EXHIBIT 10.1
UNIVERSAL AND ▇▇▇▇▇▇▇▇▇ REGISTRATION RIGHTS
AGREEMENT dated October 24, 1997, among
DIGITAL THEATER SYSTEMS, INC., a Delaware
corporation (the "Corporation"), and the
INVESTORS (as herein defined).
The Investors own or have the right to purchase or otherwise acquire
shares of the Common Stock (as hereinafter defined) of the Corporation. The
Corporation and the Investors deem it to be in their respective best interests
to set forth the rights of the Investors in connection with public offerings and
sales of the Common Stock.
NOW, THEREFORE, in consideration of the premises and mutual covenants
and obligations hereinafter set forth, the Corporation and the Investors hereby
agree as follows:
SECTION 1. DEFINITIONS. As used in this Agreement, the following
terms shall have the following meanings:
(a) "Commission" means the Securities and Exchange
Commission or any other Federal agency at the time administering the Securities
Act.
(b) "Common Stock" means the common stock, $.0001 par
value per share, of the Corporation.
(c) "Exchange Act" means the Securities Exchange Act of
1934 or any successor Federal statute, and the rules and regulations of the
Commission promulgated thereunder, all as the same shall be in effect from time
to time.
(d) "Investors" means Universal City Studios, Inc. and
Forth Investments, LLC and each additional person who shall execute a
counterpart signature page hereto, and includes any successor to, or assignee or
transferee of, any such person who or which agrees in writing to be treated as
an Investor hereunder and to be bound by the terms and comply with all
applicable provisions hereof.
(e) "Other Shares" means at any time those shares of
Common Stock which do not constitute Primary Shares or Registrable Shares.
(f) "Primary Shares" means at any time the authorized but
unissued shares of Common Stock and shares of Common Stock held by the
Corporation in its treasury.
(g) "Registrable Shares" means Restricted Shares which
constitute Common Stock.
(h) "Restricted Shares" means shares of Common Stock
issued and outstanding or issuable upon exercise of warrants to purchase Common
Stock held by the Investors. As to any particular Restricted Shares, once
issued, such Restricted Shares shall cease
to be Restricted Shares when (i) they have been registered under the Securities
Act, the registration statement in connection therewith has been declared
effective and they have been disposed of pursuant to such effective registration
statement, (ii) they are eligible to be sold or distributed pursuant to Rule 144
within any consecutive three month period (including, without limitation, Rule
144(k)) without volume limitations, or (iii) they shall have ceased to be
outstanding.
(i) "Registration Date" means the date upon which the
registration statement pursuant to which the Corporation shall have initially
registered shares of Common Stock under the Securities Act for sale to the
public shall have been declared effective.
(j) "Rule 144" means Rule 144 promulgated under the
Securities Act or any successor rule thereto or any complementary rule thereto
(such as Rule 144A).
(k) "Securities Act" means the Securities Act of 1933 or
any successor Federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect from time to time.
SECTION 2. REQUIRED REGISTRATION. On any date after the
Registration Date, if the Corporation shall be requested in writing by the
holders of at least thirty percent (30%) (on a Common Stock equivalent basis) of
the Restricted Shares then outstanding to effect the registration under the
Securities Act of Registrable Shares, the Corporation shall promptly use its
best efforts to effect the registration under the Securities Act of the
Registrable Shares which the Corporation has been so requested to register;
provided, however, that the Corporation shall not be obligated to effect any
registration under the Securities Act except in accordance with the following
provisions:
(a) the Corporation shall not be obligated to use its
best efforts to file and cause to become effective (i) more than two
registration statements initiated pursuant to this Section 2, (ii) any
registration statement during any period in which any other registration
statement (other than on Form S-4 or Form S-8 promulgated under the Securities
Act or any successor forms thereto) pursuant to which Primary Shares are to be
or were sold has been filed and not withdrawn or has been declared effective
within the prior 90 days or (iii) any registration statement initiated pursuant
to this Section 2 unless such registration statement relates to Registrable
Shares having a minimum aggregate offering price of $10,000,000 (based on the
then current market price or fair value of the Common Stock);
(b) the Corporation may delay the filing or effectiveness
of any registration statement for a period of up to 120 days after the date of a
request for registration pursuant to this Section 2 if at the time of such
request (i) the Corporation is engaged, or has fixed plans to engage within 90
days of the time of such request, in a firm commitment underwritten public
offering of Primary Shares in which the holders of Registrable Shares may
include Registrable Shares pursuant to Section 3 or (ii) the Corporation
reasonably determines that such registration and offering would interfere with
any material transaction involving the Corporation, as approved by the Board of
Directors or (iii) the Corporation has received a request for registration in
accordance with the terms of an agreement granting registration rights on behalf
of the holder of Other Shares, provided that the Corporation may only so delay
the filing or effectiveness of a
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registration statement once pursuant to clause (i) above and once pursuant to
clause (ii) above, in each case in any 12-month period and provided further
that, in the event of a delay in registration contemplated by clause (iii), the
Corporation agrees to file or use its best efforts to cause the effectiveness of
such registration promptly upon the expiration of the required period of delay;
and
(c) with respect to any registration pursuant to this
Section 2, the Corporation shall give notice of such registration to the
Investors who do not request registration hereunder and to the holders of all
Other Shares which are entitled to registration rights and the Corporation may
include in such registration any Primary Shares or Other Shares; provided,
however, that if the managing underwriter advises the Corporation that the
inclusion of all Registrable Shares, Primary Shares and/or Other Shares proposed
to be included in such registration would interfere with the successful
marketing (including pricing) of the Registrable Shares proposed to be included
in such registration, then the number of Registrable Shares, Primary Shares
and/or Other Shares proposed to be included in such registration shall be
included in the following order:
(i) first, the Registrable Shares requested to
be included in such registration (or, if necessary, such Registrable Shares pro
rata among the holders thereof based upon the number of Registrable Shares
requested to be registered by each such holder);
(ii) second, the Other Shares which are entitled
to registration rights; and
(iii) third, the Primary Shares.
(d) If the method of disposition requested by the
holders, pursuant to this Section 2, is an underwritten public offering, the
majority of the holders of Registrable Shares shall have the right to designate
the managing underwriter of such offering, which underwriter shall be a top 15
investment bank as rated by Securities Data Corp. at the time of the request.
(e) At any time before the registration statement
covering Registrable Shares becomes effective, the holders of a majority of such
shares may request the Corporation to withdraw or not to file the registration
statement. In that event, if such request of withdrawal shall not have been
caused by, or made in response to, the material adverse effect of an event on
the business, properties, condition, financial or otherwise, or operations of
the Corporation, the holders shall have used one of their demand registration
rights under this Section 2 and the Corporation shall no longer be obligated to
register Registrable Shares pursuant to the exercise of such one registration
right pursuant to this Section 2 unless the remaining holders shall pay to the
Corporation the expenses incurred by the Corporation through the date of such
request.
SECTION 3. PIGGYBACK REGISTRATION. If the Corporation at any
time proposes for any reason to register Primary Shares or Other Shares under
the Securities Act (other than on Form S-4 or Form S-8 promulgated under the
Securities Act or any successor forms thereto), it shall promptly give written
notice to the Investors of its intention to so register such Primary Shares or
Other Shares and, upon the written request, delivered to the Corporation within
30 days after delivery of any such notice by the Corporation, of the Investors
to include in such registration
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Registrable Shares (which request shall specify the number of Registrable Shares
proposed to be included in such registration), the Corporation shall use its
best efforts to cause all such Registrable Shares to be included in such
registration on the same terms and conditions as the securities otherwise being
sold in such registration; provided, however, that if the managing underwriter
advises the Corporation that the inclusion of all Registrable Shares requested
to be included in such registration would interfere with the successful
marketing (including pricing) of the Primary Shares or Other Shares proposed to
be registered by the Corporation, then the number of Primary Shares, Registrable
Shares and Other Shares proposed to be included in such registration shall be
included in the following order:
(a) if the Corporation proposes to register Primary
Shares:
(i) first, the Primary Shares; and
(ii) second, the Registrable Shares and Other
Shares requested to be included in such registration (or, if necessary, such
Registrable Shares and Other Shares pro rata among the holders thereof based
upon the number of Registrable Shares and Other Shares requested to be
registered by each such holder); or
(b) if the Corporation proposes to register Other Shares
pursuant to a request for registration by the holders of such Other Shares:
(i) first, the Other Shares held by the parties
demanding such registration;
(ii) second, the Registrable Shares and Other
Shares (other than shares registered pursuant to Section 3(b)(i) hereof)
requested to be registered by the holders hereof (or, if necessary, pro rata
among the holders thereof based on the number of Registrable Shares and Other
Shares requested to be registered by such holders); and
(iii) third, the Primary Shares.
SECTION 4. REGISTRATIONS ON FORM S-3. Anything contained in
Section 2 to the contrary notwithstanding, at such time as the Corporation shall
have qualified for the use of Form S-3 promulgated under the Securities Act or
any successor form thereto, the holders of at least twenty-five percent (25%) of
the Registrable Shares then outstanding shall have the right to request in
writing two registrations per twelve month period thereafter on Form S-3 or such
successor form of Registrable Shares, which request or requests shall (i)
specify the number of Registrable Shares intended to be sold or disposed of and
the holders thereof, (ii) state the intended method of disposition of such
Registrable Shares and (iii) relate to Registrable Shares having anticipated net
proceeds of at least $3,000,000. A requested registration on Form S-3 or any
such successor form in compliance with this Section 4 shall not count as a
registration statement initiated pursuant to Section 2 but shall otherwise be
treated as a registration initiated pursuant to, and shall, except as otherwise
expressly provided in this Section 4, be subject to Section 2.
SECTION 5. HOLDBACK AGREEMENT. If the Corporation at any time
shall register shares of Common Stock under the Securities Act (including any
registration pursuant to Sections 2, 3
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or 4 hereof) for sale to the public, the Investors shall not sell publicly, make
any short sale of, grant any option for the purchase of, or otherwise dispose
publicly of, any shares of Common Stock (other than those shares of Common Stock
included in such registration pursuant to Sections 2, 3 or 4 hereof) without the
prior written consent of the Corporation, for a period designated by the
Corporation in writing to the Investors, which period shall begin not more than
10 days prior to the effectiveness of the registration statement pursuant to
which such public offering shall be made and shall not last more than 180 days
after the effective date of such registration statement. The Corporation shall
obtain the agreement of any person permitted to sell shares of stock in a
registration to be bound by and to comply with this Section 5 as if such person
was an Investor hereunder.
SECTION 6. PREPARATION AND FILING. If and whenever the
Corporation is under an obligation pursuant to the provisions of this Agreement
to use its best efforts to effect the registration of any Registrable Shares,
the Corporation shall, as expeditiously as practicable:
(a) use its best efforts to cause a registration
statement that registers such Registrable Shares to become and remain effective
for a period of 90 days or until all of such Registrable Shares have been
disposed of (if earlier) (it being understood that the Corporation may
discontinue pursuant to Section 3 any registration);
(b) furnish, at least five business days before filing a
registration statement that registers such Registrable Shares, a prospectus
relating thereto or any amendments or supplements relating to such a
registration statement or prospectus, to one counsel selected by the Investors
(the "Investors' Counsel"), copies of all such documents proposed to be filed
(it being understood that such five-business-day period need not apply to
successive drafts of the same document proposed to be filed so long as such
successive drafts are supplied to the Investors' Counsel in advance of the
proposed filing by a period of time that is customary and reasonable under the
circumstances);
(c) prepare and file with the Commission such amendments
and supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration statement
effective for at least a period of 90 days or until all of such Registrable
Shares have been disposed of (if earlier) and to comply with the provisions of
the Securities Act with respect to the sale or other disposition of such
Registrable Shares (it being understood that the Corporation may discontinue
pursuant to Section 3 any registration);
(d) notify in writing the Investors' Counsel promptly (i)
of the receipt by the Corporation of any notification with respect to any
comments by the Commission with respect to such registration statement or
prospectus or any amendment or supplement thereto or any request by the
Commission for the amending or supplementing thereof or for additional
information with respect thereto, (ii) of the receipt by the Corporation of any
notification with respect to the issuance by the Commission of any stop order
suspending the effectiveness of such registration statement or prospectus or any
amendment or supplement thereto or the initiation or threatening of any
proceeding for that purpose and (iii) of the receipt by the Corporation of any
notification with respect to the suspension of the qualification of such
Registrable Shares for sale in any jurisdiction or the initiation or threatening
of any proceeding for such purposes;
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(e) use its best efforts to register or qualify such
Registrable Shares under such other securities or blue sky laws of such
jurisdictions as the Investors reasonably request and do any and all other acts
and things which may be reasonably necessary or advisable to enable the
Investors to consummate the disposition in such jurisdictions of the Registrable
Shares owned by the Investors; provided, however, that the Corporation will not
be required to qualify generally to do business, subject itself to general
taxation or consent to general service of process in any jurisdiction where it
would not otherwise be required to do so but for this paragraph (e) or to
provide any material undertaking or make any changes in its By-laws or
Certificate of Incorporation which the Board of Directors determines to be
contrary to the best interests of the Corporation;
(f) furnish to the Investors holding such Registrable
Shares such number of copies of a summary prospectus, if any, or other
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as such Investors
may reasonably request in order to facilitate the public sale or other
disposition of such Registrable Shares;
(g) use its best efforts to cause such Registrable Shares
to be registered with or approved by such other governmental agencies or
authorities as may be necessary by virtue of the business and operations of the
Corporation to enable the Investors holding such Registrable Shares to
consummate the disposition of such Registrable Shares;
(h) notify the Investors holding such Registrable Shares
on a timely basis at any time when a prospectus relating to such Registrable
Shares is required to be delivered under the Securities Act within the
appropriate period mentioned in subparagraph (a) of this Section 6, of the
happening of any event as a result of which the prospectus included in such
registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances then existing and, at the request of the Investors, prepare and
furnish to such Investors 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 offerees of such shares, such prospectus shall not include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading in
light of the circumstances then existing;
(i) subject to the execution of confidentiality
agreements in form and substance satisfactory to the Corporation, make available
upon reasonable notice and during normal business hours, for inspection by the
Investors holding such Registrable Shares, any underwriter participating in any
disposition pursuant to such registration statement and any attorney, accountant
or other agent retained by the Investors or underwriter (collectively, the
"Inspectors"), all pertinent financial and other records, pertinent corporate
documents and properties of the Corporation (collectively, the "Records"), as
shall be reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Corporation's officers, directors and employees to
supply all information (together with the Records, the "Information") reasonably
requested by any such Inspector in connection with such registration statement.
Any of the Information which the Corporation determines in good faith to be
confidential, and of which determination the Inspectors are so notified, shall
not be disclosed by the Inspectors unless
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(i) the disclosure of such Information is necessary to avoid or correct a
misstatement or omission in the registration statement, (ii) the release of such
Information is ordered pursuant to a subpoena or other order from a court of
competent jurisdiction or (iii) such Information has been made generally
available to the public; the Investors agree that they will, upon learning that
disclosure of such Information is sought in a court of competent jurisdiction,
give notice to the Corporation and allow the Corporation, at the Corporation's
expense, to undertake appropriate action to prevent disclosure of the
Information deemed confidential;
(j) use its best efforts to obtain from its independent
certified public accountants "cold comfort" letters in customary form and at
customary times and covering matters of the type customarily covered by cold
comfort letters;
(k) use its best efforts to obtain from its counsel an
opinion or opinions in customary form;
(l) provide a transfer agent and registrar (which may be
the same entity and which may be the Corporation) for such Registrable Shares;
(m) issue to any underwriter to which the Investors
holding such Registrable Shares may sell shares in such offering certificates
evidencing such Registrable Shares;
(n) list such Registrable Shares on any national
securities exchange on which any shares of the Common Stock are listed or, if
the Common Stock is not listed on a national securities exchange, use its best
efforts to qualify such Registrable Shares for inclusion on the automated
quotation system of the National Association of Securities Dealers, Inc. (the
"NASD"), or such other national securities exchange as the holders of a majority
of such Registrable Shares shall reasonably request;
(o) 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, earnings statements (which
need not be audited) covering a period of 12 months beginning within three
months after the effective date of the registration statement, which earnings
statements shall satisfy the provisions of Section 11(a) of the Securities Act;
and
(p) use its best efforts to take all other steps
necessary to effect the registration of such Registrable Shares contemplated
hereby.
Each holder of the Registrable Shares, upon receipt of any notice from
the Corporation of any event of the kind described in Section 6(h) hereof, shall
forthwith discontinue disposition of the Registrable Shares pursuant to the
registration statement covering such Registrable Shares until such holder's
receipt of the copies of the supplemented or amended prospectus contemplated by
Section 6(h) hereof, and, if so directed by the Corporation, such holder shall
deliver to the Corporation all copies, other than permanent file copies then in
such holder's possession, of the prospectus covering such Registrable Shares at
the time of receipt of such notice.
SECTION 7. EXPENSES. All expenses (other than underwriting
discounts and commissions relating to the Registrable Shares, as provided in the
last sentence of this Section 7)
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incurred by the Corporation in complying with Section 6, including, without
limitation, all registration and filing fees (including all expenses incident to
filing with the NASD), fees and expenses of complying with securities and blue
sky laws, printing expenses, fees and expenses of the Corporation's counsel and
accountants and reasonable fees and expenses of the Investors' Counsel, shall be
paid by the Corporation; provided, however, that all underwriting discounts and
selling commissions applicable to the Registrable Shares and Other Shares shall
be borne by the holders selling such Registrable Shares and Other Shares, in
proportion to the number of Registrable Shares and Other Shares sold by each
such holder.
SECTION 8. INDEMNIFICATION.
(a) In connection with any registration of any
Registrable Shares under the Securities Act pursuant to this Agreement, the
Corporation shall indemnify and hold harmless the holders of Registrable Shares,
each underwriter, broker or any other person acting on behalf of the holders of
Registrable Shares and each other person, if any, who controls any of the
foregoing persons within the meaning of the Securities Act against any losses,
claims, damages or liabilities, joint or several (or actions in respect
thereof), to which any of the foregoing persons may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or allegedly untrue statement of a material fact contained in
the registration statement under which such Registrable Shares were registered
under the Securities Act, any preliminary prospectus or final prospectus
contained therein or otherwise filed with the Commission, any amendment or
supplement thereto or any document incident to registration or qualification of
any Registrable Shares, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading or, with respect to
any prospectus, necessary to make the statements therein in light of the
circumstances under which they were made not misleading, or any violation by the
Corporation of the Securities Act or state securities or blue sky laws
applicable to the Corporation and relating to action or inaction required of the
Corporation in connection with such registration or qualification under such
state securities or blue sky laws; and shall reimburse the holders of
Registrable Shares, such underwriter, such broker or such other person acting on
behalf of the holders of Registrable Shares and each such controlling person for
any legal or other expenses reasonably incurred by any of them in connection
with investigating or defending any such loss, claim, damage, liability or
action; provided, however, that the Corporation shall not be liable in any such
case to the extent that any such loss, claim, damage, liability or action
(including any legal or other expenses incurred) arises out of or is based upon
an untrue statement or allegedly untrue statement or omission or alleged
omission made in said registration statement, preliminary prospectus, final
prospectus, amendment, supplement or document incident to registration or
qualification of any Registrable Shares in reliance upon and in conformity with
written information furnished to the Corporation through an instrument duly
executed by the holders of Registrable Shares or their counsel or underwriter
specifically for use in the preparation thereof; provided further, however, that
the foregoing indemnity agreement is subject to the condition that, insofar as
it relates to any untrue statement, allegedly untrue statement, omission or
alleged omission made in any preliminary prospectus but eliminated or remedied
in the final prospectus (filed pursuant to Rule 424 of the Securities Act), such
indemnity agreement shall not inure to the benefit of any Investor, underwriter,
broker or other person acting on behalf of holders of the Restricted Shares from
whom the person asserting any
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loss, claim, damage, liability or expense purchased the Restricted Shares which
are the subject thereof, if a copy of such final prospectus had been made
available to such person and such Investor, underwriter, broker or other person
acting on behalf of holders of the Registrable Shares and such final prospectus
was not delivered to such person with or prior to the written confirmation of
the sale of such Registrable Shares to such person.
(b) In connection with any registration of Registrable
Shares under the Securities Act pursuant to this Agreement, each holder of
Registrable Shares shall severally and not jointly indemnify and hold harmless
(in the same manner and to the same extent as set forth in the preceding
paragraph of this Section 8) the Corporation, each director of the Corporation,
each officer of the Corporation who shall sign such registration statement, each
underwriter, broker or other person acting on behalf of the holders of
Registrable Shares and each person who controls any of the foregoing persons
within the meaning of the Securities Act with respect to any statement or
omission from such registration statement, any preliminary prospectus or final
prospectus contained therein or otherwise filed with the Commission, any
amendment or supplement thereto or any document incident to registration or
qualification of any Registrable Shares, if such statement or omission was made
in reliance upon and in conformity with written information furnished by the
holders of Registrable Shares to the Corporation or such underwriter
specifically for use in connection with the preparation of such registration
statement, preliminary prospectus, final prospectus, amendment, supplement or
document; provided, however, that the maximum amount of liability in respect of
such indemnification shall be limited, in the case of each seller of Registrable
Shares, to an amount equal to the net proceeds actually received by such Seller
from the sale of Registrable Shares effected pursuant to such registration.
(c) Promptly after receipt by an indemnified party of
notice of the commencement of any action involving a claim referred to in the
preceding paragraphs of this Section 8, such indemnified party will, if a claim
in respect thereof is made against an indemnifying party, give written notice to
the latter of the commencement of such action. In case any such action is
brought against an indemnified party, the indemnifying party will 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 responsible for any
legal or other expenses subsequently incurred by the indemnified party in
connection with the defense thereof; provided, however, that if any indemnified
party shall have reasonably concluded, based upon the advice of counsel, that
there may be one or more legal or equitable defenses available to such
indemnified party which are additional to or conflict with those available to
the indemnifying party, or that such claim or litigation involves or could have
an effect upon matters beyond the scope of the indemnity agreement provided in
this Section 8, the indemnifying party shall not have the right to assume the
defense of such action on behalf of such indemnified party and such indemnifying
party shall reimburse such indemnified party and any person controlling such
indemnified party for that portion of the fees and expenses of any one counsel
retained by the indemnified party which is reasonably related to the matters
covered by the indemnity agreement provided in this Section 8.
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(d) If the indemnification provided for in this Section 8
is held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any loss, claim, damage, liability or action referred to
herein, then the indemnifying party, in lieu of indemnifying such indemnified
party hereunder, shall contribute to the amounts paid or payable by such
indemnified party as a result of such loss, claim, damage, liability or action
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and of the indemnified party on the other in
connection with the statements or omissions which resulted in such loss, claim,
damage, liability or action as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other things,
whether the 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 by the indemnified party and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
SECTION 9. INFORMATION BY HOLDER. The Investors shall furnish to
the Corporation such written information regarding the Investors and the
distribution proposed by the Investors as the Corporation may reasonably request
in writing and as shall be reasonably required in connection with any
registration, qualification or compliance referred to in this Agreement.
SECTION 10. EXCHANGE ACT COMPLIANCE. From the Registration Date
or such earlier date as a registration statement filed by the Corporation
pursuant to the Exchange Act relating to any class of the Corporation's
securities shall have become effective, the Corporation shall comply with all of
the reporting requirements of the Exchange Act applicable to it (whether or not
it shall be required to do so, but specifically excluding Section 14 of the
Exchange Act if not then applicable to the Corporation) and shall comply with
all other public information reporting requirements of the Commission which are
conditions to the availability of Rule 144 for the sale of the Common Stock. The
Corporation shall cooperate with the Investors in supplying such information as
may be necessary for the Investors to complete and file any information
reporting forms presently or hereafter required by the Commission as a condition
to the availability of Rule 144.
SECTION 11. NO CONFLICT OF RIGHTS. The Corporation shall not,
after the date hereof, grant any registration rights which conflict with or
impair the registration rights granted hereby The Investors expressly
acknowledge the registration rights granted by the Corporation pursuant to that
certain Registration Rights Agreement dated as of the date hereof between the
Corporation and the investors named therein.
SECTION 12. TERMINATION. This Agreement shall terminate and be of
no further force or effect when there shall no longer be any Registrable Shares
outstanding.
SECTION 13. SUCCESSORS AND ASSIGNS. This Agreement shall bind
and inure to the benefit of the Corporation and the Investors and, subject to
Section 15, the respective successors and assigns of the Corporation and the
Investors.
SECTION 14. ASSIGNMENT. Each Investor may assign its rights
hereunder to any purchaser or transferee of Registrable Shares; provided,
however, that such purchaser or
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transferee shall, as a condition to the effectiveness of such assignment, be
required to execute a counterpart to this Agreement agreeing to be treated as an
Investor whereupon such purchaser or transferee shall have the benefits of, and
shall be subject to the restrictions contained in, this Agreement as if such
purchaser or transferee was originally included in the definition of an Investor
herein and had originally been a party hereto.
SECTION 15. ENTIRE AGREEMENT. This Agreement contains the entire
agreement among the Corporation and the Investors with respect to the subject
matter hereof and supersedes all prior and contemporaneous arrangements or
understandings with respect thereto.
SECTION 16. NOTICES. All notices, requests, consents and other
communications hereunder to any party shall be deemed to be sufficient if
contained in a written instrument delivered in person or sent by telecopy,
nationally-recognized overnight courier or first class registered or certified
mail, return receipt requested, postage prepaid, addressed to such party at the
address set forth below or such other address as may hereafter be designated in
writing by such party to the other parties:
(i) if to the Corporation, to:
Digital Theater Systems, Inc.
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, #▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
with a copy to:
▇▇▇▇ & ▇▇▇▇▇, Professional Corporation
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.; and
(ii) if to the Investors, to:
Forth Investments, LLC
c/o Breslauer, Jacobsen, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇,
Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (310)
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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with a copy to:
Gang, Tyre, ▇▇▇▇▇ & ▇▇▇▇▇, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
and
Universal City Studios, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Senior Vice President,
Corporate Development
with copies to:
Attn: General Counsel
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇; and
▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇
All such notices, requests, consents and other communications shall be deemed to
have been delivered (a) in the case of personal delivery or delivery by
telecopy, on the date of such delivery, (b) in the case of dispatch by
nationally-recognized overnight courier, on the next business day following such
dispatch and (c) in the case of mailing, on the third business day after the
posting thereof.
SECTION 17. MODIFICATIONS; AMENDMENTS; WAIVERS. The terms and
provisions of this Agreement may not be modified or amended, nor may any
provision be waived, except pursuant to a writing signed by the Corporation and
the holders of at least a majority of the Registrable Shares then outstanding;
provided, however, that any amendment to or modification of this Agreement which
would have a disproportionate adverse affect on the rights of any Investor shall
require the written consent of such Investor.
SECTION 18. COUNTERPARTS; FACSIMILE SIGNATURES. This Agreement
may be executed in any number of counterparts, and each such counterpart hereof
shall be deemed to be an original instrument, but all such counterparts together
shall constitute but one agreement. Facsimile counterpart signatures to this
Agreement shall be acceptable at the Closing (as defined in the Securities
Purchase Agreement) if the originally executed counterpart is delivered within a
reasonable period thereafter.
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SECTION 19. HEADINGS. The headings of the various sections of
this Agreement have been inserted for convenience of reference only and shall
not be deemed to be a part of this Agreement.
SECTION 20. GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of California applicable
to contracts made and to be performed wholly therein.
IN WITNESS WHEREOF, the parties hereto have executed this Registration
Rights Agreement on the date first written above.
DIGITAL THEATER SYSTEMS, INC.
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: VP, CFO
UNIVERSAL CITY STUDIOS, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------------------
Name:
Title:
FORTH INVESTMENTS, LLC
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chief Financial Officer
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