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CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
Between
UNAPIX ENTERTAINMENT, INC.
and
KA INVESTMENTS LDC
Dated as of July 15, 1998
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CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT (this "AGREEMENT"), dated as
of July 15, 1998, between Unapix Entertainment, Inc., a Delaware corporation
(the "COMPANY"), and KA Investments LDC, a Cayman Islands corporation (the
"PURCHASER").
WHEREAS, subject to the terms and conditions set forth in this Agreement,
the Company desires to issue and sell to the Purchaser and the Purchaser desires
to purchase from the Company, shares of the Company's 6% Series B Convertible
Preferred Stock, par value $.01 per share (the "PREFERRED STOCK").
IN CONSIDERATION of the mutual covenants contained in this Agreement, the
Company and Purchaser agree as follows:
ARTICLE I.
PURCHASE AND SALE OF PREFERRED STOCK
11. PURCHASE AND SALE. (a) Subject to the terms and conditions set forth
herein, the Company shall issue and sell to the Purchaser, and the Purchaser
shall purchase from the Company 300 shares of Preferred Stock (the "SHARES").
(b) The Shares shall have the respective rights, preferences and
privileges set forth in EXHIBIT A attached hereto, which shall be incorporated
into a Certificate of Designation to be approved by the Purchaser and filed on
or prior to the Closing Date (as defined below) by the Company with the
Secretary of State of Delaware (the "CERTIFICATE OF DESIGNATION").
For purposes of this Agreement, "CONVERSION PRICE," "ORIGINAL ISSUE DATE,"
"CONVERSION DATE," "TRADING DAY" and "PER SHARE MARKET VALUE" shall have the
meanings set forth in EXHIBIT A.
12. PURCHASE PRICE. The purchase price per Share shall be $10,000.
13. THE CLOSING.
(a) The closing of the purchase and sale of the Shares (the
"CLOSING") shall take place at the offices of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
& ▇▇▇▇▇▇ LLP ("▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇"), ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, immediately following the execution hereof or such later date as the
parties shall agree. The date of the Closing is hereinafter referred to as the
"CLOSING DATE."
(b) At the Closing, the parties shall deliver or shall cause to be
delivered the following: (i) the Company shall deliver to the Purchaser (1)
stock certificates representing the Shares, registered in the name of the
Purchaser, (2) a three year non-callable common stock purchase warrant in the
form of EXHIBIT B (the "WARRANT") entitling the Purchaser to purchase an
aggregate of 200,000 shares of the Company's common stock, $.01 par value per
share (the "COMMON STOCK"), at an exercise price equal to 120% of the average of
the closing sales prices of the Common Stock as reported on the American Stock
Exchange (the "AMEX") for the five (5) Trading Days immediately preceding the
Closing Date (the "CLOSING PRICE"), registered in the name of the Purchaser, (3)
the legal opinion of St. ▇▇▇▇ & ▇▇▇▇▇, L.L.C., outside counsel to the Company,
substantially in the form of EXHIBIT D, dated the Closing Date, and (4) all
other documents, instruments and writings required to have been delivered at or
prior to the Closing Date by the Company pursuant to this Agreement, including
an executed Registration Rights Agreement, dated the date hereof, between the
Company and the Purchaser, in the form of EXHIBIT C (the "REGISTRATION RIGHTS
AGREEMENT"), and the Irrevocable Transfer Agent Instructions, dated the Closing
Date, in the form of EXHIBIT E, delivered to and acknowledged by the Company's
transfer agent (the "TRANSFER AGENT INSTRUCTIONS"); and (ii) the Purchaser shall
deliver to the Company (1) $3,000,000 in United States dollars in immediately
available funds by wire transfer to an account designated in writing by the
Company for such purpose prior to the Closing Date, and (2) all documents,
instruments and writings required to have been delivered at or prior to the
Closing Date by the Purchaser pursuant to this Agreement, including an executed
Registration Rights Agreement.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES
21. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY. The
Company hereby makes the following representations and warranties to the
Purchaser:
(a) ORGANIZATION AND QUALIFICATION. The Company is a corporation,
duly incorporated, validly existing and in good standing under the laws of the
State of Delaware, with the requisite corporate power and authority to own and
use its properties and assets and to carry on its business as currently
conducted. The Company has no subsidiaries other than as set forth in SCHEDULE
2.1(A) (collectively the "SUBSIDIARIES"). Except as set forth in SCHEDULE
2.1(A), each of the Subsidiaries is an entity, duly incorporated or otherwise
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization (as applicable), with the full
corporate power and authority to own and use its properties and assets and to
carry on its business as currently conducted. Except as set forth in SCHEDULE
2.1(A), each of the Company and the Subsidiaries is duly qualified to do
business and is in good standing as a foreign corporation in each jurisdiction
in which the nature of the business conducted or property owned by it makes such
qualification necessary, except where the failure to be so qualified or in good
standing, as the case may be, could not, individually or in the aggregate, (x)
adversely affect the legality, validity or enforceability of the Securities (as
defined below) or any of this Agreement, the Certificate of Designation, the
Warrant or the Registration Rights Agreement (collectively, the "TRANSACTION
DOCUMENTS"), (y) have or result in a material adverse effect on the results of
operations, assets, prospects, or condition (financial or otherwise) of the
Company and
the Subsidiaries, taken as a whole, or (z) adversely impair the Company's
ability to perform fully on a timely basis its obligations under any of the
Transaction Documents (any of (x), (y) or (z), being a "MATERIAL ADVERSE
EFFECT").
(b) AUTHORIZATION; ENFORCEMENT. The Company has the requisite
corporate power and authority to enter into and to consummate the transactions
contemplated by each of the Transaction Documents, and otherwise to carry out
its obligations thereunder. The execution and delivery of each of the
Transaction Documents by the Company and the consummation by it of the
transactions contemplated thereby have been duly authorized by all necessary
action on the part of the Company and no further action is required by the
Company. Each of the Transaction Documents has been duly executed by the
Company and, when delivered (or filed, as the case may be) in accordance with
the terms hereof, will constitute the valid and binding obligation of the
Company enforceable against the Company in accordance with its terms. Neither
the Company nor any Subsidiary is in violation of any of the provisions of its
respective certificate of incorporation, by- laws or other charter documents.
(c) CAPITALIZATION. The number of authorized, issued and outstanding
capital stock of the Company is set forth in SCHEDULE 2.1(C). No shares of
Common Stock are entitled to preemptive or similar rights, nor is any holder of
the Common Stock entitled to preemptive or similar rights arising out of any
agreement or understanding with the Company by virtue of any of the Transaction
Documents. Except as disclosed in SCHEDULE 2.1(C), there are no outstanding
options, warrants, script rights to subscribe to, calls or commitments of any
character whatsoever relating to, or, except as a result of the purchase and
sale of the Shares and the Warrant, securities, rights or obligations
convertible into or exchangeable for, or giving any person any right to
subscribe for or acquire any shares of Common Stock, or contracts, commitments,
understandings, or arrangements by which the Company or any Subsidiary is or may
become bound to issue additional shares of Common Stock, or securities or rights
convertible or exchangeable into shares of Common Stock. To the knowledge of
the Company, except as specifically disclosed in the SEC Documents (as defined
below) or SCHEDULE 2.1(C), no Person or group of related Persons beneficially
owns (as determined pursuant to Rule 13d-3 promulgated under the Securities
Exchange Act of 1934, as amended (the "EXCHANGE ACT")) or has the right to
acquire by agreement with or by obligation binding upon the Company beneficial
ownership of in excess of 5% of the Common Stock. A "PERSON" means an
individual or corporation, partnership, trust, incorporated or unincorporated
association, joint venture, limited liability company, joint stock company,
government (or an agency or subdivision thereof) or other entity of any kind.
(d) ISSUANCE OF THE SHARES AND THE WARRANT. The Shares and the
Warrant are duly authorized, and, when issued and paid for in accordance with
the terms hereof, shall have been validly issued, fully paid and nonassessable,
free and clear of all liens, encumbrances and rights of first refusal of any
kind (collectively, "LIENS"). The Company has on the date hereof and will, at
the Closing Date and at all times while the Shares and the Warrant are
outstanding, maintain an adequate reserve of duly reserved shares of Common
Stock, reserved for issuance to
the holders of the Shares and the Warrant to enable it to perform its
conversion, exercise and other obligations under this Agreement, the Certificate
of Designation and the Warrant. Such number of reserved and available shares
of Common Stock is not less than the sum of (i) 120% of the number of shares of
Common Stock which would be issuable upon conversion in full of the Shares,
assuming such conversion were effected on the Original Issue Date, (ii) the
number of shares of Common Stock issuable upon exercise in full of the Warrant,
and (iii) the number of shares Common Stock which would be issuable upon payment
of dividends on the Shares, assuming each Share is outstanding for two years and
all dividends are paid in shares of Common Stock. The shares of Common Stock
issuable upon conversion of the Shares, as payment of dividends thereon, and
upon exercise of the Warrant are collectively referred to herein as the
"UNDERLYING SHARES." The Shares, the Warrant and Underlying Shares are,
collectively, the "SECURITIES." When issued in accordance with the Certificate
of Designation and upon exercise of the Warrant, in accordance with their terms,
the Underlying Shares shall have been duly authorized, validly issued, fully
paid and nonassessable, free and clear of all Liens.
(e) NO CONFLICTS. The execution, delivery and performance of the
Transaction Documents by the Company and the consummation by the Company of the
transactions contemplated thereby do not and will not (i) conflict with or
violate any provision of its certificate of incorporation, bylaws or other
charter documents (each as amended through the date hereof), or (ii) subject to
obtaining the Required Approvals, conflict with, or constitute a default (or an
event which with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, credit facility, indenture or instrument
(evidencing a Company debt or otherwise) to which the Company or any Subsidiary
is a party or by which any property or asset of the Company or any Subsidiary is
bound or affected, or (iii) result in a violation of any law, rule, regulation,
order, judgment, injunction, decree or other restriction of any court or
governmental authority to which the Company is subject (including Federal and
state securities laws and regulations), or by which any property or asset of the
Company is bound or affected, except in the case of each of clauses (ii) and
(iii), as could not, individually or in the aggregate, have or result in a
Material Adverse Effect. The business of the Company is not being conducted in
violation of any law, ordinance or regulation of any governmental authority,
except for violations which, individually or in the aggregate, could not have or
result in a Material Adverse Effect.
(f) CONSENTS AND APPROVALS. Neither the Company nor any Subsidiary
is required to obtain any consent, waiver, approval, authorization or order of,
give any notice to, or make any filing or registration with, any court or other
Federal, state, local or other governmental authority or other Person in
connection with the execution, delivery and performance by the Company of the
Transaction Documents, other than (i) as have been made (in the case of filings
and registrations) or obtained (in the case of consents, waivers, orders,
approvals or authorizations) and subject, in the case of the consent and waiver
of Imperial Bank, to the terms and conditions contained therein (to which
Purchaser is a party), (ii) the filings of the Certificate of Designation with
the Secretary of State of Delaware, (iii) the filing of Underlying Securities
Registration Statement with the Securities and Exchange Commission (the
"COMMISSION")
pursuant to the Registration Rights Agreement, (iv) the application(s) to the
AMEX for the listing of the Underlying Shares with the AMEX (and with any other
national securities exchange or market on which the Common Stock is then
listed), (v) the filing of a Form D with the Commission, and (vi) in all other
cases where the failure to obtain such consent, waiver, authorization or order,
or to give such notice or make such filing or registration could not have or
result in, individually or in the aggregate, a Material Adverse Effect (the
"REQUIRED APPROVALS").
(g) LITIGATION; PROCEEDINGS. Except as specifically disclosed in the
SEC Documents, there is no action, suit, notice of violation, proceeding or
investigation pending or, to the knowledge of the Company, threatened against or
affecting the Company or any of its Subsidiaries or any of their respective
properties before or by any court, governmental or administrative agency or
regulatory authority (Federal, state, county, local or foreign) which (i)
adversely affects or challenges the legality, validity or enforceability of any
of the Transaction Documents or the Securities or (ii) could reasonably be
expected to, individually or in the aggregate, have or result in a Material
Adverse Effect.
(h) NO DEFAULT OR VIOLATION. Neither the Company nor any Subsidiary
(i) is in default under or in violation of (and no event has occurred which has
not been waived which, with notice or lapse of time or both, would result in a
default by the Company or any Subsidiary under), nor has the Company or any
Subsidiary received notice of a claim that it is in default under or that it is
in violation of, any indenture, loan or credit agreement or any other agreement
or instrument to which it is a party or by which it or any of its properties is
bound, (ii) is in violation of any order of any court, arbitrator or
governmental body, or (iii) is in violation of any statute, rule or regulation
of any governmental authority, except as could not individually or in the
aggregate, have or result in a Material Adverse Effect.
(i) SCHEDULES. The Schedules to this Agreement furnished by or on
behalf of the Company do not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements made
therein, in light of the circumstances under which they were made, not
misleading.
(j) PRIVATE OFFERING. Assuming the accuracy of the representations
and warranties of the Purchaser set forth in Sections 2.2(b)-(f), the offer,
issuance and sale of the Securities to the Purchaser as contemplated hereby are
exempt from the registration requirements of the Securities Act of 1933, as
amended (the "SECURITIES ACT"). Neither the Company nor any Person acting on
its behalf has taken any action which might subject the offering, issuance or
sale of the Securities to the registration requirements of the Securities Act.
(k) SEC DOCUMENTS; FINANCIAL STATEMENTS. The Company has filed all
reports required to be filed by it under the Exchange Act, including pursuant to
Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or
such shorter period as the Company was required by law to file such material)
(the foregoing materials being collectively referred to
herein as the "SEC DOCUMENTS" and, together with the Schedules to this Agreement
the "DISCLOSURE MATERIALS") on a timely basis or has received a valid extension
of such time of filing and has filed any such SEC Documents prior to the
expiration of any such extension. As of their respective dates, the SEC
Documents complied in all material respects with the requirements of the
Securities Act and the Exchange Act and the rules and regulations of the
Commission promulgated thereunder, and none of the SEC Documents, when filed,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. All material agreements to which the Company is a party or to which
the property or assets of the Company are subject have been filed as exhibits to
the SEC Documents as required. The financial statements of the Company included
in the SEC Documents comply in all material respects with applicable accounting
requirements and the rules and regulations of the Commission with respect
thereto as in effect at the time of filing. Such financial statements were
prepared by the Company's independent certified public accountants in accordance
with generally accepted accounting principles applied on a consistent basis
("GAAP") during the periods involved, except as may be otherwise specified in
such financial statements or the notes thereto, and fairly present in all
material respects the financial position of the Company as of and for the dates
thereof and the results of operations and cash flows for the periods then ended,
subject, in the case of unaudited statements, to normal, immaterial, year- end
audit adjustments. Since December 31, 1997, except as specifically disclosed in
the SEC Documents, (a) there has been no event, occurrence or development that
could reasonably be expected to have or result in a Material Adverse Effect, (b)
the Company has not incurred any liabilities (contingent or otherwise) other
than (x) liabilities incurred in the ordinary course of business consistent with
past practice and (y) liabilities not required to be reflected in the Company's
financial statements pursuant to GAAP, (c) the Company has not altered its
method of accounting or the identity of its auditors and (d) the Company has not
declared or made any payment or distribution of cash or other property to its
stockholders or officers or directors (other than in compliance with existing
Company stock option plans) with respect to its capital stock, or purchased,
redeemed (or made any agreements to purchase or redeem) any shares of its
capital stock. The Company last filed audited financial statements with the
Commission on April 15, 1998, and has not received any comments from the
Commission in respect thereof.
(l) INVESTMENT COMPANY. The Company is not, and is not an Affiliate
(as defined in Rule 405 under the Securities Act) ) of, an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.
(m) CERTAIN FEES. Except for certain fees payable by the Company to
Reedland Capital Partners, no fees or commissions will be payable by the Company
to any broker, financial advisor or consultant, finder, placement agent,
investment banker, or bank with respect to the transactions contemplated by this
Agreement. The Purchaser shall have no obligation with respect to any fees or
with respect to any claims made by or on behalf of other Persons for fees of a
type contemplated in this Section that may be due in connection with the
transactions contemplated by this Agreement. The Company shall indemnify and
hold harmless
the Purchaser, its employees, officers, directors, agents, and partners, and
their respective Affiliates, from and against all claims, losses, damages, costs
(including the costs of preparation and attorney's fees) and expenses suffered
in respect of any such claimed or existing fees, as such fees and expenses are
incurred.
(n) SOLICITATION MATERIALS. Neither the Company nor any Person
acting on the Company's behalf has (i) distributed any offering materials in
connection with the offering and sale of the Securities, or (ii) solicited any
offer to buy or sell the Securities by means of any form of general solicitation
or advertising.
(o) FORM S-3 ELIGIBILITY. The Company is, and at the Closing Date
will be, eligible to register securities for resale with the Commission under
Form S-3 promulgated under the Securities Act.
(p) EXCLUSIVITY. The Company shall not issue and sell the Shares to
any Person other than the Purchaser other than with the specific prior written
consent of the Purchaser.
(q) SENIORITY. No class of equity securities of the Company is
senior to the Shares in right of payment, whether upon liquidation or
dissolution, or otherwise.
(r) PATENTS AND TRADEMARKS. The Company has, or has rights to use,
all patents, patent applications, trademarks, trademark applications, service
marks, trade names, copyrights, licenses and rights (collectively, the
"INTELLECTUAL PROPERTY RIGHTS") which are necessary for use in connection with
its business, and which the failure to so have would have a Material Adverse
Effect. To the best knowledge of the Company, all such Intellectual Property
Rights are enforceable and there is no existing infringement by another Person
of any of the Intellectual Property Rights.
(s) LISTING AND MAINTENANCE REQUIREMENTS COMPLIANCE. The Company has
not in the two years preceding the date hereof received notice (written or oral)
from the AMEX or any other stock exchange, market or trading facility on which
the Common Stock is or has been listed (or on which it has been quoted) to the
effect that the Company is not in compliance with the listing or maintenance
requirements of such exchange or market. The Company is in compliance with all
such maintenance requirements.
(t) REGISTRATION RIGHTS; RIGHTS OF PARTICIPATION. Except as
described on SCHEDULE 6(B) to the Registration Rights Agreement, (i) the Company
has not granted or agreed to grant to any Person any rights (including
"piggy-back" registration rights) to have any securities of the Company
registered with the Commission or any other governmental authority which has not
been satisfied and (ii) no Person, has any right of first refusal, preemptive
right, right of participation, or any similar right to participate in the
transactions contemplated by the Transaction Documents.
(u) REGULATORY PERMITS. The Company and the Subsidiaries possess all
certificates, authorizations and permits issued by the appropriate Federal,
state or foreign regulatory authorities necessary to conduct their respective
businesses as described in the SEC Documents, except where the failure to
possess such permits could not, individually or in the aggregate, have or result
in a Material Adverse Effect ("MATERIAL PERMITS"), and neither the Company nor
any such Subsidiary has received any notice of proceedings relating to the
revocation or modification of any Material Permit.
(v) Disclosure. The Company confirms that it has not provided the
Purchaser or its agents or counsel with any information that constitutes or
might constitute material non-public information. The Company understands and
confirms that the Purchaser shall be relying on the foregoing representations in
effecting transactions in securities of the Company.
2.2 Representations and Warranties of the Purchaser. The Purchaser hereby
represents and warrants to the Company as follows:
(a) Organization; Authority. The Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation with the requisite corporate power and
authority, to enter into and to consummate the transactions contemplated by the
Transaction Documents and otherwise to carry out its obligations thereunder.
The purchase by the Purchaser of the Securities hereunder has been duly
authorized by all necessary action on the part of the Purchaser. Each of this
Agreement and the Registration Rights Agreement has been duly executed and
delivered by the Purchaser and constitutes the valid and legally binding
obligation of the Purchaser, enforceable against it in accordance with its
terms.
(b) Investment Intent. The Purchaser is acquiring the Securities for
its own account for investment purposes only and not with a view to or for
distributing or reselling such Securities or any part thereof or interest
therein, without prejudice, however, to the Purchaser's right, subject to the
provisions of this Agreement and the Registration Rights Agreement, at all times
to sell or otherwise dispose of all or any part of such Securities pursuant to
an effective registration statement under the Securities Act and in compliance
with applicable state securities laws or under an exemption from such
registration.
(c) Purchaser Status. At the time the Purchaser was offered the
Shares and the Warrant, it was, and at the date hereof, it is, and at the
Closing Date and each exercise date under the Warrant, it will be, an
"accredited investor" as defined in Rule 501(a) under the Securities Act.
(d) Experience of the Purchaser. The Purchaser either alone or
together with its representatives, has such knowledge, sophistication and
experience in business and financial matters so as to be capable of evaluating
the merits and risks of the prospective investment in the
Securities, and has so evaluated the merits and risks of such investment.
(e) Ability of the Purchaser to Bear Risk of Investment. The
Purchaser is able to bear the economic risk of an investment in the Securities
and, at the present time, is able to afford a complete loss of such investment.
(f) Access to Information. The Purchaser acknowledges receipt of the
Disclosure Materials and further acknowledges that it has reviewed the
Disclosure Materials and has been afforded (i) the opportunity to ask such
questions as it has deemed necessary of, and to receive answers from,
representatives of the Company concerning the terms and conditions of the
offering of the Securities and the merits and risks of investing in the
Securities; (ii) access to information about the Company and the Company's
financial condition, results of operations, business, properties, management and
prospects sufficient to enable it to evaluate its investment; and (iii) the
opportunity to obtain such additional information which the Company possesses or
can acquire without unreasonable effort or expense that is necessary to make an
informed investment decision with respect to the investment and to verify the
accuracy and completeness of the information contained in the Disclosure
Materials. Neither such inquiries nor any other investigation conducted by or
behalf of the Purchaser or its representatives or counsel shall modify, amend or
affect the Purchaser's right to rely on the truth, accuracy and completeness of
the Disclosure Materials and the Company's representations and warranties
contained in the Transaction Documents.
(g) General Solicitation. The Purchaser is not purchasing the Shares
as a result of or subsequent to any advertisement, article, notice or other
communication published in any newspaper, magazine or similar media or broadcast
over television or radio or presented at any seminar.
(h) Reliance. The Purchaser understands and acknowledges that (i)
the Securities are being offered and sold to it without registration under the
Securities Act in a private placement that is exempt from the registration
provisions of the Securities Act and (ii) the availability of such exemption,
depends in part on, and the Company will rely upon the accuracy and truthfulness
of, the foregoing representations and the Purchaser hereby consents to such
reliance.
The Company acknowledges and agrees that the Purchaser makes no
representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in this Section 2.2.
ARTICLE I
OTHER AGREEMENTS OF THE PARTIES
3.1 TRANSFER RESTRICTIONS. (a) Securities may only be disposed pursuant
to an
effective registration statement under the Securities Act, to the Company or
pursuant to an available exemption from or in a transaction not subject to the
registration requirements of the Securities Act. In connection with any
transfer of Securities other than pursuant to an effective registration
statement or to the Company, except as otherwise set forth herein, the Company
may require the transferor thereof to provide to the Company an opinion of
counsel selected by the transferor, the form and substance of which opinion
shall be reasonably satisfactory to the Company, to the effect that such
transfer does not require registration under the Securities Act. The Company
shall not be obligated to permit transfers of Securities (other than pursuant to
an effective registration statement or pursuant to Rule 144 promulgated under
the Securities Act) to more than seven (7) Persons who are not either Affiliates
of the Purchaser or investment funds under common management with the Purchaser.
Notwithstanding the foregoing, the Company hereby consents to and agrees to
register on the books of the Company and with any transfer agent for the
securities of the Company any transfer of Securities by the Purchaser to an
Affiliate of the Purchaser or to an investment fund under common management with
the Purchaser, or any transfer among any such Affiliates or funds, provided that
transferee certifies to the Company that it is an "accredited investor" as
defined in Rule 501(a) under the Securities Act and that it is acquiring the
Securities solely for investment purposes. Any such transferee shall agree in
writing to be bound by the terms of this Agreement and shall have the rights of
a Purchaser under this Agreement and the Registration Rights Agreement.
(b) The Purchaser agrees to the imprinting, so long as is required by
this Section 3.1(b), of the following legend on the Securities:
NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE
SECURITIES ARE [CONVERTIBLE] [EXERCISABLE] HAVE BEEN REGISTERED WITH THE
SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY
STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT
BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN
A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, AS EVIDENCED BY AN OPINION OF COUNSEL, THE FORM AND
SUBSTANCE OF WHICH OPINION SHALL BE REASONABLY SATISFACTORY TO THE COMPANY,
AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.
[FOR SHARES ONLY] THE SHARES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO CERTAIN RESTRICTIONS ON CONVERSION SET FORTH IN A CONVERTIBLE
PREFERRED STOCK PURCHASE AGREEMENT, DATED AS OF JULY 15, 1998, BETWEEN
UNAPIX ENTERTAINMENT, INC. (THE "COMPANY") AND THE ORIGINAL HOLDER
HEREOF. A COPY OF THAT AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF THE
COMPANY.
Underlying Shares shall not contain the legend set forth above nor any
other legend if the conversion of Shares, the payment of dividends thereon,
exercise of the Warrant or other issuances of Underlying Shares as contemplated
hereby or by the Certificate of Designation occurs at any time while an
Underlying Securities Registration Statement is effective under the Securities
Act (provided the Purchaser shall have delivered to the Company an indemnity
against losses, claims and damages suffered by the Company as a result of a
failure by the Purchaser to comply with applicable prospectus delivery
requirements) or in the event there is not an effective Underlying Securities
Registration Statement at such time, if in the opinion of counsel to the Company
such legend is not required under applicable requirements of the Securities Act
(including judicial interpretations and pronouncements issued by the staff of
the Commission). The Company shall cause its counsel to issue the Transfer Agent
instructions attached hereto as Exhibit E to the Company's transfer agent on the
day that the Underlying Securities Registration Statement is declared effective
by the Commission. The Company agrees that it will provide the Purchaser, upon
request, with a certificate or certificates representing Underlying Shares, free
from such legend at such time as such legend is no longer required hereunder.
The Company may not make any notation on its records or give instructions to any
transfer agent of the Company which enlarge the restrictions of transfer set
forth in this Section.
3.2 ACKNOWLEDGMENT OF DILUTION. The Company acknowledges that the
issuance of the Underlying Shares upon (i) conversion of the Shares and payment
of dividends thereon in accordance with the terms of the Certificate of
Designation and (ii) exercise of the Warrant, may result in dilution of the
outstanding shares of Common Stock, which dilution may be substantial under
certain market conditions. The Company further acknowledges that its obligation
to issue Underlying Shares upon (x) conversion of the Shares and payment of
dividends thereon in accordance with the terms of the Certificate of
Designation, and (y) exercise of the Warrant, is unconditional and absolute,
subject to the limitations set forth herein in the Certificate of Designation or
pursuant to the Warrant, regardless of the effect of any such dilution.
3.3 FURNISHING OF INFORMATION. As long as the Purchaser owns Securities,
the Company covenants to timely file (or obtain extensions in respect thereof
and file within the applicable grace period) all reports required to be filed by
the Company after the date hereof pursuant to Section 13(a) or 15(d) of the
Exchange Act. As long as the Purchaser owns Securities, if the Company is not
required to file reports pursuant to such sections, it will prepare and furnish
to the Purchaser and make publicly available in accordance with Rule 144(c)
promulgated under the Securities Act annual and quarterly financial statements,
together with a discussion and analysis of such financial statements in form and
substance substantially similar to those that would otherwise be required to be
included in reports required by Section 13(a) or 15(d) of the Exchange Act, as
well as any other information required thereby, in the time period that such
filings would have been required to have been made under the Exchange Act. The
Company further covenants that it will take such further action as any holder of
Securities may reasonably request, all to the extent required from time to time
to enable such Person to sell Underlying Shares without registration under the
Securities Act within the limitation of the exemptions provided by Rule 144
promulgated under the Securities Act, including the legal opinion referenced
above in this Section. Upon the request of any such Person, the Company shall
deliver to such Person a written certification of a duly authorized officer as
to whether it has complied with such requirements.
3.4 BLUE SKY LAWS. In accordance with the Registration Rights Agreement,
the Company shall qualify or exempt the issuance and sale of the Underlying
Shares under the securities or Blue Sky laws of such jurisdictions as the
Purchaser may reasonably request and shall continue such qualification or
exemption at all times until the Purchaser notifies the Company in writing that
it no longer owns Securities; provided, however, that neither the Company nor
its Subsidiaries shall be required in connection therewith to qualify as a
foreign corporation where they are not now so qualified or to take any action
that would subject the Company to general service of process in any such
jurisdiction where it is not then so subject or subject the Company to any
material tax in any such jurisdiction where it is not then so subject.
3.5 INTEGRATION. The Company shall not, and shall use its best efforts to
ensure that, no Affiliate shall, sell, offer for sale or solicit offers to buy
or otherwise negotiate in respect of any security (as defined in Section 2 of
the Securities Act) that would be integrated with the offer or sale of the
Securities in a manner that would require the registration under the Securities
Act of the sale of the Securities to the Purchaser.
3.6 INCREASE IN AUTHORIZED SHARES. At such times as the Company would be,
if a notice of conversion or exercise (as the case may be) were to be delivered
on such date, precluded from (a) converting the Shares in full, assuming all
Shares were converted at a Conversion Price equal to the Floor (as defined in
the Purchase Agreement), (b) paying any earned and unpaid dividends in respect
of the Shares in shares of Common Stock, based upon payment at a time when the
Conversion Price is equal to the Floor, or (c) honoring the exercise in full of
the Warrant due to the unavailability of a sufficient number of shares of
authorized but unissued or reserved Common Stock, the Board of Directors of the
Company shall promptly (and in any case, within 30 Business Days from such date)
prepare and mail to the stockholders of the Company proxy materials requesting
authorization to amend the Company's Certificate of Incorporation to increase
the number of shares of Common Stock which the Company is authorized to issue to
at least such number of shares as reasonably requested by the Purchaser in order
to provide for such number of authorized and unissued shares of Common Stock to
enable the Company to comply with its conversion, exercise and reservation of
shares obligations as set forth in this Agreement, the Certificates of
Designation and the Warrant (the sum of (x) the number of then authorized shares
of Common Stock, (y) the number of shares of Common Stock then outstanding plus
all shares of Common Stock issuable upon exercise of all outstanding options,
warrants and convertible instruments, and (z) the sum of (i) the number of
Underlying Shares as are then issuable upon a conversion in full of all then
outstanding Shares based upon a
Conversion Price equal to the Floor, and as payment of dividends thereon at a
time when the Conversion Price is equal to the Floor, and (ii) the number of
Underlying Shares as are issuable upon exercise in full of the Warrant, shall be
a reasonable number). In connection therewith, the Board of Directors shall (a)
adopt proper resolutions authorizing such increase, (b) recommend to and
otherwise use its best efforts to promptly and duly obtain stockholder approval
to carry out such resolutions (and hold a special meeting of the stockholders no
later than the 60th day after delivery of the proxy materials relating to such
meeting) and (c) within 5 business Days of obtaining such stockholder
authorization, file an appropriate amendment to the Company's Certificate of
Incorporation to evidence such increase.
3.7 LISTING AND RESERVATION OF UNDERLYING SHARES. (a) The Company shall
(i) not later than the 10th day following the Closing Date, prepare and file
with the AMEX (as well as any other national securities exchange or market or
trading or quotation facility on which the Common Stock is then listed) an
additional shares listing application covering a number of shares of Common
Stock which is at least equal to the number of shares required to be reserved
pursuant to Section 2.1(d), (ii) take all steps necessary to cause the such
shares to be approved for listing in the AMEX (as well as on any other national
securities exchange or market or trading or quotation facility on which the
Common Stock is then listed) as soon as possible thereafter, and (iii) provide
to the Purchaser evidence of such listing, and the Company shall maintain the
listing of its Common Stock thereon.
(b) The Company shall maintain a reserve of Common Stock for issuance
upon conversion of the Shares (and for payment of dividends thereon in shares of
Common Stock) and upon exercise of the Warrant in accordance with its terms, in
such amount as may be required to perform its obligations in full under the
Transaction Documents, which reserve shall include a number of shares of Common
Stock equal to no less than two times the number of shares of Common Stock as
would be issuable upon conversion in full of the Shares, upon payment of
dividends thereon and upon conversion in full of the Warrant.
3.8 PURCHASER OWNERSHIP OF COMMON STOCK. The Purchaser agrees not to
convert Shares or exercise the Warrant to the extent such conversion or exercise
would result in the Purchaser beneficially owning (as determined in accordance
with Section 13(d) of the Exchange Act and the rules thereunder) in excess of
4.999% of the then issued and outstanding shares of Common Stock, including
shares issuable upon conversion of the Shares and exercise of the Warrant held
by such Purchaser after application of this Section. To the extent that the
limitation contained in this Section applies, the determination of whether
Shares are convertible (in relation to other securities owned by a Purchaser)
and of which Shares are convertible shall be in the sole discretion of the
Purchaser, and the submission of Shares for conversion shall be deemed to be
such Purchaser's determination of whether such Shares are convertible (in
relation to other securities owned by a Purchaser) and of which portion of such
Shares are convertible, in each case subject to such aggregate percentage
limitation, and the Company shall have no obligation to verify or confirm the
accuracy of such determination. Nothing contained herein shall be deemed to
restrict the right of the Purchaser to convert Shares or exercise the Warrant at
such
time as such conversion will not violate the provisions of this Section. The
provisions of this Section will not apply to any conversion pursuant to Section
5(a)(iii) of the Certificates of Designation, and may be waived by the Purchaser
upon not less than 75 days prior notice to the Company, and the provisions of
this Section shall continue to apply until such 75th day (or later, if stated in
the notice of waiver).
3.9 CONVERSION PROCEDURES. The Transfer Agent Instructions, Conversion
Notice (as defined in Exhibit A and Notice of Exercise under the Warrant set
forth the totality of the procedures with respect to the conversion of the
Shares and exercise of the Warrant, including the form of legal opinion, if
necessary, that shall be rendered to the Company's transfer agent and such other
information and instructions as may be reasonably necessary to enable the
Purchaser to convert its Shares and exercise the Warrant as contemplated in the
Shares and the Warrant (as applicable).
3.10 NOTICE OF BREACHES. (a) Each of the Company and the Purchaser shall
give prompt written notice to the other of any breach by it of any
representation, warranty or other agreement contained in any Transaction
Document, as well as any events or occurrences arising after the date hereof
which would reasonably be likely to cause any representation or warranty or
other agreement of such party, as the case may be, contained therein to be
incorrect or breached as of the Closing Date. However, no disclosure by either
party pursuant to this Section shall be deemed to cure any breach of any
representation, warranty or other agreement contained in any Transaction
Document.
(b) Notwithstanding the generality of Section 3.10(a), the Company
shall promptly notify the Purchaser of any notice or claim (written or oral)
that it receives from any lender of the Company to the effect that the
consummation of the transactions contemplated by the Transaction Documents
violates or would violate any written agreement or understanding between such
lender and the Company, and the Company shall promptly furnish by facsimile to
the holders of the Shares a copy of any written statement in support of or
relating to such claim or notice.
3.11 CONVERSION AND EXERCISE OBLIGATIONS OF THE COMPANY. The Company shall
honor conversions of the Shares and exercises of the Warrant and shall deliver
Underlying Shares in accordance with the respective terms and conditions and
time periods set forth in the respective Certificate of Designation and the
Warrant.
3.12 RIGHT OF FIRST REFUSAL; SUBSEQUENT REGISTRATIONS. (a) The Company
shall not, directly or indirectly, without the prior written consent of
Purchaser, offer, sell, grant any option to purchase, or otherwise dispose of
(or announce any offer, sale, grant or any option to purchase or other
disposition) any of its or its Affiliates' equity or equity-equivalent
securities or any instrument that is convertible into or exchangeable for Common
Stock in a transaction not registered under the Securities Act (a "Subsequent
Placement") for a period of 12 months after the Closing Date, except (i) the
granting of options or warrants to employees, officers and
directors, and the issuance of shares upon exercise of options granted, by the
Company, (ii) shares issued upon exercise of any currently outstanding warrants
or options and upon conversion of any currently outstanding convertible
securities of the Company in each case disclosed in Schedule 2.1(c), (iii)
shares of Common Stock issued upon conversion of Shares, as payment of dividends
thereon, or upon exercise of the Warrant in accordance with their respective
terms, (iv) securities issued by the Company in connection with acquisitions of
non-affiliated entities and in connection with the transactions disclosed under
the heading "Other Contractual Commitments" on Schedule 2.1(c), in the amounts
set forth under such heading, (v) issuances of up to an aggregate of 250,000
shares of Common Stock to holders of Company issued warrants disclosed in
Schedule 2.1(c) in connection with redemptions thereof, and (vi) placements of
securities that are not subject to the registration requirements of the
Securities Act to either General Cinema Corporation, Pegasus Investors, L.P.,
▇▇▇▇ ▇▇▇▇▇▇ or any of their respective Affiliates so long as any such placements
that are comprised in whole or in part of securities as are convertible or
exchangeable for Common Stock are not so convertible or exchangeable prior to
the earlier to occur of (x) the 120th day following the date upon which the
Purchaser can initially convert the Shares pursuant to the Certificate of
Designation and (y) such time as at least 85% of the Shares have been converted
(the earlier to occur of (x) and (y) above, hereinafter referred to as the
"Disposition Event"), and, provided, further, that if such placement consists of
a sale of Common Stock, no disposition by the holder thereof may occur until
the occurrence of the Disposition Event, unless, in any such case, (A) the
Company delivers to the Purchaser a written notice (the "Subsequent Placement
Notice") of its intention to effect such Subsequent Placement, which Subsequent
Placement Notice shall describe in reasonable detail the proposed terms of such
Subsequent Placement, the amount of proceeds intended to be raised thereunder,
the Person(s) or, if not then known, a list of not more than seven (7) potential
investors with whom such Subsequent Placement shall be affected, and attached to
which shall be a term sheet or similar document relating thereto, and (B) the
Purchaser shall not have notified the Company by 5:00 p.m. (New York City time)
on the fifth (5th) Trading Day after its receipt of the Subsequent Placement
Notice of its willingness to provide (or to cause its sole designee to provide),
subject to completion of mutually acceptable documentation, financing to the
Company on substantially the terms set forth in the Subsequent Placement Notice.
If the Purchaser shall fail to notify the Company of its intention to enter into
such negotiations within such time period, the Company may effect the Subsequent
Placement upon the terms and to the Person(s) or investors (or Affiliates
thereof) identified in the Subsequent Placement Notice; provided, that the
Company shall provide the Purchaser with a second Subsequent Placement Notice,
and the Purchaser shall again have the right of first refusal set forth above in
this Section, if the Subsequent Placement subject to the initial Subsequent
Placement Notice shall not have been consummated for any reason on the terms
set forth in such Subsequent Placement Notice within thirty (30) Trading Days
after the date of the initial Subsequent Placement Notice with one or more of
the Persons or investors (or Affiliates thereof) identified in the Subsequent
Placement Notice.
(b) Except for (x) Underlying Shares, (y) other "Registrable
Securities" (as
such term is defined in the Registration Rights Agreement) to be registered in
accordance with the Registration Rights Agreement, and (z) Company securities to
be registered for resale in connection with financings permitted pursuant to
paragraph (a)(i) through (iv) of this Section, the Company shall not, without
the prior written consent of the Purchaser (i) issue or sell any of its or any
of its Affiliates' equity or equity-equivalent securities pursuant to Regulation
S promulgated under the Securities Act, or (ii) register for resale any
securities of the Company for a period of not less than 90 Trading Days after
the date that an Underlying Securities Registration Statement is declared
effective by the Commission. Any days that the Purchaser is unable to sell
Underlying Shares under an Underlying Securities Registration Statement shall be
added to such 90 Trading Day period.
3.13 CERTAIN SECURITIES LAWS DISCLOSURES; PUBLICITY. The Company shall
timely file with the Commission a Form D promulgated under the Securities Act as
required under Regulation D promulgated under the Securities Act and provide a
copy thereof to the Purchaser promptly after the filing thereof. The Company
shall (i) issue a press release acceptable to the Purchaser disclosing the
transactions contemplated hereby within three (3) Business Days after the
Closing Date and (ii) file with the Commission a Report on Form 8-K disclosing
the transactions contemplated hereby within ten (10) Business Days after the
applicable Closing Date, provided that the Company may satisfy the requirements
of this clause (ii) by the filing of its quarterly report on form 10-QSB within
fifteen (15) Business Days of the Closing Date.
3.14 USE OF PROCEEDS. The Company shall use the net proceeds from the sale
of the Securities hereunder for working capital purposes and not for the
satisfaction of any portion of Company debt (other than payments under the
Company's credit facility with Imperial Bank and payments on account of trade
payables) or to redeem any Company equity or equity-equivalent securities.
Pending application of the proceeds of this placement in the manner permitted
hereby, the Company will invest such proceeds in interest bearing accounts
and/or short-term, investment grade interest bearing securities.
3.15 TRANSFER OF INTELLECTUAL PROPERTY RIGHTS. Except in connection with
the sale of all or substantially all of the assets of the Company or in the
ordinary course of the Company's business consistent with past practice, the
Company shall not transfer, sell or otherwise dispose of any Intellectual
Property Rights, or allow any of the Intellectual Property Rights to become
subject to any Liens, or fail to renew such Intellectual Property Rights (if
renewable and it would otherwise lapse if not renewed), without the prior
written consent of the Purchaser.
3.16 STANDSTILL AGREEMENT. If after the first anniversary of the Closing
Date, the Company shall enter into an underwriting agreement which provides for
a firm commitment underwriting on a primary basis of in excess of $10,000,000 of
the Common Stock (for which no shares of Common Stock are to be sold for any
other selling stockholders), then upon request by the Company the Purchaser
shall not dispose of any Securities for a period of up to 90 days after the date
of such agreement (a "Standstill"). The Company shall provide the Purchaser
with a notice of such underwriting agreement and the duration of the Standstill.
In the event of a
Standstill, at the Purchaser's option, the maturity of the Preferred Stock shall
be extended by a number of days equal to the duration of the Standstill. Prior
to the first anniversary of the Closing Date, if the Company, shall enter into
such an underwriting agreement for the Common Stock, the Purchaser shall not be
required to Standstill unless the Company shall have redeemed all Shares held by
the Purchaser in accordance with Section 6(b) of the Certificates of
Designation. No Standstill shall affect the Purchaser's right to convert Shares
or the Company's obligation to honor such conversions in accordance with the
terms of the Certificates of Designation.
3.17 REIMBURSEMENT. If the Purchaser, other than by reason of its gross
negligence or willful misconduct, becomes involved in any capacity in any
action, proceeding or investigation brought by or against any Person, including
stockholders of the Company, in connection with or as a result of the
consummation of the transactions contemplated by Transaction Documents, the
Company will reimburse the Purchaser for its reasonable legal and other expenses
(including the cost of any investigation and preparation, but not internal
salary costs) incurred in connection therewith, as such expenses are incurred.
The reimbursement obligations of the Company under this paragraph shall be in
addition to any liability which the Company may otherwise have, shall extend
upon the same terms and conditions to any Affiliates of the Purchaser who are
actually named in such action, proceeding or investigation, and partners,
directors, agents, employees and controlling persons (if any), as the case may
be, of the Purchaser and any such Affiliate, and shall be binding upon and inure
to the benefit of any successors, assigns, heirs and personal representatives of
the Company, the Purchaser and any such Affiliate and any such Person. The
Company also agrees that neither the Purchaser nor any such Affiliates,
partners, directors, agents, employees or controlling persons shall have any
liability to the Company or any person asserting claims on behalf of or in right
of the Company in connection with or as a result of the consummation of the
Transaction Documents except to the extent that any losses, claims, damages,
liabilities or expenses incurred by the Company result from the gross negligence
or willful misconduct of the Purchaser or entity in connection with the
transactions contemplated by this Agreement.
ARTICLE IV
MISCELLANEOUS
4.1 FEES AND EXPENSES. At the Closing the Company shall pay $15,000
to ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ in connection with the preparation and negotiation of the
Transaction Documents. Other than the amount contemplated in the immediately
prior sentence, and except as otherwise set forth in the Registration Rights
Agreement, each party shall pay the fees and expenses of its advisers, counsel,
accountants and other experts, if any, and all other expenses incurred by such
party incident to the negotiation, preparation, execution, delivery and
performance of this Agreement. The Company shall pay all stamp and other taxes
and duties levied in connection with the issuance of the Securities pursuant
hereto.
4.2 ENTIRE AGREEMENT; AMENDMENTS. This Agreement, together with the
Exhibits and Schedules hereto, the Registration Rights Agreement, the
Certificate of Designation and the Warrant contain the entire understanding of
the parties with respect to the subject matter hereof and supersede all prior
agreements and understandings, oral or written, with respect to such matters,
which the parties acknowledge have been merged into such documents, exhibits and
schedules.
4.3 NOTICES. Any and all notices or other communications or
deliveries required or permitted to be provided hereunder shall be in writing
and shall be deemed given and effective on the earliest of (i) the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile telephone number specified in this Section prior to 7:00 p.m. (New
York City time) on a Business Day, (ii) the Business Day after the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile telephone number specified in the Purchase Agreement later than 7:00
p.m. (New York City time) on any date and earlier than 11:59 p.m. (New York City
time) on such date, (iii) the Business Day following the date of mailing, if
sent by nationally recognized overnight courier service, or (iv) upon actual
receipt by the party to whom such notice is required to be given. The address
for such notices and communications shall be as follows:
If to the Company: Unapix Entertainment, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
With copies to: St. ▇▇▇▇ & ▇▇▇▇▇, L.L.C.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
If to the Purchaser: KA Investments LDC
c/o Tarmachan Capital Management
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
With copies to: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
or such other address as may be designated in writing hereafter, in the same
manner, by such Person.
4.4 AMENDMENTS; WAIVERS. No provision of this Agreement may be
waived or amended except in a written instrument signed, in the case of an
amendment, by both the Company and the Purchaser; or, in the case of a waiver,
by the party against whom enforcement of any such waiver is sought. No waiver
of any default with respect to any provision, condition or requirement of this
Agreement shall be deemed to be a continuing waiver in the future or a waiver of
any other provision, condition or requirement hereof, nor shall any delay or
omission of either party to exercise any right hereunder in any manner impair
the exercise of any such right accruing to it thereafter.
4.5 HEADINGS. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.
4.6 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and permitted assigns.
The Company may not assign this Agreement or any rights or obligations hereunder
without the prior written consent of the Purchaser. Except as set forth in
Section 3.1(a), the Purchaser may not assign this Agreement or any of the rights
or obligations hereunder without the consent of the Company. This provision
shall not limit the Purchaser's right to transfer securities or transfer or
assign rights hereunder or under the Registration Rights Agreement.
4.7 NO THIRD-PARTY BENEFICIARIES. This Agreement is intended for the
benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person.
4.8 GOVERNING LAW. This Agreement shall be governed by and construed
and enforced in accordance with the internal laws of the State of New York
without regard to the principles of conflicts of law thereof.
4.9 SURVIVAL. The representations, warranties, agreements and
covenants contained herein shall survive each Closing and the delivery and
conversion or exercise (as the case may be) of the Shares and the Warrant.
4.10 EXECUTION. This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile signature
page were an original thereof.
4.11 PUBLICITY. The Company and the Purchaser shall consult with each
other in issuing any press releases or otherwise making public statements with
respect to the transactions contemplated hereby and neither party shall issue
any such press release or otherwise make any such public statement without the
prior written consent of the other, which consent shall not be unreasonably
withheld or delayed, except that no prior consent shall be required if such
disclosure is required by law, in which such case the disclosing party shall
provide the other party with prior notice of such public statement.
Notwithstanding the foregoing, the Company shall not publicly disclose the name
of the Purchaser without the prior written consent of the Purchaser, except to
the extent such disclosure (but not any disclosure as to the controlling Persons
thereof) is required by applicable law or securities exchange rules, in which
case the Company shall provide the Purchaser with prior notice of such
disclosure.
4.12 SEVERABILITY. In case any one or more of the provisions of this
Agreement shall be invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this Agreement shall not
in any way be affecting or impaired thereby and the parties will attempt to
agree upon a valid and enforceable provision which shall be a reasonable
substitute therefor, and upon so agreeing, shall incorporate such substitute
provision in this Agreement.
4.13 REMEDIES. In addition to being entitled to exercise all rights
provided herein or granted by law, including recovery of damages, the Purchaser
will be entitled to
specific performance of the obligations of the Company under the Transaction
Documents. Each of the Company and the Purchaser agree that monetary damages
may not be adequate compensation for any loss incurred by reason of any breach
of its obligations described in the foregoing sentence and hereby agrees to
waive in any action for specific performance of any such obligation the defense
that a remedy at law would be adequate.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have caused this
Convertible Preferred Stock Purchase Agreement to be duly executed by
their respective authorized signatories as of the date first indicated
above.
.
UNAPIX ENTERTAINMENT, INC.
By:
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Name:
Title:
KA INVESTMENTS LDC
By:
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Name:
Title: