Exhibit 10.1


 


 


 


 


 


 


SECURITIES PURCHASE AGREEMENT


Between


DG FastChannel, Inc.


And


Midwood Capital
Management LLC,


Midwood Capital Partners, L.P.,


Midwood Capital Partners QP, L.P.


 


 


 


December 22, 2006










 



 


THIS
SECURITIES PURCHASE AGREEMENT (this “Agreement”) is entered into
effective as of December 22, 2006 between DG FastChannel, Inc., a Delaware
corporation (the “Purchaser”), Midwood Capital LLC, a Delaware limited
liability company (“Seller”), Midwood Capital Partners, L.P., a Delaware
limited partnership (“LP”) and Midwood Capital Partners QP, L.P., a Delaware
limited partnership (“QP” and together with LP, the “Funds”)’


WHEREAS, Seller
and the Funds beneficially own 1,108,674 shares (the “Shares”) of common stock,
no par value, of POINT.360 (“Point 360”), a California corporation;


WHEREAS, Seller is
the sole general partner of, and manages and provides investment advice to,
each of the Funds;


WHEREAS, Purchaser
desires to acquire the Shares, free from all liens, pledges, encumbrances,
proxies, voting agreements or arrangements of any kind with respect to the
Shares, on the terms, representations warranties, and covenants hereinafter set
forth.


NOW, THEREFORE, in
consideration of the foregoing premises and the covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:


1.     Purchase.  Seller shall deliver, convey and transfer, or
cause the Funds to deliver, convey and transfer, the Shares against delivery in
same day funds by wire transfer of $3.25 per Share, for a total purchase price
(“Purchase Price”) of $3,603,191, to a brokerage account designated in writing
by Purchaser, by irrevocable written instructions (the “Transfer Instructions”)
to the broker(s) engaged by Seller on behalf of the Funds which presently hold
or otherwise have custody of the Shares. 
Seller shall provide Purchaser with written wire instructions for
delivery of the Purchase Price to an account(s) at a U.S. financial institution
or broker (the “Wire Instructions”), upon which Purchaser can rely in full
payment for the Shares.  Against
confirmation of delivery of the Transfer Instructions to such broker(s) which
presently hold or have custody of the Shares, Purchaser shall deliver or cause
to be delivered the Purchaser Price in accordance with the Wire Instructions.


2.     Representations, Warranties and
Covenants of the Purchaser. 
Purchaser hereby represents, warrants and covenants to each of the
Seller and the Funds as follows.


2.1           Due Authorization.  Purchaser has all requisite power and
authority to execute, deliver and perform its obligations under this Agreement,
and has taken all necessary corporate action to enter and perform this
Agreement.  This Agreement has been duly
authorized and validly executed and delivered by Purchaser and constitutes a
legal, valid and binding agreement of Purchaser enforceable against Purchaser
in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors’ and contracting parties’ rights generally and except as
enforceability may be subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).


2.2           Non-Contravention.  The execution and delivery of this Agreement,
the purchase of the Shares under this Agreement, the fulfillment of the terms
of this Agreement and the consummation of the transactions contemplated hereby
will not (A) conflict with or constitute a violation of, or default (with or
without the giving of notice or the passage of time or both) under, 



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(i) any
material bond, debenture, note or other evidence of indebtedness, or under any
material lease, indenture, mortgage, deed of trust, loan agreement, joint
venture or other agreement or instrument to which Purchaser is a party,
(ii) the charter, by-laws or other organizational documents of Purchaser,
as applicable, or (iii) any law, administrative regulation, ordinance or
order of any court or governmental agency, arbitration panel or authority
applicable to Purchaser or its property, or (B) result in the creation or
imposition of any lien, encumbrance, claim, security interest or restriction
whatsoever upon any of the material properties or assets of Purchaser or an
acceleration of indebtedness pursuant to any obligation, agreement or condition
contained in any material bond, debenture, note or any other evidence of
indebtedness or any material indenture, mortgage, deed of trust or any other
agreement or instrument to which Purchaser is a party or by which any of them
is bound or to which any of the property or assets of Purchaser is
subject.  No consent, approval,
authorization or other order of, or registration, qualification or filing with,
any regulatory body, administrative agency, self-regulatory organization, stock
exchange or market, or other governmental body in the United States is required
for the execution and delivery of this Agreement and the acquisition of the
Shares by Purchaser, other than with respect to such filings as may be required
by Purchaser under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”).


2.3           Status. Purchaser acknowledges
that may be entering into this Agreement and acquiring the Shares on the basis
of incomplete or inaccurate information available to it, and that neither
Seller nor the Funds, nor any of their respective affiliates or
representatives, have made any statement or representations with respect to the
financial condition, results of operations or prospects of Point 360.  Purchaser hereby waives any claims or causes
of action it may have against Seller, the Funds or any of their respective
affiliates or representatives with respect to the offer to sell and the sale of
the Shares under the securities laws of the Untied States, applicable state
securities or other laws or judicial doctrines, upon delivery of the Shares as
provided under this Agreement.


3.     Representations, Warranties and
Covenants of Seller and the Funds. 
Each of Seller and the Funds, severally and not joint, hereby
represents, warrants and covenants to Purchaser as follows:


3.1           Title.  The Funds are the beneficial owner of the
Shares and hold good and marketable title to the Shares without restriction on
sale or transfer, and upon consummation of the transaction contemplated by this
Agreement, Purchaser will acquire title to the Shares, free and clear of any
and all liens, claims, pledges or encumbrances, proxies or voting agreements or
arrangements of any kind.


3.2           Due Authorization.  Each of the Seller and the Funds has all
requisite power and authority to execute, deliver and perform its obligations
under this Agreement, and has taken all necessary company or partnership
action, as applicable, to enter and perform this Agreement.  This Agreement has been duly authorized and
validly executed and delivered by each of Seller and the Funds and constitutes
a legal, valid and binding agreement of each of Seller and the Funds
enforceable against Seller and the Funds in accordance with its terms, except
as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ and contracting
parties’ rights generally and except as enforceability may be subject to
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).



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3.3             Non-Contravention.  The execution and delivery of this Agreement,
the sale of the Shares under this Agreement, the fulfillment of the terms of
this Agreement and the consummation of the transactions contemplated hereby
will not (A) conflict with or constitute a violation of, or default (with or
without the giving of notice or the passage of time or both) under,
(i) any material bond, debenture, note or other evidence of indebtedness,
or under any material lease, indenture, mortgage, deed of trust, loan
agreement, joint venture or other agreement or instrument to which Seller or
either of the Funds is a party, (ii) the organizational documents of
Seller or the Funds, or (iii) any law, administrative regulation,
ordinance or order of any court or governmental agency, arbitration panel or
authority applicable to Seller or either of the Funds or their respective property,
other than with respect to a potential obligation arising under the Exchange
Act, or (B) result in the creation or imposition of any lien, encumbrance,
claim, security interest or restriction whatsoever upon any of the material
properties or assets of Seller or either of the Funds or an acceleration of
indebtedness pursuant to any obligation, agreement or condition contained in
any material bond, debenture, note or any other evidence of indebtedness or any
material indenture, mortgage, deed of trust or any other agreement or
instrument to which Seller or either of the Funds is a party or by which any of
them is bound or to which any of the property or assets of Seller or either of
the Funds is subject.  No consent,
approval, authorization or other order of, or registration, qualification or
filing with, any regulatory body, administrative agency, self -regulatory
organization, stock exchange or market, or other governmental body in the
United States is required for the execution and delivery of this Agreement and
the sale of the Shares by Seller and the Funds.


3.4           Share Ownership.  Upon fulfillment of their obligations
hereunder, neither Seller nor either of the Funds, will own (beneficially or
otherwise) any equity securities of the Point 360, or any securities
convertible into or exchangeable or exercisable for any equity securities of
the Point 360, or which, upon redemption thereof could result in Seller or
either of the funds receiving any equity securities of Point 360, or options,
warrants, contractual rights or other rights of any kind to acquire or vote any
equity securities of the Point 360.


3.5           Status.  Seller is the sole general partner of the
Funds and has sole investment and voting power with respect to the Shares.  Each of Seller and the Funds acknowledge that
they are sophisticated investors in equity securities and that they trade and
invest regularly in equity securities of United States issuers such as Point
360, that they may be entering into this Agreement and selling the Shares on the
basis of incomplete or inaccurate information available to them, that neither
Purchaser nor any of Purchaser’s affiliates or representatives have disclosed
to them any intent to acquire additional shares of common stock of Point 360
but if Purchaser or any affiliate thereof should acquire more shares of common
stock of Point 360 through any means including open market, privately
negotiated or business combination transactions, Purchaser or its affiliates
may do so at any time at a price or fair market value greater than $3.25 per
share.  Each of Seller and the Funds
hereby waive any claims or causes of actions they may have against Purchaser,
its affiliates or representatives with respect to the offer to purchase and the
sale of the Shares under the securities laws of the United States, applicable
state securities or other laws or judicial doctrines, upon payment in full of
the Purchase Price of the Shares as provided under this Agreement.


3.6           U.S. Taxpayer.  Each of Seller and the Funds have executed
and delivered to Purchase a Substitute Form W-9, substantially in the form
attached hereto, and represent and warrant to Purchaser that they are not a “foreign
person” within the meaning of Section 1445(b)(2) of the Internal Revenue Code.



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4.     Survival
of Representations, Warranties and Agreements.  Notwithstanding any investigation made by any
party to this Agreement, all covenants, agreements, representations and
warranties made by Purchaser and Seller and each of the Funds herein shall
survive the execution and delivery of this Agreement, the delivery to Purchaser
of the Shares and the payment of the Purchase Price as provided herein.


5.     Notices.  All notices, requests, consents and other
communications hereunder shall be in writing, shall be mailed (A) if
within domestic United States by first-class registered or certified airmail,
or nationally recognized overnight express courier, postage prepaid, or by
facsimile, or (B) if delivered from outside the United States, by
International Federal Express or facsimile, and shall be deemed given
(i) if delivered by first-class registered or certified mail domestic,
three business days after so mailed, (ii) if delivered by nationally
recognized overnight carrier, one business day after so mailed, (iii) if
delivered by International Federal Express, two business days after so mailed,
and (iv) if delivered by facsimile, upon electric confirmation of receipt
and shall be delivered as addressed as follows:


(a)             if to the Purchaser, to:


DG FastChannel,
Inc.

750 W. John Carpenter Freeway

Suite 700

Irving, Texas 7503

Attn: Omar A. Choucair 

Chief Financial Officer

Phone: (972) 581-2000

Fax:  (972) 581-2001


with a copy to:


Latham & Watkins LLP

555 Eleventh Street, N.W.

Suite 1000

Washington, DC  20004

Attn:  William P. O’Neill

Phone:  (202) 637-2200

Fax:  (202) 637-2201


(b)             if to Seller or the Funds, to:


Midwood Capital
Management LLC

575 Boylston

4th Floor

Boston, MA 02116

Attn:  David Cohen

Managing Director

Phone:  (617) 224-1751

Fax:  (617) 224-1769



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with a copy to:


Foley Hoag LLP

155 Seaport Boulevard

Boston, MA  02210

Attn:  Peter M. Rosenblum

Phone:  (617) 832-1151

Fax:  (617) 832-7000


Copies delivered to
counsel shall not constitute notice.


6.             Changes. 
This Agreement may not be modified or amended except pursuant to an
instrument in writing signed by the Purchaser and Seller and the Funds.


7.             Headings. 
The headings of the various sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed to be part
of this Agreement.


8.             Severability. 
In case any provision contained in this Agreement should be invalid,
illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not in any
way be affected or impaired thereby.


9.             Governing Law. 
This Agreement shall be governed by, and construed in accordance with,
the internal laws of the State of New York, without giving effect to the
principles of conflicts of law.


10.           Entire Agreement.  This Agreement constitutes the entire agreement
between the parties hereto pertaining to the subject matter hereof, and any and
all other written or oral agreements relating to such subject matter are
expressly cancelled.


11.           Finders Fees.  Neither Purchaser, nor Seller, nor the Funds
nor any affiliate thereof has incurred any obligation which will result in the
obligation of the other party to pay any finder’s fee or commission in
connection with this transaction.


12.           Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which,
when taken together, shall constitute but one instrument, and shall become
effective when one or more counterparts have been signed by each party hereto
and delivered to the other parties.


13.           Successors and Assigns.  This Agreement shall inure to the benefit of
and be binding upon the successors and permitted assigns of Purchaser and
Seller and the Funds.


14.           Expenses.  Each of the Purchaser and Seller and the
Funds shall bear its own expenses in connection with the preparation and
negotiation of the Agreement and any brokerage fees or commissions in respect
of the sale and delivery of the Shares.


[Signature pages follow.]



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IN WITNESS
WHEREOF, the parties hereto have caused this Agreement to be duly executed as
of the date first above written.


	
  

  	
  DG FastChannel, Inc.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Scott Ginsburg

  
	
   

  	
   

  	
   

  	
  Scott Ginsburg

  
	
   

  	
   

  	
   

  	
  Chairman and CEO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Midwood Capital Management LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ David Cohen

  
	
   

  	
   

  	
   

  	
  David Cohen

  
	
   

  	
   

  	
   

  	
  Managing Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Midwood Capital Partners, L.P.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  Midwood Capital Management LLC

  
	
   

  	
   

  	
   

  	
  General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ David Cohen

  
	
   

  	
   

  	
   

  	
  David Cohen

  
	
   

  	
   

  	
   

  	
  Managing Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Midwood Capital Partners QP, L.P.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  Midwood Capital Management LLC

  
	
   

  	
   

  	
   

  	
  General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ David Cohen

  
	
   

  	
   

  	
   

  	
  David Cohen

  
	
   

  	
   

  	
   

  	
  Managing Director

  



 



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