b) Twenty percent (20%) of the purchase price (the "Retained
Funds") and the 5,280 shares of MFI restricted common stock shall be
retained by Seller subject to the evaluation of assets as set forth in
Section 1.07.
1.05. Nonassumption of liabilities of Seller. Purchaser shall not
assume any liabilities whatsoever of Seller. Specifically, but not limited
to: (i) any federal, state or local income, sales, business or employment
tax liability, known or unknown of Seller, (ii) any ad valorem taxes which
have become a lien on any of the Assets, or (iii) any liabilities or
obligations of Seller which may be incident to or result from the sale of
Sellers' assets hereunder or from any dissolution or liquidation of Seller
and any resulting distribution of assets.
1.06. Instruments of Transfer; Further Assurances. In order to
consummate the transactions contemplated hereby, the following shall be
delivered at the Closing:
(a) Seller shall deliver to Purchaser the Assets listed on Exhibit
"A", and the Assignment in the form attached hereto as Exhibit "B".
(b) Purchaser shall deliver to Seller the certificates representing
5,280 shares of restricted common stock, Twenty-Three Thousand Four Hundred
Dollars ($23,400) in cash, and a Registration Rights Agreement in the form
attached hereto as Exhibit "C".
(c) At the Closing, and at all times thereafter as may be necessary,
Seller shall execute and deliver to Purchaser such other instruments of
transfer as shall be reasonably necessary or appropriate to vest in
Purchaser good and indefeasible title to the Assets and to comply with the
purposes and intent of this Agreement.
1.07. Asset Evaluation. Not less than fifteen (15) days nor more
than thirty (30) days from Closing (the "Evaluation Period"), Purchaser
shall evaluate the Assets for the following criteria:
(a) suitability for broadcasting;
(b) good title;
(c) duplication in Purchaser's film library.
If, in Purchaser's sole discretion, he finds that any of the Assets are
unsuitable for broadcasting, lack good title or are duplicative, he may
return the film to Seller and deduct the per film purchase price of Two
Hundred Fifty Dollars cash ($250) from the Retained Funds, and forty (40)
shares of Company common stock. Any remaining funds and shares shall be
immediately released to Seller following the Evaluation Period, or replace
with another western film or equate type picture, or replace with another
western film of equal type picture,
1.08. Partial Registration. On or before June 15, 1998 MFI will
either:
(i) Register up to 2,640 shares of the stock, pursuant to the
attached Registration Rights Agreement or
(ii) Arrange for the private resale of the stock at not less
than $5.00 per share; or
(iii) MFI will sell the shares pursuant to a suitable exemption.
ARTICLE II
Purchaser's Representations and Warranties
Purchaser represents and warrants that the following are true and
correct as of this date and will be true and correct through the Closing
Date as if made on that date:
2.01. Organization and Good Standing. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the State
of its incorporation, with all requisite power and authority to carry on the
business in which it is engaged, to own the properties it owns and to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby.
2.02. Authorization and Validity. The execution, delivery and
performance of this Agreement and the other agreements contemplated hereby
by Purchaser, and the consummation of the transactions contemplated hereby
and thereby, have been duly authorized by Purchaser. This Agreement and each
other agreement contemplated hereby have been or will be prior to Closing
duly executed and delivered by Purchaser and constitute or will constitute
legal, valid and binding obligations of Purchaser, enforceable against
Purchaser in accordance with their respective terms.
2.03. Capitalization. MFI has the corporate authority to issue a
total of _________ shares of common stock, of which _________ shares have
been issued and are outstanding. In addition, MFI has issued and outstanding
Warrants to purchase an aggregate of ________ shares of common stock, and
options to purchase _____________ shares of common stock.
2.04. No Violation. Neither the execution and performance of this
Agreement or the other agreements contemplated hereby, nor the consummation
of the transactions contemplated hereby or thereby, will (a) conflict with,
or result in a breach of the terms, conditions and provisions of, or
constitute a default under, the Articles of Incorporation or By-laws of
Purchaser or any agreement, indenture or other instrument under which
Purchaser is bound, or (b) violate or conflict with any judgment, decree,
order, statute, rule or regulation of any court or any public, governmental
or regulatory agency or body having jurisdiction over Purchaser or the
properties or assets of Purchaser.
2.05. Finder's Fee. Purchaser has not incurred any obligation for
any finder's, broker's or agent's fee in connection with the transactions
contemplated hereby.
ARTICLE III
Representations and Warranties of Seller
Seller represents and warrants that the following are true and correct
as of this date and will be true and correct through the Closing Date as if
made on that date:
3.01. Organization and Good Standing. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State
of its incorporation, with all requisite power and authority to carry on the
business in which it is engaged, to own the properties it owns and to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby.
3.02. Authorization and Validity. The execution, delivery and
performance of this Agreement and the other agreements contemplated hereby
by Seller and the consummation of the transactions contemplated hereby and
thereby, have been duly authorized by Seller. This Agreement and each other
agreement contemplated hereby have been or will be duly executed and
delivered by Seller and constitute or will constitute legal, valid and
binding obligations of Seller, enforceable against it in accordance with
their respective terms.
3.03. No Violation. Neither the execution and performance of this
Agreement or the agreements contemplated hereby nor the consummation of the
transactions contemplated hereby or thereby will (a) result in a violation
or breach of the Articles of Incorporation or Bylaws of Seller or any
agreement or other instrument under which Seller is bound or to which any of
the assets of Seller are subject, or result in the creation or imposition of
any lien, charge or encumbrance upon any of such assets, or (b) violate any
applicable law or regulation or any judgment or order of any court or
governmental agency. Seller has complied in all material respects with all
applicable laws, regulations and licensing requirements, and has filed with
the proper authorities all necessary statements and reports. Seller
possesses all necessary licenses, franchises, permits and governmental
authorizations.
3.04. Consents. No authorization, consent, approval, permit or
license of, or filing with, any governmental or public body or authority,
any lender or lessor or any other person or entity is required to authorize,
or is required in connection with, the execution, delivery and performance
of this Agreement or the agreements contemplated hereby on the part of
Seller.
3.05. Compliance with Laws. There are no existing violations by
Seller of any applicable federal, state or local law or regulation that
could affect the property or business of Seller.
3.06. Finder's Fee. Seller has not incurred any obligation for any
finder's, broker's or agent's fee in connection with the transactions
contemplated hereby.
3.07. Litigation. Seller has not had any legal action or
administrative proceeding or investigation instituted or, to the best of the
knowledge of Seller, threatened against or affecting, or that could affect
any of the assets or business of Seller. Seller is not (a) subject to any
continuing court or administrative order, writ, injunction or decree
applicable specifically to Seller or to its business, assets, operations or
employees, or (b) in default with respect to any such order, writ,
injunction or decree. Seller knows of no basis for any such action,
proceeding or investigation.
3.08. Title. Seller has good title to all of the Assets being sold to
Purchaser by it and that the same are free and clear of all liens and
encumbrances and the use, distribution and showing of the Assets will not
infringe any copyright claims of any other party.
3.09. Accuracy of Information Furnished. All information furnished to
Purchaser by Seller herein or in any exhibit hereto is true, correct and
complete in all material respects. Such information states all material
facts required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which such statements are made,
true, correct and complete.
ARTICLE IV
Purchaser's Conditions Precedent
Except as may be waived in writing by Purchaser, the obligations of
Purchaser hereunder are subject to the fulfillment at or prior to the
Closing of each of the following conditions:
4.01. Representations and Warranties. The representations and
warranties of Seller contained herein shall be true and correct as of the
Closing, and Purchaser shall not have discovered any material error,
misstatement or omission therein.
4.02. Covenants. Seller shall have performed and complied with all
covenants or conditions required by this Agreement to be performed and
complied with by them prior to the Closing.
4.03. Proceedings. No action, proceeding or order by any court or
governmental body or agency shall have been threatened in writing, asserted,
instituted or entered to restrain or prohibit the carrying out of the
transactions contemplated by this Agreement.
4.04. No Material Adverse Change. No material, adverse change in the
assets, business operations or financial condition of Seller shall have
occurred after the date hereof and prior to the Closing.
ARTICLE V
Seller's Conditions Precedent
Except as may be waived in writing by Seller, the obligations of Seller
hereunder are subject to fulfillment at or prior to the Closing of each of
the following conditions:
5.01. Representations and Warranties. The representations and
warranties of Purchaser contained herein shall be true and correct as of the
Closing, subject to any changes contemplated by this Agreement, Seller shall
not have discovered any material error, misstatement or omission therein.
5.02. Covenants. Purchaser shall have performed and complied in all
material respects with all covenants or conditions required by this
Agreement to be performed and complied with by it prior to the Closing.
5.03. Proceedings. No action, proceeding or order by any court or
governmental body or agency shall have been threatened in writing, asserted,
instituted or entered to restrain or prohibit the carrying out of the
transactions contemplated by this Agreement.
ARTICLE VI
Indemnification
6.01. Seller's Indemnity. Subject to the terms and conditions of
this Article VI, Seller hereby agrees to indemnify, defend and hold
Purchaser and its officers, directors, stockholders agents, attorneys and
affiliates harmless from and against all losses, claims, obligations,
demands, assessments, penalties, liabilities, costs, damages, reasonable
attorneys' fees and expenses (collectively, "Damages"), asserted against or
incurred by Purchaser by reason of or resulting from a breach by Seller or
of any representation, warranty or covenant contained herein or in any
agreement executed pursuant hereto, or the failure to perform any other
condition imposed on Seller hereunder.
6.02. Purchaser's Indemnity. Subject to the terms and conditions of
this Article VI, Purchaser hereby agrees to indemnify, defend and hold
Seller and its officers, directors, agents, attorneys and affiliates
harmless from and against all Damages asserted against or incurred by Seller
by reason of or resulting from a breach by Purchaser of any representation,
warranty or covenant contained herein or in any agreement executed pursuant
hereto, or the failure to perform any other condition imposed on Purchaser
hereunder.
6.03. Conditions of Indemnification. The respective obligations and
liabilities of Seller and Purchaser (the "indemnifying party") to the other
(the "party to be indemnified") under Sections 6.01 and 6.02 hereof with
respect to claims resulting from the assertion of liability by third parties
shall be subject to the following terms and conditions:
(a) Within 20 days (or such earlier time as might be required to
avoid prejudicing the indemnifying party's position including the entry of a
default judgment) after receipt of notice of commencement of any action
evidenced by service of process or other legal pleading, or with reasonable
promptness after the assertion in writing of any claim by a third party, the
party to be indemnified shall give the indemnifying party written notice
thereof together with a copy of such claim, process or other legal pleading,
and the indemnifying party shall have the right to undertake the defense
thereof by representatives of its own choosing and at its own expense;
provided, however, that the party to be indemnified may participate in the
defense with counsel of its own choice and at its own expense.
(b) In the event that the indemnifying party, by the 30th day after
receipt of notice of any such claim (or, if earlier, by the 10th day
preceding the day on which an answer or other pleading must be served in
order to prevent judgment by default in favor of the person asserting such
claim), does not elect to defend against such claim, the party to be
indemnified will (upon further notice to the indemnifying party) have the
right to undertake the defense, compromise or settlement of such claim on
behalf of and for the account and risk of the indemnifying party and at the
indemnifying party's expense, subject to the right of the indemnifying party
to assume the defense of such claims at any time prior to settlement,
compromise or final determination thereof.
(c) Anything in this Section 6.03 to the contrary notwithstanding,
the indemnifying party shall not settle any claim without the consent of the
party to be indemnified unless such settlement involves only the payment of
money and the claimant provides to the party to be indemnified a release
from all liability in respect of such claim. If the settlement of the claim
involves more than the payment of money, the indemnifying party shall not
settle the claim without the prior consent of the party to be indemnified,
which consent shall not be unreasonably withheld.
(d) The party to be indemnified and the indemnifying party will each
cooperate with all reasonable requests of the other.
6.04. Remedies Not Exclusive. The remedies provided in this Article
VI shall not be exclusive of any other rights or remedies available by one
party against the other, either at law or in equity.
ARTICLE VII
Miscellaneous
7.01. Amendment. This Agreement may be amended, modified or
supplemented only by an instrument in writing executed by the party against
which enforcement of the amendment, modification or supplement is sought.
7.02. Assignment. Neither this Agreement nor any right created hereby
shall be assignable by either party hereto, except by Purchaser to a wholly-
owned subsidiary of Purchaser.
7.03. Notice. Any notice or communication must be in writing and
given by depositing the same in the United States mail, addressed to the
party to be notified, postage prepaid and registered or certified with
return receipt requested, or by delivering the same in person. Such notice
shall be deemed received on the date on which it is hand-delivered or on the
third business day following the date on which it is so mailed. For
purposes of notice, the addresses of the parties shall be:
If to Seller: Delta Equities Corporation
000 Xxxxx Xxx
Xxxxx Xxxx, Xxxxx 00000
Attn: Xxxxx Xxxxxxxxx
with a copy to:
If to Purchaser: Mac Filmworks, Inc.
0000 Xxxxxxxxx Xxxx, Xxxxx X-0
Xxxxxxxxxx, Xx. 00000
Attn: Xxx XxXxxxxxxx
with a copy to: Xxxxxx X. Xxxxxxxxx
Xxxxxx & Xxxxxxxxx, P.C.
Texaco Heritage Plaza
1111 Xxxxx, Suite 2450
Xxxxxxx, Xxxxx 00000
Any party may change its address for notice by written notice given to the
other parties.
7.04. Entire Agreement. This Agreement and the exhibits hereto
supersede all prior agreements and understandings relating to the subject
matter hereof, except that the obligations of any party under any agreement
executed pursuant to this Agreement shall not be affected by this Section.
7.05. Costs, Expenses and Legal Fees. Whether or not the transactions
contemplated hereby are consummated, each party hereto shall bear its own
costs and expenses (including attorney fees), except that each party hereto
agrees to pay the costs and expenses, including reasonable attorney fees,
incurred by the other parties in successfully (a) enforcing any of the terms
of this Agreement, or (b) proving that the other parties breached any of the
terms of this Agreement in any material respect.
7.06. Severability. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under present or future laws effective
during the term hereof, such provision shall be fully severable and this
Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provision never comprised a part hereof; and the remaining
provisions hereof shall remain in full force and effect and shall not be
affected by the illegal, invalid or unenforceable provision or by its
severance herefrom. Furthermore, in lieu of such illegal, invalid or
unenforceable provision, there shall be added automatically as part of this
Agreement, a provision as similar in its terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and
enforceable.
7.07. Specific Performance. Seller acknowledges that a refusal by
Seller to consummate the transaction contemplated hereby, will cause
irrevocable harm to Purchaser, for which there may be no adequate remedy at
law and for which the ascertainment of damages would be difficult.
Therefore, Purchaser shall be entitled, in addition to, and without having
to prove the inadequacy of, other remedies at law, to specific performance
of this Agreement, as well as injunctive relief (without being required to
post bond or other security).
7.08. Survival of Representations, Warranties and Covenants. The
representations, warranties and covenants contained herein shall survive the
Closing and all statements contained in any certificate, exhibit or other
instrument delivered by or on behalf of Seller or Purchaser pursuant to this
Agreement shall be deemed to have been representations and warranties by
Seller or Purchaser, as the case may be, and shall survive the Closing and
any investigation made by any party hereto or on its behalf.
7.09. Governing Law. This Agreement and the rights and obligations of
the parties hereto shall be governed, construed and enforced in accordance
with the laws of the State of Louisiana. The parties agree that any
litigation relating directly or indirectly to this Agreement must be brought
before and determined by a court of competent jurisdiction within the State
of Louisiana.
7.10. Captions. The captions in this Agreement are for convenience of
reference only and shall not limit or otherwise affect any of the terms or
provisions hereof.
7.11. Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, and all of which together shall
constitute one and the same instrument.
7.12. Taxes. Buyer shall be liable for and shall indemnify Purchaser
against all sales, use or other taxes resulting from the transactions
contemplated hereby.
7.13 Offset. Notwithstanding anything to the contrary contained
herein, Seller agrees that Purchaser shall be entitled to credit and offset
against any payments due by Purchaser as a result of Seller's breach of any
of the terms and conditions hereof.
7.14. Bulk Transfer Laws. Prior to the Closing, the parties hereto
will comply in all respects with any applicable bulk transfer laws.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
SELLER:
DELTA EQUITIES CORPORATION
By://s// XXXXX XXXXXXXXX
Name: Xxxxx Xxxxxxxxx
Title: President
PURCHASER:
MAC FILMWORKS, INC.
By://s// XXX XXXXXXXXXX, SR.
Name: Xxx XxXxxxxxxx, Sr.
Title: President
EXHIBIT "A"
EXHIBIT "B"
ASSIGNMENT
FOR GOOD AND VALUABLE CONSIDERATION, the receipt, sufficiency and
adequacy of which are hereby acknowledged, Delta Equities Corporation
("DEC") does hereby:
SELL, ASSIGN AND TRANSFER to Mac Filmworks, Inc., a Texas corporation,
the assets listed on Exhibit "A" attached hereto for its own use and for use
of its successors and assigns (the "Assets");
WARRANT AND COVENANT that no assignment, grant, mortgage, license or
other agreement affecting the rights and property herein conveyed by the
undersigned has been or will be made to others;
WARRANT AND COVENANT that the Assets are free and clear of all liens
and encumbrances and the use, distribution and showing of the assets will
not infringe any copyright claims of any party;
COVENANT, when requested and at the expense of the assignee, to execute
all additional instruments and to do all things necessary for carrying out
the purpose of this instrument;
TO BE BINDING on the assigns and successors of the undersigned and
extend to the successors and assigns.
IN WITNESS WHEREOF, the undersigned hereby executes this agreement the
27 day of September, 1997.
ASSIGNOR:
DELTA EQUITIES CORPORATION
By: //s//XXXXX XXXXXXXXX
Name: Xxxxx Xxxxxxxxx
Title: President
EXHIBIT "C"
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement"), dated July 12,
1997, is by and between MAC FILMWORKS, INC., a Texas corporation
("Company"), and DELTA EQUITIES CORPORATION, (the "Holder").
W I T N E S S E T H:
WHEREAS, in connection with the transaction by and between Company and
the Holder, the Company has agreed to grant certain Registration Rights
(hereinafter defined) to 660 of the Holder's shares ("Shares") of the
Company's common stock, par value $.001 per share ("Common Stock").
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 is hereby acknowledged, the parties hereto
agree as follows:
ARTICLE ONE
Registration Rights Agreement
SECTION 1.1 Registration Rights Available. The Company agrees to
provide the Holder with the following registration rights with respect to
the Shares and any other securities issued or issuable at any time or from
time to time in respect of the Shares upon a stock split, stock dividend,
recapitalization or other similar event involving the Company (collectively,
the "Securities"): one right to "piggyback" on a firm commitment
underwritten offering of Company securities, subject to the provisions of
this Agreement (the right to one piggyback registration right hereunder
being "Registration Rights").
SECTION 1.2 No Demand Registration. The undersigned hereof
acknowledges that such registration right does not constitute a demand
registration right.
SECTION 1.3 Piggyback Registration. With respect to Holder's right to
piggyback on a firm commitment underwriting of the Company securities
pursuant to Section 1.1, the parties agree as follows:
(a) Pursuant to Section 1.1, the Company will (i) promptly give to the
Holder written notice of any registration relating to a firm commitment
public offering of the Company securities; and (ii) include in such
registration (and related qualification under blue sky laws or other
compliance, unless such expense or terms of such qualification is
unreasonable in comparison to the number of securities to be registered in
such jurisdiction, as determined in the sole discretion of the Company), and
in the underwriting involved therein, all the Securities specified in
Holder's written request or requests, mailed in accordance with Section 3.8
herein within 30 days after the date of such written notice from the
Company.
(b) The right of Holder to registration pursuant to Section 1.1 shall
be conditioned upon Holder's participation in such underwriting, and the
inclusion of the Securities in the underwriting shall be limited to the
extent provided herein. The Holder and all other holders proposing to
distribute their securities through such underwriting shall (together with
the Company and the other holders distributing their securities through such
underwriting) enter into an underwriting agreement in customary form with
the managing underwriter selected for such underwriting by the Company.
Notwithstanding any other provision of this Agreement, if the managing
underwriter determines that marketing factors require a limitation of the
number of shares to be underwritten, the managing underwriter may limit some
or all of the Securities that may be included in the registration and
underwriting as follows: the number of Securities that may be included in
the registration and underwriting by the Holder shall be determined by
multiplying the number of shares of Securities of all selling shareholders
of the Company which the managing underwriter is willing to include in such
registration and underwriting, times a fraction, the numerator of which is
the number of Securities requested to be included in such registration and
underwriting by the Holder, and the denominator of which is the total number
of Securities which all selling shareholders of the Company have requested
to have included in such registration and underwriting. To facilitate the
allocation of shares in accordance with the above provisions, the Company
may round the number of shares allocable to any such person to the nearest
100 shares. If the Holder disapproves of the terms of any such
underwriting, it may elect to withdraw therefrom by written notice to the
Company and the managing underwriter, delivered not less than seven days
before the effective date. Any securities excluded or withdrawn from such
underwriting shall be withdrawn from such registration, and shall not be
transferred in a public distribution prior to 120 days after the effective
date of the registration statement relating thereto, or such other shorter
period of time as the underwriters may require.
SECTION 1.4 Registration Procedure. With respect to each Registration
Right, the following provisions shall apply:
(a) The Holder shall be obligated to furnish to the Company and the
underwriters (if any) such information regarding the Securities and the
proposed manner of distribution of the Securities as the Company and the
underwriters (if any) may request in writing and as shall be required in
connection with any registration, qualification or compliance referred to
herein and shall otherwise cooperate with the Company and the underwriters
(if any) in connection with such registration, qualification or compliance.
(b) With a view to making available the benefits of certain rules and
regulations of the Commission which may at any time permit the sale of the
Restricted Securities (used herein as defined in Rule 144 under the
Securities Act) to the public without registration, the Company agrees to
use its best lawful efforts to:
(i) Make and keep public information available, as those terms
are understood and defined in Rule 144 under the Securities Act, at all
times during which the Company is subject to the reporting requirements
of the Securities Exchange Act of 1934, as amended ("Exchange Act");
(ii) 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 all times during which the Company is subject to
such reporting requirements); and
(iii) So long as the Holder owns any Restricted Securities, to
furnish to the Holder forthwith upon request a written statement by the
Company as to its compliance with the reporting requirements of said
Rule 144 and with regard to the Securities Act and the Exchange Act (at
all times during which the Company is 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 the Holder may reasonably request in availing themselves of
any rule or regulation of the Commission allowing the Holder to sell
any such securities without registration.
(c) The Company agrees that it will furnish to the Holder such number
of prospectuses, offering circulars or other documents incident to any
registration, qualification or compliance referred to herein as provided or,
if not otherwise provided, as the Holder from time to time may reasonably
request.
(d) All expenses (except for costs of any interim audit required by
underwriters, any underwriting and selling discounts and commissions and
legal fees for Holder's attorneys) of any registrations permitted pursuant
to this Agreement and of all other offerings by the Company (including, but
not limited to, the expenses of any qualifications under the blue-sky or
other state securities laws and compliance with governmental requirements of
preparing and filing any post-effective amendments required for the lawful
distribution of the Securities to the public in connection with such
registration, of supplying prospectuses, offering circulars or other
documents) will be paid by the Company.
(e) In connection with the preparation and filing of a registration
statement under the Securities Act pursuant to this Agreement, the Company
will give the Holder, its counsel and accountants, the opportunity to
participate in the preparation of such registration statement, each
prospectus included therein or filed with the Commission, and each amendment
thereof or supplement thereto, and will give each of them such access to its
books and records and such opportunities to discuss the business of the
Company with its officers and the independent public accountants who have
certified its financial statements as shall be necessary to conduct a
reasonable investigation within the meaning of the Securities Act.
ARTICLE TWO
Indemnification
SECTION 2.1 Indemnification by the Company. In the event of any
registration of the Securities of the Company under the Securities Act, the
Company agrees to indemnity and hold harmless the Holder and each other
person who participates as an underwriter in the offering or sale of such
securities against any and all claims, demands, losses, costs, expenses,
obligations, liabilities, joint or several, damages, recoveries and
deficiencies, including interest, penalties and attorneys' fees
(collectively, "Claims"), to which the Holder or underwriter may become
subject under the Securities Act or otherwise, insofar as such Claims (or
actions or proceedings, whether commenced or threatened, in respect thereof)
arise out of or are based on any untrue statement or alleged untrue
statement of any material fact contained in any registration statement under
which Holder's Securities were registered under the Securities Act, 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 not misleading, and the Company
will reimburse the Holder's and each such underwriter for any legal or any
other expenses reasonably incurred by them in connection with investigating
or defending any such Claim (or action or proceeding in respect thereof);
provided that the Company shall not be liable in any such case to the extent
that any such Claim (or action or proceeding in respect thereof) or expense
arises out of or is based on an untrue statement or alleged untrue statement
or omission or alleged omission made in such registration statement, any
such preliminary prospectus, final prospectus, summary prospectus, amendment
or supplement in reliance on and in conformity with written information
furnished to the Company through an instrument duly executed by the Holder's
specifically stating that it is for use in the preparation thereof. Such
indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of the Holder's or any such underwriter
and shall survive the transfer of the Securities by the Holder.
SECTION 2.2 Indemnification by the Holder. The Company may require,
as a condition to including the Securities in any registration statement
filed pursuant to this Agreement, that the Company shall have received an
undertaking satisfactory to it from the Holder, to indemnify and hold
harmless (in the same manner and to the same extent as set forth in Section
2.1) the Company, each director of the Company, each officer of the Company
and each other person, if any, who controls the Company, within the meaning
of the Securities Act, with respect to any statement or alleged statement in
or omission or alleged omission from such registration statement, any
preliminary prospectus contained therein, or any amendment or supplement
thereto, if such statement or alleged statement or omission or alleged
omission was made in reliance on and in conformity with written information
furnished to the Company through an instrument duly executed by the Holder
specifically stating that it is for use in the preparation of such
registration statement, preliminary prospectus, final prospectus, summary
prospectus, amendment or supplement. Notwithstanding the foregoing, the
maximum liability hereunder which any holder shall be required to suffer
shall be limited to the net proceeds to such Holder from the Shares sold by
such Holder in the offering. 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 or controlling person and shall survive the
transfer of the Securities by the Holder.
SECTION 2.3 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 this Article Two, such indemnified party
will, if a claim in respect thereof is to be made against an indemnifying
party, give 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 this Article Two, except to the extent that the indemnifying party is
actually prejudiced by such failure to give notice. In case any such action
is brought against an indemnifying party, unless in such indemnified party's
reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist in respect of such Claim, 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. No indemnifying party
shall, without the consent of the 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 of such Claim.
SECTION 2.4 Indemnification Payments. The indemnification required by
this Article shall be made by periodic payments of the amount thereof during
the course of the investigation or defense, as and when bills are received
or expense, loss, damage or liability is incurred.
ARTICLE THREE
Miscellaneous
SECTION 3.1 Consent to Amendments. Except as otherwise expressly
provided herein, the provisions of this Agreement may be amended or waived
only by the written agreement of the Company and the Holder of 51% or more
of the Shares and shall be effective only to the extent specifically set
forth in such writing.
SECTION 3.2 Term of the Agreement. This Agreement shall terminate
with respect to the Holder on the earlier to occur of (i) all of the
Securities having been registered as provided in Article One or (ii)
_________________.
SECTION 3.3 Successors and Assigns. Except as otherwise expressly
provided herein, all covenants and agreements contained in this Agreement by
or on behalf of any of the parties hereto are transferable and will bind and
inure to the benefit of the respective successors and assigns of the parties
hereto, but only if so expressed in writing.
SECTION 3.4 Severability. Whenever possible, each provision of this
Agreement will be interpreted in such a manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
prohibited by or invalid under applicable law, such provision will be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of this Agreement.
SECTION 3.5 Delays or Omissions. No failure to exercise or delay in
the exercise of any right, power or remedy accruing to the Holder on any
breach or default of the Company under this Agreement shall impair any such
right, power or remedy nor shall it be construed to be a waiver of any such
breach or default.
SECTION 3.6 Remedies Cumulative. All remedies under this Agreement,
or by law or otherwise afforded to any party hereto shall be cumulative and
not alterative.
SECTION 3.7 Descriptive Headings. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a part of
this Agreement. Unless clearly denoted otherwise, any reference to Articles
or Sections contained herein shall be to the Articles or Sections of this
Agreement.
SECTION 3.8 Notices. Any notices required or permitted to be sent
hereunder shall be delivered personally or mailed, certified mail, return
receipt requested, to the following addresses, and shall be deemed to have
been received on the day of personal delivery or within three business days
after deposit in the mail, postage prepaid:
If to the Company, to:
Mac Filmworks, Inc.
9464 Mansfield, Suite A-1
Shreveport, La. 7118
Attention: President
If to Holder, to:
Delta Equities Corporation
000 Xxxxx Xxx
Xxxxx Xxxx, Xxxxx 00000
Attn: Xxxxx Xxxxxxxxx
SECTION 3.9 Governing Law. The validity, meaning and effect of this
Agreement shall be determined in accordance with the laws of the State of
Louisiana applicable to contracts made and to be performed in that state.
SECTION 3.10 Final Agreement. This Agreement, together with those
documents expressly referred to herein, constitutes the final agreement of
the parties concerning the matters referred to herein, and supersedes all
prior agreements and understandings.
SECTION 3.11 Execution in Counterparts. This Agreement may be
executed in any number of counterparts, each of which when so executed and
delivered shall be deemed an original, and such counterparts together shall
constitute one instrument.
The parties hereto have executed this Agreement as of the date first
set forth above.
COMPANY:
MAC FILMWORKS, INC.
By: //s//
Name: Xxx XxXxxxxxxx, Sr.
Title: President - CEO
HOLDER:
DELTA EQUITIES CORPORATION
By: //s//
Name: Xxxxx Xxxxxxxxx
Title: President
