-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MkBT0hljo92w7c9AuQd2WQ2i9ZcsJlq4XS9t9Zqal9DegTirKNRu2i3jVkR5WmtA 0cLYMadqlDvBHaRB7wVSSA== 0000950135-06-007685.txt : 20061227 0000950135-06-007685.hdr.sgml : 20061227 20061227172856 ACCESSION NUMBER: 0000950135-06-007685 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20061227 DATE AS OF CHANGE: 20061227 GROUP MEMBERS: DAVID E. COHEN GROUP MEMBERS: MIDWOOD CAPITAL PARTNERS QP, L.P. GROUP MEMBERS: MIDWOOD CAPITAL PARTNERS, L.P. GROUP MEMBERS: ROSS D. DEMONT FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: MIDWOOD CAPITAL MANAGEMENT LLC CENTRAL INDEX KEY: 0001273663 IRS NUMBER: 000000000 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 45 FAIRFIELD STREET STREET 2: 5TH FLOOR CITY: BOSTON STATE: MA ZIP: 02116 BUSINESS PHONE: 6172262609 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: POINT 360 CENTRAL INDEX KEY: 0001014733 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-ALLIED TO MOTION PICTURE PRODUCTION [7819] IRS NUMBER: 954272619 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-52979 FILM NUMBER: 061301306 BUSINESS ADDRESS: STREET 1: 2777 NORTH ONTARIO STREET CITY: BURBANK STATE: CA ZIP: 91504 BUSINESS PHONE: 818-565-1440 MAIL ADDRESS: STREET 1: 2777 NORTH ONTARIO STREET CITY: BURBANK STATE: CA ZIP: 91504 FORMER COMPANY: FORMER CONFORMED NAME: VDI MULTIMEDIA DATE OF NAME CHANGE: 19991115 FORMER COMPANY: FORMER CONFORMED NAME: VDI MEDIA DATE OF NAME CHANGE: 19960516 SC 13D/A 1 b63541mcsc13dza.txt MIDWOOD CAPITAL MANAGEMENT LLC OMB APPROVAL ---------------------------- OMB Number: 3235-0145 Expires: February 28, 2009 Estimated average burden hours per response. . . 14.5 ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D UNDER THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. 5)* POINT.360 - -------------------------------------------------------------------------------- (Name of Issuer) Common Stock, no par value - -------------------------------------------------------------------------------- (Title of Class of Securities) - -------------------------------------------------------------------------------- 730698 10 7 (CUSIP Number) Midwood Capital Management LLC Attn: David E. Cohen 575 Boylston St. 4th Floor Boston, MA 02108 617-224-1751 With a copy to: Peter M. Rosenblum, Esq. Foley Hoag LLP 155 Seaport Blvd. Boston, MA 02210 617-832-1151 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) December 22, 2006 - -------------------------------------------------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Sections 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. [ ] NOTE: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Section 240.13d-7 for other parties to whom copies are sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). PERSONS WHO RESPOND TO THE COLLECTION OF INFORMATION CONTAINED IN THIS FORM ARE NOT REQUIRED TO RESPOND UNLESS THE FORM DISPLAYS A CURRENTLY VALID OMB CONTROL NUMBER. ================================================================================ CUSIP NO. 730698 10 7 13D PAGE 2 OF 12 PAGES - -------------------------------------------------------------------------------- 1. Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only). David E. Cohen - -------------------------------------------------------------------------------- 2. Check the Appropriate Box if a Member of a Group (See Instructions) (a) [ ] (b) [ ] - -------------------------------------------------------------------------------- 3. SEC Use Only - -------------------------------------------------------------------------------- 4. Source of Funds (See Instructions) OO - -------------------------------------------------------------------------------- 5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6. Citizenship or Place of Organization USA - -------------------------------------------------------------------------------- Number of 7. Sole Voting Power Shares ---------------------------------------------------------------- Beneficially 8. Shared Voting Power 0 Owned by ---------------------------------------------------------------- Each 9. Sole Dispositive Power Reporting ---------------------------------------------------------------- Person With 10. Shared Dispositive Power 0 - -------------------------------------------------------------------------------- 11. Aggregate Amount Beneficially Owned by Each Reporting Person 0 - -------------------------------------------------------------------------------- 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) [ ] - -------------------------------------------------------------------------------- 13. Percent of Class Represented by Amount in Row (11) 0% - -------------------------------------------------------------------------------- 14. Type of Reporting Person (See Instructions) IN - -------------------------------------------------------------------------------- CUSIP NO. 730698 10 7 13D PAGE 3 OF 12 PAGES - -------------------------------------------------------------------------------- 1. Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only). Ross D. DeMont - -------------------------------------------------------------------------------- 2. Check the Appropriate Box if a Member of a Group (See Instructions) (a) [ ] (b) [ ] - -------------------------------------------------------------------------------- 3. SEC Use Only 4. Source of Funds (See Instructions) OO 5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) [ ] 6. Citizenship or Place of Organization USA - -------------------------------------------------------------------------------- Number of 7. Sole Voting Power Shares ---------------------------------------------------------------- Beneficially 8. Shared Voting Power 0 Owned by ---------------------------------------------------------------- Each 9. Sole Dispositive Power Reporting ---------------------------------------------------------------- Person With 10. Shared Dispositive Power 0 - -------------------------------------------------------------------------------- 11. Aggregate Amount Beneficially Owned by Each Reporting Person 0 - -------------------------------------------------------------------------------- 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) [ ] - -------------------------------------------------------------------------------- 13. Percent of Class Represented by Amount in Row (11) 0% - -------------------------------------------------------------------------------- 14. Type of Reporting Person (See Instructions) IN - -------------------------------------------------------------------------------- CUSIP NO. 730698 10 7 13D PAGE 4 OF 12 PAGES - -------------------------------------------------------------------------------- 1. Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only). Midwood Capital Management LLC I.R.S. Identification No. 14-1885029 - -------------------------------------------------------------------------------- 2. Check the Appropriate Box if a Member of a Group (See Instructions) (a) [ ] (b) [ ] - -------------------------------------------------------------------------------- 3. SEC Use Only 4. Source of Funds (See Instructions) OO 5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) [ ] 6. Citizenship or Place of Organization Delaware - -------------------------------------------------------------------------------- 7. Sole Voting Power 0 Number of ---------------------------------------------------------------- Shares 8. Shared Voting Power Beneficially ---------------------------------------------------------------- Owned by 9. Sole Dispositive Power 0 Each ---------------------------------------------------------------- Reporting 10. Shared Dispositive Power Person With ---------------------------------------------------------------- 11. Aggregate Amount Beneficially Owned by Each Reporting Person 0 - -------------------------------------------------------------------------------- 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) [ ] - -------------------------------------------------------------------------------- 13. Percent of Class Represented by Amount in Row (11) 0% - -------------------------------------------------------------------------------- 14. Type of Reporting Person (See Instructions) IA - -------------------------------------------------------------------------------- CUSIP NO. 730698 10 7 13D PAGE 5 OF 12 PAGES - -------------------------------------------------------------------------------- 1. Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only). Midwood Capital Partners, L.P. I.R.S. Identification No. 27-0060548 - -------------------------------------------------------------------------------- 2. Check the Appropriate Box if a Member of a Group (See Instructions) (a) [ ] (b) [ ] - -------------------------------------------------------------------------------- 3. SEC Use Only - -------------------------------------------------------------------------------- 4. Source of Funds (See Instructions) OO - -------------------------------------------------------------------------------- 5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6. Citizenship or Place of Organization Delaware - -------------------------------------------------------------------------------- Number of 7. Sole Voting Power 0 Shares ---------------------------------------------------------------- Beneficially 8. Shared Voting Power Owned by ---------------------------------------------------------------- Each 9. Sole Dispositive Power 0 Reporting ---------------------------------------------------------------- Person With 10. Shared Dispositive Power - -------------------------------------------------------------------------------- 11. Aggregate Amount Beneficially Owned by Each Reporting Person 0 - -------------------------------------------------------------------------------- 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) [ ] - -------------------------------------------------------------------------------- 13. Percent of Class Represented by Amount in Row (11) 0% - -------------------------------------------------------------------------------- 14. Type of Reporting Person (See Instructions) PN - -------------------------------------------------------------------------------- CUSIP NO. 730698 10 7 13D PAGE 6 OF 12 PAGES - -------------------------------------------------------------------------------- 1. Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only). - -------------------------------------------------------------------------------- Midwood Capital Partners QP, L.P. I.R.S. Identification No. 42-1657728 - -------------------------------------------------------------------------------- 2. Check the Appropriate Box if a Member of a Group (See Instructions) (a) [ ] (b) [ ] - -------------------------------------------------------------------------------- 3. SEC Use Only - -------------------------------------------------------------------------------- 4. Source of Funds (See Instructions) OO - -------------------------------------------------------------------------------- 5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6. Citizenship or Place of Organization Delaware - -------------------------------------------------------------------------------- Number of 7. Sole Voting Power 0 Shares ---------------------------------------------------------------- Beneficially 8. Shared Voting Power Owned by ---------------------------------------------------------------- Each 9. Sole Dispositive Power 0 Reporting ---------------------------------------------------------------- Person With 10. Shared Dispositive Power - -------------------------------------------------------------------------------- 11. Aggregate Amount Beneficially Owned by Each Reporting Person 0 - -------------------------------------------------------------------------------- 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) [ ] - -------------------------------------------------------------------------------- 13. Percent of Class Represented by Amount in Row (11) 0% - -------------------------------------------------------------------------------- 14. Type of Reporting Person (See Instructions) PN - -------------------------------------------------------------------------------- CUSIP No. 730698 10 7 Page 7 of 12 ITEM 1. SECURITY AND ISSUER This joint statement on Schedule 13D relates to the common stock, no par value (the "Common Stock") of POINT.360, a California corporation (the "Issuer"). The address of the Issuer's principal executive offices is 2777 North Ontario Street, Burbank, CA 91504. ITEM 2. IDENTITY AND BACKGROUND This joint statement on Schedule 13D is being filed by David E. Cohen, Ross D. DeMont, Midwood Capital Management LLC, Midwood Capital Partners, L.P. and Midwood Capital Partners QP, L.P., who are collectively referred to as the "Reporting Persons." Messrs. Cohen and DeMont (the "Managers") are the managers of Midwood Capital Management, LLC ("Capital"), which is the sole general partner of each of Midwood Capital Partners, L.P. ("LP") and Midwood Capital Partners QP, L.P. ("QP" and together with LP, the "Funds"). By virtue of their positions, each of the Managers has the power to vote and dispose of shares of Common Stock held by each of the Funds. Information with respect to each of the Reporting Persons is as follows: (1) (a) David E. Cohen (b) 575 Boylston St., 4th Floor, Boston, MA 02116 (c) Mr. Cohen is a manager of Capital. (d) No (e) No (f) United States (2) (a) Ross D. DeMont (b) 575 Boylston St., 4th Floor, Boston, MA 02116 (c) Mr. DeMont is a manager of Capital. (d) No (e) No (f) United States (3) (a) Midwood Capital Management, LLC, a Delaware limited liability company (b) 575 Boylston St., 4th Floor, Boston, MA 02116 (c) Capital is the sole general partner of, and manages and provides investment advice to, each of the Funds. CUSIP No. 730698 10 7 Page 8 of 12 (d) No (e) No (4) (a) Midwood Capital Partners, L.P., a Delaware limited partnership (b) c/o Midwood Capital Management, LLC, 575 Boylston St., 4th Floor, Boston, MA 02116 (c) LP is a private investment fund engaged in the business of investing in securities. (d) No (e) No (5) (a) Midwood Capital Partners QP, L.P., a Delaware limited partnership (b) c/o Midwood Capital Management, LLC, 575 Boylston St., 4th Floor, Boston, MA 02116 (c) QP is a private investment fund engaged in the business of investing in securities. (d) No (e) No ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION The purchases of 96,851 shares of Common Stock on December 6, 2006 by the Reporting Persons, as detailed in item 5 below, were for a total purchase price of $169,489.25. These purchases and all previous purchases of Common Stock by the Reporting Persons were conducted using cash from the Funds. The shares of Common Stock held by LP and QP were held in margin accounts which from time to time may have incurred debit balances. Since other securities were held in such margin accounts, it is impracticable to determine the amounts, if any, borrowed with respect to such shares of Common Stock. The cost of borrowing with respect to such margin accounts fluctuates with the broker loan rate and the amount of the debit balance. The Reporting Persons currently own no shares of Common Stock. ITEM 4. PURPOSE OF TRANSACTION The Reporting Persons acquired shares of the Common Stock of the Issuer based on their belief that the Issuer's stock is undervalued and represents an attractive investment opportunity. The Reporting Persons have in the past and may in the future wish to engage in a constructive dialogue with management of the Issuer ("Management"), as well as with non-employee Directors and other stockholders of the Issuer, regarding new strategies to create and maximize value for the Issuer's stockholders, which may include a sale of the Issuer. Depending upon their evaluation of the factors described below, one or more of the Reporting Persons may from time to time purchase additional securities of the Issuer, dispose of all or a portion of the securities CUSIP No. 730698 10 7 Page 9 of 12 then held by such Reporting Person, or cease buying or selling such securities. Any such additional purchases or sales of securities of the Issuer may be in the open market or privately negotiated transactions or otherwise. The factors which the Reporting Persons may consider in evaluating equity interests of the Issuer include the following: (i) the Issuer's business and prospects; (ii) the business strategy and actions of Management and the Board of Directors of the Issuer (the "Board of Directors") to enhance the Issuer's value to its stockholders; (iii) the performance of the Common Stock and the availability of the Common Stock for purchase at particular price levels; (iv) the availability and nature of opportunities to dispose of the Reporting Persons' interests; (v) general economic conditions; (vi) stock market and money market conditions; (vii) other business and investment opportunities available to the Reporting Persons; and (viii) other plans and requirements of the Reporting Persons. Depending on their assessment of the foregoing factors, the Reporting Persons may, from time to time, modify their present intention as stated in this item 4. On December 22, 2006, the Reporting Persons sold 1,108,674 shares of Common Stock of the Company, at a price per share of $3.25, conducted via a privately negotiated transaction pursuant to the terms of a Stock Purchase Agreement, a copy of which is attached hereto. Except as set forth above, the Reporting Persons do not have at this time any specific plans which would result in (a) the acquisition of additional securities of the Issuer or the disposition of securities of the Issuer; (b) any extraordinary corporate transactions such as a merger, reorganization or liquidation involving the Issuer or any of its subsidiaries; (c) any sale or transfer of a material amount of the assets of the Issuer or of any of its subsidiaries; (d) any change in the present Management or Board of Directors, including any plans or proposals to change the number of term of directors or to fill any existing vacancies on the Board of Directors; (e) any material change in the present capitalization or dividend policy of the Issuer; (f) any other material change in the Issuer's business or corporate structure; (g) any change in the Issuer's charter or by-laws which may impede the acquisition of control of the Issuer by any person; (h) the Issuer's Common Stock being delisted from a national securities exchange or ceasing to be authorized to be quoted in an inter-dealer quotation system or a registered national securities association; (i) causing a class of equity securities of the Issuer to become eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934, as amended; or (j) any action similar to those enumerated above. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER (a) As of the date of this Amendment No. 5, the Reporting Persons, singly and collectively, own no shares of the Common Stock of the Issuer and represent 0% of the class. (b) N/A CUSIP No. 730698 10 7 Page 10 of 12 (c) The following transactions in the Common Stock were conducted by Reporting Persons since December 5, 2006, which is the date of the Amendment No. 4 to this joint statement on Schedule 13D:
NO. OF SHARES PURCHASE/(SALE) PERSON DATE PURCHASED/(SOLD) PRICE PER SHARE - --------------------------------- -------- ---------------- --------------------- Midwood Capital Partners, L.P. 12/06/06 47,782 $1.75 12/20/06 (488,371) $3.25 Midwood Capital Partners QP, L.P. 12/06/06 49,069 $1.75 12/20/06 (620,303) $3.25
The purchases of an aggregate of 96,851 shares of Common Stock by the Reporting Persons on December 6, 2006 were conducted in the ordinary course of business on the open market for cash. The sales of an aggregate of 1,108,674 shares of Common Stock by the Reporting Persons on December 22, 2006, as detailed above, were conducted via a privately negotiated transaction for cash, pursuant to the terms of a Stock Purchase Agreement, a copy of which is attached hereto. (d) N/A (e) On December 22, 2006, the Reporting Persons ceased to be the beneficial owners of more than five percent of the Common Stock. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER The Reporting Persons are parties to a Joint Filing Agreement dated November 9, 2005 relating to this Schedule 13D, a copy of which was previously filed with this Schedule 13D and is hereby incorporated by reference herein. Except for the foregoing and as otherwise described in this Schedule 13D, including the Exhibits attached hereto, there are no contracts, arrangements, understandings, or relationships (legal or otherwise) among the Reporting Persons, or between any Reporting Person(s) and any third party, with respect to any securities of the Issuer, including, but not limited to, transfer or voting any of the securities, finder's fees, joint ventures, loan or option arrangements, put or calls, guarantees of profits, division of profits or losses, or the giving or withholding of proxies. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS Stock Purchase Agreement by and among Midwood Capital Management, LLC, Midwood Capital Partners, L.P. and Midwood Capital Partners QP, L.P. and DG FastChannel, Inc. dated December 22, 2006. CUSIP No. 730698 10 7 Page 11 of 12 Signature After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. DATE: December 27, 2006 MIDWOOD CAPITAL PARTNERS, L.P. By: Midwood Capital Management, LLC General Partner By: /s/ David E. Cohen ---------------------------------------- David E. Cohen Manager MIDWOOD CAPITAL PARTNERS QP, L.P. By: Midwood Capital Management, LLC General Partner By: /s/ David E. Cohen ---------------------------------------- David E. Cohen Manager MIDWOOD CAPITAL MANAGEMENT, LLC By: /s/ David E. Cohen ---------------------------------------- David E. Cohen Manager CUSIP No. 730698 10 7 Page 12 of 12 DAVID E. COHEN By: /s/ David E. Cohen ---------------------------------------- David E. Cohen ROSS D. DEMONT By: /s/ Ross D. DeMont ---------------------------------------- Ross D. DeMont EX-99.1 2 b63541mcexv99w1.txt EX-99.1 SECURITIES PURCHASE AGREEMENT ================================================================================ SECURITIES PURCHASE AGREEMENT BETWEEN DG FASTCHANNEL, INC. AND MIDWOOD CAPITAL MANAGEMENT LLC, MIDWOOD CAPITAL PARTNERS, L.P., MIDWOOD CAPITAL PARTNERS QP, L.P. DECEMBER 22, 2006 ================================================================================ THIS SECURITIES PURCHASE AGREEMENT (this "Agreement") is entered into effective as of December 22, 2006 between DG FastChannel, Inc., a Delaware corporation (the "Purchaser"), Midwood Capital LLC, a Delaware limited liability company ("Seller"), Midwood Capital Partners, L.P., a Delaware limited partnership ("LP") and Midwood Capital Partners QP, L.P., a Delaware limited partnership ("QP" and together with LP, the "Funds")' WHEREAS, Seller and the Funds beneficially own 1,108,674 shares (the "Shares") of common stock, no par value, of POINT.360 ("Point 360"), a California corporation; WHEREAS, Seller is the sole general partner of, and manages and provides investment advice to, each of the Funds; WHEREAS, Purchaser desires to acquire the Shares, free from all liens, pledges, encumbrances, proxies, voting agreements or arrangements of any kind with respect to the Shares, on the terms, representations warranties, and covenants hereinafter set forth. NOW, THEREFORE, in consideration of the foregoing premises and the covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1. Purchase. Seller shall deliver, convey and transfer, or cause the Funds to deliver, convey and transfer, the Shares against delivery in same day funds by wire transfer of $3.25 per Share, for a total purchase price ("Purchase Price") of $3,603,191, to a brokerage account designated in writing by Purchaser, by irrevocable written instructions (the "Transfer Instructions") to the broker(s) engaged by Seller on behalf of the Funds which presently hold or otherwise have custody of the Shares. Seller shall provide Purchaser with written wire instructions for delivery of the Purchase Price to an account(s) at a U.S. financial institution or broker (the "Wire Instructions"), upon which Purchaser can rely in full payment for the Shares. Against confirmation of delivery of the Transfer Instructions to such broker(s) which presently hold or have custody of the Shares, Purchaser shall deliver or cause to be delivered the Purchaser Price in accordance with the Wire Instructions. 2. Representations, Warranties and Covenants of the Purchaser. Purchaser hereby represents, warrants and covenants to each of the Seller and the Funds as follows. 2.1 Due Authorization. Purchaser has all requisite power and authority to execute, deliver and perform its obligations under this Agreement, and has taken all necessary corporate action to enter and perform this Agreement. This Agreement has been duly authorized and validly executed and delivered by Purchaser and constitutes a legal, valid and binding agreement of Purchaser enforceable against Purchaser in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors' and contracting parties' rights generally and except as enforceability may be subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). 2.2 Non-Contravention. The execution and delivery of this Agreement, the purchase of the Shares under this Agreement, the fulfillment of the terms of this Agreement and the consummation of the transactions contemplated hereby will not (A) conflict with or constitute a violation of, or default (with or without the giving of notice or the passage of time or both) under, 1 (i) any material bond, debenture, note or other evidence of indebtedness, or under any material lease, indenture, mortgage, deed of trust, loan agreement, joint venture or other agreement or instrument to which Purchaser is a party, (ii) the charter, by-laws or other organizational documents of Purchaser, as applicable, or (iii) any law, administrative regulation, ordinance or order of any court or governmental agency, arbitration panel or authority applicable to Purchaser or its property, or (B) result in the creation or imposition of any lien, encumbrance, claim, security interest or restriction whatsoever upon any of the material properties or assets of Purchaser or an acceleration of indebtedness pursuant to any obligation, agreement or condition contained in any material bond, debenture, note or any other evidence of indebtedness or any material indenture, mortgage, deed of trust or any other agreement or instrument to which Purchaser is a party or by which any of them is bound or to which any of the property or assets of Purchaser is subject. No consent, approval, authorization or other order of, or registration, qualification or filing with, any regulatory body, administrative agency, self-regulatory organization, stock exchange or market, or other governmental body in the United States is required for the execution and delivery of this Agreement and the acquisition of the Shares by Purchaser, other than with respect to such filings as may be required by Purchaser under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). 2.3 Status. Purchaser acknowledges that may be entering into this Agreement and acquiring the Shares on the basis of incomplete or inaccurate information available to it, and that neither Seller nor the Funds, nor any of their respective affiliates or representatives, have made any statement or representations with respect to the financial condition, results of operations or prospects of Point 360. Purchaser hereby waives any claims or causes of action it may have against Seller, the Funds or any of their respective affiliates or representatives with respect to the offer to sell and the sale of the Shares under the securities laws of the Untied States, applicable state securities or other laws or judicial doctrines, upon delivery of the Shares as provided under this Agreement. 3. Representations, Warranties and Covenants of Seller and the Funds. Each of Seller and the Funds, severally and not joint, hereby represents, warrants and covenants to Purchaser as follows: 3.1 Title. The Funds are the beneficial owner of the Shares and hold good and marketable title to the Shares without restriction on sale or transfer, and upon consummation of the transaction contemplated by this Agreement, Purchaser will acquire title to the Shares, free and clear of any and all liens, claims, pledges or encumbrances, proxies or voting agreements or arrangements of any kind. 3.2 Due Authorization. Each of the Seller and the Funds has all requisite power and authority to execute, deliver and perform its obligations under this Agreement, and has taken all necessary company or partnership action, as applicable, to enter and perform this Agreement. This Agreement has been duly authorized and validly executed and delivered by each of Seller and the Funds and constitutes a legal, valid and binding agreement of each of Seller and the Funds enforceable against Seller and the Funds in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors' and contracting parties' rights generally and except as enforceability may be subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). 2 3.3 Non-Contravention. The execution and delivery of this Agreement, the sale of the Shares under this Agreement, the fulfillment of the terms of this Agreement and the consummation of the transactions contemplated hereby will not (A) conflict with or constitute a violation of, or default (with or without the giving of notice or the passage of time or both) under, (i) any material bond, debenture, note or other evidence of indebtedness, or under any material lease, indenture, mortgage, deed of trust, loan agreement, joint venture or other agreement or instrument to which Seller or either of the Funds is a party, (ii) the organizational documents of Seller or the Funds, or (iii) any law, administrative regulation, ordinance or order of any court or governmental agency, arbitration panel or authority applicable to Seller or either of the Funds or their respective property, other than with respect to a potential obligation arising under the Exchange Act, or (B) result in the creation or imposition of any lien, encumbrance, claim, security interest or restriction whatsoever upon any of the material properties or assets of Seller or either of the Funds or an acceleration of indebtedness pursuant to any obligation, agreement or condition contained in any material bond, debenture, note or any other evidence of indebtedness or any material indenture, mortgage, deed of trust or any other agreement or instrument to which Seller or either of the Funds is a party or by which any of them is bound or to which any of the property or assets of Seller or either of the Funds is subject. No consent, approval, authorization or other order of, or registration, qualification or filing with, any regulatory body, administrative agency, self -regulatory organization, stock exchange or market, or other governmental body in the United States is required for the execution and delivery of this Agreement and the sale of the Shares by Seller and the Funds. 3.4 Share Ownership. Upon fulfillment of their obligations hereunder, neither Seller nor either of the Funds, will own (beneficially or otherwise) any equity securities of the Point 360, or any securities convertible into or exchangeable or exercisable for any equity securities of the Point 360, or which, upon redemption thereof could result in Seller or either of the funds receiving any equity securities of Point 360, or options, warrants, contractual rights or other rights of any kind to acquire or vote any equity securities of the Point 360. 3.5 Status. Seller is the sole general partner of the Funds and has sole investment and voting power with respect to the Shares. Each of Seller and the Funds acknowledge that they are sophisticated investors in equity securities and that they trade and invest regularly in equity securities of United States issuers such as Point 360, that they may be entering into this Agreement and selling the Shares on the basis of incomplete or inaccurate information available to them, that neither Purchaser nor any of Purchaser's affiliates or representatives have disclosed to them any intent to acquire additional shares of common stock of Point 360 but if Purchaser or any affiliate thereof should acquire more shares of common stock of Point 360 through any means including open market, privately negotiated or business combination transactions, Purchaser or its affiliates may do so at any time at a price or fair market value greater than $3.25 per share. Each of Seller and the Funds hereby waive any claims or causes of actions they may have against Purchaser, its affiliates or representatives with respect to the offer to purchase and the sale of the Shares under the securities laws of the United States, applicable state securities or other laws or judicial doctrines, upon payment in full of the Purchase Price of the Shares as provided under this Agreement. 3.6 U.S. Taxpayer. Each of Seller and the Funds have executed and delivered to Purchase a Substitute Form W-9, substantially in the form attached hereto, and represent and warrant to Purchaser that they are not a "foreign person" within the meaning of Section 1445(b)(2) of the Internal Revenue Code. 3 4. Survival of Representations, Warranties and Agreements. Notwithstanding any investigation made by any party to this Agreement, all covenants, agreements, representations and warranties made by Purchaser and Seller and each of the Funds herein shall survive the execution and delivery of this Agreement, the delivery to Purchaser of the Shares and the payment of the Purchase Price as provided herein. 5. Notices. All notices, requests, consents and other communications hereunder shall be in writing, shall be mailed (A) if within domestic United States by first-class registered or certified airmail, or nationally recognized overnight express courier, postage prepaid, or by facsimile, or (B) if delivered from outside the United States, by International Federal Express or facsimile, and shall be deemed given (i) if delivered by first-class registered or certified mail domestic, three business days after so mailed, (ii) if delivered by nationally recognized overnight carrier, one business day after so mailed, (iii) if delivered by International Federal Express, two business days after so mailed, and (iv) if delivered by facsimile, upon electric confirmation of receipt and shall be delivered as addressed as follows: (a) if to the Purchaser, to: DG FastChannel, Inc. 750 W. John Carpenter Freeway Suite 700 Irving, Texas 7503 Attn: Omar A. Choucair Chief Financial Officer Phone: (972) 581-2000 Fax: (972) 581-2001 with a copy to: Latham & Watkins LLP 555 Eleventh Street, N.W. Suite 1000 Washington, DC 20004 Attn: William P. O'Neill Phone: (202) 637-2200 Fax: (202) 637-2201 (b) if to Seller or the Funds, to: Midwood Capital Management LLC 575 Boylston 4th Floor Boston, MA 02116 Attn: David Cohen Managing Director Phone: (617) 224-1751 Fax: (617) 224-1769 4 with a copy to: Foley Hoag LLP 155 Seaport Boulevard Boston, MA 02210 Attn: Peter M. Rosenblum Phone: (617) 832-1151 Fax: (617) 832-7000 Copies delivered to counsel shall not constitute notice. 6. Changes. This Agreement may not be modified or amended except pursuant to an instrument in writing signed by the Purchaser and Seller and the Funds. 7. Headings. The headings of the various sections of this Agreement have been inserted for convenience of reference only and shall not be deemed to be part of this Agreement. 8. Severability. In case any provision contained in this Agreement should be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby. 9. Governing Law. This Agreement shall be governed by, and construed in accordance with, the internal laws of the State of New York, without giving effect to the principles of conflicts of law. 10. Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto pertaining to the subject matter hereof, and any and all other written or oral agreements relating to such subject matter are expressly cancelled. 11. Finders Fees. Neither Purchaser, nor Seller, nor the Funds nor any affiliate thereof has incurred any obligation which will result in the obligation of the other party to pay any finder's fee or commission in connection with this transaction. 12. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall constitute an original, but all of which, when taken together, shall constitute but one instrument, and shall become effective when one or more counterparts have been signed by each party hereto and delivered to the other parties. 13. Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of Purchaser and Seller and the Funds. 14. Expenses. Each of the Purchaser and Seller and the Funds shall bear its own expenses in connection with the preparation and negotiation of the Agreement and any brokerage fees or commissions in respect of the sale and delivery of the Shares. [Signature pages follow.] 5 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written. DG FASTCHANNEL, INC. By: /s/ Scott Ginsburg ------------------------------ Scott Ginsburg Chairman and CEO MIDWOOD CAPITAL MANAGEMENT LLC By: /s/ David Cohen ------------------------------ David Cohen Managing Director MIDWOOD CAPITAL PARTNERS, L.P. By: Midwood Capital Management LLC General Partner By: /s/ David Cohen ------------------------------ David Cohen Managing Director MIDWOOD CAPITAL PARTNERS QP, L.P. By: Midwood Capital Management LLC General Partner By: /s/ David Cohen ------------------------------ David Cohen Managing Director Attachment: Substitute Form W-9 Substitute W-9 REQUEST FOR TAXPAYER GIVE FORM TO THE Form IDENTIFICATION NUMBER AND CERTIFICATION REQUESTER. DO NOT (Rev. February 2005) SEND TO THE IRS. PLEASE PRINT OR TYPE See SPECIFIC INSTRUCTIONS on page 2. - -------------------------------------------------------------------------------- Name (as shown on your income tax return) - -------------------------------------------------------------------------------- Business name, if different from above MIDWOOD CAPITAL PARTNERS, L.P. - -------------------------------------------------------------------------------- Check [ ] Individual/Sole [ ] Corporation [X] Partnership [ ] Other _________ [X] Exempt from appropriate Proprietor backup withholding box: [ ] LLC filing as Sole [ ] LLC filing as [ ] LLC filing as Partnership Proprietor Corporation - ---------------------------------------------------------------------------------------------------------------------- Address (number, street, and apt. or suite no.) Requester's name and address (optional) 575 BOYLSTON STREET, 4TH FLOOR - ------------------------------------------------------------------------------- City, state, and ZIP code BOSTON, MA 02116 - ---------------------------------------------------------------------------------------------------------------------- List account number(s) here (optional) - ----------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------- PART I TAXPAYER IDENTIFICATION/NUMBER (TIN) - -------------------------------------------------------------------------------- Enter your TIN in the appropriate box. The TIN provided must match the name given on Line 1 to avoid backup withholding. For individuals, this is your social security number (SSN). However, for a resident alien, sole proprietor, or disregarded entity, see the Part I instructions on page 3. For other entities, it is your employer identification number (EIN). If you do not have a number, see How to get a TIN on page 3. NOTE: If the account is in more than one name, see the chart on page 3 for guidelines on whose number to enter. - ------------------------------ SOCIAL SECURITY NUMBER - ------------------------------ OR - ------------------------------ EMPLOYER IDENTIFICATION NUMBER 270060548 - ------------------------------ - -------------------------------------------------------------------------------- PART II CERTIFICATION - -------------------------------------------------------------------------------- Under penalties of perjury, I certify that: 1. The number shown on this form is my correct taxpayer identification number (or I am waiting for a number to be issued to me), and 2. I am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service (IRS) that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding, and 3. I am a U.S. person (including a U.S. resident alien). CERTIFICATION INSTRUCTIONS. You must cross out item 2 above if you have been notified by the IRS that you are currently subject to backup withholding because you have failed to report all interest and dividends on your tax return. For real estate transactions, item 2 does not apply. For mortgage interest paid, acquisition or abandonment of secured property, cancellation of debt, contributions to an individual retirement arrangement (IRA), and generally, payments other than interest and dividends, you are not required to sign the Certification, but you must provide your correct TIN. (See the instructions on page 3.) - -------------------------------------------------------------------------------- SIGN HERE SIGNATURE OF U.S. PERSON > /s/ David E. Cohen DATE > 12/22/06 - -------------------------------------------------------------------------------- PURPOSE OF FORM A person who is required to file an information return with the IRS must obtain your correct taxpayer identification number (TIN) to report, for example, income paid to you, real estate transactions, mortgage interest you paid, acquisition or abandonment of secured property, cancellation of debt, or contributions you made to an IRA. U.S. PERSON. Use form W-9 only if you are a U.S. person (including a resident alien), to provide your correct TIN to the person requesting it (the requester) and, when applicable, to: 1. Certify the TIN you are giving is correct (or you are waiting for a number to be issued), 2. Certify you are not subject to backup withholding, or 3. Claim exemption from backup withholding if you are a U.S. exempt payee. NOTE: If a requester gives you a form other than Form W-9 to request your TIN, you must use the requester's form if it is substantially similar to this Form W-9. For federal tax purposes you are considered a person if you are: - An individual who is a citizen or resident of the United States, - A partnership, corporation, company, or association created or organized in the United States or under the laws of the United States, or - Any estate (other than a foreign estate) or trust. See Regulations sections 301.7701-6(a) and 7(a) for additional information. FOREIGN PERSON. If you are a foreign person, do not use for W-9. Instead use the appropriate Form W-8 (see Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities). NONRESIDENT ALIEN WHO BECOMES A RESIDENT ALIEN. Generally, only a nonresident alien individual may use the terms of a tax treaty to reduce or eliminate U.S. tax on certain types of income. However, most tax treaties contain a provision known as a "saving clause." Exceptions specified in the saving clause may permit an exemption from tax to continue for certain types of income even after the recipient has otherwise become a U.S. resident alien for tax purposes. If you are a U.S. resident alien who is relying on a exception contained in the saving clause of a tax treaty to claim an exemption from U.S. tax on certain types of income, you must attach a statement to Form W-9 that specifies the following five items: 1. The treaty country. Generally, this must be the same treaty under which you claimed exemption from tax as a nonresident alien. 2. The treaty article addressing the income. 3. The article number (or location) in the tax treaty that contains the saving clause and its exceptions. 4. The type and amount of income that qualifies for the exemption from tax. 5. Sufficient facts to justify the exemption from tax under the terms of the treaty article. EXAMPLE. Article 20 of the U.S.-China income tax treaty allows an exemption from tax for scholarship income received by a Chinese student temporarily present in the United States. Under U.S. law, this student will become a resident alien for tax purposes if his or her stay in the United States exceeds 5 calendar years. However, paragraph 2 of the first Protocol to the U.S.-China treaty (dated April 30, 1984) allows the provisions of Article 20 to continue to apply even after the Chinese student becomes a resident alien of the United States. A Chinese Substitute Form W-9 (Rev. 02-2005) Substitute W-9 REQUEST FOR TAXPAYER GIVE FORM TO THE Form IDENTIFICATION NUMBER AND CERTIFICATION REQUESTER. DO NOT (Rev. February 2005) SEND TO THE IRS. PLEASE PRINT OR TYPE See SPECIFIC INSTRUCTIONS on page 2. - -------------------------------------------------------------------------------- Name (as shown on your income tax return) - -------------------------------------------------------------------------------- Business name, if different from above MIDWOOD CAPITAL PARTNERS QP, L.P. - -------------------------------------------------------------------------------- Check [ ] Individual/Sole [ ] Corporation [X] Partnership [ ] Other _________ [X] Exempt from appropriate Proprietor backup withholding box: [ ] LLC filing as Sole [ ] LLC filing as [ ] LLC filing as Partnership Proprietor Corporation - ---------------------------------------------------------------------------------------------------------------------- Address (number, street, and apt. or suite no.) Requester's name and address (optional) 575 BOYLSTON STREET, 4TH FLOOR - ------------------------------------------------------------------------------- City, state, and ZIP code BOSTON, MA 02116 - ---------------------------------------------------------------------------------------------------------------------- List account number(s) here (optional) - ----------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------- PART I TAXPAYER IDENTIFICATION/NUMBER (TIN) - -------------------------------------------------------------------------------- Enter your TIN in the appropriate box. The TIN provided must match the name given on Line 1 to avoid backup withholding. For individuals, this is your social security number (SSN). However, for a resident alien, sole proprietor, or disregarded entity, see the Part I instructions on page 3. For other entities, it is your employer identification number (EIN). If you do not have a number, see How to get a TIN on page 3. NOTE: If the account is in more than one name, see the chart on page 3 for guidelines on whose number to enter. - ------------------------------ SOCIAL SECURITY NUMBER - ------------------------------ OR - ------------------------------ EMPLOYER IDENTIFICATION NUMBER 421657728 - ------------------------------ - -------------------------------------------------------------------------------- PART II CERTIFICATION - -------------------------------------------------------------------------------- Under penalties of perjury, I certify that: 1. The number shown on this form is my correct taxpayer identification number (or I am waiting for a number to be issued to me), and 2. I am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service (IRS) that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding, and 3. I am a U.S. person (including a U.S. resident alien). CERTIFICATION INSTRUCTIONS. You must cross out item 2 above if you have been notified by the IRS that you are currently subject to backup withholding because you have failed to report all interest and dividends on your tax return. For real estate transactions, item 2 does not apply. For mortgage interest paid, acquisition or abandonment of secured property, cancellation of debt, contributions to an individual retirement arrangement (IRA), and generally, payments other than interest and dividends, you are not required to sign the Certification, but you must provide your correct TIN. (See the instructions on page 3.) - -------------------------------------------------------------------------------- SIGN HERE SIGNATURE OF U.S. PERSON > /s/ David E. Cohen DATE > 12/22/06 - -------------------------------------------------------------------------------- PURPOSE OF FORM A person who is required to file an information return with the IRS must obtain your correct taxpayer identification number (TIN) to report, for example, income paid to you, real estate transactions, mortgage interest you paid, acquisition or abandonment of secured property, cancellation of debt, or contributions you made to an IRA. U.S. PERSON. Use form W-9 only if you are a U.S. person (including a resident alien), to provide your correct TIN to the person requesting it (the requester) and, when applicable, to: 1. Certify the TIN you are giving is correct (or you are waiting for a number to be issued), 2. Certify you are not subject to backup withholding, or 3. Claim exemption from backup withholding if you are a U.S. exempt payee. NOTE: If a requester gives you a form other than Form W-9 to request your TIN, you must use the requester's form if it is substantially similar to this Form W-9. For federal tax purposes you are considered a person if you are: - An individual who is a citizen or resident of the United States, - A partnership, corporation, company, or association created or organized in the United States or under the laws of the United States, or - Any estate (other than a foreign estate) or trust. See Regulations sections 301.7701-6(a) and 7(a) for additional information. FOREIGN PERSON. If you are a foreign person, do not use for W-9. Instead use the appropriate Form W-8 (see Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities). NONRESIDENT ALIEN WHO BECOMES A RESIDENT ALIEN. Generally, only a nonresident alien individual may use the terms of a tax treaty to reduce or eliminate U.S. tax on certain types of income. However, most tax treaties contain a provision known as a "saving clause." Exceptions specified in the saving clause may permit an exemption from tax to continue for certain types of income even after the recipient has otherwise become a U.S. resident alien for tax purposes. If you are a U.S. resident alien who is relying on a exception contained in the saving clause of a tax treaty to claim an exemption from U.S. tax on certain types of income, you must attach a statement to Form W-9 that specifies the following five items: 1. The treaty country. Generally, this must be the same treaty under which you claimed exemption from tax as a nonresident alien. 2. The treaty article addressing the income. 3. The article number (or location) in the tax treaty that contains the saving clause and its exceptions. 4. The type and amount of income that qualifies for the exemption from tax. 5. Sufficient facts to justify the exemption from tax under the terms of the treaty article. EXAMPLE. Article 20 of the U.S.-China income tax treaty allows an exemption from tax for scholarship income received by a Chinese student temporarily present in the United States. Under U.S. law, this student will become a resident alien for tax purposes if his or her stay in the United States exceeds 5 calendar years. However, paragraph 2 of the first Protocol to the U.S.-China treaty (dated April 30, 1984) allows the provisions of Article 20 to continue to apply even after the Chinese student becomes a resident alien of the United States. A Chinese Substitute Form W-9 (Rev. 02-2005) -----END PRIVACY-ENHANCED MESSAGE-----