EXHIBIT 4
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______________________________________________________________________________
PREFERENCE WARRANT
REGISTRATION RIGHTS AGREEMENT
Dated as of January 27, 1999
Among
@ENTERTAINMENT, INC.,
and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ PRIVATE EQUITY LIMITED on behalf of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ DEVELOPMENT CAPITAL SYNDICATION LIMITED,
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
and THE ▇▇▇▇▇▇▇ TRUST
______________________________________________________________________________
______________________________________________________________________________
TABLE OF CONTENTS
PAGE
SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 2. PREFERENCE REGISTRATION RIGHTS. . . . . . . . . . . . . . . . 7
2.1(a) (i) PREFERENCE WARRANT SHELF REGISTRATION STATEMENT. . . . . 7
(ii) PREFERENCE WARRANT STOCK SHELF REGISTRATION STATEMENT. . 8
(b) BLUE SKY. . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(c) ACCURACY OF DISCLOSURE. . . . . . . . . . . . . . . . . . . . 8
(d) LIQUIDATED DAMAGES. . . . . . . . . . . . . . . . . . . . . . 9
(e) ADDITIONAL ACTS . . . . . . . . . . . . . . . . . . . . . . . 9
(f) LISTING OF PREFERENCE WARRANT SHARES. . . . . . . . . . . . . 9
2.2 [Reserved]. . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.3 LIMITATIONS, CONDITIONS AND QUALIFICATIONS TO OBLIGATIONS
UNDER REGISTRATION COVENANTS. . . . . . . . . . . . . . . . 9
2.4 [Reserved]. . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.5 RULE 144 AND RULE 144A. . . . . . . . . . . . . . . . . . . . 10
2.6 UNDERWRITTEN REGISTRATIONS. . . . . . . . . . . . . . . . . . 11
SECTION 3. [RESERVED]. . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 4. REGISTRATION PROCEDURES . . . . . . . . . . . . . . . . . . . 11
SECTION 5. INDEMNIFICATION AND CONTRIBUTION. . . . . . . . . . . . . . . 17
SECTION 6. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . 21
(a) REMEDIES. . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(b) NO INCONSISTENT AGREEMENTS. . . . . . . . . . . . . . . . . . 21
(c) [INTENTIONALLY OMITTED] . . . . . . . . . . . . . . . . . . . 21
(d) AMENDMENTS AND WAIVERS. . . . . . . . . . . . . . . . . . . . 21
(e) NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(f) SUCCESSORS AND ASSIGNS. . . . . . . . . . . . . . . . . . . . 22
(g) COUNTERPARTS. . . . . . . . . . . . . . . . . . . . . . . . . 22
(h) GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . 22
(j) SEVERABILITY. . . . . . . . . . . . . . . . . . . . . . . . . 22
(k) HEADINGS. . . . . . . . . . . . . . . . . . . . . . . . . . . 23
(l) ENTIRE AGREEMENT. . . . . . . . . . . . . . . . . . . . . . . 23
(m) SECURITIES HELD BY THE COMPANY OR ITS AFFILIATES. . . . . . . 23
EXECUTION COPY
PREFERENCE WARRANT REGISTRATION RIGHTS AGREEMENT
This PREFERENCE WARRANT REGISTRATION RIGHTS AGREEMENT (the
"AGREEMENT") is made and entered into as of January 27, 1999, among
@ENTERTAINMENT, INC., (the "COMPANY") a Delaware corporation, The ▇▇▇▇▇▇▇
Trust ("▇▇▇▇▇▇▇"), ▇▇▇▇▇ ▇▇▇▇▇ ("▇▇▇▇▇ ▇▇▇▇▇"), ▇▇▇▇▇▇ ▇▇▇▇▇ ("▇▇▇▇▇▇
▇▇▇▇▇") and ▇▇▇▇▇▇ ▇▇▇▇▇ ("▇▇▇▇▇▇ ▇▇▇▇▇", and together with ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇, the "▇▇▇▇▇ PURCHASERS") and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ PRIVATE
EQUITY LIMITED on behalf of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ DEVELOPMENT CAPITAL SYNDICATION
LIMITED ("MGPE", and together with the Chase Purchasers, the "PURCHASERS").
This Agreement is made pursuant to (i) the Purchase Agreement
dated January 22, 1999, between the Company and MGPE (the "MGPE PURCHASE
AGREEMENT") and (ii) the Purchase Agreement dated as of January 22, 1999
among the Company and ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇ (the
"▇▇▇▇▇ PURCHASE AGREEMENT"), and together with the MGPE Purchase Agreement,
the "PURCHASE AGREEMENTS"), in which the Company has agreed to sell to the
Purchasers (i) an aggregate of 50,000 shares of the Company's Series A and
Series B 12% Cumulative Preference Shares (the "PREFERENCE SHARES"), and
(ii) warrants (the "PREFERENCE WARRANTS"), initially entitling the holders
thereof to purchase an aggregate of 5,500,000 shares of Common Stock of the
Company, par value $0.01 per share (the "Common Stock"). The execution of
this Agreement is a condition to the obligations of the Purchasers under
the Purchase Agreements.
In consideration of the foregoing, the parties hereto agree as
follows:
SECTION 1. DEFINITIONS. As used in this Agreement, the following
defined terms shall have the following meanings:
"ADVICE" has the meaning ascribed to such term in Section 4
hereof.
"AGREEMENT" shall have the meaning ascribed to such term in the
preamble hereto.
"BUSINESS DAY" shall mean a day that is not a Legal Holiday.
"CAPITAL STOCK" shall mean, with respect to any Person, any and
all shares, interests, partnership interests, participations, rights
in or other equivalents (however designated and whether voting or
non-voting) of such person's capital stock, and any rights (other than
debt securities convertible into capital stock), warrants or options
exchangeable for or convertible into such capital stock whether
outstanding on the issue date or issued after the issue date.
"CHANGE OF CONTROL" shall have the meaning ascribed to such term
in the Indenture.
"COMPANY" shall have the meaning ascribed to such term in the
preamble of this Agreement and shall also include the Company's
permitted successors and assigns.
"COMMON STOCK" shall have the meaning ascribed to such term in
the preamble of this Agreement.
"CONVERTIBLE PREFERRED STOCK" shall mean any securities
convertible or exercisable or exchangeable into Common Stock of the
Company, whether outstanding on the date hereof or thereafter issued.
"DAMAGE AMOUNT" shall have the meaning ascribed to such term in
Section 2.1(d) hereof.
"DTC" shall have the meaning ascribed to such term in Section
4(i) hereof.
"EFFECTIVENESS PERIOD" shall mean the respective periods for
which the Company is obligated to use its reasonable efforts to keep a
Registration Statement effective pursuant to Sections 2.1(a) and
2.2(a).
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
"EXERCISE DATE" shall mean the earlier of (i) the date that a
shelf Registration Statement covering the sale of Common Stock
underlying the Preference Warrants is declared effective under the
Securities Act and (ii) January 27, 1999.
"HOLDER" shall mean each holder (including the Purchasers) of any
Preference Registrable Security and each of their successors, assigns
and direct and indirect transferees who become registered owners of
such Preference Registrable Securities.
"INDEMNIFIED PARTY" and "INDEMNIFYING PARTY" shall have the
respective meanings ascribed to such term in Section 5(c).
"INDENTURE" shall mean the Indenture, dated as of the date
hereof, between the Company and Bankers Trust Company, as Trustee,
pursuant to which the Notes are issued.
"INSPECTORS" shall have the meaning ascribed to such term in
Section 4(m) hereof.
"LEGAL HOLIDAY" shall mean a Saturday, a Sunday or a day on which
(i) banking institutions in The City of New York are required or
authorized by law or other government action to be closed and (ii) the
principal U.S. securities exchange or market, if any, on which any
Common Stock is listed or admitted to trading and the principal U.S.
securities exchange or market, if any, on which the Preference
Warrants are listed or admitted to trading are closed for business.
"LIQUIDATED DAMAGES" shall have the meaning ascribed to such term
in Section 2.1(d) hereof.
"MGPE" shall have the meaning ascribed to such term in the
preamble hereto.
"PERSON" shall mean any individual, corporation, limited
liability company, partnership, joint venture, association, joint-
stock company, trust, unincorporated organization or government or any
agency or political subdivision thereof or any other entity, including
any predecessor of any such entity.
"PREFERENCE REGISTRABLE SECURITIES" shall mean any of (i) the
Preference Warrants, (ii) the Preference Warrant Shares and (iii) any
other securities issued or issuable with respect to the Preference
Warrants or Preference Warrant Shares by way of stock dividend or
stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization or
otherwise. As to any particular Preference Registrable Securities,
such securities shall cease to be Preference Registrable Securities
when (a) a registration statement with respect to the offering of such
securities by the holder thereof shall have been declared effective
under the Securities Act and such securities shall have been disposed
of by such holder pursuant to such registration statement, (b) such
securities have been sold to the public pursuant to, or are eligible
for sale to the public without volume or manner of sale restrictions
under, Rule 144(k) (or any similar provision then in force, but not
Rule 144A) promulgated under the Securities Act, (c) such securities
shall have been otherwise transferred and new certificates for such
securities not bearing a legend restricting further transfer shall
have been delivered by the Company or its transfer agent and
subsequent disposition of such securities shall not require
registration or qualification under the Securities Act or any similar
state law then in force, or (d) such securities shall have ceased to
be outstanding.
"PREFERENCE WARRANT REGISTRATION EXPENSES" shall mean all
expenses incident to the Company's performance of or compliance with
this Agreement, including, without limitation, all SEC and stock
exchange or National Association of Securities Dealers, Inc.
registration and filing fees and expenses, fees and expenses incurred
in connection with compliance with securities or blue sky laws
(including, without limitation, reasonable fees and disbursements of
counsel for the underwriters and the Holders in connection with blue
sky qualifications of the Registrable Securities), printing expenses,
messenger, telephone and delivery expenses, fees and disbursements of
counsel for the Company, counsel for the underwriters, if any, the
Warrant Agent and all independent certified public accountants, and
other reasonable out-of-pocket expenses of Holders (it being
understood that Preference Warrant Registration Expenses shall not
include as to the fees and expenses of counsel, the fees and expenses
of more than one counsel for the Holders and one counsel for the
underwriters and shall not include any underwriting discounts,
commissions or transfer taxes).
"PREFERENCE REGISTRATION STATEMENT" shall mean any appropriate
registration statement of the Company filed with the SEC pursuant to
the Securities Act which covers any of the Preference Warrants, the
Preference Warrant Shares and any other Preference Registrable
Securities pursuant to the provisions of this Agreement and all
amendments and supplements to any such Registration Statement,
including post-effective amendments, in each case including the
Prospectus contained therein, all exhibits thereto and all material
incorporated by reference therein. "Preference Registration
Statement" shall include the Preference Warrant Shelf Registration
Statement and the Preference Warrant Stock Shelf Registration
Statement.
"PREFERENCE WARRANT AGENT" shall mean Bankers Trust Company and
any successor warrant agent for the Preference Warrants pursuant to
the Preference Warrant Agreement.
"PREFERENCE WARRANT AGREEMENT" shall mean the Preference Warrant
Agreement dated as of the date hereof, between the Company and the
Preference Warrant Agent, as amended or supplemented from time to time
in accordance with the terms thereof.
"PREFERENCE WARRANT SHARES" shall mean shares of Common Stock
issuable upon exercise of the Preference Warrants initially at an
exercise price of $10.00 per share.
"PREFERENCE WARRANT SHELF REGISTRATION STATEMENT" shall mean the
Preference Registration Statement filed with the SEC pursuant to
Section 2.1(a)(i).
"PREFERENCE WARRANT STOCK SHELF REGISTRATION STATEMENT"shall mean
the Preference Registration Statement filed with the SEC pursuant to
Section 2.1(a)(ii).
"PREFERENCE WARRANTS" shall have the meaning ascribed to such
term in the preamble hereto.
"PROSPECTUS" shall mean the prospectus included in any Preference
Registration Statement (including, without limitation, any prospectus
subject to completion and a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under
the Securities Act), as amended or supplemented by any prospectus
supplement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material
incorporated by reference or deemed to be incorporated by reference in
such Prospectus.
"PURCHASE AGREEMENTS" shall have the meaning ascribed to such
term in the preamble hereof.
"RULE 144" shall mean Rule 144 promulgated under the Securities
Act, as such Rule may be amended from time to time, or any similar
rule (other than Rule 144A) or regulation hereafter adopted by the SEC
providing for offers and sales of securities made in compliance
therewith resulting in offers and sales by subsequent holders that are
not affiliates of an issuer of such securities being free of the
registration and prospectus delivery requirements of the Securities
Act.
"RULE 144A" shall mean Rule 144A promulgated under the Securities
Act, as such Rule may be amended from time to time, or any similar
rule (other than Rule 144) or regulation hereafter adopted by the SEC.
"SEC" shall mean the Securities and Exchange Commission.
"SECURITIES ACT" shall mean the Securities Act of 1933, as
amended from time to time.
"SELLING HOLDER" shall mean a Holder who is selling Preference
Registrable Securities in accordance with the provisions of Section
2.2.
"SHELF REGISTRATION DEFAULT" shall have the meaning ascribed to
such term in Section 2.1(d).
"SUSPENSION PERIOD" shall have the meaning ascribed to such term
in Section 2.3(a).
"UNITS OFFERING" shall mean the Company's offering, which is
simultaneous with the offering of Preference Shares and Preference
Warrants, of 256,800 units consisting of 14 1/2 % Senior Discount Notes
due 2009 and 1,207,200 warrants to purchase 1,813,665 shares of common
stock.
Capitalized terms used herein but not defined shall have the
meaning ascribed thereto in the Preference Warrant Agreement.
SECTION 2. PREFERENCE REGISTRATION RIGHTS.
2.1 (a)(i) PREFERENCE WARRANT SHELF REGISTRATION STATEMENT. The
Company shall cause to be filed pursuant to Rule 415 (or any successor
provision) of the Securities Act a shelf registration statement covering
the resale of the Preference Warrants (the "Preference Warrant Shelf
Registration Statement") and shall use its best efforts to cause the
Preference Warrant Shelf Registration Statement to be declared effective
under the Securities Act on or before July 7, 1999. Subject to Section
2.3(a) hereof, the Company shall use reasonable efforts to maintain the
effectiveness of the Preference Warrant Shelf Registration Statement until
such time as all Preference Warrants have expired or have been exercised or
redeemed.
(ii) PREFERENCE WARRANT STOCK SHELF REGISTRATION STATEMENT. The
Company shall also caused to be filed pursuant to Rule 415 (or any
successor provision) of the Securities Act, a shelf registration statement
covering the issuance of the Preference Warrant Shares (the "Preference
Warrant Stock Shelf Registration Statement") and shall use its best efforts
to cause the Preference Warrant Stock Shelf Registration Statement to be
declared effective under the Securities Act by January 27, 2000. Subject
to Section 2.3(a) hereof, the Company shall use reasonable efforts to
maintain the effectiveness of the Warrant Stock Shelf Registration
Statement until such time as all the Preference Warrants have expired or
have been exercised or redeemed.
(iii) The Company will pay all Preference Warrant Registration
Expenses in connection with the resale of Preference Warrants and the
issuance of the Preference Warrant Shares.
(iv) The Preference Registration Statements may also include
securities issued in the Units Offering and securities issuable upon
conversion of such securities.
(b) BLUE SKY. The Company shall use its reasonable efforts to
register or qualify the Preference Warrant Shares under all applicable
securities laws, blue sky laws or similar laws of all jurisdictions in the
United States and Canada in which any Holder may or may be deemed to
purchase Preference Warrant Shares upon the exercise of Preference Warrants
and shall use its reasonable efforts to maintain such registration or
qualification through such time as all Preference Warrants have expired or
have been exercised or redeemed and Preference Warrant Shares have been
resold; PROVIDED, HOWEVER, that the Company shall not be required to
qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this Section 2.1(b) or to take any
action which would subject it to general service of process or to taxation
in any such jurisdiction where it is not then so subject.
(c) ACCURACY OF DISCLOSURE. The Company represents and warrants
to each Holder and agrees for the benefit of each Holder that (i) the
Preference Registration Statements and any amendment thereto will not
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
contained therein not misleading; and (ii) each of the Prospectuses
furnished to such Holder for delivery in connection with the exercise of
Preference Warrants or in connection with the sale of Preference Warrant
Shares, as the case may be, and the documents incorporated by reference
therein will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements contained therein, in light of the circumstances under which
they were made, not misleading; provided, however, that the Company shall
have no liability under clause (i) or (ii) of this Section 2.1(c) with
respect to any such untrue statement or omission made in a Preference
Registration Statement in reliance upon and in conformity with information
furnished to the Company by or on behalf of the Holders specifically for
inclusion therein.
(d) LIQUIDATED DAMAGES. In the event that (i) the Preference
Warrant Shelf Registration Stock Statement is not declared effective by the
SEC on or prior to July 7, 1999 or (ii) the Preference Warrant Stock Shelf
Registration Statement is not declared effective by the SEC on or prior to
January 27, 2000, or following the dates either such Preference
Registration Statement is declared effective but thereafter ceases to be
effective or usable without being restored to effectiveness by amendment or
otherwise, except during such time periods indicated in Section 2.3(a)
(each of the events referred to in clauses (i) and (ii) above, a "SHELF
REGISTRATION DEFAULT"), then the Company shall pay liquidated damages
("LIQUIDATED DAMAGES") to each Holder of Preference Warrants or Preference
Warrant Shares, as the case may be, an amount (the "DAMAGE AMOUNT") in an
initial amount equal to $.0025 per week per Preference Warrant for each
week that the Shelf Registration Default continues for the first 90-day
period following such Shelf Registration Default. The Damage Amount shall
be increased by an additional $.0025 per week per Preference Warrant with
respect to each subsequent 90-day period until such Shelf Registration
Default has been cured, up to a maximum amount of Liquidated Damages of
$0.0125 per week per Preference Warrant.
(e) ADDITIONAL ACTS. If the issuance or sale of any Preference
Warrant Shares or other securities issuable upon the exercise of the
Preference Warrants requires registration or approval of any governmental
authority (other than the registration requirements under the Securities
Act), or the taking of any other action under the laws of the United States
of America or any political subdivision thereof before such securities may
be validly offered or sold in compliance with such laws, then the Company
covenants that it will, in good faith and as expeditiously as reasonably
possible, use all reasonable efforts to secure and maintain such
registration or approval or to take such other action, as the case may be.
(f) LISTING OF PREFERENCE WARRANT SHARES. The Company shall use
its best efforts to register the Preference Warrant Shares on the Nasdaq
National Market by the Exercise Date.
2.2 [Reserved]
2.3 LIMITATIONS, CONDITIONS AND QUALIFICATIONS TO OBLIGATIONS
UNDER REGISTRATION COVENANTS. The obligations of the Company set forth in
Sections 2.1 and 2.6 hereof are subject to each of the following
limitations, conditions and qualifications:
(a) Subject to the next sentence of this paragraph, the Company
shall be entitled to postpone, for a reasonable period of time, the
filing of, or suspend the effectiveness of, any registration statement
or amendment thereto, or suspend the use of any prospectus and shall
not be required to amend or supplement the registration statement, any
related prospectus or any document incorporated therein by reference
(other than an effective registration statement being used for an
underwritten offering); PROVIDED that the duration of such
postponement or suspension (a "SUSPENSION PERIOD") may not exceed
during any 360 day period a period of more than 60 days or two periods
of more than an aggregate of 90 days. Such Suspension Period may be
effected only if (i) the Company's Board determines in its good faith
that there is a valid business purpose for such suspension and (ii)
provides notice that such determination was made by the Company's
Board to the Holders of the Preference Warrants; PROVIDED, HOWEVER,
that in no event shall the Company be required to disclose the
business purpose for such suspension if the Company determines in good
faith that such business purpose must remain confidential; and
PROVIDED FURTHER, HOWEVER, that the Effectiveness Period shall be
extended by the number of days in any Suspension Period. The Company
may further suspend effectiveness for a period not in excess of 5
Business Days to allow for the updating of the financial statements
included in a Registration Statement to the extent required by law,
such suspension for updating financial statements not to exceed 45
calendar days in aggregate in any 12-month period. If the Company
shall so postpone the filing of a Registration Statement it shall, as
promptly as possible, deliver a certificate signed by the chief
executive officer of the Company to the Selling Holders as to such
determination, and the Selling Holders shall (1) have the right, in
the case of a postponement of the filing or effectiveness of a
Registration Statement, upon the affirmative vote of the Holders of
not less than a majority of the Preference Registrable Securities to
be included in such Registration Statement, to withdraw the request
for registration by giving written notice to the Company within
10 days after receipt of such notice or (2) in the case of a
suspension of the right to make sales, receive an extension of the
registration period equal to the number of days of the suspension.
(b) The Company's obligations shall be subject to the obligations
of the Selling Holders, which the Selling Holders acknowledge, to
furnish all information and materials and to take any and all actions
as may be required under applicable federal and state securities laws
and regulations to permit the Company to comply with all applicable
requirements of the SEC, if applicable, and to obtain any acceleration
of the effective date of such Registration Statement.
2.4 [Reserved]
2.5 RULE 144 AND RULE 144A. The Company covenants that it will
file the reports required to be filed by it under the Securities Act and
the Exchange Act and the rules and regulations adopted by the SEC
thereunder in a timely manner and, if at any time the Company is not
required to file such reports, it will, upon the request of any Holder or
beneficial owner of Preference Registrable Securities, make available such
information necessary to permit sales pursuant to Rule 144A under the
Securities Act. The Company further covenants that it will take such
further action as any Holder of Preference Registrable Securities may
reasonably request, all to the extent required from time to time to enable
such Holder to sell Preference Registrable Securities without registration
under the Securities Act within the limitation of the exemptions provided
by (a) Rule 144(k) and Rule 144A under the Securities Act, as such Rules
may be amended from time to time, or (b) any similar rule or regulation
hereafter adopted by the SEC. Upon the request of any Holder of Preference
Registrable Securities, the Company will in a timely manner deliver to such
Holder a written statement as to whether it has complied with such
information requirements.
2.6 UNDERWRITTEN REGISTRATIONS. No Holder of Preference
Registrable Securities may participate in any underwritten registration
pursuant to a Preference Registration Statement filed under this Agreement
unless such Holder (a) agrees to (i) sell such Holder's Preference
Registrable Securities on the basis provided in and in compliance with any
underwriting arrangements approved by the Holders of not less than a
majority of the Preference Registrable Securities to be sold thereunder and
(ii) comply with Rules 101, 102 and 104 of Regulation M under the Exchange
Act and (b) completes and executes all questionnaires, powers of attorney,
indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements.
If the Company has complied with all its obligations under this
Agreement all holders of Preference Warrants or Preference Warrant Shares,
upon request of the lead managing underwriter with respect to an
underwritten public offering, will be required to not sell or otherwise
dispose of any Preference Warrants or Preference Warrant Shares owned by
them for a period not to exceed 30 days prior to and 180 days after the
consummation of such underwritten public offering.
SECTION 3. [RESERVED].
SECTION 4. REGISTRATION PROCEDURES. In connection with the
obligations of the Company with respect to any Preference Registration
Statement pursuant to Sections 2.1 and 2.6 hereof, the Company shall,
except as otherwise provided:
(a) At least five days prior to the initial filing of a
Preference Registration Statement or Prospectus and at least two days
prior to the filing of any amendment or supplement thereto (including
any document that would be incorporated or deemed to be incorporated
therein by reference), furnish to the Preference Warrant Agent, the
Holders and the managing underwriters, if any, copies of all such
documents proposed to be filed, which documents (other than those
incorporated or deemed to be incorporated by reference) shall be
subject to the review of such Holders, and such underwriters, if any,
and cause the officers and directors of the Company, counsel to the
Company and independent certified public accountants to the Company to
respond to such reasonable inquiries as shall be necessary, in the
opinion of counsel to such underwriters, to conduct a reasonable
investigation within the meaning of the Securities Act; PROVIDED that
the foregoing inspection and information gathering shall be
coordinated on behalf of the Holders by MGPE. The Company shall not
file any such Preference Registration Statement or related Prospectus
or any amendments or supplements thereto to which the Holders of a
majority of the Preference Registrable Securities included in such
Preference Registration Statement shall reasonably object on a timely
basis.
(b) Prepare and file with the SEC such amendments, including
post-effective amendments to each Preference Registration Statement as
may be necessary to keep such Preference Registration Statement
continuously effective for the applicable time period required
hereunder; cause the related Prospectus to be supplemented by any
required Prospectus supplement, and as so supplemented to be filed
pursuant to Rule 424 (or any similar provisions then in force)
promulgated under the Securities Act; and comply with the provisions
of the Securities Act and the Exchange Act with respect to the
disposition of all securities covered by such Preference Registration
Statement during such period in accordance with the intended methods
of disposition by the sellers thereof set forth in such Preference
Registration Statement as so amended or in such Prospectus as so
supplemented.
(c) Notify the Holders of Preference Registrable Securities to be
sold and the managing underwriters, if any, promptly, and (if
requested by any such person) confirm such notice in writing, (i)(A)
when a Prospectus or any Prospectus supplement or post-effective
amendment is proposed to be filed, and (B) with respect to a
Preference Registration Statement or any post-effective amendment,
when the same has become effective, (ii) of any request by the SEC or
any other Federal or state governmental authority for amendments or
supplements to a Preference Registration Statement or related
Prospectus or for additional information, (iii) of the issuance by the
SEC, any state securities commission, any other governmental agency or
any court of any stop order suspending the effectiveness of such
Preference Registration Statement or of any order or injunction
suspending or enjoining the use of a Prospectus or the effectiveness
of a Preference Registration Statement or the initiation of any
proceedings for that purpose, (iv) of the receipt by the Company of
any notification with respect to the suspension of the qualification
or exemption from qualification of any of the Preference Registrable
Securities for sale in any jurisdiction, or the initiation or
threatening of any proceeding for such purpose, and (v) of the
happening of any event, the existence of any information becoming
known that makes any statement made in a Preference Registration
Statement or related Prospectus or any document incorporated or deemed
to be incorporated therein by reference untrue in any material respect
or omit to state any material fact required to be stated therein or
necessary to make the statements therein, not misleading, and that in
the case of the Prospectus, it will not contain any untrue statement
of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading.
(d) Use its best efforts to avoid the issuance of or, if issued,
obtain the withdrawal of any order enjoining or suspending the
effectiveness of the Preference Registration Statement or the use of a
Prospectus or the lifting of any suspension of the qualification (or
exemption from qualification) of any of the Preference Registrable
Securities covered thereby for sale in any jurisdiction described in
Section 4(h) at the earliest practicable moment.
(e) If requested by the managing underwriters, if any, or if
none, by the Holders of a majority of the Preference Registrable
Securities being sold pursuant to such Preference Registration
Statement, (i) promptly incorporate in a Prospectus supplement or
post-effective amendment such information as the managing
underwriters, if any, or if none, such Holders reasonably believe
should be included therein, and (ii) make all required filings of such
Prospectus supplement or such post-effective amendment under the
Securities Act as soon as practicable after the Company has received
notification of the matters to be incorporated in such prospectus
supplement or post-effective amendment; PROVIDED, HOWEVER, that the
Company shall not be required to take any action pursuant to this
Section 4(e) that would in the opinion of counsel for the Company,
violate applicable law.
(f) Upon written request to the Company, furnish to each Holder
of Preference Registrable Securities to be sold pursuant to a
Registration Statement and each managing underwriter, if any, without
charge, at least one conformed copy of the Preference Registration
Statement and each amendment thereto, including financial statements
and schedules, all documents incorporated or deemed to be incorporated
therein by reference, and all exhibits to the extent requested
(including those previously furnished or incorporated by reference) as
soon as practicable after the filing of such documents with the SEC.
(g) Deliver to each Holder of Preference Registrable Securities
to be sold pursuant to a Preference Registration Statement and each
managing underwriter, if any, without charge, as many copies of each
Prospectus (including each form of prospectus) and each amendment or
supplement thereto as such Persons may reasonably request; and the
Company hereby consents to use of such Prospectus and each amendment
or supplement thereto and each document supplemental thereto by each
of the selling Holders of Preference Registrable Securities and the
underwriters or agents, if any, in connection with the offering and
sale of the Preference Registrable Securities covered by such
Prospectus and any amendment or supplement thereto.
(h) Prior to any offering of Preference Registrable Securities,
use its best efforts to register or qualify or cooperate with the
Holders of Preference Registrable Securities to be sold, the managing
underwriter or underwriters, if any, and their respective counsel in
connection with the registration or qualification (or exemption from
such registration or qualification) of such Preference Registrable
Securities for offer and sale under the securities or Blue Sky laws of
such jurisdictions as any such Holder or underwriter reasonably
requests in writing; keep each such registration or qualification (or
exemption therefrom) effective during the period such Preference
Registration Statement is required to be kept effective hereunder and
do any and all other acts or things necessary or advisable to enable
the disposition in such jurisdictions of the Preference Registrable
Securities covered by the applicable Preference Registration
Statement; PROVIDED, HOWEVER, that the Company shall not be required
to (i) qualify generally to do business in any jurisdiction where it
is not then so qualified or (ii) take any action that would subject it
to general service of process in any such jurisdiction where it is not
then so subject or to taxation in any jurisdiction where it is not so
subject.
(i) In connection with any sale or transfer of Preference
Registrable Securities that will result in such securities no longer
being Preference Registrable Securities, cooperate with the Holders of
Preference Registrable Securities and the managing underwriters, if
any, to facilitate the timely preparation and delivery of certificates
representing Preference Registrable Securities to be sold, which
certificates shall not bear any restrictive legends whatsoever and
shall be in a form eligible for deposit with The Depository Trust
Company ("DTC"); and to enable such Preference Registrable Securities
to be in such denominations and registered in such names as the
managing underwriter or underwriters, if any, or such Holders may
reasonably request at least two business days prior to any sale of
Preference Registrable Securities.
(j) Upon the occurrence of any event contemplated by Section
4(c)(v) above, as promptly as practicable prepare a supplement or
amendment, including if appropriate a post-effective amendment to each
Preference Registration Statement or a supplement to the related
Prospectus or any document incorporated or deemed to be incorporated
therein by reference, and file any other required document so that, as
thereafter delivered, such Prospectus will not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading.
(k) Prior to the effective date of a Preference Registration
Statement, (i) provide the registrar for the Preference Warrants and
Preference Registrable Securities with certificates for such
securities in a form eligible for deposit with DTC and (ii) provide
CUSIP numbers for such securities.
(l) Enter into such agreement (including an underwriting
agreement in such form, scope and substance as is customary in
underwritten offerings) and take all such other reasonable actions in
connection therewith (including those reasonably requested by the
managing underwriters, if any, or the Holders of a majority of the
Preference Registrable Securities being sold) in order to expedite or
facilitate the disposition of such Preference Registrable Securities,
and, whether or not an underwriting agreement is entered into and
whether or not the registration is an underwritten registration, (i)
make such representations and warranties to the Holders of such
Preference Registrable Securities and the underwriter or underwriters,
if any, with respect to the business of the Company and the
subsidiaries of the Company (including with respect to businesses or
assets acquired or to be acquired by any of them), and the Preference
Registration Statement, Prospectus and documents, if any, incorporated
or deemed to be incorporated by reference therein, in each case, in
form, substance and scope as are customarily made by issuers to
underwriters in underwritten offerings, and confirm the same if any
when requested; (ii) obtain opinions of counsel to the Company and
updates thereof (which counsel and opinions (in form, scope and
substance) shall be reasonably satisfactory to the managing
underwriters, if any, addressed to each selling Holder of Preference
Registrable Securities and each of the underwriters, if any), covering
the matters customarily covered in opinions requested in underwritten
offerings and such other matters as may be reasonably requested by
such underwriters; (iii) use their best efforts to obtain customary
"cold comfort" letters and updates thereof from the independent
certified public accountants of the Company (and, if necessary, any
other independent certified public accountants of any subsidiary of
the Company or of any business acquired by the Company for which
financial statements and financial data are, or are required to be,
included in the Preference Registration Statement), addressed (where
reasonably possible) to each of the underwriters, if any, such letters
to be in customary form and covering matters of the type customarily
covered in "cold comfort" letters in connection with underwritten
offerings; (iv) if an underwriting agreement is entered into, the same
shall contain customary indemnification provisions and procedures no
less favorable to the Selling Holders and the underwriters, if any,
than those set forth in Section 5 hereof (or such other provisions and
procedures acceptable to Holders of a majority of Preference
Registrable Securities covered by such Preference Registration
Statement and the managing underwriter, if any); and (v) deliver such
documents and certificates as may be reasonably requested by the
Holders of a majority of the Preference Registrable Securities being
sold and the managing underwriters or underwriters to evidence the
continued validity of the representations and warranties made pursuant
to clause (i) above and evidence compliance with any customary
conditions contained in the underwriting agreement or other agreements
entered into by the Company.
(m) Make available for inspection by a representative of the
selling Holders of Preference Registrable Securities, any underwriter
participating in any such disposition of Preference Registrable
Securities, if any, and any attorney, consultant or accountant
retained by such representative of the selling Holders of Preference
Registrable Securities or underwriter (collectively, the
"INSPECTORS"), at the offices where normally kept, during the
reasonable business hours, all financial and other records, pertinent
corporate documents and properties of the Company and the subsidiaries
of the Company (including with respect to businesses and assets
acquired or to be acquired to the extent that such information is
available to the Company), and cause the officers, directors, agents
and employees of the Company and its subsidiaries of the Company
(including with respect to businesses and assets acquired or to be
acquired to the extent that such information is available to the
Company) to supply all information in each case reasonably requested
by any such Inspector in connection with such Preference Registration
Statement; PROVIDED, HOWEVER, that such persons shall first agree in
writing with the Company that any information that is reasonably and
in good faith designated by the Company in writing as confidential at
the time of delivery of such information shall be kept confidential by
such Persons, unless (i) disclosure of such information is required by
court or administrative order or is necessary to respond to inquiries
of regulatory authorities, (ii) disclosure of such information is
required by law (including any disclosure requirements pursuant to
U.S. securities laws in connection with the filing of the Preference
Registration Statement or the use of any Prospectus), (iii) such
information becomes generally available to the public other than as a
result of a disclosure or failure to safeguard such information by
such person or (iv) such information becomes available to such person
from a source other than the Company and its subsidiaries and such
source is not bound by a confidentiality agreement; PROVIDED, FURTHER
that the foregoing investigation shall be coordinated on behalf of the
selling Holders of Preference Registrable Securities by MGPE.
(n) Comply with all applicable rules, regulations and policies of
the SEC and make generally available to its securityholders earnings
statements satisfying the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder no later than 60 days after the
end of any 12-month period (or 135 days after the end of any 12-month
period if such period is a fiscal year) (i) commencing at the end of
any fiscal quarter in which Preference Registrable Securities are sold
to an underwriter or to underwriters in a firm commitment or
reasonable efforts underwritten offering and (ii) if not sold to an
underwriter or to underwriters in such an offering, commencing on the
first day of the first fiscal quarter of the Company after the
effective date of the relevant Preference Registration Statement,
which statements shall cover said such period, consistent with the
requirements of Rule 158 under the Securities Act.
(o) Use its best efforts to cause all Preference Warrant Shares
relating to such Preference Registration Statement to be listed on
each securities exchange, if any, on which similar securities issued
by the Company are then listed.
(p) Cooperate with each seller of Preference Registrable
Securities to facilitate the timely preparation and delivery of
certificates representing Preference Registrable Securities to be sold
and not bearing any restrictive legends and registered in such names
as the Selling Holders may reasonably request at least two business
days prior to the closing of any sale of Preference Registrable
Securities.
(q) Cooperate with each seller of Preference Registrable
Securities covered by any Preference Registration Statement and each
underwriter, if any, participating in the disposition of such
Preference Warrants or Preference Registrable Securities and its
respective counsel in connection with any filings required to be made
with the National Association of Securities Dealers, Inc.
The Company may require a Holder of Preference Registrable
Securities to be included in a Preference Registration Statement to furnish
to the Company such information regarding (i) the intended method of
distribution of such Preference Registrable Securities (ii) such Holder and
(iii) the Preference Registrable Securities held by such Holder as is
required by law to be disclosed in such Preference Registrable Statement
and the Company may exclude from such Registration Statement the Preference
Registrable Securities of any Holder who fails to furnish such information
within a reasonable time after receiving such request.
If any such Preference Registration Statement refers to any
Holder by name or otherwise as the Holder of any securities of the Company,
then such Holder shall have the right to require (i) the insertion therein
of language, in form and substance reasonably satisfactory to such Holder,
to the effect that the holding by such Holder of such securities is not to
be construed as a recommendation by such Holder of the investment quality
of the Company's securities covered thereby and that such holding does not
imply that such Holder will assist in meeting any future financial
requirements of the Company, or (ii) in the event that such reference to
such Holder by name or otherwise is not required by the Securities Act, the
deletion of the reference to such Holder in such amendment or supplement to
the Preference Registration Statement filed or prepared subsequent to the
time that such reference ceases to be required.
Each Holder of Preference Registrable Securities agrees by
acquisition of such Preference Registrable Securities that, upon receipt of
any notice from the Company of the happening of any event of the kind
described in Section 4(c)(ii), 4(c)(iv) or 4(c)(v) hereof, such Holder will
forthwith discontinue disposition of such Preference Registrable Securities
covered by the Preference Registration Statement or Prospectus until such
Holder's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 4(j) hereof, or until it is advised in writing (the
"ADVICE") by the Company that the use of the applicable Prospectus may be
resumed, and in either case has received copies of any additional or
supplemental filings that are incorporated or deemed to be incorporated by
reference in such Prospectus. If the Company shall give any such notice,
the Effectiveness Period shall be extended by the number of days during
such periods from and including the date of the giving of such notice to
and including the date when each seller of Preference Registrable
Securities covered by such Registration Statement shall have received
(x) the copies of the supplemented or amended Prospectus contemplated by
Section 4(j) hereof or (y) the Advice, and, in either case, has received
copies of any additional or supplemental filings that are incorporated or
deemed to be incorporated by reference in such Prospectus.
Holders of the Preference Registrable Securities shall be
obligated to keep confidential the existence of a Suspension Period or any
confidential information communicated by the Company to the Holder with
respect thereto.
SECTION 5. INDEMNIFICATION AND CONTRIBUTION. (a) The Company
agrees to indemnify and hold harmless each Purchaser, each Holder, each
underwriter, if any, who participates in an offering of Preference
Registrable Securities, their respective affiliates, and their respective
directors, officers, employees, agents and each Person, if any, who
controls any of such parties within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement
or alleged untrue statement of a material fact contained in any
Preference Registration Statement (or any amendment thereto) pursuant
to which Preference Registrable Securities were registered under the
1933 Act, including all documents incorporated therein by reference,
or the omission or alleged omission therefrom of a material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading or arising out of any untrue statement or alleged
untrue statement of a material fact contained in any Prospectus (or
any amendment or supplement thereto) or the omission or alleged
omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever, in each case, based upon any
such untrue statement or omission, or any such alleged untrue
statement or omission; PROVIDED that (subject to Section 5(d) below)
any such settlement is effected with the written consent of the
Company; and
(iii) against any and all expenses whatsoever, as incurred
(including the reasonable fees and disbursements of one counsel chosen
by MGPE), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
court or governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue statement or omission, or
any such alleged untrue statement or omission, to the extent that any
such expense is not paid under subparagraph (i) or (ii) of this
Section 5(a);
PROVIDED, HOWEVER, that this indemnity agreement does not apply to any
loss, liability, claim, damage or expense to the extent (i) arising out of
an untrue statement or omission or alleged untrue statement or omission (A)
made in or omitted from a preliminary Prospectus or Preference Registration
Statement and corrected or included in a subsequent Prospectus or
Preference Registration Statement or any amendment or supplement thereto
made in reliance upon and in conformity with written information furnished
to the Company by the Selling Holders of Preference Registrable Securities,
any Purchaser, any Holder, or any underwriter expressly for use in the
Preference Registration Statement (or any amendment thereto) or the
Prospectus (or any amendment or supplement thereto) or (B) resulting from
the use of the Prospectus during a period when the use of the Prospectus
has been suspended for sales thereunder in accordance with Sections 2.1(b),
2.1(c), 2.3, 2.4 or 2.6 hereof, PROVIDED, in each case, that Holders
received prior notice of such suspension or other unavailability.
(b) In the case of any registration of Preference Registrable
Securities, each Holder agrees, severally and not jointly, to indemnify and
hold harmless the Company, each Purchaser, each underwriter, if any, who
participates in an offering of Preference Registrable Securities and the
other Selling Holders and each of their respective directors and officers
(including each officer of the Company who signed the Preference
Registration Statement) and each Person, if any, who controls the Company,
any Purchaser, any underwriter or any other Selling Holder within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act, against any and all loss, liability, claim, damage and expense
described in the indemnity contained in Section 5(a) hereof, as incurred,
but only with respect to untrue statements or omissions, or alleged untrue
statements or omissions, made in the Registration Statement (or any
amendment thereto) or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information
furnished to the Company by such Holder expressly for use in the Preference
Registration Statement (or any amendment thereto), or the Prospectus (or
any amendment or supplement thereto); PROVIDED, HOWEVER, that no such
Holder shall be liable for any claims hereunder in excess of the amount of
net proceeds received by such Holder from the sale of Preference Warrants
and Preference Registrable Securities pursuant to such Preference
Registration Statement.
(c) In case any action shall be commenced involving any Person
in respect of which indemnity may be sought pursuant to either paragraph
(a) or (b) above, such Person (the "INDEMNIFIED PARTY") shall give notice
as promptly as reasonably practicable to each Person against whom such
indemnity may be sought (the "indemnifying party"), but failure to so
notify an indemnifying party shall not relieve such indemnifying party from
any liability hereunder to the extent it is not materially prejudiced as a
result thereof and in any event shall not relieve it from any liability
which it may have otherwise than on account of this indemnity agreement.
An indemnifying party may participate at its own expense in the defense of
such action; PROVIDED, HOWEVER, that counsel to the indemnifying party
shall not (except with the consent of the indemnified party) also be
counsel to the indemnified party. In no event shall the indemnifying party
or parties be liable for the fees and expenses of more than one counsel (in
addition to any local counsel) separate from their own counsel for all
indemnified parties in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances. No indemnifying party shall, without
the prior written consent of the indemnified parties, settle or compromise
or consent to the entry of any judgment with respect to any litigation, or
any investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 5
(whether or not the indemnified parties are actual or potential parties
thereof), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising
out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a
failure to act by or on behalf of any indemnified party.
(d) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses
of counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 5(a)(ii) hereof effected
without its written consent if (i) such settlement is entered into more
than 45 days after receipt by such indemnifying party of the aforesaid
request, (ii) such indemnifying party shall have received notice of the
terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed
such indemnified party in accordance with such request prior to the date of
such settlement.
(e) If the indemnification provided for in any of the indemnity
provisions set forth in this Section 5 is for any reason unavailable to or
insufficient to hold harmless an indemnified party in respect of any
losses, liabilities, claims, damages or expenses referred to therein, then
each indemnifying party shall contribute to the aggregate amount of such
losses, liabilities, claims, damages and expenses incurred by such
indemnified party, as incurred, in such proportion as is appropriate to
reflect the relative fault of such indemnifying party or parties on the one
hand, and such indemnified party or parties on the other hand, in
connection with the statements or omissions which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations. The relative fault of such indemnifying party or
parties on the one hand, and such indemnified party or parties on the other
hand shall be determined by reference to, among other things, whether any
such untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied
by such indemnifying party or parties or such indemnified party or parties
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company,
the Purchaser and the Holders of the Preference Registrable Securities
agree that it would not be just and equitable if contribution pursuant to
this Section 5 were determined by pro rata allocation (even if the Selling
Holders of Preference Registrable Securities were treated as one entity,
and the Holders were treated as one entity, for such purpose) or by another
method of allocation which does not take account of the equitable
considerations referred to above in Section 5. The aggregate amount of
losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 5 shall be deemed
to include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by an governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission. No
Person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from
any Person who was not guilty of such fraudulent misrepresentation. For
purposes of this Section 5, each Person, if any, who controls a Purchaser
or Holder within the meaning of this Section 15 of the Securities Act or
Section 20 of the Exchange Act shall have the same rights to contribution
as such Purchaser or Holder, and each director of the Company, each officer
of the Company who signed the Preference Registration Statement, and each
Person, if any, who controls the Company within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act shall have the same
rights to contribution as the Company.
SECTION 6. MISCELLANEOUS.
(a) REMEDIES. In the event of a breach by the Company of any of
its obligations under this Agreement, each Holder, in addition to being
entitled to exercise all rights provided herein, in the Preference Purchase
Agreement or granted by law, including recovery of damages, will be
entitled to specific performance of its rights under this Agreement. The
Company agrees that monetary damages would not be adequate compensation for
any loss incurred by reason of a breach by it of any of the provisions of
this Agreement.
(b) NO INCONSISTENT AGREEMENTS. The Company will not enter into
any agreement which is inconsistent with the rights granted to the Holders
of Preference Registrable Securities in this Agreement or otherwise
conflicts with the provisions hereof. The rights granted to the Holders
hereunder do not in any way conflict with and are not inconsistent with the
rights granted to the holders of the Company's other issued and outstanding
securities, if any, under any such agreements.
(c) [INTENTIONALLY OMITTED].
(d) AMENDMENTS AND WAIVERS. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions
hereof may not be given, otherwise than with the prior written consent of
the Holders of not less than a majority of the then outstanding Preference
Warrants and each class and series of Preference Registrable Securities;
PROVIDED, HOWEVER, that, for the purposes of this Agreement, Preference
Warrants and Preference Registrable Securities that are owned, directly or
indirectly, by the Company or any of its affiliates (other than MGPE, the
Chase Purchasers and their affiliates) are not deemed outstanding.
Notwithstanding the foregoing, a waiver or consent to depart from the
provisions hereof with respect to a matter that relates exclusively to the
rights of one or more Holders and that does not directly or indirectly
affect the rights of other Holders may be given by a majority of the
Holders so affected; PROVIDED, HOWEVER, that the provisions of this
sentence may not be amended, modified or supplemented except in accordance
with the provisions of the immediately preceding sentence. Notwithstanding
the foregoing, no amendment, modification, supplement, waiver or consent
with respect to Section 5 shall be made or given otherwise than the prior
written consent of each Person affected thereby.
(e) NOTICES. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand delivery,
registered first-class mail, facsimile, or any courier guaranteeing
delivery by a specific date (i) if to a Holder, at the most current address
of such Holder as set forth in the register for the Preference Registrable
Securities, which address initially is, with respect to each Purchaser, the
address set forth with respect to such Purchaser in the relevant Preference
Purchase Agreement and, in the case of ▇▇▇▇▇▇▇, to The ▇▇▇▇▇▇▇ Trust, c/o
Chase Enterprises, Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-
3585 Attention: ▇▇▇▇ ▇▇▇▇▇▇▇ with a copy to Rothschild Trust Guernsey
Limited, P.O. Box 472, St. Peter's House, ▇▇ ▇▇▇▇▇▇▇, St. Peter's Port,
Guernsey, Channel Islands GY1 6AX, attention ▇.▇. ▇▇▇▇▇▇▇; and (ii) if to
the Company, initially to @Entertainment, Inc., c/o WIVJATV
Sp. z.o.o./@Entertainment, Inc., ul. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇ ▇, ▇▇-▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇, Attention: Przemylslaw ▇▇▇▇▇, facsimile no.: 011 48 22 668 7200,
and thereafter at such other address, notice of which is given in
accordance with the provisions of this Section 6(e), with a copy to ▇▇▇▇▇ &
▇▇▇▇▇▇▇▇, 815 Connecticut, N.W., Washington, D.C. 20006-4078, Attention:
▇▇▇▇ ▇. ▇▇▇▇, Esq., facsimile no.: (▇▇▇) ▇▇▇-▇▇▇▇, and thereafter at such
other address notice of which is given in accordance with the provisions of
this Section 6(e).
All such notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; five
Business Days after being deposited in the mail, postage prepaid, if
mailed; when answered back, if telexed; when receipt is acknowledged, if
telecopied; and on the Business Day scheduled for delivery, if timely
delivered to an air courier guaranteeing delivery by a specific date.
(f) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors and permitted assigns of each
of the parties and shall inure to the benefit of each Holder. If any
transferee of any Holder shall acquire Preference Registrable Securities,
in any manner, whether by operation of law or otherwise, such Preference
Registrable Securities shall be held subject to all of the terms of this
Agreement, and by taking and holding such Preference Registrable Securities
such Person shall be conclusively deemed to have agreed to be bound by and
to perform all of the terms and provisions of this Agreement and such
Person shall be entitled to receive the benefits hereof. The Company may
not assign any of its rights or obligations hereunder without the prior
written consent of each Holder of Preference Registrable Securities.
Notwithstanding the foregoing, no successor or assignee of the Company
shall have any rights granted under the Agreement until such person shall
acknowledge its rights and obligations hereunder by a signed written
statement of such person's acceptance of such rights and obligations.
(g) COUNTERPARTS. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same Agreement.
(h) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
(j) SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction
to be invalid, illegal, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions set forth herein shall remain in
full force and effect and shall in no way be affected, impaired or
invalidated, and the parties hereto shall use their best efforts to find
and employ an alternative means to achieve the same or substantially the
same result as that contemplated by such term, provision, covenant or
restriction. It is hereby stipulated and declared to be the intention of
the parties that they would have executed the remaining terms, provisions,
covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.
(k) HEADINGS. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(l) ENTIRE AGREEMENT. This Agreement, together with the
Purchase Agreements and the Preference Warrant Agreement and the Preference
Registration Rights Agreement, is intended by the parties as a final
expression of their agreement, and is intended to be a complete and
exclusive statement of the agreement and understanding of the parties
hereto in respect of the subject matter contained herein and therein. This
Agreement, the Preference Purchase Agreement and the Preference Warrant
Agreement supersede all prior agreements and understandings between the
parties with respect to such subject matter.
(m) SECURITIES HELD BY THE COMPANY OR ITS AFFILIATES. Whenever
the consent or approval of Holders of a specified percentage of Preference
Registrable Securities is required hereunder, Preference Registrable
Securities held by the Company or by any of its affiliates (as such term is
defined in Rule 405 under the Securities Act) (other than MGPE, the Chase
Purchasers and their affiliates) shall not be counted (in either the
numerator or the denominator) in determining whether such consent or
approval was given by the Holders of such required percentage.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first written above.
@ ENTERTAINMENT, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇
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Name:
Title:
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇
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Name:
Title:
Confirmed and accepted as of the date first above written:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ PRIVATE EQUITY LIMITED
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ PRIVATE EQUITY LIMITED
By: /s/ [Illegible]
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Name:
Title:
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇
The ▇▇▇▇▇▇▇ Trust
By: Rothschild Trust Guernsey Limited
By: /s/ ▇.▇. ▇▇▇▇
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Title Director
By: /s/ ▇▇ ▇▇▇▇▇▇
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Title
Authorised Signatory