EXHIBIT 4.3
REGISTRATION RIGHTS AGREEMENT, dated as of
October [ ], 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"),
M&J K B LIMITED PARTNERSHIP, a Delaware
limited partnership ("M&J K B"), XX-XX,
L.P., a Delaware limited partnership
("XX-XX"), DW LIPS, L.P., a California
limited partnership ("DW Lips"), DW
INVESTMENT II, INC., a Washington
corporation ("DWI II"), and the other
holders of Registrable Securities (as
defined below) party hereto (together with
Holdco, M&J K, M&J K B, XX-XX, DW Lips, DWI
II 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 October [ ], 2004, providing for the separation of the animation business
(the "Separation") from DW;
WHEREAS, 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 and/or the Universal Triggered Follow-on Offering (each 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 (as defined below);
NOW THEREFORE, in consideration of the mutual covenants and
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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:
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 B (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), (v) DWI II and
(vi) Universal.
"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.
"DWI II" is defined in the preamble hereto.
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"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 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, M&J K B, 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 B, Xxxxxxx
Xxxxxxxxxx, his spouse, 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, his spouse 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.
"Final Allocation" is defined in the Holdco Partnership
Agreement.
"Follow-on Offering" is defined in the Formation Agreement.
"Formation Agreement" means the Formation Agreement, dated as
of October [ ], 2004, among the Company, the Holders and the other parties
thereto, 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 October [ ], 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.
"M&J K B" is defined in the preamble hereto.
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"Minimum Demand Request" means, (a) in the case of any
Requesting Holder other than Universal, 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 discounts and commissions and (b) in the case of Universal as the
Requesting Holder, on the date a Demand Request is delivered, such number of
Registrable Securities owned by Universal as of such date.
"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 or similar transaction); 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 (including volume
and manner of sale restrictions) 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
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Follow-on Offering or the Universal 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) such
security ceases to be outstanding; provided further, however, that with respect
to Universal only, Registrable Securities shall include only (and all of) such
shares of Class A Stock allocated to Universal in the Final Allocation.
"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).
"Satisfaction Event" is defined in the Holdco Partnership
Agreement.
"SEC" means the United States Securities and Exchange
Commission.
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"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.
"Underwriter" is defined in Section 1.06(a).
"Universal" means Vivendi Universal Entertainment LLLP.
"Universal Triggered Offering" is defined in the Formation
Agreement.
"Vulcan Repayment Date" means the date on which DWI II has
received its Fifty Percent Return (as defined in and in accordance with the
Holdco Partnership Agreement) and gross cash proceeds from the sale of
Registrable Securities equal to the remainder of DWI II'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 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 Triggered Offering, as
applicable, pursuant to the Holdco Partnership Agreement and
(y) in the case of M&J K B, XX-XX and DW Lips, may
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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
(ii) unless Holdco is the Requesting Holder, 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 (and the Participating Partners if Holdco
is the Requesting Holder) a resolution of the Board of Directors stating that
the Company is deferring such registration pursuant to this
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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 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 (i) the Company shall not be obligated to effect
a registration in respect of a Universal 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) and (ii) in the event that a registration requested
by Holdco is not consummated because it would not have resulted in a
Satisfaction Event with respect to the Participating Partners as provided in
Section 3.05 or 4.01 of the Formation Agreement, then Holdco shall be deemed not
to have used a registration request in respect of such registration), a total of
one registration requested by M&J K B, a total of one registration requested by
XX-XX, a total of one registration requested by DW Lips, a total of three
registrations requested by DWI II and a total of one registration requested by
Universal 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
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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 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 or a Universal Triggered Offering and results from the inability to
generate a Satisfaction Event. Except as provided in clause (y) above, 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
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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) except
in the case of a Shelf Registration, 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 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 (x) Holdco is the Requesting
Holder in respect of a Follow-on Offering or a Universal Triggered Offering or
(y) DWI II is the Requesting Holder (for the avoidance of doubt, whether
directly or by means of clause (x) above, Section 1.02(h) or Section 4.01(b) of
the Formation Agreement), DWI II (instead of Holdco) (or, in the case of a
Universal Triggered Offering, Universal instead of Holdco, provided, that DWI II
does not exercise its rights under Section 4.01(b) of the Formation Agreement)
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) and all such joint lead bookrunning underwriters shall be
entitled to receive equivalent compensation in their role as joint lead
bookrunning underwriters in such offering.
(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
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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 requested to be
registered by the Requesting Holder 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 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, to Universal
on the basis of the shares of Registrable Securities Universal
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)).
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(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 offering); provided, however, that in
the case of a Follow-on Offering or a Universal Triggered Offering requested by
Holdco, this paragraph (g) shall apply only to the amount of Registrable
Securities necessary to cause a Satisfaction Event for the Participating
Partners.
(h) Vulcan Demand Request. Notwithstanding anything to the
contrary in this Agreement, if DWI II 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 DWI II (or an entity Controlled By Xxxx Xxxxx) at any time prior to
the Vulcan Repayment Date and, within five Business Days of the receipt of a
copy of such Demand Request from the Company under Section 1.02, DWI II 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
DWI II shall be deemed to be the Requesting Holder for all purposes of this
Agreement, including Section 1.02(a)(i), Section 1.02(a)(i)(C) and Section
1.02(e) (and such Demand Request shall be treated as a Demand Request of DWI II
and not the initial Requesting Holder for all purposes). The failure to exercise
such right shall not affect DWI II'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
13
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 Registration
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 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
14
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.
(a) 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 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, to Universal on
the basis of the shares of Registrable Securities Universal 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
15
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 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
16
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
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
17
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;
(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 or any Demand
Request made by Holdco, make
18
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
or any Demand Request made by Holdco, 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.
(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
19
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 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 OCTOBER [ ], 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
20
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 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
21
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 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
22
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 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
23
(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), as the case may be, 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), as the case may be,
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, 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.
(ii) 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
24
Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation.
(iii) 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 supplemented, and waivers or consents to departures from the
provisions hereof may not be given, without the prior written consent of the
Company, DWI II, M&J K B, XX-XX and Holders of a majority-in-interest of the
Registrable Securities; provided, however, that no amendment shall affect any
rights or obligations of a Holder 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 DWI II, 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
25
Telecopier: (000) 000-0000
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 DWI II, at:
DW Investment II, Inc.
000 Xxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Attention: W. Xxxxx Xxxx, Executive Vice President,
Investment Management; and Executive
Vice President, Legal
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.
Xxxxx X. Xxxxxx, 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.
26
(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 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
27
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
M&J K B LIMITED PARTNERSHIP,
By M&J K DREAM CORP.,
General Partner
by
---------------------------------
Name: Xxxxxxx Xxxxxxxxxx
Title: President
2
THE JK ANNUITY TRUST,
by
------------------------------------
Name:
Title:
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
3
DW LIPS, L.P.,
By DW SUBS. INC.,
General Partner
by
------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: President
DW INVESTMENT II, INC.,
by
------------------------------------
Name:
Title:
XXX ENTERTAINMENT, L.L.C.,
by
------------------------------------
Name:
Title:
CHEMICAL INVESTMENTs, INC.,
by
------------------------------------
Name:
Title:
MICROSOFT CORPORATION,
by
------------------------------------
Name:
Title:
4
ZIFF INVESTORS PARTNERSHIP,
L.P. IIA,
By Ziff Investment Management, LLC,
General Partner
by
------------------------------
Name:
Title:
XXXX X. XXXXXXXXX,
-------------------------------------------
VIVENDI UNIVERSAL ENTERTAINMENT LLLP,
by
------------------------------------
Name:
Title:
THOMSON INC.,
by
------------------------------------
Name:
Title:
KADOKAWA ENTERTAINMENT U.S. INC.,
by
------------------------------------
Name:
Title:
