Document:

Exhibit
4.1

 

SERIES A CONVERTIBLE PREFERRED STOCK

PURCHASE AGREEMENT

 

 

Between

 

MEDIA 100 INC.

 

and

 

CCM MASTER FUND, LTD.

 

Dated as of May 14, 2003

 

 

TABLE OF CONTENTS

 

	
  1.

  	
  Authorization
  and Sale of Series A Convertible Preferred Stock

  
	
  1.1.

  	
  Authorization
  of Series A Preferred Stock

  
	
  1.2.

  	
  Sale of
  Series A Convertible Preferred Stock

  
	
  1.3

  	
  Proceeds

  
	
  2.

  	
  The Closing

  
	
  3.

  	
  Representations of the
  Company

  
	
  3.1.

  	
  Organization and
  Corporate Power; No Violations

  
	
  3.2.

  	
  Authorization

  
	
  3.3.

  	
  Capitalization

  
	
  3.4.

  	
  SEC Reports

  
	
  3.5.

  	
  Financial
  Statements

  
	
  3.6.

  	
  Intellectual
  Property

  
	
  3.7.

  	
  Litigation

  
	
  3.8.

  	
  Investment
  Company/Government Regulations

  
	
  3.9.

  	
  Private
  Offering

  
	
  3.10.

  	
  Insurance

  
	
  3A.

  	
  Covenant
  of the Company

  
	
  4.

  	
  Representations of
  the Purchasers

  
	
  4.1.

  	
  Accredited
  Investor

  
	
  4.2.

  	
  Investment

  
	
  4.3.

  	
  Suitability

  
	
  4.4.

  	
  Access
  to Management

  
	
  4.5.

  	
  Authorization

  
	
  5.

  	
  Conditions to the
  Obligations of the Purchasers

  
	
  5.1.

  	
  Accuracy of
  Representations and Warranties

  
	
  5.2.

  	
  Performance

  
	
  5.3.

  	
  Registration Rights
  Agreement

  
	
  5.4.

  	
  Certificates and Documents

  
	
  5.5.

  	
  Nominee to
  Board

  
	
  6.

  	
  Conditions
  to the Obligations of the Company

  
	
  6.1.

  	
  Accuracy of
  Representations and Warranties

  
	
  6.2.

  	
  Performance

  
	
  6.3

  	
  Registration Rights Agreement

  
	
  6.4.

  	
  Required Stockholder
  Approval

  
	
  7.

  	
  Required Corporation Action

  
	
  8.

  	
  Successors
  and Assigns

  
	
  9.

  	
  Expenses

  
	
  10.

  	
  Notices

  
	
  11.

  	
  Brokers

  
	
  12.

  	
  No Conditions to
  Effectiveness; Entire Agreement

  
	
  13.

  	
  Amendments
  and Waivers

  
	
  14.

  	
  Counterparts

  
	
  15.

  	
  Captions

  
	
  16.

  	
  Severability

  
	
  17.

  	
  Governing Law

  

 

	
  SCHEDULES:

  
	
   

  	
   

  
	
  Schedule I

  	
  Schedule of Purchasers

  
	
   

  	
   

  
	
  EXHIBITS:

  	
   

  
	
   

  	
   

  
	
  Exhibit A

  	
  Form of Certificate of Designation of Series A
  Convertible Preferred Stock of the Company

  
	
  Exhibit B

  	
  Form of Registration
  Rights Agreement

  
	
  Exhibit C

  	
  Form of Opinion

  

 

i

 

SERIES A CONVERTIBLE PREFERRED STOCK PURCHASE
AGREEMENT

 

This Agreement dated as
of May 14, 2003 is between Media 100 Inc., a Delaware corporation (the “Company”),
and the several purchasers named in the attached Schedule I (each
individually, a “Purchaser” and collectively, the “Purchasers”).

 

In consideration of the
mutual promises and covenants contained in this Agreement, and intending to be
legally bound by the terms and conditions of this Agreement, the parties hereto
hereby agree as follows:

 

1.                                      Authorization and Sale of Series A
Convertible Preferred Stock.

 

1.1.                            Authorization of Series A
Convertible Preferred Stock.  The Company has, or before the Initial
Closing (as defined in Section 2) will have,  duly authorized the sale and issuance of
up to two thousand five hundred (2,500) shares of its Series A Convertible
Preferred Stock, $0.01 par value per share (the “Preferred Stock”),
having the rights, restrictions, privileges and preferences set forth in Exhibit A
hereto.  The Company has, or on or
before the Initial Closing will have, designated the terms of the Preferred
Stock by filing a Certificate of Designation in substantially the form set
forth in Exhibit A (the “Certificate of Designation”) with
the Secretary of State of the State of Delaware.

 

1.2.                            Sale of Series A Convertible
Preferred Stock.  Subject to the terms and conditions of this
Agreement, at each Closing the Company shall sell and issue to each Purchaser,
and each Purchaser shall purchase from the Company, at a purchase price of
$1,000 per share, the number of shares of Preferred Stock set forth opposite
the name of such Purchaser with respect to such Closing under the heading “Number
of Shares of Preferred Stock to Be Purchased” on Schedule I (the “Shares”),
at the aggregate purchase price set forth opposite the name of such Purchaser
with respect to such Closing under the heading “Aggregate Purchase Price for
the Shares to Be Purchased” on Schedule I, payable as set forth in
Section 2 of this Agreement.

 

1.3                               Proceeds.  Proceeds from the sale of the Preferred
Stock will be used for general working capital purposes.

 

2.                                      The Closing.

 

(a)                                  The initial closing
of the sale and purchase of the Preferred Stock pursuant to this Agreement
shall take place at the offices of Testa, Hurwitz & Thibeault, LLP,
125 High Street, Boston, Massachusetts 02110 on May 14, 2003, or at
such other time, date, and place as are mutually agreeable to the Company and
the Purchasers (the “Initial Closing”). 
The date of the Initial Closing is hereinafter referred to as the “Initial
Closing Date.”

 

(b)                                  The subsequent
closing of the sale and purchase of the Preferred Stock pursuant to this
Agreement shall take place at the offices of Testa, Hurwitz & Thibeault,
LLP, 125 High Street, Boston, Massachusetts 02110 within three (3)
business days after the date on which the condition set forth in Section 6.4
has been satisfied or waived, or at such other time,

 

 

date, and place as are mutually agreeable to the Company and the
Purchasers (the “Subsequent Closing”, and together with the Initial
Closing, each a “Closing”).  The
date of the Subsequent Closing is hereinafter referred to as the “Subsequent
Closing Date” and together with the Initial Closing Date, each a “Closing
Date.”

 

(c)                                  At each Closing, the
Company shall deliver, or shall cause its transfer agent to deliver, to each
Purchaser within ten (10) days of such Closing a certificate registered in the
name of each Purchaser representing the Shares being purchased by such
Purchaser at such Closing.  As payment
in full for the Preferred Stock being purchased by such Purchaser under this
Agreement and against delivery of the stock certificate or certificates
therefor, on the Closing Date each Purchaser shall deliver to the Company a
check payable to the order of the Company or wire transfer of such sum to the
account of the Company the amount set forth opposite the name of such Purchaser
with respect to such Closing under the header “Aggregate Purchase Price for
the Shares to Be Purchased” on Schedule I.  If at the Closing any of the conditions
specified in Section 5.1-5.5 of this Agreement shall not have been fulfilled or
waived, each Purchaser shall, at its election, be relieved of all of its
obligations under this Agreement with respect to such Closing without thereby
waiving any other right it may have by reason of such failure or such
non-fulfillment.  If at the Closing any
of the conditions specified in Section 6 of this Agreement shall not have been
fulfilled or waived, the Company shall, at its election, be relieved of all of
its obligations under this Agreement without thereby waiving any other right it
may have by reason of such failure or such non-fulfillment.

 

3.                                      Representations of the Company.  Except as disclosed in the SEC Reports (as
defined below), the Company hereby represents and warrants to the Purchasers as
follows:

 

3.1.                            Organization and Corporate Power;
No Violations.  The Company is a
corporation duly organized, validly existing and in corporate good standing
under the laws of the State of Delaware and is qualified to do business as a
foreign corporation in each jurisdiction in which such qualification is
required, except where the failure to be so qualified would not have either
individually or in the aggregate, a material adverse effect on the business,
operations, financial condition, assets, liabilities or contractual rights of
the Company (a “Material Adverse Effect”).  The Company has all required corporate power and authority to own
its property, to carry on its business as presently conducted, to enter into
and perform this Agreement, the Registration Rights Agreement (as defined
below) and the other agreements, documents and instruments contemplated hereby
(collectively with this Agreement, the “Financing Documents”), and
generally to carry out the transactions contemplated hereby.  The Company is not in violation of any term
of its Restated Certificate of Incorporation, as amended, (the “Restated
Charter”) or By-laws, and to the Company’s knowledge, the Company is not in
violation of any term of any agreement, instrument, judgment, decree, order,
statute, rule or government regulation applicable to the Company or to which
the Company is a party, where any such violation, noncompliance or default
would result in a Material Adverse Effect.

 

3.2.                            Authorization.  The Financing Documents are valid and
binding obligations of the Company, enforceable in accordance with their
terms.  The execution, delivery and
performance of the Financing Documents have been duly authorized by all
necessary corporate or other action of the Company.  The issuance, sale and delivery of the Preferred Stock

 

2

 

in accordance with this Agreement, and the issuance, sale and delivery
of the shares of Common Stock issuable upon conversion of the Preferred Stock
(the “Conversion Shares”), have been, or will be prior to the Initial
Closing, duly authorized and reserved for issuance, as the case may be, by all
necessary corporate action on the part of the Company.  The Preferred Stock when so issued, sold and
delivered against payment therefor in accordance with the provisions of this
Agreement, and the Conversion Shares, when issued, will be duly and validly
issued, fully paid and non-assessable. 
Except (i) for the filing of the Certificate of Designation with the
Secretary of State of the State of Delaware, (ii) for the filing of a Form D
and other blue sky filings with the SEC (as defined below) and applicable state
securities agencies, and (iii) that the issuance, sale and delivery of the
Shares and the Conversion Shares (other than the Shares being sold at the
Initial Closing and the related Conversion Shares) requires the approval of the
Company’s stockholders pursuant to Nasdaq Marketplace Rule 4350(i)(1) (the “Required
Stockholder Approval”), no consent, approval or authorization of, or
designation, declaration or filing with, any governmental authority or any
other person or entity is required of the Company in connection with the
execution and delivery of the Financing Documents, or the issuance, sale and
delivery of the Preferred Stock in accordance with the terms of this Agreement
or the consummation of any other transaction contemplated hereby or by the
other Financing Documents.

 

3.3.                            Capitalization.  The authorized
capital stock of the Company (immediately prior to the Initial Closing and
after giving effect to the Certificate of Designation) will consist of
25,000,000 shares of Common Stock, $0.01 par value, (the “Common Stock”)
13,083,019 of which shares are issued and outstanding, and one million
(1,000,000) shares of preferred stock, two thousand five hundred (2,500)
of which are designated as Series A Convertible Preferred Stock, $0.01 par
value.  All of the issued and
outstanding shares of the Company’s capital stock have been duly authorized and
validly issued and are fully paid and non-assessable and have been issued in
compliance with applicable Federal and state securities laws.

 

3.4.                            SEC Reports.  The Common Stock is registered pursuant to
Section 12(g) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”).  Copies of all reports filed
by the Company with the Securities and Exchange Commission (the “SEC”)
pursuant to the Exchange Act during the period from November 30, 2001 to the
applicable Closing Date (the “SEC Reports”) have been, or will be,
furnished or are, or will be, publicly available to the Purchasers.  The Company has filed, or will file, in a
timely manner all SEC Reports that the Company was, or will be, required to
file under the Exchange Act during, from and after November 30, 2001 to the
applicable Closing Date.  Such SEC
Reports complied in all material respects with the SEC’s requirements as of
their respective filing dates, and the information contained therein as of the
respective dates thereof did not contain 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 light of the circumstances under where they were
made not misleading.

 

3.5.                            Financial Statements.  The audited financial statements of the Company contained in the
Company’s Annual Report on Form 10-K for the year ended November 30, 2002,
including the notes relating thereto, disclose all material liabilities of the
Company as of the date thereof.  Such
financial statements have been prepared in accordance with generally

 

3

 

accepted accounting principles consistently applied throughout the
periods involved.  Said financial
statements and related notes fairly present the financial position and the
results of operations and cash flow of Company as of the respective dates
thereof and for the periods indicated. 
Since November 30, 2002, there has not been any material adverse
change in the business, financial condition, operations, results of operations,
assets, employee relations, customer or supplier relations of the Company,
except as contemplated and set forth in the Company’s Form 10-K for the period
ended November 30, 2002 or any Quarterly Report on Form 10-Q of the Company for
any subsequent period or any Current Report on Form 8-K of the Company.

 

3.6.                            Intellectual Property.  To the knowledge of the Company, the Company owns or possesses
sufficient rights to use all material patents, patent rights, trademarks,
copyrights, licenses, inventions, trade secrets, trade names and know-how
(collectively, “Intellectual Property”) as are owned or used by it or that are
necessary for the conduct of its business as now conducted except where the
failure to currently own or possess could not reasonably be expected to have a
Material Adverse Effect.  The Company
has not received any notice of, nor has it any knowledge of, any infringement
of or conflict with asserted rights of the Company by others with respect to
any Intellectual Property, except as could not reasonably be expected to have a
Material Adverse Effect.  To the
knowledge of the Company, no product or process presently used or proposed to
be manufactured, marketed, offered, sold or used by the Company will violate
any license or infringe on any intellectual property rights of any other
Person, except as could not reasonable be expected to have a Material Adverse
Effect.

 

3.7.                            Litigation.  There is no litigation or governmental
proceeding or investigation pending against the Company or against any officer
or key employee of the Company.  To the
knowledge of the Company, there is no litigation or governmental proceeding or
investigation pending or threatened against the Company which may have a
Material Adverse Effect or which may call into question the validity, or
materially hinder the enforceability or performance, of the Financing
Documents.

 

3.8.                            Investment Company/Government Regulations.  The Company is not an “investment company”
within the meaning of the Investment Company Act of 1940, as amended.  The Company is not subject to regulation
under the Public Utility Holding Company Act of 1935, as amended, the Federal
Power Act, the Interstate Commerce Act, or any federal or state statute or
regulation limiting its ability to incur indebtedness.

 

3.9.                            Private Offering.  No form of general solicitation or general
advertising was used by the Company or its representatives in connection with
the offer or sale of the Preferred Stock. 
No registration of the Preferred Stock or Common Stock issuable upon
conversion of the Preferred Stock pursuant to the provisions of the Securities
Act or the state securities or “blue sky” laws will be required by the offer,
sale or issuance of the Shares pursuant to this Agreement or of the Conversion
Shares, other than the filing of a Form D and other “blue sky” filings (such as
a Form U-2) with the SEC and applicable state securities agencies.  The Company agrees that neither it, nor
anyone acting on its behalf, will offer or sell the Preferred Stock or any
other security so as to require the registration of the Preferred Stock or
Common Stock issuable upon conversion of the Preferred Stock pursuant to the
provisions of the

 

4

 

Securities Act or any state securities or “blue
sky” laws, unless such Preferred Stock or Common Stock issuable upon conversion
of the Preferred Stock is so registered.

 

3.10.                     Insurance.
 The
Company carries insurance covering its properties and businesses customary for
the type and scope of its properties and business, but in any event in amounts
sufficient to prevent the Company from becoming a co-insurer. All such policies are in full force and effect,
and are underwritten by financially sound and reputable insurers.  All such policies will remain in full force
and effect and will not in any way be affected by, or terminate or lapse by
reason of any of the transactions contemplated hereby.

 

3A.                             Covenant of the Company.  The
Company hereby agrees that if on September 19, 2003, the Stockholders’ Equity
of the Company is less than $3,400,000, then the Company shall pay, on the
earliest to occur of (i) May 31, 2004, (ii) the redemption or repurchase of the
Preferred Stock by the Company, and (iii) a liquidation, dissolution or winding
up of the Company (as that term is used in Section 3 of the Certificate of
Designation), a cumulative cash dividend (out of funds legally available
therefor) to the holders of record of shares of the Preferred Stock on May 1,
2004 such dividend in an amount equal to $100 per share (subject to appropriate
equitable adjustment for any stock splits, stock dividends, combinations,
reorganizations, reclassifications, recapitalizations or other similar events
affecting the shares of Preferred Stock) (the “Initial Dividend”).

 

The
“Deficiency Payment Amount” with respect to any fiscal quarter shall be an
amount equal to:  (a) $50 per share of
Preferred Stock (subject to appropriate equitable adjustment for any stock
splits, stock dividends, combinations, reorganizations, reclassifications,
recapitalizations or other similar events affecting the shares of Preferred
Stock) if on May 31, 2004 or on the last day of any fiscal quarter thereafter, the
Stockholders’ Equity of the Company is less than $4,900,000 (the first such
fiscal quarter the “Applicable Quarter”), unless after the Applicable
Quarter the Stockholder’s Equity Threshold was met in which case the Deficiency
Payment Amount shall be zero; or (b) $50 per share of Preferred Stock (subject
to appropriate equitable adjustment for any stock splits, stock dividends,
combinations, reorganizations, reclassifications, recapitalizations or other
similar events affecting the shares of Preferred Stock) if on any fiscal
quarter end after the Stockholders’ Equity Threshold is met, the Stockholders’
Equity of the Company is less than $5,500,000 (a “Subsequent Applicable
Quarter”), unless the Stockholder’s Equity Threshold is met after such
Subsequent Applicable Quarter in which case the Deficiency Payment Amount shall
be zero.  For avoidance of doubt, for
the purposes of (a) and (b) above, the Deficiency Payment Amount shall be zero
for the fiscal quarter end in which the Stockholder’s Equity Threshold is met
and only one $50 Deficiency Payment Amount shall arise for any fiscal quarter
(whether under (a) or (b), but not both).

 

As
soon as reasonably practicable after the filing of the Company’s Form 10-Q or
10-K for the period then ended, the Company shall deliver to the holders of
record of shares of the Preferred Stock a certificate setting forth the
Stockholder’s Equity for the fiscal quarter then ended.

 

On
June 30, 2004 and for each September 30 and December 31, March 31 and June 30
thereafter (each a “Deficiency Payment Date”), for so long as shares of
the Preferred

 

5

 

Stock remains outstanding, the Company shall pay
in cash (out of funds legally available therefor) to the holders of record of
shares of the Preferred Stock as of May 31, August 30, November 30, February
28, respectively, for such quarter an amount equal to the Deficiency Payment
Amount (which shall be cumulative) determined in accordance with the second
paragraph of this Section 3A, if any, for the fiscal quarter ended immediately
preceding such Deficiency Payment Date (i.e. with respect to each June 30, May
31; with respect to each September 30, August 31; with respect to each December
31, November 30; and with respect to each March 31, February 28), plus all or
any part of the Initial Dividend, if any, and all or any part of the Deficiency
Payment Amounts, if any, which were payable on any previous Deficiency Payment
Dates but were not actually paid. 
Notwithstanding the immediately preceding sentence, the aggregate amount
required to be paid on any Deficiency Payment Date shall be paid on the
earliest to occur of (i) such Deficiency Payment Date, (ii) the redemption or
repurchase of the Preferred Stock by the Company, and (iii) a liquidation,
dissolution or winding up of the Company (as that term is used in Section 3 of
the Certificate of Designation).  For
avoidance of doubt, if any amounts due on any Deficiency Payment Date are not
actually paid because funds are not legally available therefor, then such
amounts shall be payable on each subsequent Deficiency Payment Date until
actually paid.

 

For
purposes of this Section 3A, “Stockholders’ Equity” shall mean the
amount, as determined by the Company, for such fiscal quarter end listed opposite
the heading “Total Stockholders’ Equity” on the Company’s balance sheet filed
with the SEC on Form 10-Q or 10-K (or any successor form) excluding the
cumulative effect of the following from the Closing Date to the fiscal quarter
then ended (i) the effect of FAS 148 (accounting for stock options), if
enacted, (ii) foreign currency translation gains and losses, (iii) dividends
paid on the Company’s capital stock (including any and all dividends paid to
the holders of shares of the Preferred Stock pursuant to this Section 3A), (iv)
the effect of any future equity financing, provided, that the effect of
the sale of up to 2,500 shares of Preferred Stock or the issuance or sale of
any shares of Common Stock pursuant to the Company’s 1986 Employee Stock Purchase
Plan, or any other employee stock purchase, option or incentive plan shall not
be excluded from the calculation of Stockholders’ Equity, (v) the negative
effect on the Stockholders’ Equity section of the Company’s balance sheet of
any new accounting pronouncement by the SEC, the Financial Accounting Standards
Board, any other applicable regulatory or accounting standards authority or any
successor agency or authority thereto, (vi) restructuring charges in an amount
not to exceed $400,000.00, in the aggregate, and (vii) all losses, damages,
liabilities and costs incurred by the Company in connection with any pending or
threatened actions or proceedings by or on behalf of any, current or former,
employee or shareholder of the Company (including, without limitation, any
amount paid or incurred in settlement thereof).

 

For
purposes of this Section 3A, if the Stockholders’ Equity of the Company equals
or exceeds $5,500,000 at the end of any two (2) consecutive fiscal quarters
after the Applicable Quarter, then the “Stockholder Equity Threshold”
shall be deemed have been met as of the first day of such second fiscal
quarter.

 

6

 

4.                                      Representations of the Purchasers.  Each Purchaser represents and warrants to
the Company as follows:

 

4.1.                            Accredited Investor.  Such Purchaser is an “accredited investor” as such term is
defined in Regulation D under the Securities Act of 1933, as amended (the “Securities
Act”) and was not organized for the specific purpose of acquiring the
Shares.

 

4.2.                            Investment.  Such Purchaser is acquiring the Shares for
its own account for investment and not with a view to, or for sale in
connection with, any distribution thereof, nor with any present intention of
distributing or selling the same, and, it has no present or contemplated
agreement, undertaking, arrangement, obligation, indebtedness or commitment
providing for the disposition thereof.

 

4.3.                            Suitability.  Such Purchaser confirms that it understands
and has fully considered for purposes of this investment the risks of this
investment and understands that (i) this investment is suitable only for a
purchaser who is able to bear the economic consequences of losing its entire
investment, (ii) the purchase of the Shares is a speculative investment
which involves a high degree of risk of loss of the entire investment, and
(iii) there are substantial restrictions on the transferability of the Shares,
and accordingly, it may not be possible for it to liquidate its investment in
case of emergency.

 

4.4.                            Access to Management. Such Purchaser confirms that,
in making its decision to purchase the Shares, it has relied solely upon
independent investigations made by it, and that its representatives have been
given the opportunity to ask questions of, and to receive answers from,
management and other persons acting on behalf of the Company concerning the
Company and the terms and conditions of the transactions contemplated by this
Agreement, and to obtain any additional information, to the extent such persons
possess such information.

 

4.5.                            Authorization. 
This Agreement is a valid and binding obligation of such Purchaser,
enforceable in accordance with its terms. 
The execution, delivery and performance of this document have been duly
authorized by all necessary corporate or other action of such Purchaser.

 

5.                                      Conditions to the Obligations of
the Purchasers.  The obligations
of each Purchaser under this Agreement are subject to the fulfillment, or the
waiver by such Purchaser, of the conditions set forth in this Section 5.1-5.5
on or before each Closing Date.

 

5.1.                            Accuracy of Representations and
Warranties.  Each representation
and warranty of the Company contained in this Agreement shall be true on and as
of the Closing Date with the same effect as though such representation and
warranty had been made on and as of that date.

 

5.2.                            Performance.  The Company shall have performed and
complied with all agreements contained in this Agreement required to be
performed and complied with by it prior to or at such Closing.

 

7

 

5.3.                            Registration Rights Agreement.  The Registration Rights Agreement (the “Registration
Rights  Agreement”) shall have been
executed and delivered substantially in the form attached hereto as Exhibit
B.

 

5.4.                            Certificates and Documents.  The Company shall have delivered to the
Purchasers:

 

(a)                                  a copy of the
Restated Charter, as in effect immediately prior to the Initial Closing,
certified by the Secretary of State of the State of Delaware, and a certificate,
as of the most recent practicable date, of the Secretary of State of the State
of Delaware as to the Company’s legal existence and corporate good standing;

 

(b)                                  a
copy of the Certificate of Designation of Series A Convertible Preferred
Stock, as in effect immediately prior to the Initial Closing, certified by the
Secretary of State of the State of Delaware;

 

(c)                                  a copy of the
resolutions of the Board of Directors of the Company authorizing and approving
the Company’s execution, delivery and performance of the Financing Documents,
all matters in connection with the Financing Documents, and the transactions
contemplated thereby; and

 

(d)                                  an opinion of Testa,
Hurwitz & Thibeault, LLP, counsel to the Company substantially in the form
attached hereto as Exhibit C.

 

5.5.                            Nominee to Board.  The Board of
Directors of the Company shall have been increased to five members and Lew
Jaffee shall have been invited to join the Board of Directors of the Company as
the nominee of the Purchasers, effective at the Initial Closing.

 

6.                                      Conditions to the Obligations of the
Company.  The obligations of the Company under this
Agreement are subject to the fulfillment, or the waiver in writing by the
Company, of the conditions set forth in this Section 6 on or before each Closing
Date.

 

6.1.                            Accuracy of Representations and
Warranties.  The representations and warranties of the
Purchasers contained in Section 4 shall be true on and as of the Closing Date
with the same effect as though such representations and warranties had been
made on and as of that date.

 

6.2.                            Performance.  The Purchasers shall have performed and complied with all
agreements contained in this Agreement required to be performed and complied
with by them prior to or at the Closing.

 

6.3.                            Registration Rights Agreement.  The Registration Rights Agreement shall have
been executed and delivered.

 

6.4.                            Required Stockholder Approval.  The Company shall have obtained the Required
Stockholder Approval on or prior to the Subsequent Closing.

 

8

 

7.                                      Required Corporation Action.  The Company shall take all action required
under the Delaware General Corporation Law and the Company’s Restated
Certificate and its By-laws to convene a meeting of the stockholders of the
Company to consider and obtain the Required Stockholder Approval.  The Company shall promptly prepare and file
a proxy statement with the SEC to solicit the consents of the Company’s
stockholders necessary to obtain the Required Stockholder Approval.  The Company shall use its commercially
reasonable efforts to hold the meeting of the stockholders to obtain the
Required Stockholder Approval as promptly as practicable following the filing
of such proxy with the SEC but in no event later than September 15, 2003.  If, at any time or from time to time, any
other action is required to fully implement the transactions contemplated by
this Agreement (including the actions necessary to obtain the Required
Stockholder Approval such as providing information about such Purchaser as is
required in a definitive proxy statement), each Purchaser shall take such
action.

 

8.                                      Successors and Assigns.  The provisions of this Agreement shall bind and inure to the
benefit of the respective successors and permitted assigns of the parties hereto.

 

9.                                      Expenses.  All costs and expenses incurred in
connection with the transactions contemplated hereby shall be paid by the party
incurring such cost or expense, provided, that the Company shall pay the
reasonable fees and expenses of the Purchasers in connection with the
transactions contemplated by the Financing Documents up to fifty thousand
dollars ($50,000) (including one legal counsel to the Purchasers).

 

10.                               Notices.  All notices, requests, consents and other
communications under this Agreement shall be in writing and shall be delivered
by hand, by telecopier, by e-mail, by express overnight courier service or
mailed by first class mail, postage prepaid, and shall be given,

 

if to Company, to:

 

Media 100 Inc.

450 Donald Lynch Boulevard

Marlborough, Massachusetts 01752-4748

Attn: Chief Financial Officer

 

with a copy to:

 

Michael A. Conza, Esq.

Testa, Hurwitz & Thibeault, LLP

125 High Street

Boston, MA  02110

Fax: (617) 248-7100

Email: conza@tht.com

 

9

 

if to any Purchaser, to:

 

To the applicable
address, fax number and/or email address set forth in Schedule I.

 

with a copy to:

 

Craig Sklar

Seward & Kissel LLP

1 Battery Park Plaza

New York, NY 10004

Fax:  (212) 480-8421

Email:  sklar@sewkis.com

 

Notices provided in
accordance with this Section 10 shall be deemed delivered upon personal
delivery, receipt by telecopy, email or overnight mail, or 48 hours after
deposit in the mail in accordance with the above.

 

11.                               Brokers.  The Company and the Purchasers
(i) represent and warrant to the other that they have retained no finder
or broker in connection with the transactions contemplated by this Agreement,
and (ii) shall indemnify and hold harmless the other from and against any and
all claims, liabilities, or obligations with respect to brokerage or finders’
fees or commissions or consulting fees in connection with the transactions
contemplated by this Agreement, asserted by any person on the basis of any
statement or representation alleged to have been made by such indemnifying
party.

 

12.                               No Conditions to Effectiveness;
Entire Agreement.  This
Agreement, together with the instruments and other documents hereby
contemplated to be executed and delivered in connection herewith, contains the
entire agreement and understanding of the parties hereto, and supersedes any
prior agreements or understandings between or among them, with respect to the
subject matter hereof.

 

13.                               Amendments and Waivers.  Except as otherwise expressly set forth in this Agreement, any
term of this Agreement may be amended and the observance of any term of this
Agreement may be waived (either generally or in a particular instance and
either retroactively or prospectively), with the written consent of the Company
and holders of at least a majority  of the outstanding Preferred Stock.  No waivers of or exceptions to any term,
condition or provision of this Agreement, in any one or more instances, shall
be deemed to be, or construed as, a further or continuing waiver of any such
term, condition or provision.

 

14.                               Counterparts.  This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

 

10

 

15.                               Captions.  The captions of the sections, subsections
and paragraphs of this Agreement have been added for convenience only and shall
not be deemed to be a part of this Agreement.

 

16.                               Severability.
Each provision of this Agreement shall be interpreted in such manner as to
validate and give effect thereto to the fullest lawful extent, but if any
provision of this Agreement is determined by a court of competent jurisdiction
to be invalid or unenforceable under applicable law, such provision shall be ineffective
only to the extent so determined and such invalidity or unenforceability shall
not affect the remainder of such provision or the remaining provisions of this
Agreement.

 

17.                               Governing Law.  This Agreement shall be governed by and
interpreted and construed in accordance with the laws of the Commonwealth of
Massachusetts (without giving effect to its conflict of laws provisions); provided,
however, that matters relating to the authorization, issuance and
enforceability of the terms of the Series A Convertible Preferred Stock
shall be governed and interpreted and construed in accordance with the General
Corporation Law of the State of Delaware (without giving effect to its conflict
of laws provisions).

 

[Remainder of page
intentionally left blank]

 

11

 

IN WITNESS WHEREOF, the Company and the Purchasers
have executed this Agreement as of the day and year first above written.

 

 

	
   

  	
  MEDIA 100 INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John A. Molinari

  	
   

  
	
   

  	
  Name:

  	
  John A. Molinari

  	
   

  
	
   

  	
  Title:

  	
  President & CEO

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CCM MASTER FUND, LTD.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Clint Coghill

  	
   

  	 

	
   

  	
  Name:

  	
  Clint Coghill

  	
   

  	 

	
   

  	
  Title:

  	
  President & Chief Investment Officer

  	
   

  	 

										

 

12

 

SCHEDULE I

 

SCHEDULE OF PURCHASERS

 

	
  Name and Address of Purchaser

  	
   

  	
  Number of
  Shares of Preferred

  Stock to Be Purchased

  	
   

  	
  Aggregate
  Purchase

  Price for the Shares

  to Be Purchased

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Initial
  Closing

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CCM Master Fund, Ltd.

  c/o Coghill Capital Management, LLC

  One North Wacker Drive, Suite 4725

  Chicago, IL  60606

  Tel: (312) 334-1100

  Fax: (312) 334-1111

  dlim@coghillcapital.com

  	
   

  	
  1,045

  	
   

  	
  $

  	
  1,045,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Totals – Initial Closing

  	
   

  	
  1,045

  	
   

  	
  $

  	
  1,045,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Subsequent
  Closing

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CCM Master Fund, Ltd.

  c/o Coghill Capital Management, LLC

  One North Wacker Drive, Suite 4725

  Chicago, IL  60606

  Tel: (312) 334-1100

  Fax: (312) 334-1111

  dlim@coghillcapital.com

  	
   

  	
  1,455

  	
   

  	
  $

  	
  1,455,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Totals – Subsequent Closing

  	
   

  	
  1,455

  	
   

  	
  $

  	
  1,455,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Grand Total

  	
   

  	
  2,500

  	
   

  	
  $

  	
  2,500,000

  	
   

  

 

13Exhibit
4.2

 

REGISTRATION
RIGHTS AGREEMENT

 

This Registration
Rights Agreement, dated as of May 14, 2003, is entered into by and among Media
100 Inc., a Delaware corporation (the “Company”), and the individuals
and entities listed on Exhibit A attached hereto (the “Purchasers”).

 

W  I 
T  N  E  S  S 
E  T  H:

 

WHEREAS, the
Company and Purchasers have entered into a Series A Convertible Preferred Stock
Purchase Agreement of even date herewith (the “Purchase Agreement”);

 

WHEREAS, the
Company and the Purchasers desire to provide for certain arrangements with
respect to the registration of shares of capital stock of the Company under the
Securities Act (as defined below);

 

NOW, THEREFORE, in consideration of the mutual
promises and covenants contained in this Agreement, the parties hereto agree as
follows:

 

1.                                       Certain
Definitions.  As used in this
Agreement, the following terms shall have the following respective meanings:

 

“Board of Directors” shall mean the board of
directors of the Company as constituted from time to time.

 

“CCM” shall mean any and all of (1) CCM Master
Fund, Ltd. (“CCM Ltd.”), and (2) any affiliate thereof which is a holder
of Preferred Shares originally issued to CCM Ltd.

 

“Charter” 
shall mean the Company’s Restated Certificate of Incorporation as is in
effect on the Closing Date (as defined below).

 

“Closing Date” shall mean May 14, 2003.

 

“Code” shall mean the Internal Revenue Code of
1986, as amended from time to time.

 

“Commission” shall mean the Securities and
Exchange Commission, or any other federal agency at the time administering the
Securities Act.

 

“Common Stock” shall mean the Common Stock,
$0.01 par value, of the Company, as constituted as of the date of this
Agreement.

 

“Conversion Shares” shall mean shares of Common
Stock issued or issuable upon conversion of the Preferred Shares (as defined
below).

 

 

“Exchange Act” shall mean the Securities
Exchange Act of 1934, as amended, or any similar federal statute, and the rules
and regulations of the Commission thereunder, all as the same shall be in
effect at the time.

 

“Material Adverse Change” shall mean a material
adverse change in the business, operations, affairs and conditions of the
Company.

 

“Person or Persons” shall mean an individual,
corporation, partnership, limited liability company, joint venture, trust, or
unincorporated organization, or a government or any agency or political
subdivision thereof.

 

“Preferred Shares”  shall mean shares of the Company’s Series A Convertible Preferred
Stock, par value $0.01 per share.

 

“Registrable Securities” shall mean the
Conversion Shares, excluding Conversion Shares which have been
(a) registered under the Securities Act pursuant to an effective
registration statement filed thereunder and disposed of in accordance with the
registration statement covering them, (b) publicly sold pursuant to
Rule 144 under the Securities Act, or (c) which are eligible for resale
under the provisions of Rule 144(k).

 

“Registration Expenses” shall mean the expenses
so described in Section 8.

 

“Securities Act” shall mean the Securities Act
of 1933, as amended, or any similar federal statute, and the rules and
regulations of the Commission thereunder, all as the same shall be in effect at
the time.

 

“Selling Expenses” shall mean the expenses so
described in Section 8.

 

“Subsidiary” or “Subsidiaries” shall mean any
corporation, trust or other business entity of which the Company and/or any of
its other subsidiaries directly or indirectly owns at the time outstanding
shares of every class of such corporation or trust other than directors’
qualifying shares comprising at least fifty percent (50%) of the voting
power of such corporation, trust or other business entity.

 

2.                                       Restrictive
Legend.  Each certificate
representing Preferred Shares, Conversion Shares or Registrable Securities
shall, except as otherwise provided in this Section 2 or in
Section 3, be stamped or otherwise imprinted with a legend substantially
in the following form:

 

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS AND MAY NOT BE TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS SUCH
SECURITIES HAVE BEEN REGISTERED UNDER SUCH ACT AND ALL SUCH APPLICABLE LAWS OR
AN EXEMPTION FROM REGISTRATION IS AVAILABLE.”

 

2

 

A certificate shall not bear such legend if in the opinion of counsel
satisfactory to the Company (it being agreed that Testa, Hurwitz &
Thibeault, LLP shall be satisfactory) the securities represented thereby may be
publicly sold without registration under the Securities Act and any applicable
state securities laws.

 

3.                                       Notice
of Proposed Transfer.  Prior to any
proposed transfer of any Preferred Shares, Conversion Shares or Registrable
Securities (other than under the circumstances described in Sections 4, 5
or 6), the holder thereof shall give written notice to the Company of its
intention to effect such transfer.  Each
such notice shall describe the manner of the proposed transfer and, if requested
by the Company, shall be accompanied by an opinion of counsel satisfactory to
the Company (it being agreed that Testa, Hurwitz & Thibeault, LLP
shall be satisfactory) to the effect that the proposed transfer may be effected
without registration under the Securities Act and any applicable state
securities laws, whereupon the holder of such stock shall be entitled to
transfer such stock in accordance with the terms of its notice; provided,
however,
that any transferee shall execute and deliver to the Company a representation
letter in form reasonably satisfactory to the Company’s counsel to the effect
that the transferee is acquiring such shares for its own account, for
investment purposes and without any view to distribution thereof.  Each certificate for Preferred Shares,
Conversion Shares or Registrable Securities transferred as above provided shall
bear the legend set forth in Section 2, except that such certificate shall
not bear such legend if (i) such transfer is in accordance with the provisions
of Rule 144 (or any other rule permitting public sale without registration
under the Securities Act) or (ii) the opinion of counsel referred to above
is to the further effect that the transferee and any subsequent transferee
(other than an affiliate of the Company) would be entitled to transfer such
securities in a public sale without registration under the Securities Act.  The restrictions provided for in this
Section 3 shall not apply to securities which are not required to bear the
legend prescribed by Section 2 in accordance with the provisions of that
Section.

 

4.                                       Required
Registration.

 

(a)                                  At
any time after the first anniversary of the Closing Date, the holders of
Registrable Securities constituting at least fifty percent (50%) in interest of
the total shares of Registrable Securities then outstanding may request in
writing that the Company register for sale under the Securities Act all or any
portion of the shares of Registrable Securities held by such requesting holder
or holders; provided that such shares constitute in the aggregate at
least (i) fifty percent (50%) of the Registrable Securities then outstanding,
and (ii) have an aggregate offering price to the public of not less than three
million dollars ($3,000,000); and provided,  further that, for so long as
CCM owns at least 1,250 Preferred Shares, such request must include the request
of CCM.  For purposes of this
Section 4 and Sections 5, 6, 13(a) and 13(e), the term “Registrable
Securities” shall be deemed to include the number of shares of Registrable
Securities which would be issuable to a holder of Preferred Shares upon
conversion of all shares of Preferred Stock; provided, however,
that the only securities which the Company shall be required to register
pursuant hereto shall be shares of Common Stock.

 

(b)                                 Following
receipt of any notice under this Section 4, the Company shall immediately
notify all holders of Registrable Securities and Preferred Shares from whom
notice 

 

3

 

has not been received and such holders shall then be entitled within 15
days thereafter to request the Company to include in the requested registration
all or any portion of their shares of Registrable Securities.  The Company shall use its best efforts to
register under the Securities Act, for public sale in accordance with the
method of disposition described in paragraph (a) above, the number of shares of
Registrable Securities specified in such notice (and in all notices received by
the Company from other holders within 15 days after the giving of such
notice by the Company).  The Company
shall be obligated to register Registrable Securities pursuant to this
Section 4 on two occasions only; provided, however, that such
obligation shall be deemed satisfied only when a registration statement
covering all shares of Registrable Securities specified in notices received as
aforesaid for sale in accordance with the method of disposition specified by
the requesting holders shall have become effective or if such registration
statement has been withdrawn prior to the consummation of the offering at the
request of the holders of Registrable Securities and Preferred Shares (other
than a withdrawal request made as a result of a material adverse change in the
business or condition, financial or otherwise, of the Company between the date
of filing of such registration statement and such withdrawal request).

 

(c)                                  The
Company shall be entitled to include in any registration statement referred to
in this Section 4 shares of Common Stock to be sold by the Company, its
directors and officers, each for their own account, except as and to the extent
that, in the opinion of the managing underwriter, such inclusion would
adversely affect the marketing of the Registrable Securities to be sold.

 

(d)                                 If
in the opinion of the managing underwriter the inclusion of all of the
Registrable Securities requested to be registered under this Section would
adversely affect the marketing of such shares, shares to be sold by the holders
of Registrable Securities, if any, shall be excluded only after any shares to
be sold by the Company have been excluded, in such manner that the shares to be
sold shall be allocated among the selling holders pro rata based on their
ownership of Registrable Securities.

 

5.                                       Incidental
Registration.  If the Company at any
time (other than pursuant to Section 4 or Section 6) proposes to
register any of its securities under the Securities Act for sale to the public,
whether for its own account or for the account of other security holders or
both (except with respect to registration statements on Forms S-4, S-8 or
another form not available for registering the Registrable Securities for sale
to the public), each such time it will give written notice to all holders of
outstanding Registrable Securities of its intention so to do.  Upon the written request of any such holder,
received by the Company within 30 days after the giving of any such notice
by the Company, to register any of its Registrable Securities, the Company will
use its best efforts to cause the Registrable Securities as to which
registration shall have been so requested to be included in the securities to
be covered by the registration statement proposed to be filed by the Company,
all to the extent requisite to permit the sale or other disposition by the
holder of such Registrable Securities so registered.  In the event that any registration pursuant to this
Section 5 shall be, in whole or in part, an underwritten public offering
of Common Stock, the number of shares of Registrable Securities to be included
in such an underwriting may be reduced (pro rata among the requesting holders
based upon the number of shares of Registrable Securities owned by such
holders) if and to the extent that the managing underwriter shall be of 

 

4

 

the opinion that such inclusion would adversely affect the marketing of
the securities to be sold by the Company therein, provided, however,
that such number of shares of Registrable Securities shall not be reduced if
any shares are to be included in such underwriting for the account of any
person other than the Company or requesting holders of Registrable Securities.

 

6.                                       Registration
on Form S-3.  If at any time
after the first anniversary of the Closing Date (i) a holder or holders of
Registrable Securities 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 requesting holder
or holders having an aggregate market value of not less than one million five
hundred thousand dollars ($1,500,000), 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 6 to use its best efforts to effect the registration of
Registrable Securities, each of the procedures and requirements of
Section 4 (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, provided, however, that there shall be
no limitation on the number of registrations on Form S-3 which may be
requested and obtained under this Section 6, and provided, further,
however,
that the requirements contained in the first sentence of Section 4(a)
shall not apply to any registration on Form S-3 which may be requested and
obtained under this Section 6.

 

Notwithstanding anything to the contrary in this Section 6, the Company
shall not be required to effect more than two registrations pursuant to this
Section 6 in any twelve (12) month period, nor shall the Company be required to
effect any registration under this Section 6 within 270 days of the effective
date of a registration statement on From S-1.

 

7.                                       Registration
Procedures.  If and whenever the
Company is required by the provisions of Sections 4, 5 or 6 to use its
best efforts to effect the registration of any shares of Registrable Securities
under the Securities Act, the Company will, as expeditiously as possible
(subject to the provisions for delay in this Agreement):

 

(a)                                  prepare
and file with the Commission a registration statement (which, in the case of an
underwritten public offering pursuant to Section 4, shall be on Form S-1
or other form of general applicability satisfactory to the managing underwriter
selected as therein provided) with respect to such securities and use its best
efforts to cause such registration statement to become and remain effective for
the period of the distribution contemplated thereby (determined as hereinafter
provided);

 

(b)                                 prepare
and file with the Commission 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 the period
specified in paragraph (a) above and comply with the provisions of the
Securities Act with respect to the disposition of all 

 

5

 

Registrable Securities covered by such registration statement in
accordance with the sellers’ intended method of disposition set forth in such
registration statement for such period;

 

(c)                                  furnish
to each seller of Registrable Securities and to each underwriter such number of
copies of the registration statement and the prospectus included therein
(including each preliminary prospectus) as such persons reasonably may request
in order to facilitate the public sale or other disposition of the Registrable
Securities covered by such registration statement;

 

(d)                                 use
its best efforts to register or qualify the Registrable Securities covered by
such registration statement under the securities or “blue sky” laws of such
jurisdictions as the sellers of Registrable Securities or, in the case of an
underwritten public offering, the managing underwriter reasonably shall
request, provided,
however,
that the Company shall not for any such purpose be required to qualify
generally to transact business as a foreign corporation in any jurisdiction
where it is not so qualified or to consent to general service of process in any
such jurisdiction;

 

(e)                                  use
its best efforts to list the Registrable Securities covered by such
registration statement with any securities exchange on which the Common Stock
of the Company is then listed;

 

(f)                                    provide
a transfer agent and registrar for all such Registrable Securities, not later
than the effective date of such registration statement;

 

(g)                                 immediately
notify each seller of Registrable Securities and each underwriter under such
registration statement, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, of the happening of any
event of which the Company has knowledge as a result of which the prospectus
contained in such registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in
light of the circumstances then existing;

 

(h)                                 if
the offering is underwritten and at the request of any seller of Registrable
Securities, use its best efforts to furnish to the underwriters on the date
that Registrable Securities is delivered to the underwriters for sale pursuant
to such registration:  (i) an opinion
dated such date of counsel representing the Company for the purposes of such
registration, addressed to the underwriters stating (A) that such registration
statement has become effective under the Securities Act, and (B) that the
registration statement and the related prospectus, and each amendment or
supplement thereof, comply as to form in all material respects with the
requirements of the Securities Act (except that such counsel need not express
any opinion as to financial statements contained therein), and (C) to such
other effects as may reasonably be requested by counsel for the underwriters,
and (ii) a letter dated such date from the independent public accountants
retained by the Company, addressed to the underwriters, stating that they are
independent public accountants within the meaning of the Securities Act and
that, in the opinion of such accountants, the financial statements of the
Company included in the 

 

6

 

registration statement or the prospectus, or any amendment or
supplement thereof, comply as to form in all material respects with the
applicable accounting requirements of the Securities Act;

 

(i)                                     advise
each selling holder of Registrable Securities, promptly after it shall receive
notice or obtain knowledge thereof, of the issuance of any stop order by the
Commission suspending the effectiveness of such registration statement or the
initiation or threatening of any proceeding for such purpose and promptly use
all reasonable efforts to prevent the issuance of any stop order or to obtain
its withdrawal if such stop order should be issued; and

 

(j)                                     cooperate
with the selling holders of Registrable Securities and the managing
underwriters, if any, to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be sold, such certificates
to be in such denominations and registered in such names as such holders or the
managing underwriters may request at least two business days prior to any sale
of Registrable Securities.

 

For purposes of Section 7(a) and 7(b) and of
Section 4(c), the period of distribution of Registrable Securities in a firm
commitment underwritten public offering shall be deemed to extend until each
underwriter has completed the distribution of all securities purchased by it,
and the period of distribution of Registrable Securities in any other
registration shall be deemed to extend until the earlier of the sale of all
Registrable Securities covered thereby and 90 days after the effective
date thereof.

 

In connection with each registration hereunder, the
sellers of Registrable Securities will furnish to the Company in writing such
information with respect to themselves and the proposed distribution by them as
reasonably shall be necessary in order to assure compliance with federal and
applicable state securities laws.

 

8.                                       Expenses.  All expenses incurred by the Company in complying
with Sections 4, 5 and 6, including, without limitation, all registration
and filing fees, printing expenses, fees and disbursements of counsel and
independent public accountants for the Company, fees and expenses (including
counsel fees) incurred in connection with complying with state securities or
“blue sky” laws, fees of the National Association of Securities Dealers, Inc.,
transfer taxes, fees of transfer agents and registrars, costs of insurance, and
fees and disbursements of one counsel for the sellers of Registrable Securities
(which counsel shall also be counsel to the Company unless there is a conflict
of interest with respect to the representation of any selling shareholder or
the underwriters otherwise object), but excluding any Selling Expenses, are
called “Registration Expenses”. 
All underwriting discounts and selling commissions applicable to the
sale of Registrable Securities are called “Selling Expenses”.

 

The Company will pay all Registration Expenses in
connection with each registration statement under Sections 4, 5 or 6.  All Selling Expenses in connection with each
registration statement under Sections 4, 5 or 6 shall be borne by the
participating sellers in proportion to the number of shares sold by each, or by
such participating sellers other than the Company (except to the extent the
Company shall be a seller) as they may agree.

 

7

 

9.                                       Indemnification
and Contribution.

 

(a)                                  In
the event of a registration of any of the Registrable Securities under the
Securities Act pursuant to Sections 4, 5 or 6, the Company will indemnify
and hold harmless each seller of such Registrable Securities thereunder and all
officers, directors, managers and employees of each such seller, each underwriter
of such Registrable Securities thereunder and each other person, if any, who
controls such seller or underwriter within the meaning of the Securities Act
(collectively, the “Indemnified Parties”), against any losses, claims,
damages or liabilities, joint or several, to which such Indemnified Parties may
become subject under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement of any material fact contained in any
registration statement under which such Registrable Securities was registered
under the Securities Act pursuant to Sections 4, 5 or 6, any final
prospectus contained therein, or any amendment or supplement thereof, or any other
violation of the securities laws in connection with any such registration
statement, or arise out of or are based upon the omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each such Indemnified Party for any
legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action, provided,
however,
that the Company will not be liable in any such case if and to the extent that
any such loss, claim, damage or liability arises out of or is based upon (i) an
untrue statement or omission so made in conformity with information furnished
by any such Indemnified Party in writing specifically for use in such
registration statement or prospectus or (ii) an untrue statement or omission
which untrue statement or omission was corrected in the final prospectus and a
copy of such prospectus shall not have been furnished to such person in a
timely manner due to the wrongful action or wrongful inaction of such
Indemnified Party, or any person or entity on behalf of such Indemnified Party,
whether as a result of negligence or otherwise.

 

(b)                                 In
the event of a registration of any of the Registrable Securities under the
Securities Act pursuant to Sections 4, 5 or 6, each seller of such
Registrable Securities thereunder, severally and not jointly, will indemnify
and hold harmless the Company, each person, if any, who controls the Company
within the meaning of the Securities Act, each officer of the Company who signs
the registration statement, each director of the Company, each underwriter and
each person who controls any underwriter within the meaning of the Securities
Act, against all losses, claims, damages or liabilities, joint or several, to
which the Company or such officer, director, underwriter or controlling person
may become subject under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon any untrue statement of any material fact contained in
the registration statement under which such Registrable Securities was
registered under the Securities Act pursuant to Sections 4, 5 or 6, any
final prospectus contained therein, or any amendment or supplement thereof, or
any other violation of the securities laws in connection with any such
registration statement, or arise out of or are based upon the omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse the Company and each such
officer, director, underwriter and controlling person for any legal or other
expenses reasonably incurred by them in connection 

 

8

 

with investigating or defending any such loss, claim, damage, liability
or action, provided,
however,
that such seller will be liable hereunder in any such case if and only to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or omission made in reliance upon and in conformity
with information pertaining to such seller, as such, furnished in writing to
the Company by such seller specifically for use in such registration statement
or prospectus, and provided, further, however,
that the liability of each seller hereunder shall be limited to the proceeds
received by such seller from the sale of Registrable Securities covered by such
registration statement.

 

(c)                                  Promptly
after receipt by an indemnified party hereunder of notice of the commencement
of any action, such indemnified party shall, if a claim in respect thereof is
to be made against the indemnifying party hereunder, notify the indemnifying
party in writing thereof, but the omission so to notify the indemnifying party
shall not relieve it from any liability which it may have to such indemnified
party other than under this Section 9 and shall only relieve it from any
liability which it may have to such indemnified party under this Section 9
if and to the extent the indemnifying party is prejudiced by such
omission.  In case any such action shall
be brought against any indemnified party and it shall notify the indemnifying
party of the commencement thereof, the indemnifying party shall be entitled to
participate in and, to the extent it shall wish, to assume and undertake the
defense thereof with counsel reasonably satisfactory to such indemnified party
(unless there is a conflict of interest with respect to the representation of
any indemnified party in which case, the indemnified party shall be entitled to
choose its own counsel at the indemnifying party’s expense), and, after notice
from the indemnifying party to such indemnified party of its election so to assume
and undertake the defense thereof, the indemnifying party shall not be liable
to such indemnified party under this Section 9 for any legal expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation and of liaison with
counsel so selected.

 

(d)                                 In
order to provide for just and equitable contribution to joint liability under
the Securities Act in any case in which either (i) any holder of
Registrable Securities exercising rights under this Agreement, or any
controlling person of any such holder, makes a claim for indemnification
pursuant to this Section 9 but it is judicially determined (by the entry
of a final judgment or decree by a court of competent jurisdiction and the expiration
of time to appeal or the denial of the last right of appeal) that such
indemnification may not be enforced in such case notwithstanding the fact that
this Section 9 provides for indemnification in such case, or
(ii) contribution under the Securities Act may be required on the part of
any such selling holder or any such controlling person in circumstances for
which indemnification is provided under this Section 9; then, and in each
such case, the Company and such holder will contribute to the aggregate losses,
claims, damages or liabilities to which they may be subject (after contribution
from others) in such proportion as
appropriate to reflect the relative fault of the Company, on the one hand, and
the sellers of such Registrable Securities, on the other, in connection with
the statement or omissions which resulted in such losses, claims, damages,
liabilities or actions, as well as any other relevant equitable considerations;
provided,
however,
that, in any such case, (A) no such holder will be required to contribute
any amount in excess of  the proceeds
received by such seller from the sale of Registrable Securities covered by such
registration statement; and (B) no person or entity guilty of fraudulent misrepresentation
(within 

 

9

 

the meaning of Section 11(f) of the Securities Act) will be
entitled to contribution from any person or entity who was not guilty of such
fraudulent misrepresentation.  The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company, on the one hand,
or by the sellers of such Registrable Securities, on the other hand, and to the
parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.

 

10.                                 Changes
in Common Stock or Series A Convertible Preferred Stock.  If, and as often as, there is any change in
the Common Stock or the Series A Convertible Preferred Stock by way of a stock
split, stock dividend, combination or reclassification, or through a merger,
consolidation, reorganization or recapitalization, or by any other means, appropriate
adjustment shall be made in the provisions hereof so that the rights and
privileges granted hereby shall continue with respect to the Common Stock and
the Series A Convertible Preferred Stock as so changed.

 

11.                                 Right
of First Refusal

 

(a)                                  Right
of First Refusal.  The Company shall
not issue, sell or exchange, agree or obligate itself to issue, sell or
exchange, or reserve or set aside for issuance, sale or exchange, any
(i) shares of Common Stock, (ii) any other equity security of the
Company, including, without limitation, Preferred Shares and debt securities
convertible into equity securities of the Company, or (iii) any option,
warrant or other right to subscribe for, purchase or otherwise acquire any such
equity security of the Company, unless in each case the Company shall have
first offered to sell such securities (the “Offered Securities”) to the
Purchasers (each an “Offeree” and collectively, the “Offerees”)
as follows:  each Offeree shall have the
right to purchase (x) that portion of the Offered Securities as the number of
shares of Registrable Securities then held by such Offeree bears to the total
number of outstanding shares of Common Stock of the Company on such date and on
a fully-diluted basis and giving effect to the conversion, exercise or exchange
of all securities of the Company which may be converted to or exercised or
exchanged for Common Stock of the Company (the “Pro Rata Amount”), at a
price and on such other terms as shall have been specified by the Company in
writing delivered to such Offeree (the “Offer”), which Offer by its
terms shall remain open and irrevocable for a period of ten (10) days from
receipt of the offer.

 

(b)                                 Notice
of Acceptance.  Notice of each
Offeree’s intention to accept, in whole or in part, any Offer made pursuant to
Section 11(a) shall be evidenced by a writing signed by such Offeree and
delivered to the Company prior to the end of the 10-day period of such offer,
setting forth such of the Offeree’s Pro Rata Amount as such Offeree elects to
purchase (the “Notice of Acceptance”).

 

(c)                                  Conditions
to Acceptances and Purchase.

 

(i)                                     Permitted
Sales of Refused Securities.  In the
event that Notices of Acceptance are not timely given by the Offerees in
respect of all of the Offered Securities, the 

 

10

 

Company shall have ninety (90) days from the expiration of the period
set forth in Section 11(a) to close the sale of all or any part of such
Offered Securities to the Person or Persons specified in the Offer, but only in
all respects upon terms and conditions, including, without limitation, unit
price, which are no more favorable, in the aggregate, to such other Person or
Persons or less favorable to the Company than those set forth in the Offer.

 

(ii)                                  Closing.  In the event that Notices of Acceptance are
timely given by the Offerees in respect of all the Offered Securities, the
Offerees shall purchase from the Company, and the Company shall sell to the
Offerees, the number of Offered Securities specified in the Notices of
Acceptance, upon the terms and conditions specified in the Offer but not later
than the day which is 10 days after the end of the ten-day period specified in
Section 11(a).  The purchase by the
Offerees of any Offered Securities is subject in all cases to the preparation,
execution and delivery by the Company and the Offerees of a purchase agreement
relating to such Offered Securities reasonably satisfactory in form and
substance to the Offerees and their respective counsel.

 

(d)                                 Further
Sale.  In each case, any Offered
Securities not purchased by the Offerees or other Person or Persons in
accordance with Section 11(c) may not be sold or otherwise disposed of
until they are again offered to the Offerees under the procedures specified in
Sections 11(a), 11(b) and 11(c).

 

(e)                                  Termination
of Right of First Refusal.  The
rights of the Offerees under this Section 11 shall terminate on the earlier to
occur of (a) when less than twenty percent (20%) of the Preferred Shares
originally issued pursuant to the Purchase Agreement remain outstanding and (b)
fifth anniversary of the Closing Date; provided, however, that the rights of the
Purchasers pursuant to this Section 11 may be waived as to all of such
Purchasers by the affirmative vote or written consent of holders of at least a
majority in interest of the then outstanding Registrable Securities, and any
such waiver shall be binding on all Purchasers, even if any of such Purchasers
do not execute such waiver and irrespective of whether one or more Purchasers participates
in the purchase of the Offered Securities.

 

(f)                                    Exception.  The rights of the Purchasers under this
Section 11 shall not apply to:

 

(i)                                     Common
Stock issued as a stock dividend to holders of Common Stock or upon any
subdivision or combination of shares of Common Stock,

 

(ii)                                  Preferred
Shares issued as a dividend to holders of Preferred Shares upon any subdivision
or combination of shares of Preferred Shares,

 

(iii)                               the Conversion Shares,

 

(iv)                              the
issuance of shares of Common Stock, or options exercisable therefor, including
options outstanding on the date of this Agreement, to officers, directors,
consultants and employees of the Company or any Subsidiary,

 

11

 

(v)                                 any
securities issued pursuant to the acquisition of another entity by the Company
by merger or purchase of all or substantially all of such entity’s equity or
assets,

 

(vi)                              any
securities issued in connection with a strategic partnership, joint venture or
other similar agreement, and

 

(vii)                           any warrants to purchase
Common Stock issued in connection with a bank loan or lease with a financial
institution or the issuance of Common Stock upon the exercise of any such
warrant.

 

(g)                                 Notwithstanding
anything herein to the contrary, in no event shall the Company be required to
comply with the provisions of Section 11 if any law or rule of securities
exchange or market (including, but not limited to, the rules of the Nasdaq
National Market and the National Association of Securities Dealers, Inc.) would
require shareholder approval in connection with, or would otherwise prohibit
such, offer or sale.

 

12.                                 Miscellaneous.

 

(a)                                  All
covenants and agreements contained in this Agreement by or on behalf of any of
the parties hereto shall bind and inure to the benefit of the respective
successors and assigns of the parties hereto (including without limitation
transferees of any Preferred Shares or Registrable Securities), whether so
expressed or not, provided, however, that rights conferred herein
shall only inure to the benefit of a transferee of Preferred Shares, Conversion
Shares or Registrable Securities if the Company is given written notice of such
transfer and (i) there is transferred to such transferee at least twenty
percent (20%) of the Preferred Shares originally issued pursuant to the
Purchase Agreement or (ii) such transferee is a partner, retired partner,
shareholder or affiliate of a party hereto. 
A transferee of Preferred Shares, Conversion Shares or Registrable
Securities shall be deemed a party hereto upon satisfaction of the requirements
contained in the previous sentence and the delivery to the Company of an
agreement in writing agreeing to be bound by the terms and conditions and
entitled to the rights and benefits of this Agreement.

 

(b)                                 All
notices, requests, consents and other communications hereunder shall be in
writing and shall be delivered in person, mailed by certified or registered
mail, return receipt requested, or sent by telecopier or telex, addressed as
follows:

 

if to the Company or any other party hereto, at the
address of such party set forth in the Purchase Agreement;

 

if to any subsequent holder of Preferred Shares,
Conversion Shares  or Registrable Securities, to it at such address as may have
been furnished to the Company in writing by such holder;

 

12

 

or, in any case, at such other address or addresses as shall have been
furnished in writing to the Company (in the case of a holder of Preferred
Shares, Conversion Shares or Registrable Securities) or to the holders of
Preferred Shares, Conversion Shares or Registrable Securities (in the case of
the Company) in accordance with the provisions of this paragraph.

 

(c)                                  This
Agreement shall be governed by and construed in accordance with the General
Corporation Law of the State of Delaware as to matters within the scope
thereof, and as to all other matters shall be governed by and construed in
accordance with the internal laws of the Commonwealth of Massachusetts, without
regard to its principles of conflicts of laws.

 

(d)                                 This
Agreement may not be amended or modified, and no provision hereof may be
waived, without the written consent of the Company and the holders of at least
a majority in interest of the Registrable Securities; provided, that the consent
of CCM shall be required to amend any provision hereof which explicitly names
CCM.  Notwithstanding the foregoing, the
“Number of Preferred Shares” listed opposite CCM on Exhibit A attached
hereto shall be automatically revised, without the consent of any party hereto,
to reflect the issuance and sale of Preferred Stock on the Subsequent Closing
Date (as such terms are defined in the Stock Purchase Agreement) and pursuant
to the Stock Purchase Agreement.

 

(e)                                  This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.

 

(f)                                    The
obligations of the Company to register shares of Registrable Securities under
Sections 4, 5 or 6 shall terminate on the fifth anniversary of the Closing
Date.

 

(g)                                 If
requested in writing by the underwriters for any underwritten public offering
of securities of the Company, each holder of Registrable Securities who is a
party to this Agreement shall agree not to sell publicly any shares of
Registrable Securities or any other shares of Common Stock (other than shares
of Registrable Securities or other shares of Common Stock being registered in
such offering), without the consent of such underwriters, for a period not to
exceed 180 days following the effective date of the registration statement
relating to such offering; provided, however, all persons holding
in excess of 5% of the capital stock of the Company on a fully diluted basis
and all executive officers and directors of the Company shall also have agreed
not to sell publicly their Common Stock under the circumstances and pursuant to
the terms set forth in this Section 12(g); and provided, further,
however, that any such lock-up agreement shall provide that if the
managing underwriter releases any shares from the lock-up with respect to such
offering prior to the scheduled expiration date, the managing underwriter shall
contemporaneously release a pro rata portion of the Registrable
Securities from such lock-up.

 

(h)                                 Notwithstanding
the provisions of Section 7(a), the Company’s obligation to file a
registration statement, or cause such registration statement to become and
remain effective, shall be suspended for up to two periods not to exceed
90 days each in any 12-month period if the Company determines that such
suspension is in the interests of the Company.

 

13

 

(i)                                     If
any provision of this Agreement shall be held to be illegal, invalid or
unenforceable, such illegality, invalidity or unenforceability shall attach
only to such provision and shall not in any manner affect or render illegal,
invalid or unenforceable any other provision of this Agreement, and this
Agreement shall be carried out as if any such illegal, invalid or unenforceable
provision were not contained herein.

 

[Remainder of Page Left
Intentionally Blank]

 

14

 

IN WITNESS
WHEREOF, this Registration Rights Agreement has been executed by the parties
hereto as of the date first above written.

 

	
   

  	
  MEDIA 100 INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John Molinari

  
	
   

  	
  Name:

  	
  John Molinari

  
	
   

  	
  Title:

  	
  President and CEO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CCM MASTER FUND, LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Clint Coghill

  
	
   

  	
  Name:

  	
  Clint Coghill

  
	
   

  	
  Title:

  	
  President & Chief
  Investment Officer

  
								

 

15

 

EXHIBIT A

 

List of Purchasers

 

	
  Name and
  Address

  	
   

  	
  Number of Preferred Shares

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  CCM Master Fund, Ltd.

  c/o Coghill Capital Management, LLC

  One North Wacker Drive, Suite 4725

  Chicago, IL  60606

  Tel: (312) 334-1100

  Fax: (312) 334-1111

  dlim@coghillcapital.com

  	
   

  	
  1,045

  	
   

  

 

16

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