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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
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TABLE OF CONTENTS
SECTION 1. Definitions......................................................1
SECTION 2. Preference Registration Rights...................................5
2.1 (a)(i) Preference Warrant Shelf Registration Statement............5
(ii) Preference Warrant Stock Shelf Registration
Statement..................................................6
(b) Blue Sky ......................................................6
(c) Accuracy of Disclosure ....................................... 6
(d) Liquidated Damages ............................................7
(e) Additional Acts ...............................................7
(f) Listing of Preference Warrant Shares ..........................7
2.2 [Reserved].......................................................7
2.3 Limitations, Conditions and Qualifications to Obligations
Under Registration Covenants.....................................7
2.4 [Reserved].......................................................8
2.5 Rule 144 and Rule 144A...........................................8
2.6 Underwritten Registrations.......................................9
SECTION 3. [Reserved].......................................................9
SECTION 4. Registration Procedures..........................................9
SECTION 5. Indemnification and Contribution................................15
SECTION 6. Miscellaneous...................................................19
(a) Remedies........................................................19
(b) No Inconsistent Agreements......................................19
(c) [Intentionally Omitted].........................................19
(d) Amendments and Waivers..........................................19
(e) Notices.........................................................19
(f) Successors and Assigns..........................................20
(g) Counterparts....................................................20
(h) Governing Law...................................................20
(j) Severability....................................................20
(k) Headings........................................................21
(l) Entire Agreement................................................21
(m) Securities Held by the Company or Its Affiliates................21
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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 ▇▇▇▇▇▇▇, ▇▇▇▇▇ Chase 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 Company's 14 1/2% Senior Discount Notes due 2009 are issued.
"Inspectors" shall have the meaning ascribed to such term in Section
4(m) hereof.
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"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
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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
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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 1,027,200 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
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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 and resale 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
Preference 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
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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,
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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 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.
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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.
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(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.
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(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
11
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
12
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
13
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
14
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:
15
(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
16
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
17
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.
18
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., One Commercial
Plaza, Hartford, Connecticut
19
06103-3585 Attention: ▇▇▇▇ ▇▇▇▇▇▇▇ with a copy to Rothschild Trust Guernsey
Limited, ▇.▇. ▇▇▇ ▇▇▇, ▇▇. ▇▇▇▇▇'▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇, ▇▇. Peter's Port,
Guernsey, Channel Islands GY1 6AX, attention ▇.▇. ▇▇▇▇▇▇▇; and (ii) if to the
Company, initially at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ III, 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 ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇-▇▇▇▇,
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.
20
(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]
21
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
@ ENTERTAINMENT, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III
------------------------
TITLE: CHIEF EXECUTIVE OFFICER
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
------------------------
TITLE: CHIEF FINANCIAL OFFICER
Confirmed and accepted as of the date first above written:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ PRIVATE EQUITY LIMITED
By: /s/
------------------------
Name:
Title:
/s/
------------------------
▇▇▇▇▇▇ ▇▇▇▇▇
/s/
------------------------
▇▇▇▇▇▇ ▇▇▇▇▇
/s/
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THE ▇▇▇▇▇▇▇ TRUST
By: /s/
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Name:
Title: