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EXHIBIT 6.49
SERIES B CONVERTIBLE PROMISSORY NOTE
Convertible into
Common Stock
of
Total Film Group, Inc.
(A Delaware Corporation)
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR UNDER THE SECURITIES LAWS OF ANY STATE. THESE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE TRANSFERRED OR
SOLD IN THE ABSENCE OP AN EFFECTIVE REGISTRATION OR OTHER COMPLIANCE UNDER
THE ACT OR THE LAWS OF THE APPLICABLE STATE OR A "NO ACTION" OR INTERPRETIVE
LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION OR AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE ISSUER, AND ITS COUNSEL, TO THE EFFECT THAT
THE SALE OR TRANSFER IS EXEMPT FROM REGISTRATION UNDER THE ACT AND SUCH STATE
STATUTES.
Total Film Group, Inc., a corporation duly organized and existing
under the laws of the State of Delaware (hereinafter referred to as the
"Maker"). for value received, hereby promises to pay to the following
registered holder hereof at the address stated,
the principal sum of__________________ Dollars ($__________) in such lawful
money of the United States of America as at the time of payment shall be
legal tender for the payment of public and private debts, on the terms and at
the time hereinafter provided.
This Note is one of a series of notes to be issued by the Maker,
which in the aggregate shall total not more than One Million Dollars
($1,000,000). This Note is subject to the following terms and provisions:
1. PAYMENT AND INTEREST. This Note shall be due and payable on or
before nine months from the date hereof except as set forth below. The Maker
shall pay to the holder of this Note simple interest on the principal amount
of this Note at the rate of 12% per annum commencing on the date of this
Note. If the Maker receives financing in an amount exceeding $3,000,000, full
repayment of this Note shall be mandatory. If the Maker shall raise equity
funds through either a private or public sale of its equity securities during
the term of this Note, or thereafter if this Note shall not be paid or
converted in full, the Maker shall apply not less than
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50% of the net proceeds of such offering or offerings, toward the payment of
this and the other notes of which this Note is a part. Such funds shall be
applied pro rata to this Note and any other outstanding notes issued in this
series.
2. CONVERSION.
a. Subject to and in compliance with the provisions
contained herein, the Holder of this Note is entitled, at its option, at any
time prior to maturity, or in case this Note or some portion hereof shall
have been called for prepayment prior to such date, then in respect of this
Note or such portion hereof, until and including, but not after, the close of
business within 10 days of the date of notice of prepayment. to convert this
Note (or any portion thereof), together with accrued but unpaid interest,
into fully paid and nonassessable registered shares (calculated as to each
conversion to the nearest share) of common stock (the "Shares") of the Maker
by surrender of this Note, duly endorsed (if so required by the Maker) or
assigned to the Maker or in blank, to "Total Film Group, Inc." at its
offices, accompanied by written notice to the Maker, in the form set forth
below, that the holder hereof selects to convert this Note or, if less than
the entire amount hereof is to be converted, the portion hereof to be
converted. Such conversion shall be effected at the rate of one Share for
each $3.00 of principal and interest to be converted; provided, however, that
during any continuing Event of Default as set forth below, the conversion
price shall be reduced to $1.50 per share for the first 90 days of default,
followed by a further reduction to $1.00 per share thereafter. No fractions
of Shares will be issued on conversion, but instead of any fractional
interest, the Maker will round up such fractional share to the next whole
share.
b. If the Maker shall at any time subdivide its outstanding
shares of common stock by recapitalization. reclassification or split-up
thereof, or if the Maker shall declare a stock dividend or distribute shares
of its common stock to its stockholders, the number of Shares convertible
pursuant to this Note immediately prior to such subdivision shall be
proportionately increased in each instance, and if the Maker shall at any
time combine the outstanding shares of common stock by recapitalization,
reclassification or combination thereof; the number of Shares convertible
pursuant to this Note immediately prior to such combination shall be
proportionately decreased in each instance.
c. Whenever the number of Shares convertible pursuant to
this Note is required to be adjusted the conversion price shall be adjusted
(to the nearest cent) in each instance by multiplying such conversion price
immediately prior to such adjustment by a fraction (x) the numerator of which
shall be the number of Shares purchasable upon the conversion of this Note
immediately prior to such adjustment, and (y) the denominator of which shall
be the number of Shares so convertible immediately thereafter.
3. ADDITIONAL CONSIDERATION. As additional consideration for the sum
received,__________ shall receive__________unregistered shares of Meetchina.com.
4. PREPAYMENT. This Note is subject to prepayment, in whole or in
part, at any time upon not less than 10 days notice by certified or
registered mail at the election of the Maker.
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Prepayment shall be effected by paving the amount equal to the outstanding
principal amount of this Note, plus all interest accrued but unpaid to the
date of prepayment. During the 10 days following the date of any notice of
prepayment, the holder shall have the right to convert this Note to the
common stock of the Maker, on the terms and conditions provided for in
paragraph 2 above.
5. LIMITATIONS ON RIGHT OF CONVERSION. Following receipt of the
written notice of intention to convert the Note, the Maker shall take such
steps as it deems appropriate to permit conversion of the Note as specified
in the notice and to issue such Shares pursuant to a valid exemption from
registration or qualification under applicable federal and state securities
laws provided that in no event shall the Maker be required to consent to the
general service of process or to qualify as a foreign corporation in any
jurisdiction where the Note holder resides if such jurisdiction is different
than such Note holder's residence when the Note was originally issued. In
order to comply with exemptions from the registration requirements of the Act
and certain state securities statutes, the Maker may require the holder of
this Note to make certain representations and execute and deliver to the
Maker certain documents as a condition to exercise of conversion rights
hereunder, all in form and substance satisfactory to the Maker as determined
in its sole discretion. In the event the Maker reasonably determines that the
Note cannot be converted in compliance with applicable federal and state
securities laws in the absence of registration or qualification under such
statutes, the Maker shall be under no obligation to permit conversion of the
Note and issue any shares of common stock pursuant hereto. The Maker shall
utilize its best efforts to qualify such Shares for sale under the applicable
state laws in those jurisdictions in which the holder of the Note resides at
the time of conversion. If; notwithstanding such efforts to qualify such
Shares for sale in such state, the Maker is unable to so qualify such Shares
for sale in such state, the Shares delivered shall be subject to applicable
restrictions on their transfer under the laws of such state or, if no
exemption from registration is available, this Note shall not be convertible.
6. SATISFACTION AND DISCHARGE OF NOTE. This Note shall cease to be
of further effect (except as to any surviving rights of conversion, transfer,
or exchange of the Note herein expressly provided for) when:
a. The Maker has paid or caused to be paid all sums payable
hereunder by the Maker, including all principal amounts and interest accrued
under the Note, or the Note has been fully converted as set forth above; and
b. All the conditions precedent herein provided for
relating to the satisfaction and discharge of this Note have been complied
with.
7. EVENTS OF DEFAULT. "Event of Default," when used herein, whatever
the reason for such Event of Defau1t and whether it shall be voluntary or
involuntary or be effected by operation of law pursuant to any judgment,
decree, or order of any court or any order, rule, or regulation of any
administration or government body or be caused by the provisions of any
paragraph herein, means any one of the following events:
a. Default in the payment of any interest on this Note when
it becomes due
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and payable, and continuance of such default for a period of 30 days; or
b. Default in the payment of the principal amount of this
Note when due whether at maturity, upon prepayment, or otherwise; or
c. Default in the performance or breach of any covenant or
warranty of the Maker in this Note (other than a covenant or warranty, the
breach or default in performance of which is elsewhere in this section
specifically dealt with), and continuation of such default or breach for a
period of 30 days after there has been given to the Maker by registered or
certified mail, by the holder of this Note, a written notice specifying such
default or breach and requiring it to be remedied and stating that such
notice is a notice of default hereunder;
d. The entry of a decree or order by a court having
jurisdiction in the premises adjudging the Maker a bankrupt or insolvent
under the Federal Bankruptcy Act or any other applicable federal or state
law, or appointing a. receiver, liquidator. assignee, trustee (or other
similar official) of the Maker or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and the continuance of
any such decree or order unstayed and in effect for a period of 60
consecutive days; or
e. The institution by the Maker of proceedings to be
adjudicated a bankrupt or insolvent, or the consent by it to the institution
of bankruptcy or insolvency proceedings against it, or a. filing by it of a
petition or answer or consent seeking reorganization or relief under the
Federal Bankruptcy Act or any other applicable federal or state law; or the
consent by it to the filing of any such petition or the appointment of a
receiver, liquidator, assignee, trustee (or other similar official) of the
Maker or of any substantial part of its property, or the making by it of any
assignment for the benefit of creditors, or the admission by it in writing of
its inability to pay its debts generally as they become due, or the taking of
corporate action by the Maker in furtherance of any such action.
8. ACCELERATION OF MATURITY. If an Event of Default occurs and is
continuing then, in every such case, the holder of this Note may declare the
principal of this Note to be due and payable immediately, by a notice in
writing to the Maker of such default, and upon any such declaration, such
principal shall become immediately due and payable. At such time after such
declaration of acceleration has been made, and before a judgment or decree
for payment of money due has been obtained by the holder, the holder of this
Note, by written notice to the Maker, may rescind and annul such declaration
and its consequences, if all Events of Default, other than the nonpayment of
the principal of tins Note which has become due solely by such acceleration,
has been cured or waived. No such rescission shall affect any subsequent
default or impair any tight consequent thereon.
9. PENALTY FOR DEFAULT If any Event of Default shall exist on the
last day of any calendar quarter after the date of this Note, subject to
compliance with state and federal securities laws, the conversion price shall
be reduced to $1.50 per share for the first 90 days of default, followed by a
further reduction to $1.00 per share thereafter. No fractions of Shares will
be issued on conversion, but instead of any fractional interest, the Maker
will round up such
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fractional share to the next whole share. The reduction in the exercise price
of the common shares shall not cure any Event of Default and shall be in
addition to any other remedies available to the holder of this Note. If the
Maker shall at any time subdivide its outstanding shares of common stock by
recapitalization, reclassification or split-up thereof, or if the Maker shall
declare a stock dividend or distribute shares of its common stock to its
stockholders, the number of shares to be issued pursuant to this paragraph
immediately prior to such subdivision shall be proportionately increased in
each instance, and if the Maker shall at any time combine the outstanding
shares of common stock by recapitalization, reclassification or combination
thereof, the number of shares to be issued pursuant to this Paragraph
immediately prior to such combination shall be proportionately decreased in
each instance. Notwithstanding the foregoing, in the event the Maker
reasonably deruinines that the shares cannot be issued in compliance with
applicable federal and state securities laws in the absence of registration
or qualification under such statutes, the Maker shall be under no obligation
to issue the shares of common stock pursuant hereto.
10. REGISTRATION RIGHTS The converted shares of common stock shall
have on demand registration rights and unlimited piggy back rights in
accordance with the terms and conditions of the Registration Rights Agreement
attached to this note.
11. RESTRICTIONS. The holder of this Note, by acceptance hereof both
with respect to the Note and the Shares to be issuable upon conversion of the
Note, represents and warrants as follows:
a. The Note and the shares of common stock which may be
acquired are for the Holder's own account to be held for investment purposes
only and not with a view to, or for, resale in connection with any
distribution of such Note or shares or any interest therein without
registration, an applicable exemption from registration, or other compliance
under the Act, and the holder hereof has no direct or indirect participation
in any such undertaking or in underwriting such an undertaking.
12. DEFAULT COSTS. Should the Maker or the holder of this Note
default in any of the covenants, conditions, or promises contained herein,
the defaulting party shall pay all costs and expenses, including a reasonable
attorneys fee, which may arise or accrue therefrom, or in pursuing any remedy
provided hereunder or by the statutes of any state.
13. RIGHTS ARE CUMULATIVE The rights and remedies granted to the
parties hereunder shall be in addition to and cumulative of any other rights
or remedies either may have under any document or documents executed in
connection herewith or available under applicable law. No delay or failure on
the part of a party in the exercise of any power or right shall operate as a
waiver thereof nor as an acquiescence in any default nor shall any single or
partial exercise of any power or right preclude any other or further exercise
thereof or the exercise of any other power or right.
14. WAIVER AND AMENDMENT. None of the provisions hereof may be
changed. waived, terminated or discharged orally, but only by an instrument
in writing signed by the party against
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whom enforcement of the change, waiver, termination or discharge is sought.
15. NOTICES. All communications provided for herein shall be in
writing and shall be deemed to be given or made when served personally or
when deposited in the United States mail addressed, if to the Maker at 9107
Wilshire Blvd., Suite 475, Beverly Hills, CA 90210, Attention Gerald Green,
President, or if to the Holder of this Note, at the address herein above or
as furnished to the Maker by such holder, or at such other address as shall
be designated by any party hereto in written notice to the other party hereto
delivered pursuant to this paragraph.
16. NEGOTIABILITY AND TRANSFERABILITY. This Note is negotiable and
transferable, subject to compliance with the provisions of paragraph 11
hereof.
17. PRESENTMENT WAIVER. The makers, guarantors, and endorsers
hereof; if any, severally waive presentment for payment, protest, and notice
of protest and of nonpayment of this Note.
Total Film Group, Inc.
By /s/ Gerald Green
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Gerald Green, President
August 15, 2000
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Total Film Group, Inc.
9107 Wilshire Boulevard
Suite 475
Beverly Hills, CA 90210
Re: Conversion of Note
Gentlemen:
The undersigned owner of this Note hereby irrevocably exercises the
option to convert this Note or the portion hereof designated, into shares of
common stock of Total Film Group, Inc., in accordance with the terms of this
Note, and directs that the shares issuable and deliverable upon the
conversion be issued in the name of and delivered to the undersigned unless a
different name has been indicated below. If shares are to be issued in the
name of a person other than the undersigned, the undersigned will pay any
transfer taxes payable with respect thereto.
Date: _____________________________
___________________________________
(Signature)
FILL IN FOR REGISTRATION OF SHARES
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Name SS # or other identifying number
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Address
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City, State & Zip Portion to be converted if less than
all
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Schedule for Promissory Note
<TABLE>
<CAPTION>
Name Amount Shares of MeetChina.com
<S> <C> <C>
Michael Lauer $250,000 7,500
Lancer Partners, LP $500,000 15,000
The Viator Fund, Ltd. $250,000 7,500
</TABLE>
