1
EXHIBIT 4.6
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT is made as of May 13, 1997 by and
among HOLLYWOOD THEATER HOLDINGS, INC., a Delaware corporation (the "Company"),
HOAK COMMUNICATIONS PARTNERS, L.P., a Delaware limited partnership ("HCP"), HCP
CAPITAL FUND, L.P., a Delaware limited partnership (""HCF") and HCP 1997
AUTHORIZED EMPLOYEE FUND, L.P., a Delaware limited partnership ("HAE") ("HCP"
and "HCF" together with "HAE", the "Investors").
W I T N E S S E T H
WHEREAS, simultaneously herewith, the Company is entering into a
Preferred Stock and Common Stock Purchase Agreement (the "Stock Purchase
Agreement"), pursuant to which the Company has agreed to sell shares of Series
C Convertible Preferred and Common Stock of the Company to the Investors;
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.
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 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 Shares" 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 Group Fund III-Focus Value Fund, L.P., a Delaware limited
partnership.
"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.
2
"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 B Preferred
and/or Series C 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 May 13, 1997, by and among the Investors, the Company and
Hollywood Theaters, Inc. as the same may hereafter be amended, modified or
restated.
"Registrable Securities" means any (i) shares of Series B
Preferred and Series C 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 B Preferred,
Series C 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 B and Series C Preferred
-2-
3
into Conversion Shares, would hold 10% or more of the total shares of Common
Stock 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 B Preferred and Series C 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, as amended, modified, replaced
or superseded from time to time.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Series B Preferred" means the Company's Series Convertible
Preferred Stock, par value $.01 per share.
"Series C. Preferred" means the Company's Series C
convertible Preferred Stock, par value $.01 per share.
"Stratford Conversion Shares" means the "Conversion Shares"
under and as defined in the Stratford Registration Rights Agreement.
"Stratford Registration Rights Agreement" means that certain
Registration Rights Agreement dated as of October 3, 1996 by and between the
Company, Stratford Capital Partners, L.P., a Texas limited partnership and
Precept Investors, Inc., a Texas corporation.
"Stratford Registrable Securities" means "Registrable
Securities" under and as defined in the Stratford Registration Rights
Agreement.
"Stratford Holders" means "Holders" under and as defined in
the Stratford Registration Rights Agreement.
2.1 Registration Rights.
(a) Request of Registration. Subject to Section 2.1(d),
at any time and from time to time after the earlier of (i) the closing of an
IPO and (ii) three years after October 3, 1996, 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
-3-
4
registration by such Holder(s) and the intended method of distribution thereof.
All such requests pursuant to this Section 2.1(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 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 Holders 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
-4-
5
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.
(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 the 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.
-5-
6
(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; provided, 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.
(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 or Stratford Registrable Securities, as the case may be, 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 or the Stratford Registration Rights Agreement, respectively,
third, the Registrable Securities, Beacon Registrable Securities and Stratford
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, Beacon Holders and
Stratford Holders participating in such offering in accordance with the number
of Conversion Shares, Beacon Conversion Shares and Stratford Shares held by and
issuable upon conversion of Registrable Securities, Beacon Registerable
Securities and Stratford Registrable Securities to each such Holder, Beacon
Holder and Stratford 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
-6-
7
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.
There 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 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 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 150 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
-7-
8
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 acts 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 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, the 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
-8-
9
(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 11(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), if
the 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 11Aa2-1
of the SEC or, failing that, secure NASDAQ authorization for such shares and,
without limiting the 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
-9-
10
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;
(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 registration 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 statement) 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
-10-
11
(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 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 date 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 (i) 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: (i) 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
-11-
12
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.
(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, pro 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 S-4 (if
-12-
13
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 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 exchangeable or exercisable for any equity security of the
Company (other than as part of such underwritten public offering, a
registration on Form S-4 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 or 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
(i) 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
-13-
14
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 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
-14-
15
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, 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 there may be one or more legal defenses available to
such indemnified party which are 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 more 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 therefor. 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
-15-
16
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 party 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
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. 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 Offerings. 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,
-16-
17
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 therewith, 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 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. 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 (i) 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
-17-
18
(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:
(i) if to the Company, to:
Hollywood Theater Holdings, Inc.
2911 Turtle Creek Blvd.
Suite 1150
Dallas, Texas 75219
Telephone: (214) 528-9500
Telecopy: (214) 520-2323
Attention: Thomas W. Stephenson, Jr.
(ii) if to Hoak Communications Partners, L.P., to:
Hoak Capital Corporation
One Galleria Tower
13355 Noel Road, Suite 1050
Dallas, Texas 75240
Telephone: (972) 960-4848
Telecopy: (972) 960-4899
Attention: Thomas L. Harrison
-18-
19
(iii) if to HCP Capital Fund, L.P., to:
Hoak Capital Corporation
One Galleria Tower
13355 Noel Road, Suite 1050
Dallas, Texas 75240
Telephone: (972) 960-4848
Telecopy: (972) 960-4899
Attention: Thomas L. Harrison
(iv) if to HCP 1997 Authorized Employee Fund,
L.P., to:
Hoak Capital Corporation
One Galleria Tower
13355 Noel Road, Suite 1050
Dallas, Texas 75240
Telephone: (972) 960-4848
Telecopy: (972) 960-4899
Attention: Thomas L. Harrison
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
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
-19-
20
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 Texas
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.
-20-
21
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date set forth above.
HOLLYWOOD THEATER HOLDINGS, INC.
By: /s/ James R. Featherstone
-------------------------------------
James R. Featherstone
Vice President and Chief Financial
Officer
HOAK COMMUNICATIONS PARTNERS, L.P.
By: HCP INVESTMENT, L.P.
By: HOAK PARTNERS, L.L.C.
By: /s/ Thomas L. Harrison
---------------------------
Thomas L. Harrison
Manager
HCP CAPITAL FUND, L.P.
By: JAMES M. HOAK & CO.
By: /s/ Thomas L. Harrison
--------------------------------
Thomas L. Harrison
Executive Vice President
HCP 1997 AUTHORIZED EMPLOYEE FUND, L.P.
By: AUTHORIZED FUND MANAGEMENT, INC.
By: /s/ Robert Sussman
--------------------------------
Robert Sussman
President
-21-