Exhibit 10.6
REGISTRATION RIGHTS AGREEMENT, dated as of [ ], 2004,
among DREAMWORKS ANIMATION SKG, INC., a Delaware
corporation (the "Company"), [HOLDCO] LLLP, a Delaware
limited liability limited partnership ("Holdco"), M&J K
Dream Limited Partnership, a Delaware limited
partnership ("M&J K"), XX-XX, L.P., a Delaware limited
partnership ("XX-XX"), DW LIPS, L.P., a California
limited partnership ("DW Lips"), [VULCAN], a [ ]
("Vulcan"), and the other holders of Registrable
Securities (as defined below) party hereto (together
with Holdco, XX-XX, DW Lips, Vulcan and any Family Group
member that agrees with the Company to be bound by the
terms of this Agreement (as defined below), the
"Holders").
WHEREAS, DreamWorks L.L.C., a Delaware limited liability company
("DW"), and the Company have entered into a Separation Agreement dated as of [
], 2004, providing for the separation of the animation business (the
"Separation") from DW;
WHEREAS, immediately after the Separation, the Company intends to
sell shares of its Class A Common Stock, par value $0.01 per share ("Class A
Stock"), in a public offering (the "Offering");
WHEREAS, the Company and the Holders are party to the Formation
Agreement (as defined below);
WHEREAS, the Contributing Members (as defined in the Formation
Agreement) have formed Holdco for the purpose of effecting the Follow-on
Offering (as defined below);
WHEREAS, the Holders will own Class A Stock, the Company's Class B
Common Stock, par value $0.01 per share ("Class B Stock"), and the Company's
Class C Common Stock, par value $0.01 per share ("Class C Stock"), as
applicable; and
WHEREAS, the Holders and the Company desire to make certain
arrangements to provide the Holders with registration rights with respect to the
Registrable Securities;
NOW THEREFORE, in consideration of the mutual covenants and
agreements set forth herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and intending to be
legally bound hereby, the parties hereby agree as follows:
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SECTION 1.01. Definitions. The following terms shall have the
following meanings for purposes of this Agreement:
"Affiliate" of any specified Person means any other Person, directly
or indirectly, through one or more intermediaries, Controlling, Controlled By or
Under Common Control With such specified Person.
"Agreement" means this Registration Rights Agreement, as it may be
amended, supplemented, restated or modified from time to time.
"Business Day" means any day other than a Saturday, a Sunday or a
U.S. Federal holiday.
"Class A Stock" is defined in the recitals hereto.
"Class B Stock" is defined in the recitals hereto.
"Class C Stock" is defined in the recitals hereto.
"Company" is defined in the preamble hereto.
"Company Funded Registration" is defined in Section 1.02(a).
"Control" (including the terms "Controlled By" and "Under Common
Control With") is defined in the Restated Certificate of Incorporation of the
Company as in effect at consummation of the Offering.
"Demand Holders" means each of (i) Holdco, (ii) M&J K (on behalf of
itself or one or more members of its Family Group), (iii) XX-XX (on behalf of
itself or one or more members of its Family Group), (iv) DW Lips (on behalf of
itself or one or more members of its Family Group) and (v) Vulcan.
"Demand Request" is defined in Section 1.02(a).
"XX-XX" is defined in the preamble hereto.
"Disadvantageous Condition" is defined in Section 1.02(a).
"DW" is defined in the recitals hereto.
"DW Lips" is defined in the preamble hereto.
"DW Preferred Holders" means Vivendi Universal Entertainment LLLP
and Thomson Inc. but only to the extent of shares of Class A Stock distributed
to them by Holdco.
"Estate Planning Vehicle" means a trust or partnership (i) that is
the record holder of shares of Class A Stock or Class B Stock and (ii) the
principal beneficiaries or
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partners of which include only Xxxxxxx Xxxxxxxxxx or Xxxxxx Xxxxxxxxx, their
respective spouses, parents, spouse's parents or issue, or issue of any thereof,
and shall include M&J K, The JK Annuity Trust, The MK Annuity Trust and the
Xxxxxxxxxx 1994 Irrevocable Trust.
"Exchange Act" means the U.S. Securities Exchange Act of 1934, as
amended, together with the rules and regulations promulgated thereunder.
"Family Group" means, (a) with respect to M&J K, Xxxxxxx Xxxxxxxxxx,
any Estate Planning Vehicle that is Controlled By either Xxxxxxx Xxxxxxxxxx or
Xxxxx Xxxxxx and any other Person that is Controlled By Xxxxxxx Xxxxxxxxxx, (b)
with respect to XX-XX, Xxxxx Xxxxxx and any other Person that is Controlled by
Xxxxx Xxxxxx and (c) with respect to DW Lips, Xxxxxx Xxxxxxxxx, his spouse, any
Estate Planning Vehicle that is established by Xxxxxx Xxxxxxxxx and any other
Person that is Controlled By Xxxxxx Xxxxxxxxx or his spouse, in each case, so
long as such Person continues to be so Controlled.
"Follow-on Offering" is defined in the Formation Agreement.
"Formation Agreement" means the Formation Agreement, dated as of [
], 2004, among the Company, [Escrow Agent] and the Holders, as it may be
amended, supplemented, restated or modified from time to time.
"Group" has the meaning assigned to such term in Section 13(d)(3) of
the Exchange Act.
"Holdco" is defined in the preamble hereto.
"Holdco Partnership Agreement" means the Limited Liability Limited
Partnership Agreement of Holdco, dated as of [ ], 2004, among the Contributing
Members (as defined in the Formation Agreement), as it may be amended,
supplemented, restated or modified from time to time.
"Holders" is defined in the preamble hereto.
"Initial DreamWorks Capital" is defined in the Holdco Partnership
Agreement.
"Inspectors" is defined in Section 1.04(a)(9).
"M&J K" is defined in the preamble hereto.
"Minimum Demand Request" means, on the date a Demand Request is
delivered, such number of shares of Class A Stock that have an aggregate minimum
market value (based on the closing price on the NYSE on the date preceding the
date of the Demand Request) of at least $100 million, before calculation of
underwriting
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discounts and commissions.
"Minimum Registration Amount" means not less than the number of
shares of Registrable Securities that could be sold by the applicable Holder in
a consecutive three month period pursuant to Rule 144 (or any similar provision
then in force) under the Securities Act; provided, however, that when the
Minimum Registration Amount is being calculated with respect to any Requesting
Holder that is requesting registration of Registrable Securities on behalf of
one or more of its Family Group members, such Minimum Registration Amount shall
be the aggregate Minimum Registration Amount for all members of the applicable
Family Group participating in the applicable registration.
"NASD" means the National Association of Securities Dealers, Inc.
"Offering" is defined in the recitals hereto.
"Participating Partner" is defined in the Holdco Partnership
Agreement.
"Person" means any individual, corporation, limited liability
company, limited or general partnership, joint venture, association, joint-stock
company, trust, unincorporated organization, government or any agency or
political subdivisions thereof or any Group comprised of two or more of the
foregoing.
"Priority Securities" is defined in Section 1.03(a).
"Proceeding" is defined in Section 1.07(k).
"Records" is defined in Section 1.04(a)(9).
"Registrable Securities" means shares of Class A Stock (including
shares of Class A Stock issuable upon conversion of shares of Class B Stock or
shares of Class C Stock or any other securities of the Company that are acquired
by way of a stock dividend or stock split or in connection with a combination of
shares, recapitalization, merger, consolidation or other reorganization of the
Company); provided, however, that a security shall cease to be a Registrable
Security if and when (i) a registration statement with respect to such security
becomes effective under the Securities Act and such security is disposed of
pursuant to such effective registration statement, (ii) such security may be
sold without restriction pursuant to Rule 144 (or any similar provision then in
force) under the Securities Act (other than in the case of any such security to
be sold in the Follow-on Offering or the Universal/Thomson Triggered Offering),
(iii) such security is otherwise transferred (other than to an Affiliate of the
Holder), if a new certificate or other evidence of ownership for such security
not bearing a legend restricting further transfer and not subject to any stop
transfer order or other restrictions on transfer is delivered by the Company and
subsequent disposition of such security does not require registration or
qualification of such security under the Securities Act, and the Company's
outside counsel provides the Holder with an unqualified opinion to such effect,
or (iv)
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such security ceases to be outstanding.
"Registration Expenses" means all fees and expenses incident to the
Company's performance of or compliance with this Agreement, consisting of (i)
all SEC, stock exchange, NASD and other registration, listing and filing fees
and expenses, (ii) fees and expenses of compliance with securities or blue sky
laws (including fees and disbursements of one counsel for the Holders who are
including Registrable Securities in a registration statement in connection with
blue sky qualification of such Registrable Securities and determination of the
eligibility of such Registrable Securities for investment under applicable blue
sky laws), (iii) rating agency fees, (iv) printing expenses, (v) messenger,
telephone and delivery expenses, (vi) fees, expenses and disbursements of
counsel for the Company, (vii) fees, expenses and disbursements of one counsel
selected by Holders of a majority-in-interest of Registrable Securities to be
sold in connection with the relevant registration (up to a maximum limitation on
the fees and expenses of such counsel for the Holders of up to $75,000 per
registration), (viii) fees, expenses and disbursements of the Company's
independent certified public accountants, (ix) costs of Securities Act liability
insurance (if the Company so desires such insurance), (x) fees and expenses of
all other Persons retained by the Company in connection with the consummation of
the transactions contemplated by this Agreement and (xi) all internal expenses
of the Company incurred in connection with the consummation of the transactions
contemplated in this Agreement (including all salaries and expenses of its
officers and employees performing legal or accounting duties, the expense of any
annual audit and the fees and expenses incurred in listing the Registrable
Securities on any securities exchange); provided, however, that "Registration
Expenses" shall not include any fees, expenses or disbursements of any Holder
participating in the relevant registration or those of any underwriters, selling
brokers or similar professionals, including any discounts, commissions or fees
of such underwriters, selling brokers or similar professionals and including any
fees, expenses or disbursements of counsel to any such Holder (except as
provided above) or any such underwriter, selling broker or professional.
"Requesting Holder" is defined in Section 1.02(a).
"SEC" means the United States Securities and Exchange Commission.
"Securities Act" means the United States Securities Act of 1933, as
amended, together with the rules and regulations promulgated thereunder.
"Seller" is defined in Section 1.06(a).
"Shelf Registration" means a "shelf" registration statement on an
appropriate form pursuant to Rule 415 under the Securities Act (or any successor
rule that may be adopted by the SEC).
"Separation" is defined in the recitals hereto.
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"Thomson" means Thomson Inc.
"Underwriter" is defined in Section 1.06(a).
"Universal" means Vivendi Universal Entertainment LLLP.
"Universal/Thomson Triggered Offering" is defined in the Formation
Agreement.
"Vulcan" is defined in the preamble hereto.
"Vulcan Repayment Date" means the date on which Vulcan has received
aggregate net cash proceeds from the sale of Registrable Securities equal to
Vulcan's Fifty Percent Return (as defined in the Holdco Partnership Agreement)
and gross cash proceeds from the sale of Registrable Securities equal to the
remainder of Vulcan's Initial DreamWorks Capital.
SECTION 1.02. Certain Demand Registration Rights. (a) General. At
any time (x) in respect of Holdco, commencing six months following consummation
of the Offering (or, if later, the closing of any overallotment option granted
in connection with the Offering) and until the date of the Final Allocation (as
defined in the Holdco Partnership Agreement) and (y) in respect of any Demand
Holder other than Holdco, commencing on the date of the Final Allocation, upon
the written request (a "Demand Request") of any of the Demand Holders (the
"Requesting Holder") requesting that the Company effect the registration under
the Securities Act of Registrable Securities of such Requesting Holder (or its
Family Group members, if applicable) representing, in the case of a request by
any Demand Holder other than Holdco, at least the Minimum Demand Request (which
request shall specify the number of shares of Registrable Securities to be
offered by such Requesting Holder (and each of its Family Group members, if
applicable), subject to reduction to the extent provided herein, and the
intended method of disposition thereof), the Company shall promptly (but in no
event more than five Business Days after receipt of the applicable Demand
Request) deliver written notice of such requested registration to all other
Holders of Registrable Securities and shall use its reasonable best efforts to
effect, as expeditiously as possible, the registration under the Securities Act
of:
(i) the Registrable Securities which the Company has been so
requested to register by the Requesting Holder (which, (x) in the
case of Holdco shall include Registrable Securities to be sold by
Holdco or the Participating Partners in the Follow-on Offering or
the Universal/Thomson Triggered Offering, as applicable, pursuant to
the Holdco Partnership Agreement and (y) in the case of M&J K, XX-XX
and DW Lips, may include Registrable Securities held of record by
the Family Group members of such Requesting Holder to the extent
such Family Group members and the number of Registrable Securities
requested to be sold thereby are specified in the applicable Demand
Request); and
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(ii) all other Registrable Securities which the Company has
been requested to register by any other Holder (or Family Group
member) thereof by written request received by the Company within 15
days after the giving of such written notice by the Company (which
request shall specify the number of shares of Registrable Securities
to be offered by such Holder (or Family Group member), subject to
reduction as provided herein, and the intended method of disposition
thereof); provided, however, that the number of shares of
Registrable Securities requested to be offered by each such Holder
(or Family Group member) shall not be less than the Minimum
Registration Amount for such Holder (or Family Group member);
all to the extent necessary to permit the disposition (in accordance with the
intended methods thereof as aforesaid) of the Registrable Securities so to be
registered; provided, however, that (A) notwithstanding any other provision of
this Agreement, (i) the Company shall not allow a registration statement with
respect to Class A Stock to be declared effective within a period of six months
after consummation of the Follow-on Offering (or, if later, consummation of any
overallotment option granted in connection with the Follow-on Offering) and (ii)
with respect to all other registration requests under this Agreement, the
Company shall not be required to file a registration statement relating to a
registration request under this Section 1.02 within a period of six months after
the effective date of any other registration statement of the Company with
respect to Class A Stock (other than in the case of clause (i) or (ii) above any
registration statement relating to equity securities issuable upon exercise of
employee stock or similar options or in connection with any employee benefit or
similar plan of the Company or in connection with an acquisition by the Company
of another entity), (B) with respect to any registration statement filed, or to
be filed, pursuant to this Section 1.02, if there is (i) material non-public
information regarding the Company which the Company's Board of Directors
reasonably determines to be significantly disadvantageous for the Company to
disclose and which the Company is not otherwise required to disclose at such
time, (ii) there is a significant business opportunity (including the
acquisition or disposition of assets (other than in the ordinary course of
business) or any merger, consolidation, share exchange, tender offer or other
similar transaction) available to the Company which the Board reasonably
determines to be significantly disadvantageous for the Company to disclose or
(iii) there is any other event or condition of similar significance to the
Company that the Board reasonably determines to be significantly disadvantageous
for the Company to disclose and which the Company is not otherwise required to
disclose at such time (each, a "Disadvantageous Condition"), and the Company
shall furnish to the Requesting Holder a resolution of the Board of Directors
stating that the Company is deferring such registration pursuant to this Section
1.02(a)(B) and setting forth in reasonable detail the Disadvantageous Condition
(giving due regard to any confidentiality or competitive considerations), its
reasons for such judgment and an approximation of the anticipated delay, then
the Company shall be entitled to cause such registration statement to be
withdrawn and the effectiveness of such registration statement terminated (and,
in the case of a Shelf Registration, the Company shall not be required to file
any amendment or
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supplement thereto required to maintain the effectiveness of such Shelf
Registration), or, in the event no registration statement shall have been filed,
shall be entitled not to file any such registration statement, until the earlier
of (x) 180 days following the date such resolution was delivered to the
Requesting Holder and (y) the date such Disadvantageous Condition no longer
exists (notice of which the Company shall promptly deliver to the Requesting
Holder and the other Holders of Registrable Securities) and upon receipt of any
such notice of a Disadvantageous Condition such Requesting Holder and any other
Holders of Registrable Securities selling securities pursuant to an effective
registration statement shall discontinue use of the prospectus contained in such
registration statement and, if so directed by the Company, each such Holder
shall deliver to the Company all copies, other than permanent file copies then
in such Holder's possession, of the prospectus then covering such Registrable
Securities current at the time of receipt of such notice, and, in the event no
registration statement shall have been filed, all drafts of the prospectus
covering such Registrable Securities, (C) the Company shall only be obligated to
effect a total of two registrations requested by Holdco (provided, however, that
the Company shall not be obligated to effect a registration in respect of a
Universal/Thomson Triggered Offering if such registration shall have been
converted into a Follow-on Offering pursuant to the Formation Agreement (in
which case the Company shall effect such Follow-on Offering pursuant to the
terms of this Agreement and Holdco shall not be entitled to any additional
Demand Requests), a total of one registration requested by M&J K, a total of one
registration requested by XX-XX, a total of one registration requested by DW
Lips and a total of three registrations requested by Vulcan pursuant to this
Section 1.02 and (D) the Company shall not be required to, and shall not, allow
a registration statement relating to a registration request under this Section
1.02 to be declared effective prior to the date that is six months after
consummation of the Offering (or, if later, six months after consummation of any
overallotment option granted in connection with the Offering). Each registration
under this Section 1.02 shall be at the Company's own expense as provided in
Section 1.02(c) (each such registration, a "Company Funded Registration").
Promptly after the expiration of the 15-day period referred to in clause (ii)
above, the Company shall notify all the Holders to be included in the
registration of the identity of each such Holder (or Family Group member, as
applicable) and the number of shares of Registrable Securities requested to be
included therein. The Company shall be permitted to satisfy its obligations
under this Section 1.02 by amending (to the extent permitted by applicable law)
any Shelf Registration previously filed by the Company under the Securities Act
so that such Shelf Registration (as amended) shall permit the disposition of all
of the Registrable Securities for which a registration request under this
Section 1.02 shall have been made. Notwithstanding the foregoing, the Company
shall have no obligation under this Agreement to file any Shelf Registration.
The Requesting Holder may, at any time prior to the effective date of the
registration statement relating to the relevant registration, revoke such
request, without liability (except as set forth in Section 1.02(b)) to any other
Holders of Registrable Securities requested to be registered pursuant to Section
1.02(a)(ii), by providing a written notice to the Company revoking such request.
In the event that the Company shall give any notice of the withdrawal of, or
delay in filing, a registration statement contemplated by clause (B) above, the
Company shall, following the end of the period
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specified in Section 1.02(a)(B), file the delayed registration statement with
the SEC and such registration statement shall be maintained effective for such
time as may be necessary so that the period of effectiveness of such new
registration statement, when aggregated with the period during which such
initial registration statement was effective, if any, shall be equal to the 180
days that a registration statement is required to be kept effective pursuant to
Section 1.04(a)(2). The Company may not withdraw or suspend the effectiveness or
availability of a registration statement pursuant to this Section 1.02(a) for
more than 180 consecutive days. Within 20 days after receiving a notice
contemplated in clause (B) above, the Requesting Holder may withdraw its Demand
Request by giving written notice thereof to the Company. If withdrawn, such
Demand Request shall be deemed not to have been made for purposes of this
Agreement.
(b) Expenses. The Company shall pay all Registration Expenses in
connection with each Company Funded Registration which is requested and becomes
effective, or which is withdrawn prior to effectiveness by the Company, pursuant
to this Section 1.02. The Company shall not be liable for Registration Expenses
in connection with a registration that shall not have become effective due to a
revocation by the Holders requesting such registration under this Section 1.02
(other than pursuant to the last sentence of Section 1.02(a)), (x) unless such
Holders agree that such revoked registration counts as one of the Company Funded
Registrations which may be requested by such Holders pursuant hereto or (y)
unless such revocation relates to a registration of a Follow-on Offering and
results from the inability to generate a Satisfaction Event (each as defined in
the Formation Agreement). If such Holders have not agreed to count such revoked
registration as one of the Company Funded Registrations, the obligation to pay
the Registration Expenses in connection with such further registration or such
revoked registration shall be due and payable by the Holders who participated in
such registration or who initially requested and revoked such registration, and
such expenses shall be borne by them in proportion to the number of shares of
Registrable Securities requested by them to be registered. The Company's
obligation to pay all Registration Expenses in connection with each Company
Funded Registration under this paragraph (b) shall not be reduced by any such
revoked registration unless the Holders so elect as provided above.
(c) Effective Registration Statement. A registration requested
pursuant to this Section 1.02 shall not be deemed to have been effected unless
the registration statement relating thereto (i) has become effective under the
Securities Act and, except in the case of a Shelf Registration, any of the
Registrable Securities of the Requesting Holder (or its Family Group members, if
applicable) included in such registration have actually been sold thereunder and
(ii) has remained effective for a period of at least that specified in Section
1.04(a)(2); provided, however, that if any effective registration statement
requested pursuant to this Section 1.02 is discontinued in connection with a
Disadvantageous Condition, such registration statement shall be at the sole
expense of the Company and shall not be included as one of the Company Funded
Registrations which may be requested pursuant to this Section 1.02; provided
further, however, that if, after any registration statement requested pursuant
to this Section 1.02 becomes effective, such registration statement is
interfered with by any stop order, injunction or other order or
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requirement of the SEC or other governmental agency or court solely due to the
actions or omissions to act of the Company, such registration statement shall be
at the sole expense of the Company and shall not be included as one of the
Company Funded Registrations which may be requested at the cost of the Company
pursuant to this Section 1.02.
(d) Selection of Underwriters. The Company shall have the right to
select the underwriters for each registration made pursuant to Section 1.02(a);
provided, however, that (i) the Holder selling a majority-in-interest of
Registrable Securities to be sold in connection with the relevant registration
shall have the right to select one (of a maximum of three) joint lead
bookrunning underwriter (but not the joint lead bookrunning underwriter that
will be on the left of the cover page of any offering materials related to such
registration or the stabilization agent), which joint lead bookrunning
underwriter shall have participation in pricing and bookbuilding and shall be
subject to the reasonable approval of the Company, and (ii) the Company shall be
entitled to select no more than two additional joint lead bookrunning
underwriters; provided further, however, that, if Holdco is the Requesting
Holder in respect of a Follow-on Offering (as defined in the Formation
Agreement), (i) Vulcan (instead of Holdco) (or, in the case of a
Universal/Thomson Triggered Offering, Universal and Thomson instead of Holdco)
shall have the right to select a joint lead bookrunning underwriter (with
participation in pricing and bookbuilding) pursuant to clause (i) of this
Section 1.02(d).
(e) Pro Rata Participation in Demand Registrations. If a requested
registration pursuant to this Section 1.02 involves an underwritten offering and
a majority of the joint lead bookrunning underwriters selected in accordance
with Section 1.02(d) shall advise the Company that, in their good faith view
(based primarily upon prevailing market conditions), the number of securities
requested to be included in such registration (including securities which the
Company requests to be included) exceeds the largest number of securities which
can be sold without having a significant negative effect on the price at which
such securities can be sold in such offering, the Company shall include the
following Registrable Securities in the following order:
(i) all Registrable Securities of the Requesting Holder
requested to be included in such registration pursuant to Section
1.02(a)(i);
(ii) to the extent that the number of Registrable Securities
requested to be included in such registration pursuant to Section
1.02(a)(i) is less than the number of securities which the Company
has been advised can be sold in such offering without having the
negative effect referred to above, all Registrable Securities
requested to be included in such registration pursuant to Section
1.02(a)(ii) that are not otherwise included in Section 1.02(e)(i)
(provided, however, that if the number of Registrable Securities
requested to be included in such registration pursuant to Section
1.02(a)(ii), together with the Registrable Securities requested to
be included in such registration pursuant to Section 1.02(a)(i),
exceeds the number which the Company has been advised can be sold in
such offering
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without having the negative effect referred to above, the number of
such Registrable Securities included in such registration pursuant
to this Section 1.02(e)(ii) shall be that number of securities which
the Company has been advised it can sell in excess of the number of
Registrable Securities being included in such registration pursuant
to Section 1.02(a)(i), allocated first, pro rata between the DW
Preferred Holders on the basis of the shares of Registrable
Securities each DW Preferred Holder has requested to be included in
such registration and second, pro rata among the other Holders
referred to in this Section 1.02(e)(ii) on the basis of the shares
of Registrable Securities each such other Holder has requested to be
included in such registration); and
(iii) to the extent that the number of Registrable Securities
requested to be included in such registration pursuant to Sections
1.02(a)(i) and 1.02(a)(ii) is, in the aggregate, less than the
number of securities which the Company has been advised can be sold
in such offering without having the significant negative effect on
pricing referred to above, any equity securities proposed to be sold
by the Company (provided, however, that if the number of securities
proposed to be sold by the Company, together with the number of
Registrable Securities to be included in such registration pursuant
to Sections 1.02(a)(i) and 1.02(a)(ii), exceeds the number which the
Company has been advised can be sold in such offering without having
the negative effect referred to above, the number of such securities
included in such registration pursuant to this Section 1.02(e)(iii)
shall be that number of securities which the Company has been
advised it can sell in excess of the number of Registrable
Securities being included in such registration pursuant to Sections
1.02(a)(i) and 1.02(a)(ii)).
(f) Additional Registration. If at least 75% of the Registrable
Securities requested to be registered by the Requesting Holder in one of the
Company Funded Registrations are not included in such registration, then such
Requesting Holder may request that the Company effect an additional registration
under the Securities Act of all or part of such Requesting Holder's Registrable
Securities in accordance with the provisions of this Section 1.02, and the
Company shall effect, and pay the Registration Expenses in connection with, such
additional registration (in addition to the Company Funded Registrations
referred to in Section 1.02(a)) requested pursuant to this Section 1.02(f).
(g) No-Cutbacks. Notwithstanding anything to the contrary in this
Agreement, and for the avoidance of doubt, with respect to any Requesting
Holder, all Registrable Securities of such Requesting Holder requested to be
included in a registration pursuant to Section 1.02(a)(i) shall be included in
such registration (regardless of whether the underwriters agree that inclusion
of all such securities would have a significant negative effect on the price at
which such securities can be sold in such
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offering); provided, however, that in the case of a Follow-on Offering requested
by Holdco, this paragraph (g) shall apply only to the amount of Registrable
Securities necessary to cause a Satisfaction Event (as defined in the Holdco
Partnership Agreement).
(h) Vulcan Demand Request. Notwithstanding anything to the contrary
in this Agreement, if Vulcan shall not have previously delivered the maximum
number of Demand Requests to which it is entitled under this Section 1.02 and a
Demand Request is delivered to the Company by any Holder other than Holdco or
Vulcan (or an entity Controlled By Vulcan) at any time prior to the Vulcan
Repayment Date and, within five days of the receipt of a copy of such Demand
Request from the Company under Section 1.02, Vulcan shall deliver a Demand
Request to the Company under Section 1.02, (which shall specify the number of
securities requested to be included in such registration) then Vulcan shall be
deemed to be the Requesting Holder for all purposes of this Agreement, including
Section 1.02(a)(ii) and Section 1.02(a)(ii)(C) (and such Demand Request shall be
treated as a Demand Request of Vulcan and not the initial Requesting Holder for
all purposes). The failure to exercise such right shall not affect Vulcan's
rights to participate in the offering requested by the Requesting Holder under
Section 1.02(a)(ii).
SECTION 1.03. Certain Piggyback Registration Rights. (a) General. If
the Company at any time proposes to register any of its equity securities (the
"Priority Securities") under the Securities Act (other than a registration (i)
on Form S-8 or S-4 or any successor or similar forms, (ii) relating to equity
securities issuable upon exercise of employee stock or similar options or in
connection with any employee benefit or similar plan of the Company, (iii) in
connection with an acquisition by the Company of another entity or (iv) pursuant
to a registration under Section 1.02), whether or not for sale for its own
account (but not for the account of any Holder or Family Group member), in a
manner which would permit registration of Registrable Securities for sale to the
public under the Securities Act, it shall each such time, subject to the
provisions of Section 1.03(b), give written notice to all Holders of record of
Registrable Securities of its intention to do so and of such Holders' rights
under this Section 1.03 at least 10 days prior to the anticipated filing date of
the registration statement relating to such registration. Such notice shall
offer all such Holders the opportunity to include in such registration statement
such number of Registrable Securities as each such Holder may request, but in no
event shall any Holder request inclusion of less than the Minimum Registrable
Amount. Upon the written request of any such Holder made within 10 days after
the receipt of the Company's notice (which request shall specify the number of
Registrable Securities intended to be disposed of by such Holder, subject to
reduction as provided herein, and the intended method of disposition thereof),
the Company shall use its reasonable best efforts to effect the registration
under the Securities Act of all Registrable Securities which the Company has
been so requested to register by the Holders thereof, to the extent required to
permit the disposition (in accordance with such intended methods thereof) of the
Registrable Securities so to be registered; provided, however, that (A) if such
registration involves an underwritten offering, all Holders of Registrable
Securities requesting to be included in the Company's registration must sell
their Registrable Securities to the underwriters selected by the Company on the
same terms and conditions as apply to the Company or the original selling
holders for whose
13
account the registration has been made; provided, however, that in respect of
any offering under this Agreement (whether under Section 1.02 or this Section
1.03 or otherwise) no Holder or any of its Affiliates (other than, for the
avoidance of doubt, the Company) shall be required to directly or indirectly
make any representations or warranties to, or agreements with, the Company or
the underwriters (including agreements with respect to indemnification) other
than representations, warranties or agreements regarding such Holder or its
Affiliates, its ownership of and title to the Registrable Securities and its
intended method of distribution, and any liability of such Holder or its
Affiliates to any underwriter or other Person under such underwriting agreement
shall be limited to liability arising from breach of its representations and
warranties and shall be limited to an amount equal to the total price at which
the securities sold by such Holder or its Affiliates were offered to the public
(net of discounts and commissions paid by such Holder or its Affiliates in
connection with such underwritten offering) and (B) if, at any time after giving
written notice of its intention to register any securities pursuant to this
Section 1.03(a) and 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 shall give written notice to
all Holders of Registrable Securities and, thereupon, shall be relieved of its
obligation to register any Registrable Securities in connection with such
registration (without prejudice, however, to rights of Holders under Section
1.02). If a registration pursuant to this Section 1.03(a) involves an
underwritten public offering, any Holder of Registrable Securities requesting to
be included in such registration may elect, in writing prior to the effective
date of the registration statement filed in connection with such registration,
not to register such securities in connection with such registration. No
registration effected under this Section 1.03 shall relieve the Company of its
obligations to effect registrations upon request under Section 1.02. The Company
shall pay all Registration Expenses in connection with each registration of
Registrable Securities pursuant to this Section 1.03. Nothing contained in this
Section 1.03 shall create any liability on the part of the Company to the
Holders if the Company should for any reason decide not to file a registration
statement for which piggyback registration rights are available or withdraw such
registration statement subsequent to its filing, regardless of any action
Holders may have taken, whether as a result of the issuance by the Company of
any notice hereunder or otherwise.
(b) Priority in Piggyback Registrations. If a registration pursuant
to this Section 1.03 involves an underwritten offering and a majority of the
joint lead bookrunning underwriters shall advise the Company that, in their good
faith view (based primarily upon prevailing market conditions), the number of
securities (including all Registrable Securities) which the Company, the Holders
and any other Persons intend to include in such registration exceeds the largest
number of securities which can be sold without having a significant negative
effect on the price at which such securities can be sold in such offering, the
Company will include in such registration in the following order: (i) all the
Priority Securities (including any to be sold for the Company's own account or
for other holders of Priority Securities (other than for the account of any
Holders)), on a pro rata basis, and (ii) to the extent that the number of
securities which the
14
Company proposes to sell for its own account or for other holders of Priority
Securities pursuant to Section 1.03(a) is less than the number of securities
which the Company has been advised can be sold in such offering without having
the negative effect referred to above, all Registrable Securities requested to
be included in such registration by the Holders pursuant to Section 1.03(a)
(provided, however, that if the number of Registrable Securities requested to be
included in such registration by the Holders pursuant to Section 1.03(a),
together with the number of Priority Securities to be included in such
registration pursuant to clause (i) of this Section 1.03(b), exceeds the number
which the Company has been advised can be sold in such offering without having
the negative effect referred to above, the number of such Registrable Securities
requested to be included in such registration by the Holders pursuant to Section
1.03(a) shall be allocated first, pro rata between the DW Preferred Holders on
the basis of the shares of Registrable Securities each DW Preferred Holder has
requested to be included in such registration and second, pro rata among all
such other requesting Holders on the basis of the number of Registrable
Securities each such other Holder has requested to be included in such
registration).
SECTION 1.04. Registration Procedures. (a) If and whenever the
Company is required to use its reasonable best efforts to effect or cause the
registration under the Securities Act as provided in this Agreement of any
Registrable Securities, the Company shall, as expeditiously as possible:
(1) use its reasonable best efforts to prepare and file, or cause to
be prepared and filed as soon as practicable but in any event within 90
days of receipt of a request for registration, a registration statement on
any form for which the Company then qualifies or which counsel for the
Company shall deem appropriate, and which form shall be available for the
sale of the Registrable Securities in accordance with the intended methods
of distribution thereof, and use its reasonable best efforts to cause such
registration statement to become and remain (for the period specified in
paragraph (2) below) effective; provided, however, that at least ten days
before filing with the SEC a registration statement or prospectus and at
least two days before filing with the SEC any amendments or supplements
thereto, the Company shall (A) furnish to the underwriters, if any, and to
one counsel selected by Holders of a majority-in-interest of the
Registrable Securities covered by such registration statement copies of
all such documents proposed to be filed, which documents shall be subject
to the review and comments of the underwriters and such counsel (provided,
however, that the determination to accept any such comments not relating
to the underwriters or such selling stockholders shall be in the Company's
sole discretion), and (B) notify each Holder of Registrable Securities
covered by such registration statement of any stop order issued or
threatened by the SEC and take all reasonable actions required to prevent
the entry of such stop order or to remove it if entered;
(2) prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection
therewith as
15
may be necessary to keep such registration statement effective for a
period of not less than 180 days (subject to blackouts upon the good faith
declaration of any Disadvantageous Condition in accordance with Section
1.02(a)) or such shorter period which shall terminate when all Registrable
Securities covered by such registration statement have been sold (but not
before the expiration of the 90-day period referred to in Section 4(3) of
the Securities Act and Rule 174 thereunder, if applicable), and 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
sellers thereof set forth in such registration statement;
(3) notify each Holder of Registrable Securities covered by such
registration statement when such registration statement or any amendment
thereto has been filed or becomes effective;
(4) notify each Holder of Registrable Securities covered by such
registration statement of any notice from the SEC that there will be a
review of such registration statement and promptly provide such Holders
with a copy of any SEC comments received by the Company in connection
therewith;
(5) furnish, without charge, to each Holder and each underwriter, if
any, of Registrable Securities covered by such registration statement such
number of copies of such registration statement, each amendment and
supplement thereto (including one conformed copy to each Holder and one
signed copy to each joint lead bookrunning underwriter and in each case
including all exhibits thereto), and the prospectus included in such
registration statement (including each preliminary prospectus), in
conformity with the requirements of the Securities Act, and such other
documents as such Holder may reasonably request in order to facilitate the
disposition of the Registrable Securities owned by such Holder;
(6) use its reasonable best efforts to register or qualify the
Registrable Securities covered by such registration statement under such
other securities or blue sky laws of such jurisdictions as any underwriter
of Registrable Securities covered by such registration statement
reasonably requests and do any and all other acts and things which may be
reasonably necessary or advisable to enable each Holder and each
underwriter to consummate the disposition in such jurisdictions of the
Registrable Securities owned by such Holder; provided, however, that the
Company shall not be required to (i) qualify generally to do business in
any jurisdiction where it would not otherwise be required to qualify but
for this paragraph (6), (ii) subject itself to taxation in any such
jurisdiction or (iii) consent to general service of process in any such
jurisdiction;
(7) use its reasonable best efforts to cause the Registrable
Securities covered by such registration statement to be registered with or
approved by such other governmental agencies or authorities as may be
necessary by virtue of the
16
business and operations of the Company to enable the Holder or Holders
thereof to consummate the disposition of such Registrable Securities;
(8) immediately notify each of the joint lead bookrunning
underwriters, if any, and 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 Securities Act of the
happening of any event which comes to the Company's attention if as a
result of such event the prospectus included in such registration
statement contains an untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to make
the statements therein not misleading, and the Company shall promptly
prepare and file with the SEC such amendment or supplement to such
registration statement or prospectus and furnish to such Holder a
supplement or amendment to such prospectus so that, as thereafter
delivered to the purchasers of such Registrable Securities, such
prospectus shall not contain an untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary
to make the statements therein not misleading;
(9) use its reasonable best efforts to cause all Registrable
Securities covered by such registration statement to be listed on the
national securities exchange or national market interdealer quotation
system on which the Class A Stock is then listed, and enter into such
customary agreements including a supplemental listing application and
indemnification agreement in customary form (provided, however, that the
applicable listing requirements are satisfied), and to provide a transfer
agent and registrar for such Registrable Securities covered by such
registration statement no later than the effective date of such
registration statement;
(10) enter into such customary agreements (including an underwriting
agreement in customary form) and take all such other actions as the
underwriters reasonably request in order to expedite or facilitate the
disposition of such Registrable Securities, including customary
indemnification;
(11) make available for inspection by any Holder of Registrable
Securities covered by such registration statement, any underwriter
participating in any disposition pursuant to such registration statement,
and any attorney, accountant or other agent retained by any such Holder or
underwriter (collectively, the "Inspectors"), those financial and other
records, organizational documents and properties of the Company and its
controlled entities (collectively, "Records"), and cause the Company's and
its controlled entities' officers, directors and employees to supply that
information and respond to those inquiries reasonably requested by any
such Inspector in connection with such registration statement, in each
case under this paragraph (11) only to the extent reasonably necessary, as
mutually determined by the Company and the underwriters or Holders, to
enable such underwriters or Holders to conduct their due diligence
investigation;
17
(12) use its reasonable best efforts to furnish to any underwriter
participating in any disposition pursuant to such registration statement a
signed counterpart of a "cold comfort" letter from the Company's
independent public accountants who have audited the Company's financial
statements included or incorporated by reference in such registration
statement (and prospectus included therein), in customary form and
covering such matter of the type customarily covered by "cold comfort"
letters delivered in connection with underwritten public offerings of
securities (including with respect to events subsequent to the date of
such financial statements) as the underwriters reasonably request (and
dated the dates such comfort letters are customarily dated);
(13) use its reasonable best efforts to furnish to each underwriter
participating in any disposition pursuant to such registration statement a
signed counterpart of an opinion and negative assurance letter of counsel
from the Company's outside counsel in customary form and covering such
matters of the type customarily covered in opinions and negative assurance
letters of counsel delivered in connection with underwritten public
offerings of securities;
(14) cooperate with each seller of Registrable Securities and each
underwriter or agent participating in the disposition of such Registrable
Securities and their respective counsel in connection with any filings
with the NASD;
(15) in the case of a Demand Request with respect to a proposed
offering in excess of $150 million, make available its officers, employees
and personnel and otherwise provide reasonable assistance to the
underwriters in their marketing of Registrable Securities as the
underwriters shall reasonably request, including, in the case of a Demand
Request with respect to a proposed offering in excess of $200 million,
participation in "roadshow" presentations or such other selling efforts as
the underwriters shall reasonably request; and
(16) otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the SEC, and make available or cause
to be made available, as applicable, to the Holders of Registrable
Securities sold under such registration statement, as soon as reasonably
practicable, an earnings statement covering a period of at least 12
months, beginning with the first month after the effective date of the
registration statement (as the term "effective date" is defined in Rule
158(c) under the Securities Act), which earnings statement shall satisfy
the provisions of Section 11(a) of the Securities Act and Rule 158
thereunder.
(b) It shall be a condition precedent to the obligation of the
Company to take any action pursuant to this Agreement in respect of the
Registrable Securities which are to be registered at the request of any Holder
thereof that such Holder shall furnish to the Company such information regarding
the Registrable Securities held by such Holder and the intended method of
disposition thereof as the Company shall reasonably request and as shall be
reasonably required in connection with the action taken by the Company.
18
(c) Each Holder agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section
1.04(a)(8), such Holder shall discontinue disposition of Registrable Securities
pursuant to the registration statement covering such Registrable Securities
until such Holder's receipt of the copies of the supplemented or amended
prospectus contemplated by Section 1.04(a)(8), and, if so directed by the
Company, such Holder shall deliver to the Company (at the Company's expense) all
copies (including any and all drafts), 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 referred to in Section 1.04(a)(2)
shall be extended by the greater of (i) 180 days and (ii) the number of days
during the period from and including the date of the giving of such notice
pursuant to Section 1.04(a)(8) to and including the date when each Holder of
Registrable Securities covered by such registration statement shall have
received the copies of the supplemented or amended prospectus contemplated by
Section 1.04(a)(8).
SECTION 1.05. Holdback Agreements. (a) If any registration of
Registrable Securities shall be in connection with an underwritten public
offering, each Holder of Registrable Securities agrees not to effect any public
sale or distribution, including any sale pursuant to Rule 144, or any successor
provision, under the Securities Act, of any Registrable Securities and not to
effect any such public sale or distribution of any other equity security of the
Company or of any security convertible into or exchangeable or exercisable for
any equity security of the Company or publicly announce an intention to do any
of the foregoing (in each case, other than as part of such underwritten public
offering) during the seven days prior to, and during the 90-day period which
begins on, the effective date of such registration statement (which 90-day
period shall be tolled to the extent of any blackouts upon the good faith
declaration of any Disadvantageous Conditions in accordance with Section
1.02(a)) (except as part of such registration) and agrees further to enter into
a customary lock-up with the underwriters of such offering (not to exceed six
months from the date of consummation of such offering); provided, however, that
such Holder of Registrable Securities has received written notice of such
registration at least 15 days prior to the anticipated beginning of the
seven-day period referred to above.
(b) If any registration of Registrable Securities shall be in
connection with an underwritten public offering, the Company agrees not to
effect any public sale or distribution of any of its equity securities or of any
security convertible into or exchangeable or exercisable for any equity security
of the Company (other than any such sale or distribution of such securities in
connection with any merger or consolidation by the Company or any subsidiary of
the Company or the acquisition by the Company or a subsidiary of the Company of
the capital stock or substantially all the assets of any other Person or in
connection with an employee stock ownership or other benefit plan) during the
seven days prior to, and during the 90-day period which begins on, the effective
date of such registration statement (which 90-day period shall be tolled to the
extent of any blackouts upon the good faith declaration of any Disadvantageous
Conditions in
19
accordance with Section 1.02(a)) (except as part of such registration) and
agrees further to enter into a customary lock-up with the underwriters of such
offering (not to exceed six months from the date of consummation of such
offering).
(c) During the term of this Agreement, each certificate evidencing
Registrable Securities held of record or beneficially owned by a Holder shall
bear the following legend:
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO AND
TRANSFERABLE ONLY UPON COMPLIANCE WITH THE PROVISIONS OF A
REGISTRATION RIGHTS AGREEMENT, DATED AS OF [ ], 2004, AMONG
DREAMWORKS ANIMATION SKG, INC. AND THE STOCKHOLDERS PARTY THERETO. A
COPY OF SUCH REGISTRATION RIGHTS AGREEMENT IS ON FILE AT THE
PRINCIPAL OFFICE OF DREAMWORKS ANIMATION SKG, INC. AT GRANDVIEW
BUILDING, 0000 XXXXXX XXXXXX, XXXXXXXX, XXXXXXXXXX 00000."
(d) Upon a Person ceasing to have rights and obligations under this
Agreement pursuant to the terms hereof or upon termination of this Agreement,
such Person may surrender to the Company any certificates held of record by such
Person and bearing the legend set forth in Section 1.05(c), and upon surrender
of such certificates, the Company shall reissue such certificates without such
legend.
SECTION 1.06. Indemnification and Contribution. (a) To the fullest
extent permitted by applicable law, the Company shall indemnify and hold
harmless each Person who participates as an underwriter (any such Person being
an "Underwriter"), each Holder of Registrable Securities to be sold in
connection with the relevant registration (each such Holder being a "Seller",
and in the event Holdco is the "Seller", each partner in Holdco who will receive
cash proceeds from the sale of such securities under such registration statement
shall also be deemed a "Seller" for purposes of this Section 1.06) and their
respective partners, directors, officers and employees and each Person, if any,
who controls any Seller or Underwriter (including, if Holdco is a Seller, the
general and limited partners thereof) within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act as follows:
(i) against any and all losses, liabilities, claims, damages,
judgments and reasonable expenses whatsoever, as incurred, arising
out of any untrue statement or alleged untrue statement of a
material fact contained in any registration statement (or any
amendment thereto) relating to such registration, including all
documents incorporated therein by reference, or the omission or
alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading
or arising out of any untrue statement or alleged
20
untrue statement of a material fact contained in any prospectus (or
any amendment or supplement thereto) relating to such registration,
including all documents incorporated therein by reference, or the
omission or alleged omission therefrom of a material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all losses, liabilities, claims, damages,
judgments and reasonable expenses whatsoever, as incurred, to the
extent of the aggregate amount paid in settlement of any litigation,
investigation or proceeding by any governmental agency or body,
commenced or threatened, or of any other claim whatsoever based upon
any such untrue statement or omission, or any such alleged untrue
statement or omission, if such settlement is effected with the
written consent of the Company; and
(iii) against any and all reasonable expense whatsoever, as
incurred (including, subject to Section 1.06(c), fees and
disbursements of counsel) incurred in investigating, preparing or
defending against any litigation, investigation or proceeding by any
governmental agency or body, commenced or threatened, in each case
whether or not such Person is a party, or any claim whatsoever based
upon any such untrue statement or omission, or any such alleged
untrue statement or omission, to the extent that any such expense is
not paid under subparagraph (i) or (ii) above;
provided, however, that this indemnity agreement does not apply to any Seller or
Underwriter with respect to any loss, liability, claim, damage, judgment or
expense to the extent arising out of any untrue statement or omission or alleged
untrue statement or omission (A) made in reliance upon and in conformity with
written information furnished to the Company by such Seller or Underwriter
expressly for use in a registration statement (or any amendment thereto) or any
related prospectus (or any amendment or supplement thereto) or (B) if such
untrue statement or omission or alleged untrue statement or omission was
corrected in an amended or supplemented registration statement or prospectus and
the Company had furnished copies thereof to the Underwriter or Seller from which
the Person asserting such loss, liability, claim, damage, judgment or expense
purchased the securities that are the subject thereof on a timely basis prior to
the date of sale by such Underwriter or Seller to such Person.
(b) Each Seller shall severally indemnify and hold harmless the
Company, each Underwriter and the other Sellers, and each of their respective
partners, directors, officers and employees (including each director and officer
of the Company who signed the relevant registration statement) and each Person,
if any, who controls the Company, any Underwriter or any other Seller within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
against any and all losses, liabilities, claims, damages, judgments and expenses
described in the indemnity contained in Section
21
1.06(a) (provided, however, that any settlement of the type described therein is
effected with the written consent of such Seller) as incurred, but only with
respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in a registration statement or any related prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with written
information furnished to the Company by such Seller expressly for use in such
registration statement (or any amendment thereto) or such prospectus (or any
amendment or supplement thereto); provided, however, that an indemnifying Seller
shall not be required to provide indemnification in any amount in excess of the
amount by which (x) the total price at which the securities sold by such
indemnifying Seller and its affiliated indemnifying Sellers and distributed to
the public were offered to the public (net of discounts and commissions paid by
the indemnifying Seller in connection with such offering) exceeds (y) the amount
of any damages which such indemnifying Seller has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission. The Company shall be entitled, to the extent customary, to receive
indemnification and contribution from underwriters, selling brokers, dealer
managers and similar securities industry professionals participating in the
distribution, to the same extent as provided above with respect to information
so furnished in writing by such Persons specifically for inclusion in any
prospectus or registration statement.
(c) Each indemnified party or parties shall give reasonably prompt
notice to each indemnifying party or parties of any action or proceeding
commenced against it in respect of which indemnity may be sought hereunder, but
failure so to notify an indemnifying party or parties shall not relieve it or
them from any liability which it or they may have under this indemnity
agreement, except to the extent that the indemnifying party is materially
prejudiced by such failure to give notice. If the indemnifying party or parties
so elects within a reasonable time after receipt of such notice, the
indemnifying party or parties may assume the defense of such action or
proceeding at such indemnifying party's or parties' expense with counsel chosen
by the indemnifying party or parties and approved by the indemnified party
defendant in such action or proceeding, which approval shall not be unreasonably
withheld; provided, however, that, if such indemnified party or parties
reasonably determine that a conflict of interest exists and that therefore it is
advisable for such indemnified party or parties to be represented by separate
counsel or that, upon advice of counsel, there may be legal defenses available
to it or them which are different from or in addition to those available to the
indemnifying party, then the indemnifying party or parties shall not be entitled
to assume such defense and the indemnified party or parties shall be entitled to
separate counsel (limited in each jurisdiction to one counsel for all
Underwriters and another counsel for all other indemnified parties under this
Agreement) at the indemnifying party's or parties' expense. The indemnified
party or parties shall have the right to engage separate counsel and participate
in the defense of any action, but, except as stated above, the fees and expenses
of such counsel shall be the expense of such indemnified party or parties. If
any indemnifying party or parties are not so entitled to assume the defense of
such action or do not assume such defense, after having received the notice
referred to in the first sentence of this paragraph, the indemnifying party or
parties will pay the reasonable fees
22
and expenses of counsel for the indemnified party or parties (limited in each
jurisdiction to one counsel for all Underwriters and another counsel for all
other indemnified parties under this Agreement). In such event, however, no
indemnifying party or parties will be liable for any settlement effected without
the written consent of such indemnifying party or parties (which consent shall
not be unreasonably withheld or delayed); provided, however, that if at any time
the indemnified party or parties shall have requested the indemnifying party or
parties to reimburse the indemnified party or parties for fees and expenses of
counsel as contemplated by this paragraph, the indemnifying party or parties
shall be liable for any settlement of any proceeding effected without the
written consent of such indemnifying party or parties if (x) such settlement is
entered into more than 15 business days after receipt by such indemnifying party
or parties of the aforesaid request accompanied by supporting documents
reasonably satisfactory to the indemnifying party or parties and (y) such
indemnifying party or parties shall not have reimbursed the indemnified party or
parties in accordance with such request prior to the date of such settlement. No
indemnifying party or parties shall, without the prior written consent of the
indemnified party or parties, effect any settlement of any action in respect of
which any indemnified party or parties is a party, unless such settlement
includes an unconditional release of such indemnified party or parties from all
liability on claims that are the subject matter of such action. If an
indemnifying party is entitled to assume, and assumes, the defense of such
action or proceeding in accordance with this paragraph, such indemnifying party
or parties shall not, except as otherwise provided in this subsection (c), be
liable for any fees and expenses of counsel for the indemnified parties incurred
thereafter in connection with such action or proceeding.
(d) (i) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in this Section 1.06
is for any reason held to be unenforceable by the indemnified parties although
applicable in accordance with its terms in respect of any losses, liabilities,
claims, damages, judgments and expenses suffered by an indemnified party
referred to therein, each applicable indemnifying party, in lieu of indemnifying
such indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, liabilities, claims, damages,
judgments and expenses in such proportion as is appropriate to reflect the
relative fault of the Company on the one hand and of the liable Sellers or
Underwriters (including, in each case, that of their respective officers,
directors, employees and agents) on the other in connection with the statements
or omissions which resulted in such losses, liabilities, claims, damages,
judgments or expenses, as well as any other relevant equitable considerations.
The relative fault of the Company on the one hand and of the liable Sellers or
Underwriters (including, in each case, that of their respective officers,
directors, employees and agents) on the other 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 Company, on the one hand, or by or on
behalf of the Sellers or Underwriters, on the other, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The amount paid or payable by a party as a result of
the losses, liabilities, claims, damages,
23
judgments and expenses referred to above shall be deemed to include, subject to
the limitations set forth in Section 1.06(c), any legal or other fees or
expenses reasonably incurred by such party in connection with investigating or
defending any action or claim.
(i) The Company and each Seller agree that it would not be
just and equitable if contribution pursuant to this Section 1.06
were determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable
considerations referred to in sub-paragraph (i) above.
Notwithstanding anything in this Section 1.06(d) to the contrary, in
the case of distributions to the public, an indemnifying Seller
shall not be required to contribute any amount in excess of the
amount by which (A) the total price at which the securities sold by
such indemnifying Seller and its affiliated indemnifying Sellers and
distributed to the public were offered to the public (net of
discounts and commissions paid by the indemnifying Seller in
connection with such offering) exceeds (B) the amount of any damages
which such indemnifying Seller has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or
alleged omission. No Person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.
(ii) For purposes of this Section, each Person, if any, who
controls a Seller or an Underwriter within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act shall have
the same rights to contribution as such Seller or Underwriter; and
each director of the Company, each officer of the Company who signed
the relevant registration statement, and each Person, if any, who
controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, shall have the
same rights to contribution as the Company.
SECTION 1.07. Miscellaneous.
(a) No Inconsistent Agreements. Neither the Company nor the Holders
have, as of the date hereof, entered into, nor shall they, on or after the date
hereof, enter into, any agreement with respect to the Registrable Securities
that is inconsistent with the rights granted to the Holders herein or otherwise
conflicts with the provisions hereof.
(b) Complete Agreement. This Agreement shall constitute the entire
agreement among the parties hereto with respect to the subject matter hereof and
shall supercede all prior agreements and understandings, whether written or
oral, between or among the parties with respect to such subject matter.
(c) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, qualified,
modified or
24
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, without the prior written consent of the Company Vulcan, M&JK,
XX-XX and Holders of a majority-in-interest of the Registrable Securities;
provided, however, that no amendment shall affect a Holder disproportionately
when compared to the other Holders without the consent of such Holder.
(d) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail,
telex, telecopier or air courier guaranteeing overnight delivery:
(i) if to a Holder other than Vulcan, at the most current
address indicated for such Holder in the Company's stock transfer
records;
(ii) if to the Company, at:
DreamWorks Animation SKG, Inc.
Grandview Building
0000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxxxx Xxxxxxxx, General Counsel
Telecopier: (000) 000-0000
25
with a copy to:
Cravath, Swaine & Xxxxx LLP
000 Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxx, Esq.
Telecopier: (000) 000-0000
(iii) if to Vulcan, at:
Vulcan Inc.
000 Xxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Attention:
Telecopier: (000) 000-0000
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxxxx, Esq.
Telecopier: (000) 000-0000
All such notices and communications shall be deemed to have been
duly given when received.
The Holders or the Company by notice to the other parties may
designate additional or different addresses for subsequent notices or
communications.
(e) Successors and Assigns. This Agreement shall be binding on and
inure to the benefit of and be enforceable by the parties hereto and, with
respect to the Company, its successors and assigns.
(f) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(g) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(h) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York without giving effect to
applicable
26
principles of conflicts of laws, except to the extent the substantive laws of
the State of Delaware are mandatorily applicable under Delaware law.
(i) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions hereof shall not be in any way impaired
or affected thereby, it being intended that all of the rights and privileges of
the parties shall be enforceable to the fullest extent permitted by law.
(j) No Third Party Beneficiaries. Except as provided in Section
1.06, this Agreement is not intended to confer any rights or remedies hereunder
upon, and shall not be enforceable by, any Person other than the parties hereto.
(k) Submission to Jurisdiction; Waivers. With respect to any suit,
action or proceeding relating to this Agreement (collectively, a "Proceeding"),
each party to this Agreement irrevocably (a) consents and submits to the
exclusive jurisdiction of the courts of the State of New York and the State of
Delaware and any court of the United States located in the Borough of Manhattan
in New York City or the State of Delaware; (b) waives any objection which such
party may have at any time to the laying of venue of any Proceeding brought in
any such court, waives any claim that such Proceeding has been brought in an
inconvenient forum and further waives the right to object, with respect to such
Proceeding, that such court does not have jurisdiction over such party; (c)
consents to the service of process at the address set forth for notices in
Section 1.07(d) herein; provided, however, that such manner of service of
process shall not preclude the service of process in any other manner permitted
under applicable law; and (d) waives, to the fullest extent permitted by
applicable law, any and all rights to trial by jury in connection with any
Proceeding.
(l) Enforcement. (i) Each party hereto acknowledges that the other
parties would not have an adequate remedy at law for money damages in the event
that any of the covenants or agreements of any of the other parties to this
Agreement were not performed in accordance with its terms, and it is therefore
agreed that each party hereto, in addition to and without limiting any other
remedy or right it may have, will have the right to an injunction or other
equitable relief in any court of competent jurisdiction, enjoining any such
breach and enforcing specifically the terms and provisions hereof, and each
party hereto hereby waives any and all defenses it may have on the ground of
lack of jurisdiction or competence of the court to grant such an injunction or
other equitable relief.
(ii) All rights, powers and remedies provided under this Agreement
or otherwise available in respect hereof at law or in equity shall be cumulative
and not alternative, and the exercise or beginning of the exercise of any
thereof by any party shall not preclude the simultaneous or later exercise of
any other such right, power or remedy by such party.
IN WITNESS HEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered as of the date first written above.
DREAMWORKS ANIMATION SKG, INC.,
by
_________________________________
Name:
Title:
[HOLDCO] LLLP,
by
_________________________________
Name:
Title:
M&J K DREAM LIMITED PARTNERSHIP,
By M&J K DREAM CORP.,
General Partner
by
____________________________
Name: Xxxxxxx Xxxxxxxxxx
Title: President
THE JK ANNUITY TRUST,
by
_________________________________
Name:
Title:
2
THE MK ANNUITY TRUST,
by
_________________________________
Name:
Title:
XXXXXXXXXX 1994 IRREVOCABLE TRUST,
by
_________________________________
Name:
Title:
XX-XX, L.P.,
By XX-XX, INC.,
General Partner
by
____________________________
Name: Xxxxx Xxxxxx
Title: President
DW LIPS, L.P.,
By DW SUBS. INC.,
General Partner
by
____________________________
Name: Xxxxxx Xxxxxxxxx
Title: President
[VULCAN],
by
_________________________________
Name:
Title:
3
XXX ENTERTAINMENT, L.L.C.,
by
_________________________________
Name:
Title:
CHEMICAL INVESTMENTs, INC.,
by
_________________________________
Name:
Title
MICROSOFT CORPORATION,
by
_________________________________
Name:
Title:
ZIFF INVESTORS PARTNERSHIP,
L.P. IIA,
By Ziff Investment Management,
LLC, General Partner
by
____________________________
Name:
Title:
OSTIN MUSIC LLC,
by
_________________________________
Name:
Title:
4
XXXXX XXXXXXXX,
_________________________________
XXXXXX XXXXX,
_________________________________
XXXXXXX XXXXX,
_________________________________
XXXX X. XXXXXXXXX,
_________________________________
VIVENDI UNIVERSAL ENTERTAINMENT LLLP,
by
_________________________________
Name:
Title:
THOMSON INC.,
by
_________________________________
Name:
Title:
5
KADOKAWA ENTERTAINMENT U.S. INC.,
by
_________________________________
Name:
Title:
