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EXHIBIT 4.1    
  

 
  REGISTRATION RIGHTS AGREEMENT    
  

        REGISTRATION
RIGHTS AGREEMENT ("Agreement") dated as of September 25, 2002, between Image Entertainment, Inc., a California
corporation ("Company"), and Standard Broadcasting Corporation Limited, a Canadian corporation
("Investor"). 

        WHEREAS,
pursuant to a Stock Purchase Agreement dated the same date as this Agreement ("Stock Purchase Agreement"), Company is issuing and
selling shares of its common stock, no par value ("Common Stock") to Investor; 

        WHEREAS,
Company is issuing a Warrant dated the same date as this Agreement ("Warrant") to Investor to purchase additional shares of its
Common Stock; and 

        WHEREAS,
the shares of Common Stock to be sold and issued to Investor pursuant to the Stock Purchase Agreement and in connection with the exercise of the Warrant (collectively, the
"Shares"), are being issued in a private placement without registration under the Securities Act of 1933, as amended (the
"Act"), in reliance on one or more exemptions from the registration requirements under the Act; 

        NOW
THEREFORE, in consideration of the foregoing recitals and the respective covenants and agreements contained herein, the parties hereto, intending to be legally bound, agree as
follows: 

        1.    Piggyback Registration

        (a)  Unless
a registration statement has already been filed and remains effective with respect to the Shares, each time Company determines to file a registration
statement under the Act (other than on Form S-1 solely covering an employee benefit plan, S-4 or S-8) in connection with the proposed offer and sale for
money of any of its securities, either for its own account or on behalf of any other security Investor, Company will give written notice of its determination to Investor. Upon the written request of
Investor within thirty (30) days after the receipt of the written notice, Company will cause all Shares of Investor to be included in the registration statement, to the extent necessary to
permit the legally permissible sale or other disposition by Investor to be so registered. 

        (b)  If
the registration is for a public offering involving an underwriting, Company will so advise Investor as a part of its written notice. In such event, the right of
Investor to registration pursuant to this Section 1 is conditioned upon Investor's participation in the underwriting and the inclusion of
Investor's Shares in the underwriting to the extent provided herein. Investor will enter into (together with Company and the other shareholders distributing their securities through the underwriting)
an underwriting agreement with the underwriter or underwriters selected by Company for the underwriting, provided that the underwriting agreement is in customary form and is reasonably acceptable to
Investor. 

        (c)  Notwithstanding
any other provision of this Section 1, if the managing underwriter of an underwritten distribution
advises Company and Investor in writing that in its good faith judgment the number of Shares and the other securities requested to be registered exceeds the number of Shares and other securities which
can be sold in the offering, then (i) the number of Shares and other securities so requested to be included in the offering will be reduced to that number of shares which in the good faith
judgment of the managing underwriter can be sold in the offering (except for shares to be issued by Company in an offering initiated by Company, which will have priority over the Shares), and
(ii) the reduced number of shares will be allocated among all participating holders of Common Stock and investor in proportion, as nearly as practicable, to the respective number of Shares and
other securities held by Investor and other holders at the time of filing the registration statement in relation to the total number of shares of Common Stock outstanding on a fully diluted basis. All
Shares and other securities which are excluded from the underwriting by reason of the underwriter's marketing limitation and all other Shares not originally requested to be so included will not be
included in the registration and will be withheld from the 

 

market by Investor for a period, not to exceed one hundred eighty (180) days, which the managing underwriter reasonably determines is necessary to effect the underwritten public offering. 

        2.    Demand Registration

        (a)  If,
at any time more than one (1) year after the date of this Agreement, Company receives written notice from Investor requesting that Company file a
registration statement under the Act covering the registration of at least fifty percent (50%) of the Shares then owned by Investor, Company will use its best efforts to effect the registration under
the Act of all Shares which investor requests to be registered, to the extent necessary to permit the legally permissible sale or other disposition by Investor to be so registered. 

        (b)  If
Investor intends to distribute the Shares covered by its request by means of an underwriting, it will so advise Company as a part of the request made pursuant to this  Section 2. The underwriter
selected by Investor shall be reasonably acceptable to Company. In such event, the right of Investor to include its
Shares in the registration shall be conditioned upon Investor's participation in such underwriting and the inclusion of the Shares in the underwriting. Company will enter into (together with Investor
and the other shareholders distributing their securities through the underwriting) an underwriting agreement with the underwriter or underwriters selected by Investor for the underwriting, provided
that the underwriting agreement is in customary form and is reasonably acceptable to Company. 

        (c)  Notwithstanding
the foregoing, if Company furnishes to Investor a certificate signed by the President of Company stating that in the good faith judgment of the Board of
Directors of Company, it would be detrimental to Company and its shareholders for the registration statement to be filed and it is therefore essential to defer the filing of the registration
statement, Company will have the right to defer the filing for a period of not more than ninety (90) days after receipt of the request of investor;  provided, however, that Company may not utilize this right more than once in any twelve-month period.
 

        (d)  Company
will not be obligated to prepare, file or to take any action to effect any registration pursuant to this  Section 2: 

        (i)    Within
one year from the date hereof; 

        (ii)  After
Company has effected a prior registration pursuant to this Agreement and such registration has been declared or ordered effective; or 

        (iii)  During
the period starting with the date ninety (90) days prior to Company's good faith estimate of the date of filing of, and ending on a date one hundred
eighty (180) days after the effective date of, a registration subject to Sections 1 or 2 hereof; provided that Company is using reasonable
efforts to cause such registration statement to become effective. 

        3.    Registration Procedures. If and whenever Company is required by the provisions of Section 1
or 2 hereof to effect the registration of Shares under the Act, Company, at its expense, will: 

        (a)  In
accordance with the Act and all applicable rules and regulations, prepare and file with the Securities and Exchange Commission ("SEC") a registration statement with
respect to the Shares and use its commercially reasonable efforts to cause the registration statement to become and remain effective until the Shares covered by such registration statement have been
sold, and prepare and file with the SEC such amendments and supplements to the registration statement and the prospectus contained therein as may be necessary to keep the registration statement
effective and the registration statement and prospectus accurate and complete until the Shares covered by such registration statement have been sold; 

2

 

        (b)  If
the offering is to be underwritten in whole or in part, enter into a customary written underwriting agreement in form and substance reasonably satisfactory to the
managing underwriter of the public offering, Investor and Company; 

        (c)  Furnish
to Investor and the underwriters of the Shares being registered such number of copies of the registration statement and each amendment and supplement thereto,
preliminary prospectus, final prospectus and such other documents as the underwriters and Investor may reasonably request in order to facilitate the public offering of the securities; 

        (d)  Use
its commercially reasonable efforts to register or qualify the securities covered by the registration statement under such state securities or blue sky laws of such
jurisdictions as Investor and the underwriters may reasonably request within ten (10) days prior to the original filing of the registration statement, except that Company will not for any
purpose be required to execute a general consent to service of process or to qualify to do business as a foreign corporation in any jurisdiction where it is not so qualified; 

        (e)  Notify
Investor, promptly after it receives notice thereof, of the date and time when the registration statement and each post-effective amendment thereto
has become effective or a supplement to any prospectus forming a part of such registration statement has been filed; 

        (f)    Notify
Investor of any request by the SEC for the amending or supplementing of the registration statement or prospectus or for additional information; 

        (g)  Prepare
and file with the SEC, upon the request of Investor, any amendments or supplements to the registration statement or prospectus which, in the reasonable opinion
of counsel for Investor, is required under the Act or the rules and regulations of the SEC thereunder in connection with Investor's distribution of the Shares; 

        (h)  Prepare
and file with the SEC, and notify Investor of the filing of, such amendments or supplements to the registration statement or prospectus as may be necessary to
correct any statements or omissions if, at the time when a prospectus relating to the securities is required to be delivered under the Act, any event has occurred as the result of which the prospectus
or any other prospectus as then in effect would include an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements
therein not misleading; 

        (i)    In
case Investor or any underwriter for Investor is required to deliver a prospectus at a time when the prospectus then in circulation is not in compliance with the Act
or the rules and regulations of the SEC, prepare upon request such amendments or supplements to such registration statement and such prospectus as may be necessary in order for the prospectus to
comply with the requirements of the Act and such rules and regulations; 

        (j)    Advise
Investor, after it receives notice or obtains knowledge thereof, of the issuance of any stop order by the SEC suspending the effectiveness of the registration
statement or the initiation or threatening of any proceeding for that purpose and promptly use its commercially reasonable efforts to prevent the issuance of any stop order or to obtain its withdrawal
if a stop order should be issued; 

        (k)  Not
file any registration statement or prospectus or any amendment or supplement to a registration statement or prospectus to which Investor has, at least five
(5) business days prior to filing, reasonably objected on the grounds that the registration statement or prospectus or amendment or supplement thereto does not comply in all material respects
with the requirements of the Act or the rules and regulations thereunder. The failure of Investor or its counsel to review or object to any registration statement or prospectus or any amendment or
supplement to a registration statement or prospectus will not affect the indemnification rights of Investor or its 

3

 

respective officers, directors, partners, legal counsel, accountants or controlling persons or any underwriter or any controlling person of such underwriter under  Section 5 hereof; 

        (l)    Make
available for inspection upon request by Investor, a managing underwriter of a distribution to be effected pursuant to a registration statement under this
Agreement, and any attorney, accountant or other agent retained by Investor or its underwriter, all pertinent corporate, financial and other documents and records of Company, and cause Company's
officers, directors and employees to supply all information reasonably requested by Investor, underwriter, attorney, accountant or agent in connection with the registration statement; and 

        (m)  At
the request of Investor, furnish to Investor on the effective date of the registration statement or, if the registration includes an underwritten public offering, at
the closing provided for in the underwriting agreement, (i) an opinion dated such date of the counsel representing Company for the purposes of the registration, addressed to the underwriters,
if any, and to investor, covering such matters with respect to the registration statement, the prospectus and each amendment or supplement thereto, proceedings under state and federal securities laws,
other matters relating to Company, the securities being registered and the offer and sale of such securities as are customarily the subject of opinions of issuer's counsel provided to underwriters in
underwritten public offerings, and such opinion of counsel will additionally cover such legal and factual matters with respect to the registration as Investor may reasonably request, and
(ii) letters dated each of such effective date and such closing date, from the independent certified public accountants of Company, addressed to the underwriters, if any, and to Investor,
stating that they are independent certified public accountants within the meaning of the Act and dealing with such matters as the underwriters may request, or, if the offering is not underwritten,
that in the opinion of such accountants the financial statements and other financial data of Company included in the registration statement or the prospectus or any amendment or supplement thereto
comply in all material respects with the applicable accounting requirements of the Act, and additionally covering such other accounting and financial matters, including information as to the period
ending not more than five (5) business days prior to the date of such letter with respect to the registration statement and prospectus, as Investor may reasonably request. 

        4.    Expenses

        (a)  With
respect to each inclusion of Shares in a registration statement pursuant to Section 1 hereof, and the
registration effected pursuant to Section 2 hereof, Company will bear all fees, costs and expenses of and incidental to the registration and the
public offering in connection therewith; provided, however, that Investor will bear its pro rata share of the underwriting discount and commissions. 

        (b)  The
fees, costs and expenses of registration to be borne as provided in Section 4(a), include, without limitation,
all registration, filing and NASD fees, printing expenses, fees and disbursements of counsel and accountants for Company, fees and disbursements of counsel for the underwriter or underwriters of such
securities (if Company and/or selling security shareholders are otherwise required to bear such fees and disbursements), reasonable fees and disbursements of counsel for Investor, and all legal fees
and disbursements (up to $50,000) and other expenses of complying with state securities or blue sky laws of any jurisdictions in which the securities to be offered are to be registered or qualified. 

        5.    Indemnification

	(a)
	Company
will indemnify and hold harmless pursuant to the provisions of this Agreement Investor and each of Investor's officers, directors, partners, legal counsel and accountants, and
each person who controls Investor within the meaning of the Act and any underwriter (as defined in the Act) for Investor, and any person who controls such underwriter within the 

4

 

meaning
of the Act, from and against, and to reimburse Investor, its officers, directors, partners, legal counsel, accountants and controlling persons and each underwriter and controlling person of
such underwriter with respect to, any and all claims, actions (actual or threatened), demands, losses, damages, liabilities, costs and expenses to which Investor, its officers, directors, partners,
legal counsel, accountants or controlling persons or any such underwriter or controlling person of such underwriter may become subject under the Act or otherwise, insofar as such claims, actions,
demands, losses, damages, liabilities, costs or expenses arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in such registration statement,
any prospectus contained therein, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in light of the circumstances in which they were made; provided, however, that Company will not be liable in any such case to the
extent that any claim, action, demand, loss, damage, liability, cost or expense is caused by an untrue statement or alleged untrue statement or omission or alleged omission so made in conformity with
written information furnished by Investor, such underwriter or such controlling person specifically for use in the preparation thereof. 

        (b)  Investor
will indemnify and hold harmless Company, its officers, directors, legal counsel and accountants, any underwriter and each person who controls Company or any
underwriter within the meaning of the Act, from and against, and agrees to reimburse Company, its officers, directors, legal counsel, accountants and controlling persons, any underwriter with respect
to, any and all claims, actions, demands, losses, damages, liabilities, costs or expenses to which Company, its officers, directors, legal counsel, accountants, such controlling persons, or any
underwriter may become subject under the Act or otherwise, insofar as such claims, actions, demands, losses, damages, liabilities, costs or expenses are caused by any untrue or alleged untrue
statement of any material fact contained in such registration statement, any prospectus contained therein or any amendment or supplement thereto, or are caused by the omission or the alleged omission
to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading, in each case, to the
extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was so made in reliance upon and in conformity with written information furnished
by Investor specifically for use in the preparation thereof. Notwithstanding the foregoing, Investor will not be obligated hereunder to pay more than the net proceeds realized by it upon its sale of
Shares included in such registration statement. 

        (c)  Promptly
after receipt by a party indemnified pursuant to the provisions of this Section 5(a) or (b) of notice of
the commencement of any action involving the subject matter of the foregoing indemnity provisions, the indemnified party will, if a claim therefor is to be made against the indemnifying party pursuant
to the provisions of Section 5(a) or (b), notify the indemnifying party of the commencement thereof; but the omission so to notify the
indemnifying party will not relieve it from any liability which it may have to an indemnified party otherwise than under this Section 5 and will
not relieve the indemnifying party from liability under this Section 5 unless the indemnifying party is prejudiced by such omission. In case any
action is brought against any indemnified party, and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein and, to the extent
that it may wish, jointly with any other indemnifying parties similarly notified, to assume the defense thereof, with counsel satisfactory to the indemnified party; provided, however, that if the
defendants in any action include both the indemnified party and the indemnifying party and the indemnified party reasonably concludes that there may be legal defenses available to it and/or other
indemnified parties which are different from or additional to those available to the indemnifying party, the indemnified party or parties will have the right to select separate counsel (in which case
the 

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indemnifying party will not have the right to direct the defense of such action on behalf of the indemnified party or parties). Upon the permitted assumption by the indemnifying party of the defense
of an action, and approval by the indemnified party of counsel, the indemnifying party will not be liable to the indemnified party under Section 5(a) or
(b) for any legal or other expenses subsequently incurred by the indemnified party in connection with the defense thereof (other than reasonable costs of investigation) unless
(i) the indemnified party has employed separate counsel in connection with the assertion of legal defenses in accordance with the proviso to the next preceding sentence, (ii) the
indemnifying party has employed counsel satisfactory to the indemnified party to represent the indemnified party within a reasonable time, (iii) the indemnifying party and its counsel fail
actively and vigorously to pursue the defense of the action or (iv) the indemnifying party authorizes the employment of counsel for the indemnified party at the expense of the indemnifying
party. No indemnifying party will be liable to an indemnified party for any settlement of any action or claim without the consent of the indemnifying party, and no indemnifying party may unreasonably
withhold its consent to any such settlement. No indemnifying party will consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving
by the claimant or plaintiff to the indemnified party of a release from all liability with respect to the claim or litigation. 

        (d)  If
the indemnification provided for in Section 5(a) or (b) is held by a court of competent jurisdiction to be
unavailable to a party to be indemnified with respect to any claims, actions, demands, losses, damages, liabilities, costs or expenses referred to therein, then each indemnifying party under any such
section, in lieu of indemnifying the indemnified party thereunder, agrees to contribute to the amount paid or payable by the indemnified party as a result of the claims, actions, demands, losses,
damages, liabilities, costs or expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other in
connection with the statements or omissions which resulted in the claims, actions, demands, losses, damages, liabilities, costs or expenses, as well as any other relevant equitable considerations. The
relative fault of the indemnifying party and of the indemnified party will be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission. Notwithstanding the foregoing, the amount Investor will be obligated to contribute pursuant to this section will be
limited to an amount equal to the per share public offering price (less any underwriting discount and commissions) multiplied by the number of Shares sold by Investor pursuant to the registration
statement which gives rise to such obligation to contribute (less the aggregate amount of any damages which Investor has otherwise been required to pay in respect of such claim, action, demand, loss,
damage, liability, cost or expense or any substantially similar claim, action, demand, loss, damage, liability, cost or expense arising from the sale of such Shares). No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) will be entitled to contribution hereunder from any person who was not guilty of such fraudulent misrepresentation. 

        (e)  In
addition to its other obligations under this Section 5, Company agrees to reimburse any underwriter and
Investor pursuant to this Agreement (and each of the underwriter's and Investor's controlling persons, officers, directors, parties, legal counsel, accountants and underwriters, and controlling
persons of the underwriters) on a monthly basis for all reasonable legal fees and other
expenses incurred in connection with investigating or defending any claim, action, investigation, inquiry or other proceeding arising out of or based upon any statement or omission, or any alleged
statement or admission, described in Section 5(a), notwithstanding the possibility that such payments might later be held to be improper. To the
extent that any payment is ultimately held to be improper, each person receiving such payment will promptly refund it. 

6

 

        6.    Restrictions. Shares will only be treated as registerable securities if and so long as they have not been (a) sold
to or through a broker or dealer or underwriter in a public distribution or a public securities transaction, or (b) sold in a transaction exempt from the registration and prospectus delivery
requirements of the Act under Section 4(1) thereof so that all transfer restrictions and restrictive legends with respect to such Shares are removed upon the consummation of such sale and the
seller and Investor receive an opinion of counsel for Company, in form and content reasonably satisfactory to the seller and buyer and their respective counsel, to the effect that the Shares in the
hands of investor are freely transferable without restriction or registration under the Act in any public or private transaction. 

        7.    Reporting Requirements. Company will maintain the effectiveness of its registration under Section 12 of the
Securities Exchange Act of 1934, as amended ("Exchange Act") and file timely (whether or not it is then required to do so) such information, documents
and reports as the SEC may require or prescribe under Section 15(d) of the Exchange Act. Company will, forthwith upon request, furnish to Investor (a) a written statement by Company that
it has complied with such reporting requirements, (b) a copy of the most recent annual or quarterly report of Company and (c) such other reports and documents filed by Company with the
SEC as Investor may reasonably request in availing itself of an exemption for the sale of Shares without registration under the Act. Company acknowledges that the purposes of the requirements
contained in this Section 7 are (i) to enable Investor to comply with the current public information requirement contained in
paragraph (c) of Rule 144 under the Act should Investor ever wish to dispose of any of the securities of Company acquired by it without registration under the Act in reliance upon
Rule 144 (or any other similar exemptive provision) and (ii) to qualify Company for the use of registration statements on Form S-3. In addition, Company will take such
other measures and file such other information, documents and reports, as may be required of it hereafter by the SEC as a condition to the availability of Rule 144 (or any similar exemptive
provision hereafter in effect) and the use of Form S-3 and will use its commercially reasonable efforts to qualify for the use of Form S-3. 

        8.    Information. Investor will furnish Company with such information with respect to Investor and the Shares as Company may
from time to time reasonably request in writing and as may be required by law or by the SEC. 

        9.    Forms. All references in this Agreement to particular forms of registration statements under the Act are intended to
include, and will be deemed to include, references to all successor forms which are intended to replace, or to apply to similar transactions as, the forms herein referenced. 

        10.  Miscellaneous

        (a)  Waivers and Amendments. Neither this Agreement nor any provision hereof may be changed, waived, discharged or terminated
orally or by course of dealing, but only by a statement in writing signed by the party against which enforcement of the change, waiver, discharge or termination is sought. Specifically, but without
limiting the generality of the foregoing, the failure of one party at any time or times to require performance of any provision hereof by the other party will not affect the right at a later time to
enforce the same. No waiver by any party of the breach of any term or provision contained in this Agreement, in any one or more instances, will be deemed to be, or construed as, a further or
continuing waiver of any such breach, or a waiver of the breach of any other term or covenant contained in this Agreement. 

        (b)  Successors and Assigns. The provisions of this Agreement will inure to the benefit of and be binding upon the successors
and assigns of each of the parties hereto. Notwithstanding the foregoing, neither Investor nor Company will assign or delegate any of its rights or obligations under this Agreement. 

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        (c)  No Third-Party Beneficiaries. No person or entity not a party to this Agreement will be deemed to be a third-party
beneficiary hereunder or entitled to any rights hereunder. 

        (d)  Interpretation. The words "include,"
"includes," and "including" when used herein will be deemed in each case to be followed by the words
"without limitation." This Agreement has been negotiated by the respective parties hereto and their attorneys and the language hereof will not be construed for or against any party. The words
"hereof," "herein," "herewith,"
"hereby" and "hereunder" and words of similar import will, unless otherwise stated, be construed to
refer to this Agreement as a whole and not to any particular provision of this Agreement. 

        (e)  Severability. If any provision of this Agreement is held to be illegal, invalid or unenforceable under present or future
laws, then, if possible, such illegal, invalid or unenforceable provision will be modified to such extent as is necessary to comply with such present or future laws and such modification will not
affect any other provision hereof; provided that if such provision may not be so modified, such illegality, invalidity or unenforceability will not affect any other provision, but this Agreement will
be reformed, construed and enforced as if such invalid, illegal or unenforceable provision had never been contained herein. 

        (f)    Descriptive Headings. The descriptive headings used in this Agreement are inserted for convenience of reference and are
not intended to be part of or to affect the meaning or interpretation of this Agreement. 

        (g)  Expenses. Each party will pay all costs and expenses incurred by it in connection with the execution and delivery of this
Agreement and the transactions contemplated hereby, including fees of legal counsel. 

        (h)  Further Assurances. Each party to this Agreement will do and perform or cause to be done and performed all such further
acts and things and will execute and deliver all such agreements, certificates, instruments and documents as the other party hereto may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby. 

        (i)    Notices. All notices, requests, claims, demands and other communications under this Agreement will be in writing and will
be deemed given if delivered personally, by facsimile (with 

8

 

oral confirmation) or sent by overnight courier (providing proof of delivery) to the parties at the following addresses (or at such other address for a party as will be specified by like notice): 

	If to Company:	 	Image Entertainment, Inc.

9333 Oso Avenue

Chatsworth, California 91311

Attn.: Jeff M. Framer, CFO

Phone: (818) 407-9100

Fax: (818) 407-9331
	

with a copy to:	
 	

Greenberg Traurig, LLP

2450 Colorado Avenue, Suite 400E

Santa Monica, California 90404

Attn.: John C. Kirkland, Esq.

Phone: (310) 586-7786

Fax: (818) 586-0286
	

If to Investor:	
 	

Standard Broadcasting Corporation Limited

2 St. Clair Avenue West, Suite 1100

Toronto, Ontario, Canada M4V 1L6

Attn.: David Coriat, EVP

Phone: (416) 960-9911

Fax: (416) 323-6828

        (j)    Arbitration. Any controversy, dispute or claim of any nature whatsoever arising out of, in connection with or in relation
to this Agreement, or otherwise involving the parties hereto, including the issue of arbitrability of any such disputes, will be resolved by final and binding arbitration in accordance with the
UNCITRAL Commercial Arbitration Rules by a retired judge at JAMS. JAMS will be the appointing authority, and the hearing will be held in Los Angeles, California. The prevailing party in any dispute
will be awarded all attorney's fees, costs and expenses in addition to other allowable costs. 

        (k)  Governing Law. This Agreement and all acts and transactions pursuant hereto and the rights and obligations of the parties
hereto will be governed by, and construed in accordance with, the internal law of the State of California, without regard to conflicts of laws. 

        (l)    Counterparts. This Agreement may be executed in counterparts, each of which will be an original and all of which together
will constitute one and the same instrument. 

        (m)  Entire Agreement. This Agreement, together with the related written agreements entered into on the same date, constitutes
the entire agreement between the parties. No representations, agreements or promises have been made except as expressly set forth herein. This Agreement supersedes any prior negotiations,
understandings or agreements, whether written or oral, and any contemporaneous oral understandings or agreements. 

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        IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first set forth above. 

	 	 	COMPANY:
	

 	
 	

IMAGE ENTERTAINMENT, INC.
	

 	
 	

By:	
 	

 Jeff M. Framer

Its Chief Financial Officer
	

 	
 	
INVESTOR:
	

 	
 	

STANDARD BROADCASTING CORPORATION LIMITED
	

 	
 	

By:	
 	

 David Coriat

Its Executive Vice President

10

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EXHIBIT 4.1

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Exhibit 10.1  

 
 

LICENSE AGREEMENT    
  

        THIS AGREEMENT ("Agreement") is entered into this 10th day of September, 2002, by and between Two Dog Net, Inc., a California corporation ("Licensor") and
D.W.C. Installations, a Nevada corporation ("Licensee"). Licensor and Licensee shall sometimes be referred to individually as the "Party" or collectively as the "Parties." 

RECITALS  

        A.    Licensor
is the owner of all right, title, and interest in and to the children's oriented global computer network programming and Internet service currently being used
and sold as The Children's Internet including but limited to a search engine, browser, secure e-mail system, education and entertainment portals, and all its proprietary characters and
content, web pages, and home rooms (the "Licensed Technology"); 

        B.    Licensor
is the owner of all right, title, and interest in and to the trademark "Children's Internet," (the "Licensed Mark"); and 

        C.    Licensee
desires to acquire, in accordance with the terms and conditions of this Agreement the exclusive license to use the Licensed Mark and Licensed Technology as set
forth below. 

        NOW
THEREFORE, in consideration of the foregoing Recitals which are incorporated into the operative provisions of this Agreement by this reference, and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the Parties hereto agree as follows: 

ARTICLE I. GRANT OF RIGHTS  

        1.01    Grant of License.    The Licensor grants to Licensee an exclusive license to use the Licensed Technology and
Licensed Mark solely in association with Licensor's internet web site (www.childrensinternet.com) and service. 

        1.02    Sublicense.    Licensee may not sublicense the rights granted pursuant to this Agreement without Licensor's
prior written consent. Any sublicense granted in violation of this provision shall be void. 

        1.03    Reservation of Rights.    Licensor expressly reserves all rights other than those being conveyed or granted in
this Agreement. 

        1.04    Territory.    The rights granted to Licensee are worldwide. 

        1.05    Term.    This Agreement shall commence on the date first written above (the "Effective Date") and shall extend
for a period of five years. Following the initial term, this Agreement shall be renewed automatically in five year terms, with no further action of the Parties necessary, unless either Party
terminates by written notice to the other no less than one year before the end of a term. 

ARTICLE 2. COMPENSATION  

        2.01    Initial Payment.    Licensee shall pay to Licensor $2,000,000 (the "License Fee") due and payable no later
than two years following the Effective Date, provided however that if Licensee pays the License Fee within the first year following the Effective Date, the License Fee shall be discounted to
$1,800,000, and if the Licensee pays the License Fee more than twelve months following the Effective date but within eighteen months following the Effective Date, the License Fee shall be discounted
to $1,900,000. Notwithstanding the foregoing, in the event Licensee raises funds in excess of $5,000,000 during the two years following the Effective Date the License Fee shall be due and payable
immediately. 

 

        2.02    Royalties.    Licensee agrees to pay Licensor a royalty of 7% on all Net Sales (as defined below) for each
calendar quarter ("Royalty Period"). All royalties provided for under this Agreement shall accrue when the respective items are billed or paid for, whichever occurs first. 

        2.03    Net Sales.    For purposes of this Agreement, "Net Sales" shall be defined as Licensee's gross sales, less the
cost of dial-up service of $3.79 per customer paid by Licensee directly to a third party carrier, Qwest Communications (i.e., the gross amount billed to customers minus the direct cost of
the dial-up service as provided by Qwest), generated by Licensee for its customers' use of the internet web site
(www.childrensinternet.com), The Children's Internet online service and the sale of wholesale dial-up services. 

        2.04    Payments and Statements to Licensor.    Within 30 days after the end of each Royalty Period, an
accurate statement of Net Sales along with any royalty payments due to Licensor shall be provided to Licensor. The acceptance by Licensor of any of the statements furnished or royalties paid shall not
preclude Licensor from questioning the correctness at any time of any payments or statements. 

        2.05    Audit.    Licensee shall keep accurate books of account and record covering all transactions relating to the
license granted in this Agreement, and Licensor or its duly authorized representatives shall have the right upon five days prior written notice, and during normal business hours, to inspect and audit
Licensee's records relating to the Licensed Technology and Licensed Mark. Licensor shall bear the cost of such inspection and audit, unless the results indicate an underpayment greater than $1,000 for
any six-month period. In that case, Licensee shall promptly reimburse Licensor for all costs of the audit along with the amount due with interest on such sums. Interest shall accrue from
the date the payment was originally due and the interest rate shall be 1.5% per month, or the maximum rate permitted by law, whichever is less. All books of account and records shall be kept available
for at least two years after the termination of this Agreement. 

        2.06    Late Payment.    Time is of the essence with respect to all payments to be made by Licensee under this
Agreement. If Licensee is late in any payment provided for in this Agreement, Licensee shall pay interest on the payment from the date due until paid at a rate of 1.5% per month, or the maximum rate
permitted by law, whichever is less. 

        2.07    Termination Rights.    In the event: (i) Licensee breaches or defaults on any term, condition or
covenant of this Agreement and such breach or default continues for a period of sixty (60) days after the giving of written notice to Licensee by Licensor, or (ii) any proceeding is
commenced by or against Licensee in bankruptcy or in the event of appointment of a receiver or trustee or an assignment for the benefit of creditors, then Licensor may avail itself of any and all
remedies at law and/or in equity or otherwise and, without limitation, shall have the right to immediately terminate the license granted by Agreement by written notice to Licensee. 

ARTICLE 3. WARRANTIES AND INDEMNIFICATION  

        3.01    Licensor Warranty.    Licensor warrants that it has the power and authority to enter into this Agreement and
has no knowledge as to any third party claims regarding the proprietary rights in the Licensed Technology or Licensed Mark which would interfere with the rights granted under this Agreement. 

        3.02    Licensor Indemnification.    Licensor shall indemnify Licensee and hold Licensee harmless from any damages and
liabilities (including reasonable attorneys fees and costs), arising from any breach of Licensor's warranty as defined above, provided: (a) such claim arises solely out of the Licensed
Technology or Licensed Mark as disclosed to the Licensee, and not out of any change in the Licensed Technology or Licensed Mark; (b) Licensee gives Licensor prompt written notice of any such
claim; (c) such indemnity shall only be applicable in the event of a final decision by a court of competent jurisdiction from which no right to appeal exists; and (d) that the maximum
amount due 

2

 

from Licensor to Licensee under this paragraph shall not exceed the amounts due to Licensor under the Royalties Section from the date that Licensor notifies Licensee of the existence of such a claim. 

        3.03    Advertising.    Licensee warrants that it will use its best commercial efforts to market and promote the
internet web site, www.childrensinternet.com and to market and promote sales of the internet service and that its operation and marketing shall be in
conformance with all applicable laws and regulations, including but not limited to all intellectual property laws Licensee shall have the right to use Licensee's 30 minute infomercial in connection
with its marketing efforts, including the right to air the infomercial on television. 

        3.04    Termination on Change of Control.    In the event that Licensee undergoes a Change of Control (as defined
below) Licensor may terminate this Agreement upon written notice to Licensee at any time after receiving notice of the Change of Control. For purposes of this Agreement "Change of Control" shall mean
the occurrence of any of: (i) an acquisition after the date hereof by an individual or legal entity or "group" (as described in Rule 13d-5(b)(1) promulgated under the U.S.
Securities Exchange Act
of 1934) of effective control (whether through legal or beneficial ownership of capital stock of the Company, by contract or otherwise) of in excess of 50% of the voting securities of the Company,
(ii) the merger of the Company with or into another entity that is not wholly-owned by the Company, consolidation or sale of 50% or more of the assets of the Company in one or a series of
related transactions, or (iii) the execution by the Company of an agreement to which the Company is a party or by which it is bound, providing for any of the events set forth above in
(i) or (ii). 

        3.04    Licensee Indemnification.    Licensee shall indemnify Licensor and hold Licensor harmless from any damages and
liabilities (including reasonable attorneys' fees and costs): (a) arising from any breach of Licensee's warranties; (b) arising out of any alleged defects or failures to perform of the
Licensor's internet web site and service, (c) any claims arising out of advertising or marketing of the Licensor's internet web site and/or service. 

        3.05    Limitation of Licensor Liability.    Licensor's maximum liability to Licensee under this Agreement, regardless
on what basis liability is asserted, shall in no event exceed the total amount paid to Licensor under this Agreement. Licensor shall not be liable to Licensee for any incidental, consequential,
punitive, or special damages. 

ARTICLE 4. OWNERSHIP AND PROTECTION OF INTELLECTUAL PROPERTY  

        4.01    Intellectual Property Protection.    Licensor may, but is not obligated to seek, in its own name and at its
own expense, appropriate further patent, trademark or copyright protection for its Licensed Technology and Licensed Mark in the U.S. or in any foreign country. Licensor makes no warranty with respect
to the validity of any patent, trademark or copyright which may be granted. Licensor grants to Licensee the right to apply for patents on the Licensed Property provided that such patents shall be
applied of in the name of Licensor and licensed to Licensee during the Term and according to the conditions of this Agreement. Licensee shall have the right to deduct its reasonable out of pocket
expenses for the preparation, filing and prosecution of any such U.S. patent application (but in no event more than $5,000) from future royalties due Licensor under this Agreement. Licensee shall
obtain Licensor's prior written consent before incurring expenses for any foreign patent application. 

        4.02    Compliance with Intellectual Property Laws.    The license granted in this Agreement is conditioned on
Licensee's compliance with the provisions of the intellectual property laws of the United States and any foreign country in the Territory. All promotional material shall bear appropriate proprietary
notices. 

        4.03    Infringement Against Third Parties.    In the event that either Party learns of imitations or infringements of
the Licensed Technology or Licensed Mark, that Party shall notify the other in writing of the infringements or imitations. Licensor shall have the right to commence lawsuits against third 

3

 

persons arising from infringement of the Licensed Technology or Licensed Mark. In the event that Licensor does not commence a lawsuit against an alleged infringer within 60 days of
notification by Licensee, Licensee may commence a lawsuit against the third party. Before filing suit, Licensee shall obtain the written consent of Licensor to do so and such consent shall not be
unreasonably withheld. Licensor will cooperate fully and in good faith with Licensee for the purpose of securing and preserving Licensee's rights to the Licensed Technology and Licensed Mark. Any
recovery (including, but not limited to a judgment, settlement or licensing agreement included as a resolution of an infringement dispute) shall be divided equally between the Parties after deduction
and payment of reasonable attorneys fees to the party bringing the lawsuit. 

        4.04    Insurance.    Licensee shall, throughout, the Term, obtain and maintain, at its own expense, standard
liability insurance coverage, naming Licensor as an additional named insured. Such policy shall: (a) be maintained with a carrier having a Moody's rating of at least B; and (b) provide
protection against any claims, demands, and causes of action arising out of any alleged defects or failure to perform of the Licensed Technology or any use of the Licensed Technology. The amount of
coverage shall be a minimum of $1,000,000 with no deductible amount for each single occurrence for bodily injury or property damage. The policy shall provide for notice to Licensor from the insurer by
Registered or Certified Mail in the event of any modification or termination of insurance. Licensee shall furnish Licensor a certificate from its carrier evidencing insurance coverage in favor of
Licensor upon request. The provisions of this section shall survive termination for three years. 

        4.05    Confidentiality.    For purposes of this Agreement, "Confidential Information" shall mean any information
belonging to a Party that is valuable to that Party and is not generally known in the industry in which it is engaged. The Parties acknowledge that each may be furnished or have access to Confidential
Information that relates to each other's business. The Parties agree to maintain the Confidential Information in strictest confidence for the sole and exclusive benefit of the other party and to
restrict access to such Confidential Information to persons bound by this Agreement, only on a need to know basis. Neither party, without prior approval of the other, shall use or otherwise disclose
to others, or permit the use by others of Confidential Information. 

        4.06    Ownership.    Licensee agrees that ownership of the Licensed Mark, Licensed Technology, and the goodwill
relating thereto shall remain vested in Licensor both during the period of this Agreement and thereafter, and Licensee further agrees never to challenge, contest or question the validity of Licensor's
ownership of the Licensed Technology, Licensed Mark or any registrations thereof by Licensor. Any logos, designs, symbols, marks, graphics, or artwork derived from the Licensed Mark by Licensee or by
a third party for Licensee shall be owned exclusively by Licensor. Licensee hereby assigns to Licensor all right, title, and interest to any such derivative material. To prevent the dilution of the
Licensed Mark, Licensee shall not adopt or use any mark which is confusingly similar to the Licensed Mark, either during the Term or thereafter. 

        4.07    Quality Control.    Licensee agrees to comply with any requirements established by Licensor concerning the
style, design, display and use of the Licensed Mark; to correctly use the registration symbol ® with every use of the Licensed Mark; and to submit in advance of its use all advertising
copy and internet
copy to Licensor for approval. Licensee may not use the Licensed Mark in any manner which would disparage or tarnish or dilute the distinctive quality of the Licensed Mark or the reputation and
goodwill embodied in the Licensed Mark or which would reflect adversely on the Licensed Mark or Licensor, as determined by Licensor in it reasonable discretion. 

        4.08    Effect of Termination.    Upon termination or expiration of this Agreement, all Royalty obligations as
established under section 2.02 shall immediately become due. After the termination or expiration of this Agreement, all rights granted to Licensee under this Agreement shall terminate and
revert to Licensor, and Licensee will refrain from further copying, marketing, distribution, or use of any Licensed Technology or Licensed Mark. Upon termination or expiration of this Agreement,
Licensee 

4

 

shall immediately ship to Licensor, without charge, all artwork and other materials used to reproduce the Licensed Mark or derivative materials, and each Party shall return to the other any
Confidential Information or materials containing Confidential Information of the other Party. 

        4.09    Survival.    The obligations of Sections 3.02, 3.04, 4.01, and 4.05 shall survive any termination or
expiration of this Agreement. 

ARTICLE 5. GENERAL PROVISIONS  

        5.01    Attorneys' Fees and Expenses.    The prevailing Party shall have the right to collect from the other Party its
reasonable costs and necessary disbursements and attorneys' fees incurred in enforcing this Agreement. 

        5.02    Governing Law.    This Agreement shall be governed in accordance with the laws of the State of California. 

        5.03    Jurisdiction.    The Parties consent to the exclusive jurisdiction and venue of the federal and state courts
located in Alameda County, California in any action arising out of or relating to this Agreement. The Parties waive any other venue to which either Party might be entitled by domicile or otherwise. 

        5.04    Waiver.    The failure to exercise any right provided in this Agreement shall not be a waiver of prior or
subsequent rights. 

        5.05    Invalidity.    If any provision of this Agreement is invalid under applicable statute or rule of law, it is to
be considered omitted and the remaining provisions of this Agreement shall in no way be affected. 

        5.06    Entire Understanding.    This Agreement expresses the complete understanding of the Parties and supersedes all
prior representations, agreements, and understandings, whether written or oral. This Agreement may not be altered except by a written document signed by both Parties. 

        5.07    Counterparts.    This Agreement may be executed in one or more counterparts, each of which shall be deemed an
original, but all such counterparts together shall constitute but one and the same agreement. 

        5.08    Notices.    Any notice or consent required to be given under this Agreement shall be in writing and shall be
sent by first class certified or registered mail, return receipt requested, or by any return receipt express courier service. Notice shall be deemed received on the date indicated on the return
receipt. 

        If
to Licensee: 

D.W.C.
Installations

2401 Crow Canyon Road, Suite 201

San Ramon, California 94583 

        If
to Licensor: 

Two
Dog Net, Inc.

2401 Crow Canyon Road, Suite 201

San Ramon, California 94583 

        5.09    No Joint Venture.    Nothing contained in this Agreement shall be construed to place the Parties in the
relationship of agent, employee, franchisee, officer, partner or joint venturer. 

5

 

        5.10    Assignability.    Licensee may not assign or transfer its rights or obligations pursuant to this Agreement
without the prior written consent of Licensor. Any assignment of transfer in violation of this section shall be void. 

        IN
WITNESS WHEREOF, the Parties hereto have executed this Agreement on the date first written above. 

LICENSEE:

D.W.C.
Installations, a Nevada corporation 

	/s/  SHOLEH HAMEDANI      
	 	 
	BY:	 	Sholeh Hamedani	 	 
	ITS:	 	President and CEO	 	 

LICENSOR:

Two
Dog Net, Inc., a California corporation 

	/s/  NASSER HAMEDANI      
	 	 
	BY:	 	Nasser Hamedani	 	 
	ITS:	 	Chairman of the Board	 	 

6

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