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EXHIBIT 4.1
REGISTRATION RIGHTS AGREEMENT
AGREEMENT, dated as of the ___ day of April 1996, between the
person whose name and address appears on the signature page hereto
(individually, a "Holder" and collectively the "Holders") and Dove Audio, Inc.,
a California corporation having its principal executive office at 301 N. Canon
Drive, Suite 207, Beverly Hills, California 90210 (the "Company").
WHEREAS, the Company, the Holders and certain other persons
are party to an Agreement and Plan of Merger dated as of April 12, 1996 (the
"Merger Agreement"; capitalized terms used herein without definition shall have
the respective meanings set forth in the Merger Agreement);
WHEREAS, simultaneously or in connection with the execution
and delivery of this Agreement, the Holders are purchasing the Dove Shares from
the Company in a private offering (the "Offering")pursuant to the Merger
Agreement;
WHEREAS, the Company desires to grant to the Holder the
registration rights set forth herein with respect to the Dove Shares;
NOW, THEREFORE, the parties hereto mutually agree as follows:
1. REGISTRABLE SECURITIES. As used herein the
term "Registrable Security" means each of the Dove Shares issued, as of the date
of determination thereof, pursuant to the Merger Agreement; provided, however,
that with respect to any particular Registrable Security, such security shall
cease to be a Registrable Security when, as of the date of determination, (i) it
has been effectively registered under the Securities Act of 1933, as amended
(the "Securities Act") and disposed of pursuant thereto, (ii) registration under
the Securities Act is no longer required for the immediate public distribution
of such security, or (iii) it has ceased to be outstanding. In the event of any
merger, reorganization, consolidation, recapitalization or other change in
corporate structure affecting the Common Stock, such adjustment shall be made in
the definition of "Registrable Security" as is appropriate in order to prevent
any dilution or enlargement of the rights granted pursuant to this Section 1.
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2. PIGGYBACK REGISTRATION.
2.1 If, at any time commencing June 30,
1996, (or, at the Company's option, at any earlier time) the Company proposes to
prepare and file with the Securities and Exchange Commission (the "Commission")
a registration statement covering equity or debt securities of the Company, or
any such securities of the Company held by its shareholders (in any such case,
other than in connection with a merger, acquisition or pursuant to Form S-4,
Form S-8 or successor forms) (for purposes of this Article 2, collectively, a
"Registration Statement"), it will give written notice of its intention to do so
by registered mail ("Notice"), at least twenty (20) days prior to the filing of
each such Registration Statement, to all holders of the Registrable Securities.
Upon the written request of such a holder (a "Requesting Holder"), made within
ten (10) days after receipt of the Notice, that the Company include any of the
Requesting Holder's Registrable Securities in the proposed Registration
Statement, the Company shall, as to each such Requesting Holder, use its
reasonable best efforts to effect the registration under the Securities Act of
the Registrable Securities which it has been so requested to register
("Piggyback Registration"), at the Company's sole cost and expense and at no
cost or expense to the Requesting Holders (other than any commission, discounts
or counsel fees payable by such Requesting Holder, as further provided in
Section 3.1 hereof); provided, however, that if, the Piggyback Registration is
in connection with an underwritten public offering and in the written opinion of
the Company's managing underwriter, if any, for such offering, the inclusion of
all or a portion of the Registrable Securities requested to be registered, when
added to the securities being registered by the Company or the selling
shareholder(s), will exceed the maximum amount of the Company's securities which
can be marketed (i) at a price reasonably related to their then current market
value, or (ii) without otherwise adversely affecting the entire offering, then
the Company may exclude from such offering all or a portion of the Registrable
Securities which it has been requested to register, it being understood that in
the initial such underwritten offering, the Company will use its reasonable best
efforts to include at least 68,181 shares to be sold by each of Messrs.
Ghalayini and Ziskin and at least 10,000 shares to be sold by Rafic Saadeh.
Without limiting the generality of the foregoing, the managing underwriter may
condition its consent to the inclusion of all or a portion of the Registrable
Securities requested to be registered upon either (as an entirety or in a
combination specified by the managing underwriter) of (x) the
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participation by the holders of such Registrable Securities in the underwritten
public offering on the terms and conditions thereof and/or (y) upon the
execution and delivery of a "lock-up" agreement by the Holder or Holders that
they will not offer for sale, sell, distribute, grant any option for the sale of
or otherwise encumber or dispose of, directly or indirectly, or exercise
registration rights with respect to any Registrable Securities for a period of
180 days after the effective date of such Registration Statement.
2.2 If securities are proposed to be
offered for sale pursuant to such Registration Statement by other security
holders of the Company and the total number of securities to be offered by the
Requesting Holders and such other selling security holders is required to be
reduced pursuant to a request from the managing underwriter, the aggregate
number of Registrable Securities to be offered by Requesting Holders pursuant to
such Registration Statement shall equal the number which bears the same ratio to
the maximum number of securities that the underwriter believes may be included
for all the selling security holders (including the Requesting Holders) as the
original number of Registrable Securities proposed to be sold by the Requesting
Holders bears to the total original number of securities proposed to be offered
by the Requesting Holders and the other selling security holders, except in the
case of the initial such underwritten offering in which case the provisions of
Section 2.1 shall apply (i.e., such formula need not be applied but Dove will
use its reasonable best efforts to include the number of shares to be sold by
Messrs. Ghalayini and Ziskin referred to above).
2.3 Notwithstanding the provisions of Article
2.1, the Company shall have the right at any time after it shall have given
written notice pursuant to Section 2.1 (irrespective of whether any written
request for inclusion of such securities shall have already been made) to elect
not to file any proposed Registration Statement, or to withdraw the same after
the filing but prior to the effective date thereof.
3. DEMAND REGISTRATION. At any time commencing
on or after June 30, 1996, any "Majority Holder" (as such term is defined below)
of the Registrable Securities shall have the right (which right is in addition
to the piggyback registration rights provided for under Article 2 hereof),
exercisable by written notice to the Company (the "Demand Registration
Request"), to have the Company prepare and file with the Commission, on up to
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two occasions (the first of which shall be the registration contemplated in
Section 6.5 of the Merger Agreement), at the sole expense of the Company, in
respect of all holders of Registrable Securities making such demand and all
Requesting Holders, a Registration Statement so as to permit a public offering
and sale of the Registrable Securities provided that the Company shall not be
required to file such registration statement if Form S-3 shall not be available.
Notwithstanding the foregoing, in the event that on or prior to June 30, 1996
Dove files or proposes to file a registration statement registering newly issued
shares of Dove Common Stock or shares of Dove Common Stock held by or issuable
to third parties, the provisions of Article 2 of this Agreement shall apply in
lieu of a "demand" under this Article 3. Once effective, the Company will be
required to maintain the effectiveness of the Registration Statement until the
earlier of (i) the date that all of the Registrable Securities have been sold,
or (ii) the date that the Registrable Securities may be freely traded without
registration under the Securities Act, under Rule 144 promulgated under the
Securities Act or otherwise. If a Majority Holder shall give notice to the
Company at any time of its or their desire to exercise the registration right
granted pursuant to this Article 3, then within ten (10) days after the
Company's receipt of such notice, the Company shall give notice to the other
holders of Registrable Securities, advising them that the Company is proceeding
with such registration and offering to include therein the Registrable
Securities of such holders, provided they furnish the Company with such
appropriate information in connection therewith as the Company shall reasonably
request in writing.
The term "Majority Holder" as used in this Agreement shall
mean any holder or any combination of holders of Registrable Securities as would
constitute a majority of the aggregate number of Registrable Securities, but
excluding any such securities which are subject to an effective Registration
Statement which was filed pursuant to Article 2 above) including all of the
Registrable Securities.
4. COVENANTS OF THE COMPANY WITH RESPECT TO
REGISTRATION. The Company covenants and agrees as follows:
4.1 The Company shall use its reasonable best
efforts to cause the Registration Statement to become effective as promptly as
possible and, if any stop order shall be issued by the Commission in connection
therewith, to use its reasonable efforts to obtain the removal of such order.
Following the
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effective date of a Registration Statement, the Company shall, upon the request
of the Holder, forthwith supply such reasonable number of copies of the
Registration Statement, preliminary prospectus and prospectus meeting the
requirements of the Act. and other documents necessary or incidental to the
public offering of the Registrable Securities, as shall be reasonably requested
by the Holder to permit the Holder to make a public distribution of the Holder's
Registrable Securities. The obligations of the Company hereunder with respect to
the Holder's Registrable Securities are expressly conditioned on the Holder's
furnishing to the Company such appropriate information concerning the Holder,
the Holder's Registrable Securities and the terms of the Holder's offering of
such Registrable Securities as the Company may reasonably request.
4.2 The Company shall pay all costs, fees and
expenses in connection with all Registration Statements filed pursuant hereto
including, without limitation, the Company's legal and accounting fees, printing
expenses, and blue sky fees and expenses; provided, however, that the Holder
shall be solely responsible for the fees of any counsel retained by the Holder
in connection with such registration and any transfer taxes or underwriting
discounts, commissions or fees applicable to the Registrable Securities sold by
the Holder pursuant thereto.
4.3 The Company will use reasonable efforts to
qualify or register the Registrable Securities included in a Registration
Statement for offering and sale under the securities or blue sky laws of such
states as are requested by the holders of such securities, provided that the
Company shall not be obligated to execute or file any general consent to service
of process or to qualify as a foreign corporation to do business under the laws
of any such jurisdiction.
5. ADDITIONAL TERMS.
5.1 The Company shall indemnify and hold
harmless the Holder and each underwriter, within the meaning of the Securities
Act, who may purchase from or sell for the Holder, any Registrable Securities,
from and against any and all losses, claims, damages and liabilities caused by
any untrue statement of a material fact contained in the Registration Statement,
any other registration statement filed by the Company under the Securities Act
or any prospectus included therein or caused by any omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not
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misleading, except insofar as such losses, claims, damages or liabilities are
caused by any such untrue statement or omission based upon information furnished
or required to be furnished in writing to the Company by any Holder or
underwriter expressly for use therein, which indemnification shall include each
person, if any, who controls either the Holder or underwriter within the meaning
of the Securities Act and each officer, director, employee and agent of the
Holder and underwriter; provided, however, that the indemnification in this
Section 5.1 with respect to any prospectus shall not inure to the benefit of the
Holder or underwriter (or to the benefit of any person controlling the Holder or
underwriter) on account of any such loss, claim, damage or liability arising
from the sale of Registrable Securities by the Holder or underwriter, if a copy
of a subsequent prospectus correcting the untrue statement or omission in such
earlier prospectus was provided to the Holder or underwriter by the Company
prior to the subject sale and the subsequent Prospectus was not delivered or
sent by the Holder or underwriter to the purchaser prior to such sale; and
provided further, that the Company shall not be obligated to so indemnify the
Holder or any such underwriter or other person referred to above unless the
Holder or underwriter or other person, as the case may be, shall at the same
time indemnify the Company, its directors, each officer signing the Registration
Statement and each person, if any, who controls the Company within the meaning
of the Securities Act, from and against any and all losses, claims, damages and
liabilities caused by any untrue statement of a material fact contained in the
Registration Statement, any registration statement or any prospectus required to
be filed or furnished by reason of this Agreement or caused by any omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, insofar as such losses, claims, damages
or liabilities are caused by any untrue statement or omission based upon
information furnished in writing to the Company by the Holder or underwriter
expressly for use therein.
5.2 If for any reason the
indemnification provided for in the preceding section is held by a court of
competent jurisdiction to be unavailable to an indemnified party with respect to
any loss, claim, damage, liability or expense referred to therein, then the
indemnifying party, in lieu of indemnifying such indemnified party thereunder,
shall contribute to the amount paid or payable by the indemnified party as a
result of such loss, claim, damage or liability in such proportion as is
appropriate to reflect not only the relative
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benefits received by the indemnified party and the indemnifying party, but also
the relative fault of the indemnified party and the indemnifying party, as well
as any other relevant equitable considerations.
5.3 Neither the filing of a Registration
Statement by the Company pursuant to this Agreement nor the making of any
request for prospectuses by the Holder shall impose upon the Holder any
obligation to sell the Holder's Registrable Securities, except as may be
required in accordance with Section 2 hereof.
5.4 The Holder, upon receipt of notice
from the Company that an event has occurred which requires a post effective
amendment to the Registration Statement or a supplement to the prospectus
included therein, shall promptly discontinue the sale of Registrable Securities
until the Holder receives a copy of a supplemented or amended prospectus from
the Company, which the Company shall provide as soon as practicable after such
notice.
6. GOVERNING LAW. The Registrable Securities will
be, if and when issued, delivered in California. This Agreement shall be deemed
to have been made and delivered in the State of California and shall be governed
as to validity, interpretation, construction, effect and in all other respects
by the internal substantive laws of the State of California, without giving
effect to the choice of law rules thereof.
7. AMENDMENT. This Agreement may only be amended
by a written instrument executed by the Company and the Holder.
8. ENTIRE AGREEMENT. This Agreement constitutes
the entire agreement of the parties hereto with respect to the subject matter
hereof, and supersedes all prior agreements and understandings of the parties,
oral and written, with respect to the subject matter hereof.
9. EXECUTION IN COUNTERPARTS. This Agreement may
be executed in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same document.
10. NOTICES. All notices, requests, demands and
other communications hereunder shall be in writing and shall be deemed duly
given when delivered by hand or mailed by registered
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or certified mail, postage prepaid, return receipt requested, as follows:
If to the Holder, to his or her address set forth on
the signature page of this Agreement.
If to the Company, to the address set forth on the
first page of this Agreement.
11. BINDING EFFECT; BENEFITS. The Holder may not
assign his or her rights hereunder. This Agreement shall inure to the benefit
of, and be binding upon, the parties hereto and their respective heirs, legal
representatives and successors. Nothing herein contained, express or implied, is
intended to confer upon any person other than the parties hereto and their
respective heirs, legal representatives and successors, any rights or remedies
under or by reason of this Agreement.
12. HEADINGS. The headings contained herein are
for the sole purpose of convenience of reference, and shall not in any way limit
or affect the meaning or interpretation of any of the terms or provisions of
this Agreement.
13. SEVERABILITY. Any provision of this Agreement
which is held by a court of competent jurisdiction to be prohibited or
unenforceable in any jurisdiction(s) shall be, as to such jurisdiction(s),
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions of this Agreement or affecting the
validity or enforceability of such provision in any other jurisdiction.
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IN WITNESS WHEREOF, this Agreement has been executed and
delivered by the parties hereto as of the date first above written.
DOVE AUDIO, INC.
By: /s/ SIMON BAKER
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Name:
Title:
HOLDER:
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