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EXHIBIT 4.4
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
THIS AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT is made as of
October 3, 1996, by and among HOLLYWOOD THEATER HOLDINGS, INC., a Delaware
corporation (the "Company"), STRATFORD CAPITAL PARTNERS, L.P., a Texas limited
partnership ("Stratford"), and PRECEPT INVESTORS, INC., a Texas corporation
("Precept", and together with Stratford, the "Investors").
WITNESSETH
WHEREAS, the Company and the Investors entered into a Registration
Rights Agreement dated as of April 30, 1996 (the "Prior Agreement") pursuant to
which the Company agreed to register under the Securities Act of 1933, as
amended, shares of Series A Convertible Preferred Stock, $.01 par value per
share, of the Company (the "Series A Preferred") owned by the Investors; and
WHEREAS, simultaneously herewith, the Company, the Investors and
Hollywood Theaters, Inc. are entering into a Stock Exchange Agreement and First
Amendment to Stock Purchase Agreement (the "Exchange Agreement") pursuant to
which, upon the occurrence of certain conditions stated therein, the Investors
will exchange their shares of Series A Preferred for shares of Series B
Convertible Preferred Stock, .001 par value per share, of the Company (the
"Series B Preferred"); and
WHEREAS, simultaneously herewith, the Company is entering into a
Preferred Stock and Common Stock Purchase Agreement (the "Beacon Stock Purchase
Agreement"), pursuant to which the Company has agreed to sell shares of Series
A Preferred, Series B Preferred and Common Stock of the Company to the Beacon
Group III - Focus Value Fund, L.P., a Delaware limited partnership ("Beacon");
and
WHEREAS, in connection with the transactions contemplated by the
Exchange Agreement and the Beacon Stock Purchase Agreement, the Company and the
Investors desire to amend and restated the Prior Agreement in its entirety.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and obligations hereinafter set forth, the parties hereto hereby
agree as follows:
1. Certain Definitions.
1.1 As used in this Agreement, the following terms shall have the
meanings ascribed to them below;
"Affiliate" means (i) with respect to any Person, any other Person
directly or indirectly controlling or controlled by or under the direct or
indirect common control with such specified
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Person or (ii) with respect to any individual, shall also mean the spouse,
sibling, child, step-child, grandchild, niece, nephew or parent of such Person,
or the spouse thereof.
"Beacon Conversion Shares" means "Conversion Share" under and as
defined in the Beacon Registration Rights Agreement.
"Beacon Registration Rights Agreement" means that certain Registration
Rights Agreement dated October 3, 1996, by and between the Company and Beacon.
"Beacon Registrable Securities" means "Registerable Securities" under
and as defined in the Beacon Registration Rights Agreement:
"Beacon Holders" means "Holders" under and as defined in the Beacon
Registration Rights Agreement.
"Common Stock" means the Common Stock, $.01 par value per share, of
the Company and any equity securities issued or issuable with respect to the
Common Stock in connection with a reclassification, recapitalization, merger,
consolidation or other reorganization.
"Conversion Shares" means the shares of Common Stock or other equity
securities issued or issuable upon conversion of the Series A Preferred and/or
Series B Preferred.
"Holder" or "Holders" means any party who is a signatory to this
Agreement and any party who shall hereafter acquire and hold Registrable
Securities.
"IPO" means the initial underwritten offering pursuant to which the
Common stock becomes registered under Section 12 of the Securities Exchange Act
of 1934, as amended (the "Exchange Act").
"Major Holder" means with respect to any registration the Holder that,
together with its Affiliates, holds the largest number of Registrable
Securities in such registration.
"Person" means any individual, corporation, limited liability company,
limited or general partnership, joint venture, association, joint-stock
company, trust, unincorporated organization or government or any agency or
political subdivisions thereof.
"Purchase Agreement" means that certain Stock Purchase Agreement
dated April 30, 1996, by and among the Investors, the Company and Hollywood
Theaters, Inc. as amended by the Exchange Agreement and as the same may
hereafter be amended, modified or restated.
"Registrable Securities" means any (i) shares of Series A Preferred
and Series B Preferred owned by the Investors, whether acquired on the date
hereof or hereafter acquired, (ii) shares of Common Stock owned by the
Investors, whether acquired on the date hereof of hereafter acquired, (iii)
Conversion Shares owned by the Investors, (iv) shares of Series A Preferred and
Series B
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Preferred or Common Stock acquired by any Person after the date hereof pursuant
to rights granted to the Investors under the Purchase Agreement or the
Shareholders" Agreement, (v) Conversion Shares acquired by any Person after the
date hereof pursuant to rights granted to the Investors under the Purchase
Agreement or the Shareholders" Agreement and (vi) shares of Common Stock issued
or issuable, directly or indirectly, with respect to the Common Stock
referenced in clauses (ii), (iii), (iv) or (v) above by way of stock dividend,
stock split or combination of shares. As to any particular Registrable
Securities, such securities shall cease to be Registrable Securities when (i) a
registration statement with respect to the sale of such securities shall have
been declared effective under the Securities Act and such securities shall have
been disposed of in accordance with such registration statement, or (ii) such
securities shall have been sold (other than in a privately negotiated sale)
pursuant to Rule 144 (or any successor provision) under the Securities Act.
"Requisite Percentage of Outstanding Holders" means the Holders of
Registrable Securities who, assuming conversion of all of the then outstanding
Series A Preferred and Series B Preferred into Conversion Shares, would hold
15% or more of the total Conversion Shares that would, then be outstanding.
"Requisite Percentage of Participating Holders" means Holders of
Registrable Securities participating in the registration who, assuming
conversion of all then outstanding Series A Preferred and Series B Preferred
into Conversion Shares, would hold a majority of the total Conversion Shares
that would then be held by all Holders participating in the registration.
"Shareholders Agreement" means the Shareholders and Voting Agreement
dated October 3, 1996 by and among the Company, Beacon, the Investors and
certain other shareholders of the Company.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
2.1 Registration Rights
(a) Request of Registration. (a) Subject to Section 2.1
(d), at any time and from time to time after the earlier of (i) the closing of
an IPQ and (ii) three years after the date hereof, one or more Holders of
Registrable Securities representing the Requisite Percentage of Outstanding
Holders shall have the right to require the Company to file a registration
statement under the Securities Act covering all or any part of their respective
Registrable Securities, by delivering a written request therefor to the Company
specifying the number of Registrable Securities to be included in such
registration by such Holder(s) and the intended method of distribution thereof.
All such requests pursuant to this Section 2. l(a) are referred to herein as
"Demand Registration Requests", and the registrations so requested are referred
to herein as "Demand Registrations" (with respect to any Demand Registration,
the Holder(s) making such demand for registration being referred to as the
"Initiating Holder"). As promptly as practicable, but no later than 5 days
after receipt of a Demand Registration Request, the Company shall give written
notice (the "Demand
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Exercise Notice") of such Demand Registration Request to all Holders of record
of Registrable Securities.
(b) Registration of Other Securities. The Company shall
include in a Demand Registration (i) the Registrable Securities of the
Initiating Holder and (ii) the Registrable Securities of any other Holder which
shall have made a written request to the Company for inclusion thereof in such
registration (which request shall specify the maximum number of Registrable
Securities intended to be disposed of by such Holder(s)) within 30 days after
the receipt of the Demand Exercise Notice.
(c) Registration. The Company shall, as expeditiously as
possible following a Demand Registration Request use its best efforts to (i)
effect such registration under the Securities Act (including, without
limitation, by means of a shelf registration pursuant to Rule 415 under the
Securities Act if so requested and if the Company is then eligible to use such
a registration) of the Registrable Securities which the Company has been so
requested to register, for distribution in accordance with such intended method
of distribution, and (ii) if requested by the Initiating Holder or Major
Holder, obtain acceleration of the effective date of the registration statement
relating to such registration.
(d) Limitations on Requested Registrations. The rights
of Holder of Registrable Securities to request Demand Registrations pursuant to
Section 2.1(a) are subject to the following limitations: (i) the Company shall
not be obligated to effect a Demand Registration within six months after the
effective date of any other registration of securities (other than pursuant to
a registration on Form S-8 or any successor or similar form which is then in
effect) and (ii) in no event shall the Company be required to effect, in the
aggregate, without regard to the Holder of Registrable Securities making such
request, more than three Demand Registrations.
(e) Cutbacks. If the managing underwriter of any
underwritten offering shall advise the Holders participating in a Demand
Registration that the Registrable Securities covered by the registration
statement cannot be sold in such offering within a price range acceptable to
the Requisite Percentage of Participating Holders, then the Holders
representing the Requisite Percentage of Participating Holders shall have the
right to notify the Company in writing that they have determined that the
registration statement be abandoned or withdrawn, in which event the Company
shall abandon or withdraw such registration statement. If the managing
underwriter of any underwritten offering shall advise the Company in writing
that in its opinion, the number of securities requested to be included in a
Demand Registration exceeds the number which can be sold in such offering
within a price range acceptable to the Requisite Percentage of Participating
Holders, the Company will include in such registration, to the extent of the
number which the Company is so advised can be sold in such offering,
Registrable Securities requested to be included in such registration, pro rata
among the Holders requesting such registration in accordance with the numbers
of Conversion Shares held by and issuable upon conversion of Registrable
Securities to each such Holder so requested to be registered. Any Registrable
Securities requested to be included in such registration by the Investors shall
be the last to be reduced.
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(f) Selection of Underwriters. The managing underwriter
or underwriters of each underwritten offering of the Registrable Securities to
be registered shall be selected by the Requisite Percentage of Participating
Holders (and shall be reasonably acceptable to the Company).
2.2 Piggyback Registrations.
(a) Piggyback Registrations. If, at any time, the
Company proposes or is required to register any of its equity securities under
the Securities Act (other than pursuant to (i) registrations on such form or
similar form(s) solely for registration of securities in connection with an
employee benefit plan or dividend reinvestment plan or a merger, consolidation
or acquisition or (ii) a Demand Registration under Section 2. 1) on a
registration statement on Form S- 1, Form S-2 or Form S-3 (or an equivalent
general registration form then in -effect), whether or not for its own account,
the Company shall give prompt written notice of its intention to do so to each
of the Holders of record of Registrable Securities. Upon the written request
of any Holder, made within 15 days following the receipt of any such written
notice (which request shall specify the maximum number of Registrable
Securities intended to be disposed of by such Holder and the intended method of
distribution thereof), the Company shall use its best efforts to cause all such
Registrable Securities, the Holders of which have so requested the registration
thereof, to be registered under the Securities Act (with the securities which
the Company at the time proposes to register) to permit the sale or other
disposition by the Holders (in accordance with the intended method of
distribution thereof) of the Registrable Securities to be so registered. There
is no limitation on the number of such piggyback registrations pursuant to the
preceding sentence which the Company is obligated to effect. No registration
effected under this Section 2.2(a) shall relieve the Company of its obligations
to effect Demand Registrations.
(b) Abandonment or Delay. If, at any time after giving
written notice of its intention to register any equity securities and prior to
the effective date of registration statement filed in connection with such
registration, the Company shall determine for any reason not to register or to
delay registration of such equity securities, the Company may, at its election,
give written notice of such determination to all Holders of record of
Registrable Securities and (i) in the case of a determination not to register,
shall be relieved of its obligation to register any Registrable Securities in
connection with such abandoned registration, without prejudice, however, to the
rights of Holders under Section 2. 1, and (ii) in the case of a determination
to delay such registration of its equity securities, shall be permitted to
delay the registration of such Registrable Securities for the same period as
the delay in registering such other equity securities.
(c) Holder's Right to Withdraw. Any Holder shall have
the right to withdraw its request for inclusion of its Registrable Securities
in any registration statement pursuant to this Section 2.2 by giving notice to
the Company of its request to withdraw; however, that (i) such request must be
made in writing prior to the earlier of the execution of the underwriting
agreement or the execution of the custody agreement with respect to such
registration and (ii) such withdrawal shall be irrevocable and, after making
such withdrawal, a Holder shall no longer have any right to include Registrable
Securities in the registration as to which withdrawal was made.
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(d) Cutbacks. If the managing underwriter of any
underwritten offering shall inform the Company by letter of its belief that the
number of Registrable Securities requested to be included in a registration
under this Section 2.2 would materially adversely affect such offering, then
the Company will include in such registration, first. the securities proposed
by the Company to be sold for its own account, second, Beacon Registrable
Securities to the extent, but only to the extent that registration is being
requested under this Section 2.2 in connection with a registration required
because of an exercise of demand registration rights under Section 2.1 of the
Beacon Registration Rights Agreement, third, the Registrable Securities and
Beacon Registrable Securities to be included in such registration to the extent
of the number and type which the Company is so advised can be sold in (or
during the time of) such offering, pro rata among the Holders and Beacon
Holders participating in such offering in accordance with the number of
Conversion Shares and Beacon Conversion Shares held by and issuable upon
conversion of Registrable Securities and Beacon Registerable Securities to each
such Holder and Beacon Holder, and fourth. all other securities of the Company
to be included in such registration to the extent of the number and type which
the Company is so advised can be sold in (or during the time of) such offering.
2.3 S-3 Registration. If at any time (i) one or more Holders of
Registrable Securities representing the Registrable Percentage of Outstanding
Holders request that the Company file a registration statement on Form S-3 or
any successor thereto for a public offering of all or any portion of the shares
of Registrable Securities held by such Holder or Holders, the reasonably
anticipated aggregate price to the public of which would exceed $1,000,000, and
(ii) the Company is a registrant entitled to use Form S-3 or any successor
thereto to register such shares, then the Company shall use its best efforts to
register under the Securities Act on Form S-3 or any successor thereto, for
public sale in accordance with the method of disposition specified in such
notice, the number of shares of Registrable Securities specified in such
notice. Whenever the Company is required by this Section 2.3 to use its best
efforts to effect the registration of Registrable Securities, each of the
procedures and requirements of Section 2.1 (including but not limited to the
requirement that the Company notify all Holders of Registrable Securities from
whom notice has not been received and provide them with the opportunity to
participate in the offering) shall apply to such registration. Notwithstanding
anything to the contrary contained herein, no request may be made under this
Section 2.3 within six months after the effective date of a registration
statement filed by the Company covering a firm commitment underwritten public
offering in which the holders of Registrable Securities shall have been
entitled to join pursuant to Sections 2.1 and 2.2 in which there shall have
been effectively registered all shares of Registrable Securities as to which
registration shall have been requested. Then is no limitation on the number of
registrations pursuant to this Section 2.3 that the Company is obligated to
effect.
2.4 Registration Proceedings. If and whenever the Company is
required by the provisions of this Agreement to use its best efforts to effect
or cause the registration of any Registrable Securities under the Securities
Act as provided in this Agreement, the Company shall. as expeditiously as
possible:
(a) prepare and file with the SEC a registration
statement on an appropriate registration form of the SEC for the disposition of
such Registrable Securities in accordance with
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the intended method of disposition thereof, which form (i) shall be selected by
the Company and (ii) shall, in the case of a shelf registration, be available
for the sale of the Registrable Securities by the selling Holders thereof and
such registration statement shall comply as to form in all material respects
with the requirements of the applicable form and include all financial
statements required by the SEC to be filed therewith, and the Company shall use
its best efforts to cause such registration statement to become effective
(provided, however, that before filing a registration statement or prospectus
or any amendments or supplements thereto, or comparable statements under
securities or "blue sky" laws of any jurisdiction, the Company will furnish to
one counsel for the Holders participating in the planned offering (selected by
the Major Holder) and the underwriters, if any, copies of all such documents
proposed to be filed (including all exhibits thereto), which documents will be
subject to the reasonable review and reasonable comment of such counsel, and
the Company shall not be file any registration statement or amendment thereto
or any prospectus or supplement thereto to which the holders of a majority of
the Registrable Securities covered by such registration statement or the
underwriters, if any, shall reasonably object in writing);
(b) 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 such period (which shall not be required to exceed 180 days in
the case of a registration pursuant to Section 2.1 or 120 days in the case of a
registration pursuant to Section 2.2) as any seller of Registrable Securities
pursuant to such registration statement shall request and to comply with the
provisions of the Securities Act with respect to the sale or other disposition
of all Registrable Securities covered by such registration statement in
accordance with the intended methods of disposition by the seller or sellers
thereof set forth in such registration statement;
(c) furnish, without charge, to each seller of such
Registrable Securities and each underwriter, if any, of the securities covered
by such registration statement such number of copies of such registration
statement, each amendment and supplement thereto (in each case including all
exhibits), and the prospectus included in such registration statement
(including each preliminary prospectus) in conformity with the requirements of
the Securities Act, and other documents, as such seller and underwriter may
reasonably request in order to facilitate the public sale or other disposition
of the Registrable Securities owned by such seller (the Company hereby
consenting to the use in accordance with applicable law of each such
registration statement (or amendment or post-effective amendment thereto) and
each such prospectus (or preliminary prospectus or supplement thereto) by each
such seller of Registrable Securities and the underwriters, if any, in
connection with the offering and sale of the Registrable Securities covered by
such registration statement or prospectus);
(d) use its best efforts to register or qualify the
Registrable Securities covered by such registration statement under other
securities or "blue sky" laws of such jurisdictions as any sellers of
Registrable Securities or any managing underwriter, if any, shall reasonably
request in writing, and do any and all other am and things which may be
reasonably necessary or advisable to enable such sellers or underwriters, if
any, to consummate the disposition of the Registrable Securities in such
jurisdictions, except that in no event shall the Company be required to qualify
to
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do business as a foreign corporation in any jurisdiction where it would not,
but for the requirements of this paragraph (d), be required to be so qualified,
to subject itself to taxation in any such jurisdiction or to consent to general
service of process in any such jurisdiction.
(e) promptly notify each Holder selling Registrable
Securities covered by such registration statement and each managing underwriter,
if any: (i) when the supplement statement, any pre-effective amendment, he
prospectus or any prospectus supplement related thereto or post-effective
amendment to the registration statement has been filed and, with respect to the
registration statement or any post-effective amendment, when the same has
become effective; (ii) of any request by the SEC or state securities authority
for amendments or supplements to the registration statement or the prospectus
related thereto or for additional information; (iii) of the issuance by the SEC
of any stop order suspending the effectiveness of the registration statement or
the initiation of any proceedings for that purpose; (iv) of the receipt by the
Company of any notification with respect to the suspension of the qualification
of any Registrable Securities for sale under the securities or blue sky laws of
any jurisdiction or the initiation of any proceeding for such purpose; (v) of
the existence of any fact of which the Company becomes aware which results in
the registration statement, the prospectus related thereto or any document
incorporated therein by reference containing an untrue statement of a material
fact or omitting to state a material fact required to be stated therein or
necessary to make any statement therein not misleading; and (vi) if at any time
the representations and warranties contemplated by Section 3 below cease to be
true and correct in all material respects; and, if the notification relates to
an event described in clause (v), the Company shall promptly prepare and
furnish to each such seller and each underwriter, if any, a reasonable number
of copies of a prospectus supplemented or amended so that, as thereafter
delivered to the purchasers of such Registrable Securities, such prospectus
shall not include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein in the light of the circumstances under which they were made not
misleading;
(f) comply with all applicable rules and regulations of
the SEC, and make generally available to its security holders, as soon as
reasonably practicable after the effective date of the registration statement
(and in any event within 16 months thereafter), an earnings statement (which
need not be audited) covering the period of at least twelve consecutive months
beginning with the first date of the Company's first calendar quarter after the
effective date of the registration statement, which earnings statement shall
satisfy the provisions of Section 1.1(a) of the Securities Act and Rule 158
thereunder,
(g)(i) cause all such Registrable Securities covered by such
registration statement to be listed on the principal securities exchange on
which similar securities issued by the Company are then listed if any listing
of such Registrable Securities is then permitted under the rules of such
exchange, or (ii) if no similar securities are then so listed, to either cause
all such Registrable Securities to be listed on a national securities exchange
or to secure designation of all such Registrable Securities as a National
Association of Securities Dealers, Inc. Automated Quotation System ("NASDAQ")
"national market system security" within the meaning of Rule 11 Aa2-1 of the
SEC or, failing that, secure NASDAQ authorization for such shares and, without
limiting the
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generality of the foregoing, take all actions that may be required by the
Company as the issuer of such Registrable Securities in order to facilitate the
managing underwriter's arranging for the registration of at least two market
makers as such with respect to such shares with the National Association of
Securities Dealers, Inc. ("NASD");
(h) provide and cause to be maintained a transfer agent
and registrar for all such Registrable Securities covered by such registration
statement not later than the effective date of such registration statement;
(i) enter into such customary agreements (including, if
applicable, an underwriting agreement) and take such other actions as the
Holders of a majority of the Registrable Securities or the Major Holder
participating in such offering shall reasonably request in order to expedite or
facilitate the disposition of such Registrable Securities. The Holders of the
Registrable Securities which are to be distributed by such underwriters shall
be parties to such underwriting agreement and may, at their option, require
that the Company make to and for the benefit of such Holders the
representations, warranties and covenants of the Company which are being made
to and for the benefit of such underwriters and which are of the type
customarily provided to institutional investors in secondary offerings;
(j) obtain an opinion from the Company's counsel and a
"cold comfort" letter from the Company's independent public accountants in
customary form and covering such matters as are customarily covered by such
opinions and "cold comfort" letters delivered to underwriters in underwritten
public offerings, which opinion and letter shall be reasonably satisfactory to
the underwriters, if any, and to the Major Holder participating in such
offering, and furnish to each Holder participating in the offering and to each
underwriter, if any, a copy of such opinion and letter addressed to such Holder
(in the case of the opinion) and underwriter (in the case of the opinion and
the "cold comfort" letter);
(k) deliver promptly to the Major Holder and counsel for
the selling Holders participating in the offering and each underwriter, if any,
copies of all correspondence between the Commission and the Company, its
counsel or auditors and any memoranda relating to discussions with the
Commission or its staff with respect to the registration statement, other than
those portions of any such memoranda which contain information subject to
attorney-client privilege with respect to the Company, and, upon receipt of
such confidentiality agreements as the Company may reasonably request, make
reasonably available for inspection by any seller of such Registrable
Securities covered by such registration statement, by any underwriter, if any,
participating in any disposition to be effected pursuant to such registration
statement and by any attorney, accountant or other agent retained by any such
seller or any such underwriter, all pertinent financial and other records,
pertinent corporate documents and properties of the Company, and cause all of
the Company's officers, directors and employees to supply all information
reasonably requested by any such seller, underwriter, attorney, accountant or
agent in connection with such registration statement;
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(l) use its best efforts to obtain promptly the
withdrawal of any order suspending the effectiveness of the registration
statement;
(m) provide a CUSIP number for all Registrable
Securities, not later than the effective date of the region statement;
(n) make reasonably available its employees and personnel
and otherwise provide reasonable assistance to the underwriters (taking into
account the needs of the Company's businesses and the requirements of the
marketing process) in the marketing of Registrable Securities in-any
underwritten offering;
(o) promptly prior to the filing of any document which is
to be incorporated by reference into the registration statement or the
prospectus (after the initial filing of such registration statements provide
copies of such document to counsel for the selling Holders of Registrable
Securities and to each managing underwriter, if any, and make the Company's
representatives reasonably available for discussion of such document and make
such changes in such document concerning the selling Holders prior to the
filing thereof as counsel for such selling Holders or underwriters may
reasonably request;
(p) furnish to each Holder participating in the offering
and the managing underwriter, without charge, at least one signed copy of the
registration statement and any post-effective amendments thereto, including
financial statements and schedules, all documents incorporated therein by
reference and all exhibits (including those incorporated by reference);
(q) cooperate with the selling Holders of Registrable
Securities and the managing underwriter, if any, to facilitate the timely
preparation and delivery of certificates not bearing any restrictive legends
representing the Registrable Securities to be sold, and cause such Registrable
Securities to be issued in such denominations and registered in such names in
accordance with the underwriting agreement prior to any sale of Registrable
Securities to the underwriters or, if not an underwritten offering, in
accordance with the instructions of the selling Holders of Registrable
Securities at least three business days prior to any sale of Registrable
Securities; and
(r) take all such other commercially reasonable actions
as are necessary or advisable in order to expedite or facilitate the
disposition of such Registrable Securities.
The Company may require as a condition precedent to the Company's
obligations under this Section 2.4 that each seller of Registrable Securities
as to which any registration is being effected furnish the Company such
information regarding such seller and the distribution of such securities as
the Company may from time to time reasonably request provided that such
information shall be used only in connection with such registration.
Each Holder of Registrable Securities agrees that upon receipt of any
notice from the Company of the happening of any event of the kind described in
clause (v) of paragraph (e) of this Section 2.4, such Holder will discontinue
such Holder's disposition of Registrable Securities
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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 paragraph (e) of this Section 2.4 and, if so
directed by the Company, will deliver to the Company (at the Company's expense)
all copies, other than permanent file copies, then in such Holder's possession
of the prospectus covering such Registrable Securities that was in effect at
the time of receipt of such notice. In the event the Company shall give any
such notice, the applicable period mentioned in paragraph (b) of this Section
2.4 shall be extended by the number of days during such period from and
including the date of the giving of such notice to and including the dab when
each seller of any Registrable Securities covered by such registration
statement shall have received the copies of the supplemented or amended
prospectus contemplated by paragraph (e) of this Section 2.4.
If any such registration statement or comparable statement under "blue
sky" laws refers to any Holder by name or otherwise as the Holder of any
securities of the Company, then such Holder shall have the right to require
("d) the insertion therein of language, in form and substance satisfactory to
such Holder and the Company, to the effect that the holding by such Holder of
such " securities is not to be construed as a recommendation by such Holder of
the investment quality of the Company's securities covered thereby and that
such holding does not imply that such Holder will assist in meeting any future
financial requirements of the Company, or (ii) in the event that such reference
to such Holder by name or otherwise is not in the judgment of the Company, as
advised by counsel, required by the Securities Act or any similar federal
statute or any state "blue sky" or securities law then in force, the deletion
of the reference to such Holder.
2.5 Registration Expenses.
(a) "Expenses" shall mean any and all fees and expenses
incident to the Company's performance of or compliance with this Article 2,
including, without limitation: ("d) SEC, stock exchange or NASD registration
and filing fees and all listing fees and fees with respect to the inclusion of
securities in NASDAQ, (ii) fees and expenses of compliance with state
securities or "blue sky" laws and in connection with the preparation of a "blue
sky" survey, including without limitation, reasonable fees and expenses of blue
sky counsel, (iii) printing and copying expenses, (iv) messenger and delivery
expenses, (v) expenses incurred in connection with any road show, (vi) fees and
disbursements of counsel for the Company, (vii) with respect to each
registration, the reasonable fees and disbursements of one counsel for the
selling Holder(s) (selected by the Major Holder), (viii) fees and disbursements
of all independent public accountants (including the expenses of any audit
and/or "cold comfort" letter) and fees and expenses of other persons",
including special experts, retained by the Company, (ix) fees and expenses
payable to a Qualified Independent Underwriter and (x) any other fees and
disbursements of underwriters, if any, customarily paid by issuers or sellers
of securities (collectively, "Expenses")
(b) The Company shall pay all Expenses with respect to
any Demand Registration, whether or not it becomes effective or remains
effective for the period contemplated by Section 2.4(b), and with respect to
any registration effected under Sections 2.2 or 2.3.
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(c) Notwithstanding the foregoing, (x) the provisions of
this Section 2.5 shall be deemed amended to the extent necessary to cause these
expense provisions to comply with "blue sky" laws of each state in which the
offering is made and (y) in connection with any registration hereunder, each
Holder of Registrable Securities being registered shall pay all underwriting
discounts and commissions and any transfer taxes, if any, attributable to the
sale of such Registrable Securities, mo rata with respect to payments of
discounts and commissions in accordance with the number of shares sold in the
offering by such Holder, and (z) the Company shall, in the case of all
registrations under this Article 2, be responsible for all its internal
expenses (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties).
2.6 Certain Limitations on Registration Rights. In the case of
any registration under Section 2.1 pursuant to an underwritten offering, or in
the case of a registration under Sections 2.2 or 2.3 if the Company has
determined to enter into an underwriting agreement in connection therewith, all
securities to be included in such registration shall be subject to an
underwriting agreement and no Person may participate in such registration
unless such Person agrees to sell such Person's securities on the basis
provided therein and completes and executes all reasonable questionnaires and
other documents (including custody agreements and powers of attorney) which
must be executed in connection therewith, and provides such other information
to the Company or the underwriter as may be necessary to register such Person's
securities.
2.7 Limitations on Sale or Distribution of Other Securities.
(a) To the extent requested in writing by a managing
underwriter, if any, of any registration effected pursuant to Section 2. 1,
each Holder of Registrable Securities agrees not to sell, transfer or otherwise
dispose of, including any sale pursuant to Rule 144 under the Securities Act,
any Common Stock, or any other equity security of the Company or any security
convertible into or exchangeable or exercisable for any equity security of the
Company (other than as part of such underwritten public offering) during the
time period reasonably requested by the managing underwriter, not to exceed 180
days (and the Company hereby also agrees) except that the Company may effect
any sale or distribution of any such securities pursuant to a registration on
Form S4 (if reasonably acceptable to such managing underwriter) or Form S-8, or
any successor or similar form which is then in effect or upon conversion,
exchange or exercise of any then outstanding Common Stock Equivalent) to use
its reasonable best efforts to cause each Holder of any equity of security or
any security convertible into or exchangeable or exercisable for any equity
security of the Company purchased from the Company at any time other than in a
public offering so to agree). Each managing underwriter shall be entitled to
rely on the agreements of each Holder of Registrable Securities set forth in
this Section 2.7(a) and shall be a third party beneficiary of the provisions of
this Section 2.7(a).
(b) The Company hereby agrees that, if it shall
previously have received a request for registration pursuant to Section 2.1,
2.2 or 2.3, and if such previous registration shall not have been withdrawn or
abandoned the Company shall not sell, transfer, or otherwise dispose of, any
Common Stock, or any other equity security of the Company or any security
convertible into or
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exchangeable or exercisable for any equity security of the Company (other than
as part of such underwritten public offering, a registration on Form S4 or Form
S-8 or any successor or similar form which is then in effect or upon the
conversion, exchange or exercise of any then outstanding Common Stock
Equivalent), until a period of 180 days shall have elapsed from the effective
date of such previous registration; and the Company shall so provide in any
registration rights agreements hereafter entered into with respect to any of
its securities.
2.8 No Required Sale. Nothing in this Agreement shall be deemed
to create an independent obligation on the part of any Holder to sell any
Registrable Securities pursuant to any effective registration statement.
2.9 Indemnification.
(a) In the event of any registration of any securities of
the Company under the Securities Act pursuant to this Article 2. the Company
will, and hereby does, indemnify and hold harmless, to the fullest extent
permitted by law, each Holder of Registrable Securities, its directors,
officers, affiliates, employees, stockholders, members and partners (and the
directors, officers, affiliates, employees, stockholders, members and partners
thereof), each other Person who participates as an underwriter or a Qualified
Independent Underwriter, if any, in the offering or sale of such securities,
each officer, director, employee, stockholder, member or partner of such
underwriter or Qualified Independent Underwriter, and each other Person, if
any, who controls such seller of any such underwriting within the meaning of
the Securities Act, against any and all losses, claims, damages or liabilities,
joint or several, actions or proceedings (whether commenced or threatened) in
respect thereof (the "Claims") and expenses (including reasonable fees of
counsel and any amounts paid in any settlement effected with the Company's
consent, which consent shall not be unreasonably withheld or delayed) to which
each such indemnified party may become subject under the Securities Act or
otherwise, insofar as such Claims or expenses arise out of or are based upon
("d) any untrue statement or alleged untrue statement of a material fact
contained in any registration statement under which such securities were
registered under the Securities Act, together with the documents incorporated
by reference therein, or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or (ii) any untrue statement or alleged untrue
statement of a material fact contained in any preliminary, final or summary
prospectus or any amendment or supplement thereto, together with the documents
incorporated by reference therein, or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that the Company shall not be
liable to any such indemnified party in any such case to the extent such Claim
or expense arises out of or is based upon any untrue statement or alleged
untrue statement of a material fact or omission or alleged omission of a
material fact made in such registration statement or amendment thereof or
supplement thereto or in any such prospectus or any preliminary, final or
summary prospectus in reliance upon and in conformity with written information
furnished to the Company by or on behalf of such indemnified party specifically
for use therein. Such indemnity and reimbursement of expenses shall remain in
full force and effect
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regardless of any investigation made by as on behalf of such indemnified party
and shall survive the transfer of such securities by such seller.
(b) Each Holder of Registrable Securities that are
included in the securities as to which any registration under Section 2.1, 2.2
or 2.3 is being effected (and, if the Company requires as a condition to
including any Registrable Securities in any registration statement filed in
accordance with Section 2.1, 2.2 or 2.3, any underwriter and Qualified
Independent Underwriter, if any) shall, severally and not jointly, indemnify
and hold harmless (in the same manner and to the same extent as set forth in
paragraph (a) of this Section 2.9) to the extent permitted by law the Company,
its officers and directors, each Person controlling the Company within the
meaning of the Securities Act and all other prospective sellers and their
directors, officers, general and limited partners and respective controlling
Persons with respect to any untrue statement or alleged untrue statement of any
material fact in, or omission or alleged omission of any material fact from,
such registration statement, any preliminary, final or summary prospectus
contained therein, or any amendment or supplement thereto, if such statement or
alleged statement or omission or alleged omission was made in reliance upon and
in conformity with written information furnished to the Company or its
representatives by or on behalf of such Holder or underwriter or Qualified
Independent Underwriter, if any, specifically for use therein and reimburse
such indemnified party for any legal or other expenses reasonably incurred in
connection with investigating or defending any such Claim as such expenses are
incurred; provided, however, that the aggregate amount which any such Holder
shall be required to pay pursuant to this Section 2.9(b) and Sections 2.9(c)
and (e) shall in no case be greater than the amount of the net proceeds
received by such person upon the sale of the Registrable Securities pursuant to
the registration statement giving rise to such Claim. Such indemnity and
reimbursement of expenses shall remain in full force and effect regardless of
any investigation made by or on behalf of such indemnified party and shall
survive the transfer of such securities by such Holder.
(c) Indemnification similar to that specified in the
preceding paragraphs (a) and (b) of this Section 2.9 (with appropriate
modifications) shall be given by the Company and each seller of Registrable
Securities with respect to any required registration or other qualification of
securities under any state securities and "blue sky" laws.
(d) Any person entitled to indemnification under this
Agreement shall notify promptly the indemnifying party in writing of the
commencement of any action or proceeding with respect to which a claim for
indemnification may be made pursuant to this Section 2.9, but the failure of
any indemnified party to provide such notice shall not relieve the indemnifying
party of its obligations under the preceding paragraphs of this Section 2.9,
except to the extent the indemnifying party is materially prejudiced thereby
and shall not relieve the indemnifying party from any liability which it may
have to any indemnified party otherwise than under this Article 2. In case any
action or proceedings is brought against an indemnified party and it shall
notify the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate therein and, unless in the reasonable
opinion of outside counsel to the indemnified party a conflict of interest
between such indemnified and indemnifying parties may exist in respect of such
claim, to assume the defense thereof jointly with any other indemnifying party
similarly notified,
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to the extent that it chooses, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation; provided, however, that (i) if the indemnifying party
fails to take reasonable steps necessary to defend diligently the action or
proceeding within 20 days after receiving notice from such indemnified party
that the indemnified party believes it has failed to do so; or (ii) if such
indemnified party who is a defendant in any action or proceeding which is also
brought against the indemnifying party reasonably shall have concluded that
them may be one or mom legal defenses available to such indemnified party which
am not available to the indemnifying party; or (iii) if representation of both
parties by the same counsel is otherwise inappropriate under applicable
standards of professional conduct, then, in any such case, the indemnified
party shall have the right to assume or continue its own defense as set forth
above (but with no mom than one firm of counsel for all indemnified parties in
each jurisdiction who shall be approved by the Major Holder of the registration
in respect of which such indemnification is sought), and the indemnifying party
shall be liable for any expenses therefore No indemnifying party shall, without
the written consent of the indemnified party, effect the settlement or
compromise of, or consent to the entry of any judgment with respect to, any
pending or threatened action or claim in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified party is
an actual or potential party to such action or claim) unless such settlement,
compromise or judgment (A) includes an unconditional release of the indemnified
party from all liability arising out of such action or claim and (B) does not
include a statement as to- or an admission of fault, culpability or a failure
to act, by or on behalf of any indemnified party.
(e) If for any reason the foregoing indemnity is
unavailable or is insufficient to hold harmless an indemnified party under
Sections 2.9(a), (b) or (c), then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of any Claim
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party, on the one hand, and the indemnified party, on the other
hand, with respect to such offering of securities. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the indemnifying party
or the indemnified party and the parties" relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission. If, however, the allocation provided in the second preceding
sentence is not permitted by applicable law, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative faults but also
the relative benefits of the indemnifying poly and the indemnified party as
well as any other relative equitable considerations. The parties hereto agree
that it would not be just and equitable if contributions pursuant to this
Section 2.9(e) were to be determined by pro rata allocation or by any other
method of allocation which does not take account of the equitable
considerations referred to in the preceding sentences of this Section 2.9(e).
The amount paid or payable in respect of any Claim shall be deemed to include
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such Claim. No person guilty of
fraudulent misrepresentation (within the meaning of Section 1.1(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
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Notwithstanding anything in this Section 2.9(e) to the contrary, no
indemnifying party (other than the Company) shall be required pursuant to this
Section 2.9(e) to contribute any amount in excess of the net proceeds received
by such indemnifying party from the sale of Registrable Securities in the
offering to which the losses, claims, damages or liabilities of the indemnified
parties relate, less the amount of any indemnification payment made by such
indemnifying party pursuant to Sections 2.9(b) and (c).
(f) The indemnity agreements contained herein shall be in
addition to any other rights to indemnification or contribution which any
indemnified party may have pursuant to law or contract and shall remain
operative and in full force and effect regardless of any investigation made or
omitted by or on behalf of any indemnified party and. shall survive the
transfer of the Registrable Securities by any such party.
(g) The indemnification and contribution required by this
Section 2.9 shall be made by periodic payments of the amount thereof during the
course of the investigation or defense, as and when bills are received or
expense, loss, damage or liability is incurred.
3. Underwritten Offerings.
3.1 Requested Underwritten Offering. If requested by the
underwriters for any underwritten offering by the Holders pursuant to a
registration statement requested under Section 2.1 or 2.3, the Company shall
enter into a customary underwriting agreement with the underwriters. Such
underwriting agreement shall be satisfactory in form and substance to the Major
Holder and shall contain such representations and warranties by, and such other
agreements on the part of, the Company and such other terms as are generally
included in the underwriting agreement of such underwriters, including, without
limitation, indemnities and contribution agreements. Any Holder participating
in the offering shall be a party to such underwriting agreement and may, at its
option, require that any or all of the representations and warranties by, and
the other agreements on the part of, the Company to and for the benefit of such
underwriters shall also be made to and for the benefit of such Holder and that
any or all of the conditions precedent to the obligations of such underwriters
under such underwriting agreement be conditions precedent to the obligations of
such Holder; provided. however, that the Company shall not be required to make
any representations or warranties with respect to written information
specifically provided by a selling Holder for inclusion in the registration
statement. Such underwriting agreement shall also contain such representations
and warranties by the participating Holders as are customary in agreements of
that type.
3.2 Piggyback Underwritten Offerings. In the case of a
registration pursuant to Section 2.2 hereof, if the Company shall have
determined to, enter into an underwriting agreement in connection them with,
all of the Holders" Registrable Securities to be included in such registration
shall be subject to such underwriting agreement. Any Holder participating in
such registration may, at its option, require that any or all of the
representations and warranties by, and the other agreements on the part of, the
Company to and for the benefit of such underwriters shall also be made to and
for the benefit of such Holder and dud any or all of the conditions precedent
to the obligations of such underwriters under such underwriting agreement be
conditions precedent to the
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obligations of such Holder. Such underwriting agreement shall also contain
such representations and warranties by the participating Holders as are
customary in agreements of that type.
4. General.
4.1 Adjustments Affecting Registrable Securities. The Company
agrees that it shall not effect or permit to occur any combination or
subdivision of shares which would adversely affect the ability of the Holder of
any Registrable Securities to include such Registrable Securities in any
registration contemplated by this Agreement or the marketability of such
Registrable Securities in any such registration. The Company agrees that it
will take all reasonable steps necessary to effect a subdivision of shares if
in the reasonable judgment of (a) the Holder of Registrable Securities that
makes a Demand Registration Request or (b) the managing underwriter for the
offering in respect of such Demand Registration Request, such subdivision would
enhance the marketability of the Registrable Securities. Each Holder agrees to
vote all of its shares of capital stock in a manner, and to take all other
actions necessary, to permit the Company to carry out the intent of the
preceding sentence including, without limitation, voting in favor of an
amendment to the Company's Articles of Incorporation in order to increase the
number of authorized shares of capital stock of the Company.
4.2 Rule 144. If the Company shall have filed a registration
statement pursuant to the requirements of Section 12 of the Exchange Act or a
registration statement pursuant to the requirements of the Securities Act in
respect of the Common Stock or securities of the Company convertible into or
exchangeable or exercisable for Common Stock, the Company covenants that (d) so
long as it remains subject to the reporting provisions of the Exchange Act, it
will timely file the reports required to be filed by it under the Securities
Act or the Exchange Act (including, but not limited to, the reports under
Sections 13 and 15(d) of the Exchange Act referred to in subparagraph (c)(1) of
Rule 144 under the Securities Act), and (ii) will take such further action as
any Holder of Registrable Securities may reasonably request, all to the extent
required from time to time to enable such Holder to sell Registrable Securities
without registration under the Securities Act within the limitation of the
exemptions provided by (A) Rule 144 under the Securities Act, as such Rule may
be amended from time to time, or (B) any similar rule or regulation hereafter
adopted by the Commission. Upon the request of any Holder of Registrable
Securities, the Company will deliver to such Holder a written statement as to
whether it has complied with such requirements.
4.3 Amendments and Waivers. This Agreement may be amended,
modified, supplemented or waived only upon the written agreement of the party
against whom enforcement of such amendment, modification, supplement or waiver
is sought.
4.4 Notices. Except as otherwise provided in this Agreement, all
notices, requests, consents and other communications hereunder to any party
shall be deemed to be sufficient if contained in a written instrument delivered
in person or by telecopy, nationally recognized overnight courier or first
class registered or certified mail, return receipt requested, postage prepaid,
addressed to such party at the address set forth below or such other address as
may hereafter be designated in writing by such party to the other parties:
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(i) if to the Company, to:
Hollywood Theater Holdings, Inc.
0000 Xxxxxx Xxxxx Xxxx., Xxxxx 0000
Xxxxxx, Xxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxxxx, Xx.
(ii) if to Stratford, to:
Stratford Capital Partners, L.P.
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx
(ii) if to Precept, to:
Precept Investors, Inc.
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxx Xxxxxx
All such notices, requests, consents and other communications shall be deemed
to have been given when received.
4.5 No Inconsistent Agreements. Without the prior written consent
of Investors, the Company will not, on or after the date of this Agreement,
enter into any agreement with respect to its securities which is inconsistent
with the rights granted in this Agreement or otherwise conflicts with the
provisions hereof, other than any lock-up agreement with the underwriters in
connection with any registered offering effected hereunder, pursuant to which
the Company shall agree not to register for sale, and the Company shall agree
not to sell or otherwise dispose of, Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock, for a specified period
following the registered offering.
4.6 Miscellaneous.
(a) This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto and the respective
successors, personal representatives and assigns of the parties hereto, whether
so expressed or not. If any Person shall acquire Registrable Securities from
any Holder, in any manner, whether by operation of law or otherwise, such
transferee shall promptly notify the Company and such Registrable Securities
acquired from such Holder shall be held subject to all of the terms of this
Agreement, and by taking and holding such Registrable
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Securities such Person shall be entitled to receive the benefits of and be
conclusively deemed to have agreed to be bound by and to perform all of the
terms and provision of this Agreement. If the Company shall so request, any
such successor or assign shall agree in writing to acquire and hold the
Registrable Securities acquired from such Holder subject to all of the terms
hereof. If any Holder shall acquire additional Registrable Securities, such
Registrable Securities shall be subject to all of the terms, and entitled to
all the benefits of this Agreement. No Person other than a Holder shall be
entitled to any benefits under this Agreement, except as otherwise expressly
provided herein.
(b) This Agreement (with the documents referred to herein
or delivered pursuant hereto) embodies the entire agreement and understanding
between the parties hereto and supersedes all prior agreements and
understandings relating to the subject matter hereof.
(c) This Agreement shall be construed and enforced in
accordance with and governed by the laws of the State of New York without
giving effect to the conflicts of law principles thereof.
(d) The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
All sections references are to this Agreement unless otherwise expressly
provided.
(e) This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
(f) Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction.
(g) The parties hereto acknowledge that there would be no
adequate remedy at law if any party fails to perform any of its obligations
hereunder, and accordingly agree that each party, in addition to any other
remedy to which it may be entitled at law or in equity, shall be entitled to
injunctive relief, including specific performance, to enforce such obligations
without the posting of any bond, and, if any action should be brought in equity
to enforce any of the provisions of this Agreement, none of the parties hereto
shall raise the defense that there is an adequate remedy at law.
(h) Each party hereto shall do and perform or cause to be
done and performed all such further acts and things and shall execute and
deliver all such other agreements, certificates, instruments, and documents as
any other party hereto reasonably may request in order to carry out the intent
and accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
(i) This Agreement amends and restates the Prior
Agreement in its entirety.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date set forth above.
HOLLYWOOD THEATER HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxxxxxxx, Xx.
-------------------------------------
Xxxxxx X. Xxxxxxxxxx, Xx.,
President
STRATFORD CAPITAL PARTNERS, L.P.
By: Stratford Capital GP Associates,
L.P., General Partner
By: Stratford Capital Corporation,
its General Partner
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------
Xxxxxxx X. Xxxxx,
Managing Director
PRECEPT INVESTORS, INC.
By: /s/ Precept Investors, Inc.
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
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