REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT ("Agreement") is made and entered
into as of the 18th day of June, 1997, by and between The ▇▇▇▇-▇▇ Corporation, a
Delaware corporation ("Company"); Hollywood Digital Limited Partnership, a
Delaware limited partnership ("Partnership"); and Hollywood Digital Inc., a
Delaware corporation; HDZ Digital Limited Partnership, a Delaware limited
partnership; The Palladion Limited Partnership, a Massachusetts limited
partnership; Phemus Corporation, a Massachusetts corporation ("Phemus"); ▇▇▇▇
▇▇▇▇▇▇▇; ▇▇▇▇▇▇▇ ▇▇▇▇▇; ▇▇▇▇▇ ▇▇▇▇▇▇▇▇; and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (collectively, the
"Partners"), with reference to the following facts:
A. Pursuant to that certain Agreement for the Purchase and Sale of
Assets of even date herewith (the "Purchase Agreement"), Company is issuing to
the Partnership two Convertible Subordinated Notes (the "Notes"), convertible
into the Class A Common Stock of the Company (the "Common Stock").
B. The Notes may be divided and transferred by the Partnership to the
Partners as a Partnership distribution.
C. The Company has agreed to grant to the Partnership and, to the
extent they are transferees of the Notes and/or the Common Stock, the Partners,
certain registration rights as set forth in this Agreement.
NOW THEREFORE, in consideration of the foregoing and the mutual
agreements, covenants and other provisions contained herein and in the Purchase
Agreement, the parties agree as follows:
Section 1. Definitions. As used in this Agreement, the following
capitalized terms shall have the following respective meanings:
1.1. Conversion Shares. The Common Stock into which the Notes
are convertible.
1.2. Exchange Act. The Securities Exchange Act of 1934, as
amended, or any similar federal statute then in effect, and a reference to a
particular section thereof shall be deemed to include a reference to the
comparable section, if any, of any such similar federal statute.
1.3. Holder. The Partnership or any of the Partners which is a
holder of the Notes or Registrable Securities.
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1.4. Person. An individual, partnership, joint venture,
corporation, trust, unincorporated organization or government or any department
or agency thereof.
1.5. Registrable Securities. Any shares of Common Stock which
are issued or will be issued upon conversion of a Note. As to any particular
Registrable Securities, once issued such securities shall cease to be
Registrable Securities when (i) a registration statement with respect to the
sale of such securities shall have become effective under the Securities Act and
such securities shall have been disposed of in accordance with such registration
statement, (ii) they shall have been distributed to the public pursuant to Rule
144 (or any successor provision) under the Securities Act, (iii) they shall have
been otherwise transferred, new certificates for them not bearing a legend
restricting further transfer shall have been delivered by the Company and
subsequent disposition of them shall not require registration or qualification
of them under the Securities Act or any similar state law then in force, or (iv)
they shall have ceased to be outstanding.
1.6. Registration Expenses. Any and all expenses incident to
performance of or compliance with this Agreement, including without limitation,
(i) all SEC and stock exchange or National Association of Securities Dealers
registration and filing fees, (ii) all fees and expenses of complying with
securities or blue sky laws (including reasonable fees and disbursements of
counsel for the underwriters in connection with blue sky qualifications of the
Registrable Securities), (iii) all printing, messenger and delivery expenses,
(iv) the fees and disbursements of counsel for the Company and of its
independent public accountants, including the expenses of any special audits
and/or "cold comfort" letters required by or incident to such performance and
compliance, but excluding underwriting discounts and commissions and transfer
taxes, if any.
1.7. Securities Act. The Securities Act of 1933, as amended,
or any similar federal statute then in effect, and a reference to a particular
section thereof shall be deemed to include a reference to the comparable
section, if any, of any such similar federal statute.
1.8. SEC. The Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act or the Exchange Act.
Section 2. Incidental Registration.
2.1. Right to Include Registrable Securities. If the Company
at any time proposes to register any Common Stock on any form for the general
registration of securities under the Securities Act (other than a registration
form relating to (i) a registration of a stock option, stock purchase or
compensation or incentive plan
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or of stock issued or issuable pursuant to any such plan, or a dividend
investment plan, (ii) a registration of stock proposed to be issued in exchange
for securities or assets of, or in connection with a merger or consolidation
with, another corporation, or (iii) a registration of stock proposed to be
issued in exchange for other securities of the Company), then the Company will
at such time give prompt written notice to all Holders of Notes and Registrable
Securities of its intention to do so and of such Holders' rights under this
Section 2. Upon the written request of such Holders made within twenty (20) days
after the receipt of any such notice (which request shall specify the
Registrable Securities intended to be disposed of by such Holder and the
intended method of disposition thereof), the Company will use its best efforts
to cause the Registrable Securities which the Company has been so requested to
register by the Holders thereof to be registered under the Securities Act;
provided, that (i) if, at any time after giving written notice of its intention
to register any securities but prior to the effective date of the registration
statement filed in connection with such registration, the Company shall
determine for any reason not to register such securities, the Company may at its
election, give written notice of such determination to each Holder and,
thereupon, shall be relieved of its obligation to register any Registrable
Securities in connection with such registration, and (ii) if such registration
involves an underwritten offering, all Holders requesting to be included in such
registration must sell their Registrable Securities to the underwriters of such
offering on the same terms and conditions as apply to the Company or the Holder
for whose account securities are to be sold, as the case may be. If a
registration requested pursuant to this Section 2.1 involves an underwritten
public offering, any Holder requesting to be included in such registration may
elect in writing, not later than three (3) days prior to the effectiveness of
the registration statement filed in connection with such registration, not to
register such securities in connection with such registration. The Company will
pay all Registration Expenses in connection with each registration of
Registrable Securities requested pursuant to this Section 2.
2.2. Priority in Incidental Registrations. In connection with
any registration pursuant to this Section 2 involving an underwritten offering,
if the managing underwriter or underwriters advise the Company in writing that,
in its or their opinion, the number of securities requested to be included in
such registration would have a material adverse effect on such offering
(including, without limitation, a significant decrease in the price at which
such securities can be sold), then the amount of Registrable Securities to be
offered for the accounts of Holders shall be reduced pro rata as to all
requesting Holders on the basis of the relative number of shares of Registrable
Securities each such Holder has requested to be included in such registration,
or such Registrable Securities shall be excluded from such registration, to the
extent necessary to reduce the total amount of securities to be included in such
offering to the amount recommended by such managing
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underwriter or underwriters; provided, however, that if securities are being
registered for the account of persons or entities other than the Company, such
reduction shall not represent a greater fraction of the number of Registrable
Securities intended to be offered by Holders than the fraction of similar
reductions imposed on such other persons or entities (but not the Company) with
respect to the amount of securities they intended to offer.
Section 3. Demand Registration.
3.1. Generally. From and after the date which is one year
after the date upon which at least 50% of the aggregate principal amount of the
Notes has been converted into Common Stock, the Holder or Holders who hold, in
the aggregate, 50% or more of the Conversion Shares may make one (1) written
request for the registration under the Securities Act of all or part of their
Registrable Securities (a "Demand Registration") and the Company shall use its
best efforts to effect such Demand Registration, so long as such request relates
to Registrable Securities constituting 50% or more of the Conversion Shares. Any
request for a Demand Registration shall specify the aggregate number of the
Registrable Securities proposed to be sold and shall also specify the intended
method of disposition thereof. Within ten (10) days after receipt of such
request the Company will given written notice of such registration request to
all Holders, and the Company will include in such registration all Registrable
Securities with respect to which the Company has received written requests for
inclusion therein within twenty (20) business days after the receipt by the
applicable Holder of the Company's notice. Each such request shall also specify
the aggregate number of Registrable Securities to be registered and the intended
method of disposition thereof. Unless the Holder or Holders requesting the
Demand Registration shall give written consent, no other party, including the
Company (but excluding another Holder of a Registrable Security), shall be
permitted to offer securities under any such Demand Registration. In any
registration initiated as a Demand Registration, the Company will pay all
Registration Expenses in connection therewith.
3.2. Phemus. In addition to the demand registration provided
by Section 3.1, from and after the date which is one year after the date upon
which its Notes have been converted into Common Stock, Phemus may make one (1)
written request for the registration under the Securities Act of all or part of
its Registrable Securities (the "Phemus Registration"), subject to the same
terms and conditions as are provided in Section 3.1 and elsewhere in this
Agreement with respect to the Demand Registration, provided that all costs and
expenses of such Phemus Registration, including the reasonable general and
administrative costs of the Company relating thereto, are paid for solely by
Phemus.
Section 4. Registration Procedures. If whenever the Company is required
to use its best efforts to effect or cause the
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registration of any Registrable Securities under the Securities Act as provided
in this Agreement, the Company will, as expeditiously as possible:
4.1. prepare and, in any event within ninety (90) days after
the end of the period within which request for registration may be given to the
Company (provided, however, if such registration involves an underwritten
offering, all Holders requesting to be included in such registration must sell
their Registrable Securities to the underwriters of such offering on the same
terms and conditions as apply to the Company or the Holder for whose account the
securities are to be sold, as the case may be), file with the SEC a registration
statement with respect to such Registrable Securities and use its best efforts
to cause such registration statement to become effective, provided, however,
that the Company may discontinue any registration of its securities which is
being effected pursuant to Section 2 herein at any time prior to the effective
date of the registration statement relating thereto. The Company will promptly
notify each seller of such Registrable Securities and confirm such advice in
writing (i) when such registration statement becomes effective, (ii) when any
post-effective amendment to such registration statement becomes effective and
(iii) of any request by the SEC for any amendment or supplement to such
registration statement or any prospectus relating thereto or for additional
information;
4.2. prepare and file with the SEC such amendments and
supplements to such registration statement as may be necessary to keep such
registration statement effective for a period of not less than six (6) months
and to comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such registration statement during such
period in accordance with the intended methods of disposition by the seller or
sellers of Registrable Securities set forth in such registration statement. If
at any time the SEC should institute or threaten to institute any proceedings
for the purpose of issuing a stop order suspending the effectiveness of any such
registration statement, the Company will promptly notify each seller of such
Registrable Securities and will use all reasonable efforts to prevent the
issuance of any such stop order or to obtain the withdrawal thereof as soon as
possible;
4.3. furnish to each seller of such Registrable Securities
such number of copies of such registration statement and of each such amendment
and supplement thereto (in each case including all exhibits), such number of
copies of the prospectus included in such registration statement (including each
preliminary prospectus and summary prospectus) in conformity with the
requirements of the Securities Act, and such other documents as such seller may
reasonably request in order to facilitate the disposition of the Registrable
Securities by such seller;
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4.4. use its best efforts to register or qualify such
Registrable Securities covered by such registration statement under such
securities or blue sky laws of any State of the United States as the managing
underwriter, if any, shall reasonably request, and do any and all other acts and
things which may be reasonably necessary or advisable to enable each seller and
underwriter, if any, to consummate the disposition in such jurisdictions of the
Registrable Securities owned by such seller, except that the Company shall not
for any such purpose be required to qualify generally to do business as a
foreign corporation in any jurisdiction where, but for the requirements of this
Section 4.4, it would not be obligated to be so qualified, to subject itself to
taxation in any such jurisdiction, or to consent to general service of process
in any such jurisdiction;
4.5. use its best efforts to list such Registrable Securities
on any securities exchange on which the Common Stock is then listed, if such
Registrable Securities are not already so listed and if such listing is then
permitted under the rules of such exchange, and to provide a transfer agent and
registrar for such Registrable Securities covered by such registration statement
not later than the effective date of such registration statement; and
4.6. promptly notify each seller of any such Registrable
Securities covered by such registration statement, at any time when a prospectus
relating thereto is required to be delivered under the Securities Act within the
appropriate period mentioned in Section 4.2 of the Company becoming aware that
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 the light of the circumstances then existing; and at the
request of any such seller promptly prepare and furnish to such seller a
reasonable number of copies of an amended or supplemental prospectus as may be
necessary so that, as thereafter delivered to the purchasers of such Registrable
Securities, 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 the light of the circumstances
then existing.
4.7. The Company may require each seller of Registrable
Securities as to which any registration is being effected to furnish the Company
in writing such information and documents regarding such seller and the
distribution of such securities as may be required to be disclosed in the
registration statement in question by the rules and regulations under the
Securities Act or under any other applicable securities or blue sky laws of the
jurisdictions referred to in Section 4.4.
4.8. Each Holder of Registrable Securities agrees by
acquisition of such Registrable Securities that, upon receipt of any
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notice from the Company of the happening of any event of the kind described in
Section 4.6, such Holder will forthwith discontinue disposition of Registrable
Securities under such registration statement until such Holder's receipt of the
copies of the supplemented or amended prospectus contemplated by Section 4.6,
and, if so directed by the Company, such Holder will deliver to the Company (at
the Company's expense) all copies, other than permanent file copies then in such
Holder's possession, of the prospectus covering such Registrable Securities
current at the time of receipt of such notice. In the event the Company shall
give any such notice, the period mentioned in Section 4.2 shall be extended by
the number of days during the period from and including the date of the giving
of such notice pursuant to Section 4.6 to and including the date when each
seller of Registrable Securities covered by such registration statement shall
have received the copies of the supplemented or amended prospectus contemplated
by Section 4.6.
Notwithstanding anything to the contrary in this Section 4, the Company shall
not be required to prepare and file any registration statement (i) if, upon the
advice of counsel, such registration statement requires the disclosure of any
material item for which the Company has not made a public disclosure, or (ii)
requires the submission of any financial statement of the Company in addition to
the Company's annual audited and quarterly unaudited financial statements
required to be filed with the SEC pursuant to the Exchange Act.
Section 5. Rule 144. The Company covenants that it will file the
reports required to be filed by it under the Securities Act and the Exchange Act
and the rules and regulations adopted by the SEC thereunder to the extent
required from time to time to enable the Holders to sell shares of Registrable
Securities without registration under the Securities Act within the limitation
of the exemptions provided by (i) Rule 144 under the Securities Act, as such
rule may be amended from time to time, or (ii) any similar rule or regulation
hereafter adopted by the SEC. Upon the request of any Holder of Registrable
Securities, the Company will deliver to such Holder a written statement as to
whether it has complied with such requirements.
Section 6. Miscellaneous.
6.1. Holdback Agreement. If any registration in which a Holder
is participating shall be in connection with an underwritten public offering,
such Holder of Registrable Securities agrees not to effect any public sale or
distribution, including any sale pursuant to Rule 144 under the Securities Act,
of any Registrable Securities, and to use such Holder's best efforts not to
effect any such public sale or distribution of any other equity security of the
Company or of any equity security, of the Company (in each case, other than as
part of such underwritten public offering) within thirty (30) days before or the
lesser of (a) one hundred eighty (180) days after the
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effective date of such registration or (b) the time period during which the
directors and officers of the Company are subject to a lock-up agreement.
6.2. Amendments and Waivers. This Agreement may be amended and
the Company may take any action herein prohibited, or omit to perform any act
herein required to be performed by it, only if the Company shall have obtained
the written consent to such amendment, action or omission to act, of Holders
(which must include Phemus Corporation) holding or entitled to issuance of
seventy-five percent (75%) of the Registrable Securities. All Holders shall be
bound by any consent authorized by this Section 6.2.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
"Company"
THE ▇▇▇▇-▇▇ CORPORATION
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Its:
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"Partnership"
HOLLYWOOD DIGITAL LIMITED PARTNERSHIP
By: HOLLYWOOD DIGITAL, INC., Its
General Partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
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Its:
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"Partners"
HOLLYWOOD DIGITAL, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
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Its:
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THE PALLADION LIMITED PARTNERSHIP
By: ▇▇▇▇▇▇▇, ▇▇▇▇▇ AND ▇▇▇▇, INC.,
Its general partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
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Its:
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HDZ DIGITAL LIMITED PARTNERSHIP
By: ▇▇▇▇▇▇▇, ▇▇▇▇▇ AND ▇▇▇▇ LIMITED
PARTNERSHIP II
By: ▇▇▇▇▇▇▇, ▇▇▇▇▇ AND ▇▇▇▇,
INC., Its general partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
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Its:
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PHEMUS CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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Its:
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By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Its:
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