EXHIBIT 10.2
AMENDED AND RESTATED REGISTRATION RIGHTS
AGREEMENT (this "Agreement") dated January
27, 2000, 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 Common Stock of the Corporation. The Corporation and the Series A
Investors are parties to the Original Registration Rights Agreement entered into
as a condition to and in connection with the Series A Purchase Agreement. The
Corporation and the Series B Investors are concurrently entering into the Series
B Purchase Agreement which provides, as a condition thereto, that the Original
Registration Rights Agreement be amended and restated in its entirety as set
forth in this Agreement in order to set forth the rights of the Investors in
connection with public offerings and sales of the Common Stock.
In accordance with Section XVII of the Original Registration Rights
Agreement, Series A Investors holding more than a majority of the Registrable
Shares (as defined in the Original Registration Rights Agreement) have approved
the amendment and restatement of the Original Registration Rights Agreement as
set forth in this Agreement.
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 I. 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 each of the persons set forth on
Schedule I 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. "Original Registration Rights Agreement" means the
Registration Rights Agreement, dated October 24, 1997, among the
corporation and the Series A Investors.
F. "Other Shares" means at any time those shares of
Common Stock which do not constitute Primary Shares or Registrable
Shares.
G. "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.
H. "Registrable Shares" means Restricted Shares which
constitute Common Stock.
I. "Restricted Shares" means shares of Common Stock
issuable upon the exercise of warrants to purchase Common Stock held by
the Investors on the date hereof. 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 (together with all other
Restricted Shares held by the same holder) 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.
J. "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.
K. "Rule 144" means Rule 144 promulgated under the
Securities Act or any successor rule thereto or any complementary rule
thereto (such as Rule 144A).
L. "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.
M. "Series B Purchase Agreement" means the Securities
Purchase Agreement dated the date hereof, among the Corporation and the
Series B Investors.
N. "Series A Preferred" means the Series A Convertible
Preferred Stock, $.0001 par value per share, of the Corporation, issued
to the Series A Investors pursuant to the Series A Purchase Agreement.
O. "Series B Preferred" means the Series B Redeemable
Preferred Stock, $.0001 par value per share, of the Corporation, issued
to the Investors pursuant to the Series B Purchase Agreement.
P. "Series A Investors" means each of the persons
identified as such on Schedule I.
Q. "Series A Purchase Agreement" means the Securities
Purchase Agreement, dated October 24, 1997, among the Corporation and
the Series A Investors.
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R. "Series B Investors" means each of the persons
identified as such on Schedule I.
SECTION II. Required Registration. On any date after the earlier of (i)
March 31, 2001, and (ii) 180 days following 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 he obligated to use its
best efforts to file and cause to become effective (i) more than two
registration statements initiated pursuant to this Section II, (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 II
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 II 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 III 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 notice in connection with the filing
of a registration statement on behalf of the holder of Other Shares,
provided that the Corporation may only so delay the filing or
effectiveness of a registration statement once pursuant to clause (i)
above and once pursuant to clause (ii) above, in each case in any
12-month period; and
C. with respect to any registration pursuant to this
Section II, 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:
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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);
1. second, the Other Shares which are entitled
to registration rights; and
2. 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 III. 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 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:
1. first the Primary Shares; and
2. second, the Registrable Shares and Other
Shares requested to be included in such registration (or, if
necessary, such Registrable Shares and Other
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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:
1. first, the Other Shares held by the parties
demanding such registration;
2. 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
thereof (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
3. third, the Primary Shares.
SECTION IV. 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 V. Holdback Agreement. If the Corporation at any time shall
register shares of Common Stock under the Securities Act (including any
registration pursuant to Sections II, III or IV 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 II, III or IV 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 its executive officers and directors, and any person permitted to sell shares
of stock in a registration to be bound by and to comply with this Section V as,
if such person was an Investor hereunder.
SECTION VI. 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:
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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 III 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;
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
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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 VI, 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 (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;
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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 VI(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 VI(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 VII. Expenses. All expenses (other than underwriting discounts
and commissions relating to the Registrable Shares, as provided in the last
sentence of this Section VII) incurred by the Corporation in complying with
Section VI, 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
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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 VIII. 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 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.
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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 VIII) 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 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 VIII, 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 VIII.
D. If the indemnification provided for in this Section VIII 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
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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 IX. 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 X. 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 XI. 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 acknowledge the registration
rights granted by the Corporation pursuant to those certain Universal and Forth
Investments Registration Rights Agreements each dated as of October 24, 1997.
SECTION XII. Termination. This Agreement shall terminate and be of no
further force or effect when there shall no longer be any Registrable Shares
outstanding.
SECTION XIII. Successors and Assigns. This Agreement shall bind and
inure to the benefit of the Corporation and the Investors and, subject to
Section XV, the respective successors and assigns of the Corporation and the
Investors.
SECTION XIV. Assignment. Each Investor may assign its rights hereunder
to any purchaser or transferee of Registrable Shares; provided, however, that
such purchaser or 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 XV. Entire Agreement. This Agreement amends and restates in its
entirety the Original Registration Rights Agreement. This Agreement and the
Securities Purchase
11
Agreements each dated as of the date hereof, and the Stockholders Agreement (as
defined in the Series A Purchase Agreement), dated as of October 24, 1997, and
the other writings referred to herein or therein or delivered pursuant hereto or
thereto, contain the entire agreement among the Corporation and the Investors
with respect to the subject matter hereof and supersede all prior and
contemporaneous arrangements or understandings with respect thereto.
SECTION XVI. 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.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇, General Counsel
with a copy to:
▇▇▇▇ & ▇▇▇▇▇, Professional Corporation
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
(ii) if to the Investors, to their respective addresses set forth
on Schedule I hereto, and in the case of the Series A
Investors, with a copy to:
▇'▇▇▇▇▇▇▇▇ Graev & Karabell, LLP
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
and, in the case of the Series B Investors, with a copy to:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ Freidenrich, LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ Cartoni
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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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 XVII. 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 XVIII. 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.
SECTION XIX. 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 XX. 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.
13
CORPORATION SIGNATURE PAGE
IN WITNESS WHEREOF, the Corporation has executed this Agreement as of
the date first written above.
DIGITAL THEATER SYSTEMS, INC.
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇▇
Title: Executive Vice President, Operations
SERIES A INVESTORS SIGNATURE PAGE
IN WITNESS WHEREOF, the following Series A Investors owning more than a
majority of the Registrable Shares (as defined in the Original Registration
Rights Agreement) have executed this Agreement as of the date first above
written.
WESTON PRESIDIO CAPITAL II
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------------
General Partner
SERIES A INVESTORS SIGNATURE PAGE
IN WITNESS WHEREOF, the following Series A Investors owning more than a
majority of the Registrable Shares (as defined in the Original Registration
Rights Agreement) have executed this Agreement as of the date first above
written.
WESTON PRESIDIO CAPITAL II
By: ________________________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: General Partner
EOS PARTNERS SBIC, L.P.
By: EOS SBIC GENERAL, L.P.
Its General Partner
By: EOS SBIC, INC.
Its General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------------
Name:
Title:
Eos Partners SBIC, L.P.
by Eos SBIC General, L.P., its General Partner
by Eos SBIC, Inc., its Managing General Partners
by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President
SERIES A INVESTORS SIGNATURE PAGE
IN WITNESS WHEREOF, the following Series A Investors owning more than a
majority of the Registrable Shares (as defined in the Original Registration
Rights Agreement) have executed this Agreement as of the date first above
written.
SCRIPPS VENTURES, LLC
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Senior Vice
President
SERIES B INVESTORS SIGNATURE PAGE
IN WITNESS WHEREOF, the Series B Investors have executed this Agreement
as of the date first written above.
WESTON PRESIDIO CAPITAL II
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------------
General Partner
SERIES B INVESTORS SIGNATURE PAGE
IN WITNESS WHEREOF, the Series B Investors have executed this Agreement
as of the date first written above.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------------
Eos Partners SBIC, L.P.
by Eos SBIC General, L.P., its General Partner
by Eos SBIC, Inc., its Managing General Partners
by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President
SCHEDULE I
INVESTORS
Series A Investors:
Weston Presidio Capital II
EOS Partners SBIC, L.P.
Scripps Ventures, L.L.C.
Series B Investors:
Weston Presidio Capital II
EOS Partners SBIC, L.P.