Registration Rights Agreement - Anthem Recording West Inc., Atlas Trust Company (Jersey) Ltd., Tavendish Enterprises Ltd., Ryley Hill Ltd., David John Shortland, Paula Loraine Shortland and Shortland No. 1 Trust
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made as of the 23rd day
of May 2000 by and among ANTHEM RECORDING WEST INC., a California corporation
(the "Company"), and the purchasers of the Company's common stock listed on the
signature pages hereto (the "Investors").
RECITALS
WHEREAS:
A. The Investors are parties to the share exchange agreement dated 5 May
2000 among the Company, the Investors and others (the "Share Exchange
Agreement"), which provides that as a condition to the closing of the
transactions contemplated therein, this Agreement must be executed and
delivered by the Investors and the Company;
B. The Company desires to grant, and the Investors desire to be granted,
the rights created herein.
NOW, THEREFORE, in consideration of the mutual promises and covenants set forth
herein, the parties hereto agree as follows:
1. REGISTRATION RIGHTS
The Company covenants and agrees as follows:
1.1 Definitions
For purposes of this CLAUSE 1:
(a) The term "Act" means the Securities Act of 1933, as amended.
(b) The term "Form S-3" means such form under the Act as in effect
on the date hereof or any registration form under the Act
subsequently adopted by the SEC that permits inclusion or
incorporation of substantial information by reference to other
documents filed by the Company with the SEC.
(c) The term "Holder" means any person owning or having the right to
acquire Registrable Securities or any assignee thereof in
accordance with CLAUSE 1.11 hereof.
(d) The term "Initial Offering" means the Company's first firm
commitment underwritten public offering of its common stock
under the Act.
(e) The term "1934 Act" means the Securities Exchange Act of 1934,
as amended.
(f) The term "register," "registered," and "registration" refer to a
registration effected by preparing and filing a registration
statement or similar document in compliance with the Act, and
the declaration or ordering of effectiveness of such
registration statement or document.
(g) The term "Registrable Securities" means (i) the common stock
issuable or issued pursuant to the Share Exchange Agreement, and
(ii) any common stock of the Company issued as (or issuable upon
the conversion or exercise of any warrant, right or other
security that is issued as) a dividend or other distribution
with respect to, or in exchange for, or in replacement of, the
shares referenced in (i) above, excluding in all cases, however,
any Registrable Securities sold by a person (x) in a transaction
in which his rights under this CLAUSE 1 are not assigned, (y)
pursuant to a registration statement that has been declared
effective and such Registrable Securities have been disposed of
pursuant to such effective registration statement, or (z) in a
transaction in
<PAGE> 2
which such Registrable Securities are sold pursuant to Rule 144
(or any similar provision then in force) under the Act.
(h) The number of shares of "Registrable Securities then outstanding"
shall be determined by the number of shares of common stock
outstanding that are, and the number of shares of common stock
issuable pursuant to then exercisable or convertible securities
that are, Registrable Securities.
(i) The term "SEC" shall mean the Securities and Exchange
Commission.
1.2 Request for Registration.
Subject to the conditions of this CLAUSE 1.2, if the Company shall
receive at any time after the Closing Date (as defined in the Share
Exchange Agreement) a written request from the Holders of fifty percent
(50%) or more of the Registrable Securities then outstanding (the
"Initiating Holders") that the Company file a registration statement
under the Act covering the registration of Registrable Securities, then
the Company shall, within twenty (20) days of the receipt thereof, give
written notice of such request to all Holders, and subject to the
limitations of this CLAUSE 1.2, use best efforts to effect, as soon as
practicable, the registration under the Act of all Registrable
Securities that the Holders request to be registered in a written
request received by the Company within twenty (20) days of the mailing
of the Company's notice pursuant to this CLAUSE 1.2(a).
(a) If the Initiating Holders intend to distribute the Registrable
Securities covered by their request by means of an underwriting,
they shall so advise the Company as a part of their request made
pursuant to this CLAUSE 1.2 and the Company shall include such
information in the written notice referred to in this
CLAUSE1.2(a). In such event the right of any Holder to include
its Registrable Securities in such registration shall be
conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable
Securities in the underwriting (unless otherwise mutually agreed
by a majority in interest of the Initiating Holders and such
Holder) to the extent provided herein. All Holders proposing to
distribute their securities through such underwriting shall
enter into an underwriting agreement in customary form with the
underwriter or underwriters selected for such underwriting by a
majority in interest of the Initiating Holders (which
underwriter or underwriters shall be reasonably acceptable to
the Company). Notwithstanding any other provision of this
CLAUSE1.2, if the underwriter advises the Company that marketing
factors require a limitation of the number of securities
underwritten (including Registrable Securities), then the
Company shall so advise all Holders of Registrable Securities
that would otherwise be underwritten pursuant hereto, and the
number of shares that may be included in the underwriting shall
be allocated to the Holders of such Registrable Securities on a
pro rata basis based on the number of Registrable Securities
held by all such Holders (including the Initiating Holders),
provided that no Registrable Securities shall be excluded unless
and until all other securities of the Company have been
excluded. Any Registrable Securities excluded or withdrawn from
such underwriting shall be withdrawn from the registration.
(b) The Company shall not be required to effect a registration
pursuant to this CLAUSE 1.2:
(i) in any particular jurisdiction in which the Company
would be required to execute a general consent to
service of process in effecting such registration,
unless the Company is already subject to service in such
jurisdiction and except as may be required under the
Act; or
<PAGE> 3
(ii) after the Company has effected two (2) registrations
pursuant to this CLAUSE 1.2, and such registrations have
been declared or ordered effective; or
(iii) during the period starting with the date sixty (60) days
prior to the Company's good faith estimate of the date
of the filing of, and ending on a date one hundred
eighty (180) days following the effective date of, a
Company-initiated registration subject to CLAUSE 1.3
below, provided that the Company is actively employing
in good faith all reasonable efforts to cause such
registration statement to become effective; or
(iv) if the Initiating Holders propose to dispose of
Registrable Securities that may be registered on Form
S-3 pursuant to CLAUSE 1.4 hereof; or
(v) if the Company shall furnish to Holders requesting a
registration pursuant to this CLAUSE 1.2, a certificate
signed by the Company's Chief Executive Officer or
Chairman of the Board stating that in the good faith
judgment of the Board of Directors of the Company, it
would be seriously detrimental to the Company and its
stockholders for such registration to be effected at
such time, in which event the Company shall have the
right to defer such filing for a period of not more than
ninety (90) days after receipt of the request of the
Initiating Holders, provided that such right to delay a
request shall be exercised by the Company not more than
once in any twelve (12)-month period and provided
further, that the Company shall not register any other
of its shares during such ninety (90) day period.
1.3 Company Registration
If (but without any obligation to do so) the Company proposes to
register (including for this purpose a registration effected by the
Company for stockholders other than the Holders) any of its stock or
other securities under the Act in connection with the public offering of
such securities (other than a registration relating solely to the sale
of securities to participants in a Company stock plan, a registration
relating to a corporate reorganization or other transaction under Rule
145 of the Act, a registration on any form that does not include
substantially the same information as would be required to be included
in a registration statement covering the sale of the Registrable
Securities, or a registration in which the only common stock being
registered is common stock issuable upon conversion of debt securities
that are also being registered), the Company shall, at such time,
promptly give each Holder written notice of such registration. Upon the
written request of each Holder given within twenty (20) days after
mailing of such notice by the Company, the Company shall, subject to the
provisions of CLAUSE 1.3(c), use its best efforts to cause a
registration statement to become effective, which includes all of the
Registrable Securities that each such Holder has requested to be
registered.
(a) Right to Terminate Registration.
The Company shall have the right to terminate or withdraw any
registration initiated by it under this CLAUSE 1.3 prior to the
effectiveness of such registration whether or not any Holder has
elected to include securities in such registration. The expenses
of such withdrawn registration shall be borne by the Company in
accordance with CLAUSE 1.7 hereof.
(b) Underwriting Requirements.
In connection with any offering involving an underwriting of
shares of the Company's capital stock, the Company shall not be
required under this CLAUSE 1.3 to include any of the Holders'
securities in such underwriting unless they accept the terms of
the
<PAGE> 4
underwriting as agreed upon between the Company and the
underwriters selected by it (or by other persons
entitled to select the underwriters) and enter into an
underwriting agreement in customary form with an
underwriter or underwriters selected by the Company. If
the total amount of securities, including Registrable
Securities, requested by stockholders to be included in
such offering exceeds the amount of securities sold
other than by the Company that the underwriters
determine in their sole discretion is compatible with
the success of the offering, then the Company shall be
required to include in the offering only that number of
such securities, including Registrable Securities, that
the underwriters determine in their sole discretion will
not jeopardize the success of the offering (the
securities so included to be apportioned pro rata among
the selling Holders according to the total amount of
securities entitled to be included therein owned by each
selling Holder or in such other proportions as shall
mutually be agreed to by such selling Holders, except
that no Registrable Securities shall be excluded until
all common stock held by other shareholders, directors,
officers and employees of the Company have been
excluded), but in no event shall the amount of
securities of the selling Holders included in the
offering be reduced below twenty-five percent (25%) of
the total amount of securities included in such
offering, unless such offering is the Initial Offering
of the Company's securities, in which case the selling
Holders may be excluded if the underwriters make the
determination described above and no other stockholder's
securities are included. For purposes of the preceding
parenthetical concerning apportionment, for any selling
stockholder that is a Holder of Registrable Securities
and that is a partnership or corporation, the partners,
retired partners and stockholders of such Holder, or the
estates and family members of any such partners and
retired partners and any trusts for the benefit of any
of the foregoing persons shall be deemed to be a single
"selling Holder," and any pro rata reduction with
respect to such "selling Holder" shall be based upon the
aggregate amount of Registrable Securities owned by all
such related entities and individuals.
1.4 Form S-3 Registration
In case the Company shall receive from the Holders of the Registrable
Securities then outstanding a written request or requests that the
Company effect a registration on Form S-3 and any related qualification
or compliance with respect to all or a part of the Registrable
Securities owned by such Holder or Holders, the Company shall:
(a) promptly give written notice of the proposed registration, and
any related qualification or compliance, to all other Holders;
and
(b) use best efforts to effect, as soon as practicable, such
registration and all such qualifications and compliances as may
be so requested and as would permit or facilitate the sale and
distribution of all or such portion of such Holders' Registrable
Securities as are specified in such request, together with all
or such portion of the Registrable Securities of any other
Holders joining in such request as are specified in a written
request given within fifteen (15) days after receipt of such
written notice from the Company, provided, however, that the
Company shall not be obligated to effect any such registration,
qualification or compliance, pursuant to this CLAUSE 1.4:
(i) if Form S-3 is not available for such offering by the
Holders;
(ii) if the Holders, together with the holders of any other
securities of the Company entitled to inclusion in such
registration, propose to sell Registrable Securities and
such other securities (if any) at an aggregate price to
the public (net of any underwriters' discounts or
commissions) of less than $500,000;
<PAGE> 5
(iii) if the Company shall furnish to the Holders a
certificate signed by the Chief Executive Officer or
Chairman of the Board of the Company stating that in the
good faith judgment of the Board of Directors of the
Company, it would be seriously detrimental to the
Company and its stockholders for such Form S-3
registration to be effected at such time, in which event
the Company shall have the right to defer the filing of
the Form S-3 registration statement for a period of not
more than ninety (90) days after receipt of the request
of the Holder or Holders under this CLAUSE 1.4;
provided, however, that the Company shall not utilize
this right more than once in any twelve (12) month
period; and provided further, that the Company shall not
register any other of its shares during such 90 day
period;
(iv) if the Company has, within the six (6) month period
preceding the date of such request, already effected one
registration on Form S-3 for the Holders pursuant to
this CLAUSE 1.4; or
(v) in any particular jurisdiction in which the Company
would be required to qualify to do business, where not
otherwise required, or to execute a general consent to
service of process in effecting such registration,
qualification or compliance.
(c) Subject to the foregoing, the Company shall file a registration
statement covering the Registrable Securities and other
securities so requested to be registered as soon as practicable
after receipt of the request or requests of the Holders.
Registrations effected pursuant to this CLAUSE 1.4 shall not be
counted as requests for registration effected pursuant to CLAUSE
1.2.
1.5 Obligations of the Company
Whenever required under this CLAUSE 1 to effect the registration of any
Registrable Securities, the Company shall, as expeditiously as
reasonably possible:
(a) prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use best efforts to
cause such registration statement to become effective, and, upon
the request of the Holders of a majority of the Registrable
Securities registered thereunder, keep such registration
statement effective for a period of up to one hundred twenty
(120) days or, if earlier, until the distribution contemplated
in the Registration Statement has been completed;
(b) prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in
connection with such registration statement as may be necessary
to comply with the provisions of the Act with respect to the
disposition of all securities covered by such registration
statement;
(c) furnish to the Holders (i) a draft copy of the registration
statement, and (ii) such numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the
requirements of the Act, and such other documents as they may
reasonably request in order to facilitate the disposition of
Registrable Securities owned by them;
(d) use best efforts to register and qualify the securities covered
by such registration statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably
requested by the Holders, provided that the Company shall not be
required in connection therewith or as a condition thereto to
qualify to do business, where not otherwise required, or to file
a general consent to service of process in any such states or
jurisdictions;
<PAGE> 6
(e) in the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in
usual and customary form, with the managing underwriter of such
offering;
(f) notify each Holder of Registrable Securities covered by such
registration statement, at any time when a prospectus relating
thereto is required to be delivered under the Act, of (i) the
issuance of any stop order by the SEC in respect of such
registration statement, or (ii) 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 the light of the circumstances then existing;
(g) if the Registrable Securities are being sold through
underwriters, furnish, upon the request of the Holders of a
majority of the Registrable Securities requesting registration,
on the date that such Registrable Securities are delivered to
the underwriters for sale, (i) an opinion, dated as of such
date, of the counsel representing the Company for the purposes
of such registration, in form and substance as is customarily
given to underwriters in an underwritten public offering and
reasonably satisfactory to a majority in interest of the Holders
requesting registration, addressed to the underwriters and to
the Holders requesting registration of Registrable Securities,
and (ii) a "comfort" letter dated as of such date, from the
independent certified public accountants of the Company, in form
and substance as is customarily given by independent certified
public accountant to underwriters in an underwritten public
offering and reasonably satisfactory to a majority in interest
of the Holders requesting registration, addressed to the
underwriters and to the Holders requesting registration of
Registrable Securities;
(h) cause all such Registrable Securities registered pursuant
hereunder to be listed on each securities exchange on which
similar securities issued by the Company are then listed;
provided that in the case of a registration effected pursuant to
CLAUSE 1.2 above, which registration constitutes the Initial
Offering, the Registrable Securities shall be listed on a
national securities exchange or the NASDAQ National Market
System; and
(i) provide a transfer agent and registrar for all Registrable
Securities registered pursuant hereunder and a CUSIP number for
all such Registrable Securities, in each case not later than the
effective date of such registration.
1.6 Information from Holder
It shall be a condition precedent to the obligations of the Company to
take any action pursuant to this CLAUSE 1 with respect to the
Registrable Securities of any selling Holder that such Holder shall
furnish to the Company such information regarding itself, the
Registrable Securities held by it, and the intended method of
disposition of such securities as shall be reasonably required to effect
the registration of such Holder's Registrable Securities.
1.7 Expenses of Registration
<PAGE> 7
All expenses other than underwriting discounts and commissions incurred
in connection with registrations, filings or qualifications pursuant to
CLAUSES 1.2, 1.3 and 1.4, including (without limitation) all
registration, filing and qualification fees (including Blue Sky fees),
printers' and accounting fees, fees and disbursements of counsel for the
Company and the reasonable fees and disbursements of one counsel for the
selling Holders shall be borne by the Company. Notwithstanding the
foregoing, the Company shall not be required to pay for any expenses of
any registration proceeding begun pursuant to CLAUSE 1.2 or CLAUSE 1.4
if the registration request is subsequently withdrawn at the request of
the Holders of a majority of the Registrable Securities to be registered
(in which case all participating Holders shall bear such expenses pro
rata based upon the number of Registrable Securities that were to be
requested in the withdrawn registration), unless, in the case of a
registration requested under CLAUSE 1.2, the Holders of a majority of
the Registrable Securities agree to forfeit their right to one demand
registration pursuant to CLAUSE 1.2, provided, however, that if at the
time of such withdrawal, the Holders have learned of a material adverse
change in the condition, business or prospects of the Company from that
known to the Holders at the time of their request and have withdrawn the
request with reasonable promptness following disclosure by the Company
of such material adverse change, then the Holders shall not be required
to pay any of such expenses and shall retain their rights pursuant to
CLAUSE 1.2 or 1.4.
1.8 Delay of Registration
No Holder shall have any right to obtain or seek an injunction
restraining or otherwise delaying any such registration as the result of
any controversy that might arise with respect to the interpretation or
implementation of this CLAUSE 1.
1.9 Indemnification
In the event any Registrable Securities are included in a registration
statement under this CLAUSE 1:
(a) To the extent permitted by law, the Company will indemnify and
hold harmless each Holder, the partners or officers, directors
and stockholders of each Holder, legal counsel and accountants
for each Holder, any underwriter (as defined in the Act) for
such Holder and each person, if any, who controls such Holder or
underwriter, within the meaning of the Act or the 1934 Act,
against any losses, claims, damages or liabilities (joint or
several) to which they may become subject under the Act, the
1934 Act or any state securities laws, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any of the following statements,
omissions or violations (collectively a "Violation"): (i) any
untrue statement or alleged untrue statement of a material fact
contained in such registration statement, including any
preliminary prospectus or final prospectus contained therein or
any amendments or supplements thereto, (ii) 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 (iii) any violation or alleged violation by the
Company of the Act, the 1934 Act, any state securities laws or
any rule or regulation promulgated under the Act, the 1934 Act
or any state securities laws; and the Company will reimburse
each such Holder, partner, officer, director, stockholder,
counsel, accountant, underwriter or controlling person for any
legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred;
provided, however, that the indemnity agreement contained in
this SUBCLAUSE 1.9(a) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the consent of the
Company (which consent shall not be unreasonably withheld), nor
shall the Company be liable in any such case for any such loss,
claim, damage, liability or action to the extent that it arises
out of or is
<PAGE> 8
based upon a Violation that occurs in reliance upon and in
conformity with written information furnished expressly for use
in connection with such registration by any such Holder,
underwriter or controlling person; provided further, however,
that the foregoing indemnity agreement with respect to any
preliminary prospectus shall not inure to the benefit of any
Holder or underwriter, or any person controlling such Holder or
underwriter, from whom the person asserting any such losses,
claims, damages or liabilities purchased shares in the offering,
if a copy of the prospectus (as then amended or supplemented if
the Company shall have furnished any amendments or supplements
thereto) was not sent or given by or on behalf of such Holder or
underwriter to such person, if required by law so to have been
delivered, at or prior to the written confirmation of the sale
of the shares to such person, and if the prospectus (as so
amended or supplemented) would have cured the defect giving rise
to such loss, claim, damage or liability.
(b) To the extent permitted by law, each selling Holder, on a
several and not joint basis, will indemnify and hold harmless
the Company, each of its directors, each of its officers who has
signed the registration statement, each person, if any, who
controls the Company within the meaning of the Act, legal
counsel and accountants for the Company, any underwriter, any
other Holder selling securities in such registration statement
and any controlling person of any such underwriter or other
Holder, against any losses, claims, damages or liabilities
(joint or several) to which any of the foregoing persons may
become subject, under the Act, the 1934 Act or any state
securities laws, insofar as such losses, claims, damages or
liabilities (or actions in respect thereto) arise out of or are
based upon any Violation (but excluding clause (iii) of the
definition thereof), in each case to the extent (and only to the
extent) that such Violation occurs in reliance upon and in
conformity with written information furnished by such Holder
expressly for use in connection with such registration; and each
such Holder will reimburse any person intended to be indemnified
pursuant to this SUBCLAUSE 1.9(b) for any legal or other
expenses reasonably incurred by such person in connection with
investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the indemnity
agreement contained in this SUBCLAUSE1.9(b) shall not apply to
amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the
consent of the Holder (which consent shall not be unreasonably
withheld), provided that in no event shall any indemnity under
this SUBCLAUSE 1.9(b) exceed the net proceeds from the offering
received by such Holder.
(c) Promptly after receipt by an indemnified party under this CLAUSE
1.9 of actual knowledge of the commencement of any action
(including any governmental action), such indemnified party
will, if a claim in respect thereof is to be made against any
indemnifying party under this CLAUSE 1.9, deliver to the
indemnifying party a written notice of the commencement thereof
and the indemnifying party shall have the right to participate
in, and, to the extent the indemnifying party so desires,
jointly with any other indemnifying party similarly noticed, to
assume the defense thereof with counsel mutually satisfactory to
the parties; provided, however, that an indemnified party
(together with all other indemnified parties that may be
represented without conflict by one counsel) shall have the
right to retain one separate counsel, with the fees and expenses
to be paid by the indemnifying party, if representation of such
indemnified party by the counsel retained by the indemnifying
party would be inappropriate due to actual or potential
differing interests between such indemnified party and any other
party represented by such counsel in such proceeding. The
failure to deliver written notice to the indemnifying party
within a reasonable time of the commencement of any such action,
if prejudicial to its ability to defend such action, shall
relieve such indemnifying party of any liability to the
indemnified party under this CLAUSE 1.9 to the extent of such
prejudice, but the omission to so deliver written notice to the
<PAGE> 9
indemnifying party will not relieve it of any liability that it
may have to any indemnified party otherwise than under this
CLAUSE 1.9.
(d) If the indemnification provided for in this CLAUSE 1.9 is held
by a court of competent jurisdiction to be unavailable to an
indemnified party with respect to any loss, liability, claim,
damage or expense referred to herein, then the indemnifying
party, in lieu of indemnifying such indemnified party hereunder,
shall contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, claim,
damage or expense in such proportion as is appropriate to
reflect the relative fault of and the relative benefits received
by the indemnifying party on the one hand and of the indemnified
party on the other in connection with the statements or
omissions that resulted in such loss, liability, claim, damage
or expense, as well as any other relevant equitable
considerations, provided that no person guilty of fraud shall be
entitled to contribution. 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 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.
The relative benefits received by the indemnifying party and the
indemnified party shall be determined by reference to the net
proceeds and underwriting discounts and commissions from the
offering received by each such party. In no event shall any
contribution under this SUBCLAUSE 1.9(d) exceed the net proceeds
from the offering received by such Holder, less any amounts paid
under SUBCLAUSE 1.9(b).
(e) Notwithstanding the foregoing, to the extent that the provisions
on indemnification and contribution contained in the
underwriting agreement entered into in connection with the
underwritten public offering are in conflict with the foregoing
provisions, the provisions in the underwriting agreement shall
control.
(f) The obligations of the Company and Holders under this CLAUSE 1.9
shall survive the completion of any offering of Registrable
Securities in a registration statement under this CLAUSE 1, and
otherwise.
1.10 Reports Under Securities Exchange Act of 1934.
With a view to making available to the Holders the benefits of Rule 144
promulgated under the Act and any other rule or regulation of the SEC
that may at any time permit a Holder to sell securities of the Company
to the public without registration or pursuant to a registration on Form
S-3, the Company agrees to:
(a) make and keep public information available, as those terms are
understood and defined in SEC Rule 144, at all times after the
effective date of the Initial Offering;
(b) file with the SEC in a timely manner all reports and other
documents required of the Company under the Act and the 1934
Act; and
(c) furnish to any Holder, so long as the Holder owns any
Registrable Securities, forthwith upon request (i) a written
statement by the Company that it has complied with the reporting
requirements of SEC Rule 144 (at any time after ninety (90) days
after the effective date of the first registration statement
filed by the Company), the Act and the 1934 Act (at any time
after it has become subject to such reporting requirements), or
that it qualifies as a registrant whose securities may be resold
pursuant to Form S-3 (at any time after it so qualifies), (ii) a
copy of the most recent annual or quarterly report of the
Company and such other reports and documents so
<PAGE> 10
filed by the Company, and (iii) such other information as may be
reasonably requested in availing any Holder of any rule or
regulation of the SEC that permits the selling of any such
securities without registration or pursuant to such form.
1.11 Assignment of Registration Rights
The rights to cause the Company to register Registrable Securities
pursuant to this CLAUSE 1 may be assigned (but only with all related
obligations) by a Holder to a transferee or assignee of such securities
that (i) is a subsidiary, affiliate, parent, partner, limited partner,
retired partner or stockholder of a Holder, (ii) is a Holder's immediate
family member (spouse or child) or trust for the benefit of an
individual Holder, or (iii) after such assignment or transfer, holds at
least 10,000 shares of Registrable Securities (subject to appropriate
adjustment for stock splits, stock dividends, combinations and other
recapitalizations), provided: (a) the Company is, within a reasonable
time after such transfer, furnished with written notice of the name and
address of such transferee or assignee and the securities with respect
to which such registration rights are being assigned; (b) such
transferee or assignee agrees in writing to be bound by and subject to
the terms and conditions of this Agreement, including without limitation
the provisions of CLAUSE 1.13 below; and (c) such assignment shall be
effective only if immediately following such transfer the further
disposition of such securities by the transferee or assignee is
restricted under the Act.
1.12 Limitations on Subsequent Registration Rights
From and after the date of this Agreement, the Company shall not,
without the prior written consent of the Holders of fifty percent (50%)
of the Registrable Securities, enter into any agreement with any holder
or prospective holder of any securities of the Company that would allow
such holder or prospective holder (a) to include such securities in any
registration filed under CLAUSE 1.3 hereof, unless under the terms of
such agreement, such holder or prospective holder may include such
securities in any such registration only to the extent that the
inclusion of such securities will not reduce the amount of the
Registrable Securities of the Holders that are included or (b) to demand
registration of their securities.
1.13 "Market Stand-Off" Agreement
Each Holder hereby agrees that it will not, without the prior written
consent of the Company and the managing underwriter, during the period
commencing on the date of the final prospectus relating to the Company's
initial public offering and ending on the date specified by the Company
and the managing underwriter (such period not to exceed one hundred
eighty (180) days) (i) lend, offer, pledge, sell, contract to sell, sell
any option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase, or otherwise
transfer or dispose of, directly or indirectly, any shares of common
stock or any securities convertible into or exercisable or exchangeable
for common stock (whether such shares or any such securities are then
owned by the Holder or are thereafter acquired), or (ii) enter into any
swap or other arrangement that transfers to another, in whole or in
part, any of the economic consequences of ownership of the common stock,
whether any such transaction described in clause (i) or (ii) above is to
be settled by delivery of common stock or such other securities, in cash
or otherwise. The foregoing provisions of this CLAUSE 1.13 shall apply
only to the Company's initial public offering of equity securities,
shall not apply to the sale of any shares to an underwriter pursuant to
an underwriting agreement, and shall only be applicable to the Holders
if all officers and directors and greater than five percent (5%)
stockholders of the Company enter into similar agreements. The
underwriters in connection with the Company's initial public offering
are intended third party beneficiaries of this CLAUSE 1.13 and shall
have the right, power and authority to enforce the provisions hereof as
though they were a party hereto. Notwithstanding the foregoing, nothing
in this CLAUSE 1.13 shall prevent the undersigned from making a transfer
of any common stock that was listed on a
<PAGE> 11
national stock exchange, any NMF security or traded on Nasdaq at the
time it was acquired by the Holder or was acquired by the undersigned
pursuant to Rule 144A of the Act, including any shares acquired in the
Company's initial public offering.
In order to enforce the foregoing covenant, the Company may impose
stop-transfer instructions with respect to the Registrable Securities of
each Holder (and the shares or securities of every other person subject
to the foregoing restriction) until the end of such period.
1.14 Termination of Registration Rights
No Holder shall be entitled to exercise any right provided for in this
CLAUSE 1 after five (5) years following the Closing Date or, as to any
Holder, such earlier time at which all Registrable Securities held by
such Holder (and any affiliate of the Holder with whom such Holder must
aggregate its sales under Rule 144) can be sold in any three (3)-month
period without registration in compliance with Rule 144 of the Act.
2. MISCELLANEOUS
2.1 Successors and Assigns.
Except as otherwise provided herein, the terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the
respective successors and assigns of the parties (including transferees
of any shares of Registrable Securities). Nothing in this Agreement,
express or implied, is intended to confer upon any party other than the
parties hereto or their respective successors and assigns any rights,
remedies, obligations, or liabilities under or by reason of this
Agreement, except as expressly provided in this Agreement.
2.2 Governing Law
This Agreement shall be governed by and construed under the laws of the
State of California as applied to agreements among California residents
entered into and to be performed entirely within California.
2.3 Counterparts
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
2.4 Titles and Subtitles.
The titles and subtitles used in this Agreement are used for convenience
only and are not to be considered in construing or interpreting this
Agreement.
2.5 Notices.
Unless otherwise provided, any notice required or permitted under this
Agreement shall be given in writing and shall be deemed effectively
given upon personal delivery to the party to be notified or upon
delivery by confirmed facsimile transmission, nationally recognized
overnight courier service, or upon deposit with the United States Post
Office, by registered or certified mail, postage prepaid and addressed
to the party to be notified at the address indicated for such party on
the signature page hereof, or at such other address as such party may
designate by ten (10) days' advance written notice to the other parties.
2.6 Expenses
<PAGE> 12
If any action at law or in equity is necessary to enforce or interpret
the terms of this Agreement, the prevailing party shall be entitled to
reasonable attorneys' fees, costs and necessary disbursements in
addition to any other relief to which such party may be entitled.
2.7 Entire Agreement; Amendments and Waivers
This Agreement (including the Exhibits hereto, if any) constitutes the
full and entire understanding and agreement among the parties with
regard to the subjects hereof and thereof. Any term of this Agreement
may be amended and the observance of any term of this Agreement may be
waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of the
Company and the holders of no less than a majority of the Registrable
Securities then outstanding. Any amendment or waiver effected in
accordance with this paragraph shall be binding upon each holder of any
Registrable Securities, each future holder of all such Registrable
Securities and the Company. Notwithstanding the foregoing, any amendment
of CLAUSE 1.13 shall require the consent of each Holder which is a
registered investment company.
2.8 Severability
If one or more provisions of this Agreement are held to be unenforceable
under applicable law, such provision shall be excluded from this
Agreement and the balance of the Agreement shall be interpreted as if
such provision were so excluded and shall be enforceable in accordance
with its terms.
2.9 Aggregation of Stock.
(a) All shares of Registrable Securities held or acquired by entities
advised by the same investment adviser and affiliated entities or
persons shall be aggregated together for the purpose of determining the
availability of any rights under this Agreement.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first above written.
SIGNED by )
)
for and on behalf of )
ANTHEM RECORDING WEST INC. )
President:
Address:
<PAGE> 13
)
)
the Common Seal )
ATLAS TRUST COMPANY (JERSEY) )/s/ Ian Richard Swindale
LIMITED WAS HERUNTO AFFIXED )Director
in the presence of : )
Witness' signature: /s/ Ian Robert Dove
Name:
Address:
Occupation: Director
SIGNED by ) /s/ Robert James Burton
)
for and on behalf of )
TAVENDISH ENTERPRISES LIMITED )
in the presence of : )
Witness' signature: /s/ Peter Joughin Cannell
Name:
Address:
Occupation: Chartered Secretary
SIGNED by )
)
for and on behalf of )
RYLEY HILL LIMITED ) /s/ D. J. Shortland
in the presence of : )
Witness' signature: /s/ A. Abbott
Name: A. Abbott
Address:
Occupation: Estate Agent
<PAGE> 14
SIGNED by )
DAVID JOHN SHORTLAND ) /s/ D. J. Shortland
in the presence of: )
Witness' signature: /s/ A. Abbott
Name: Adison Abbott
Address:
Occupation: Estate Agent
SIGNED by PAULA LORAINE )
SHORTLAND in the ) /s/ P.L. Shortland
presence of: )
Witness' signature: /s/ A. Abbott
Name: Adison Abbott
Address:
Occupation: Estate Agent
SIGNED by ) /s/ D. J. Shortland
DAVID JOHN SHORTLAND, )/s/ C.E. Catherall
CHRISTINE ELIZABETH )
CATHERALL, BRUCE CARLESS and )/s/ Bruce Carless
BETTY MAY SHORTLAND )/s/ B.M. Shortland
as trustees of the SHORTLAND NO.1 )
TRUST )
in the presence of: )
Witness' signature: /s/ A. Abbott
Name: Adison Abbott
Address:
Occupation Esate Agent