EXHIBIT 5
______________________________________________________________________________
______________________________________________________________________________
PREFERENCE REGISTRATION RIGHTS AGREEMENT
Dated January 27, 1999
among
@ENTERTAINMENT, INC.
and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ PRIVATE EQUITY LIMITED on behalf of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ DEVELOPMENT CAPITAL SYNDICATION LIMITED,
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
and THE ▇▇▇▇▇▇▇ TRUST
______________________________________________________________________________
______________________________________________________________________________
TABLE OF CONTENTS
PAGE
1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . 1
2. REGISTRATION UNDER THE 1933 ACT . . . . . . . . . . . . 4
3. REGISTRATION PROCEDURES . . . . . . . . . . . . . . . . 6
4. INDEMNIFICATION AND CONTRIBUTION. . . . . . . . . . . . 12
5. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . 15
EXECUTION COPY
PREFERENCE REGISTRATION RIGHTS AGREEMENT
THIS PREFERENCE REGISTRATION RIGHTS AGREEMENT (the "Agreement") is
made and entered into 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 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"), which provide for the sale by the Company of
45,000 shares of the Company's Series A 12% Cumulative Preference Shares
par value $0.01 per share (the "Series A Preference Shares") to MGPE, the
sale of 5,000 shares of the Company's Series B 12% Cumulative Preference
Shares, par vaue $0.01 per share (the "Series B Preference Shares" and
together with the Series A Preference Shares, the "Cumulative Preference
Shares") to the Chase Purchasers and the sale to MGPE and the Chase
Purchasers of warrants (the "Preference Warrants") to purchase 5,500,000
shares of the Company's Common Stock. In order to induce the Purchasers to
enter into the Purchase Agreements, the Company has agreed to provide the
Purchasers and their direct and indirect transferees the registration
rights set forth in this Agreement. The execution of this Agreement is a
condition to the closing under the Purchase Agreements.
In consideration of the foregoing, the parties hereto agree as
follows:
1. DEFINITIONS.
As used in this Agreement, the following capitalized defined terms
shall have the following meanings:
"1933 ACT" shall mean the Securities Act of 1933, as amended from time
to time.
"1934 ACT" shall mean the Securities Exchange Act of 1934, as amended
from time to time.
"BOARD OF DIRECTORS" shall mean the Board of Directors of the Company
or any duly authorized committee of such Board of Directors.
"CERTIFICATE OF DESIGNATIONS" shall mean the certificate of
designations, preferences and rights of the Cumulative Preference Shares
filed with the Secretary of State of the State of Delaware.
"CLOSING DATE" shall mean the Closing Date as defined in the Purchase
Agreement.
"COMPANY" shall have the meaning set forth in the preamble and shall
also include the Company's successors.
"COMMON STOCK" shall mean the shares of common stock, par value $0.01
per share, of the Company.
"CUMULATIVE PREFERENCE SHARES" shall have the meaning set forth in the
preamble to this Agreement; in addition, it shall also mean any new
preference share which is issued by the Company upon the sale or other
disposition by MGPE of a Series A Preference Share.
"DIVIDEND PAYMENT DATE" shall mean March 31 and September 30 of each
year.
"HOLDER" or "HOLDERS" shall mean the Purchasers, for so long as they
own any Cumulative Preference Shares, and each of their successors, assigns
and direct and indirect transferees who become registered owners of
Cumulative Preference Shares.
"MAJORITY HOLDERS" shall mean the Holders of a majority of the
outstanding shares of Cumulative Preference Shares; PROVIDED that whenever
the consent or approval of Holders of a specified percentage of Cumulative
Preference Shares is required hereunder, Cumulative Preference Shares held
by the Company or any of its affiliates (as such term is defined in Rule
405 under the 1933 Act) (other than MGPE or subsequent holders of
Preference Shares if such subsequent holders are deemed to be such
affiliates solely by reason of their holding of such Cumulative Preference
Shares, and other than the Chase Purchasers and their affiliates) shall not
be counted in determining whether such consent or approval was given by the
Holders of such required percentage or amount.
"MGPE" shall have the meaning set forth in the preamble to this
Agreement.
"PERSON" shall mean an individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political
subdivision thereof.
"PREFERENCE OFFERING" shall mean the offering of 50,000 shares of the
Company's 12% Cumulative Preference Shares and Preference Warrants
initially entitling the Holders thereof to purchase an aggregate 5,500,000
shares of Common Stock of the Company at a par value of $.01 per share.
"PREFERENCE REGISTRATION EXPENSES" shall mean any and all expenses
incident to performance of or compliance by the Company with this
Agreement, including without limitation: (i) all SEC, stock exchange or
National Association of Securities Dealers, Inc. registration and filing
fees, (ii) all fees and expenses incurred in connection with compliance
with state securities or blue sky laws (including reasonable fees and
disbursements of counsel for any Underwriters or Holders in connection with
blue sky qualification of any of the Cumulative Preference Shares),
(iii) all expenses of any Persons in preparing or assisting in preparing,
word processing, printing and distributing any Shelf Registration
Statement, any Prospectus, any amendments or supplements thereto, any
underwriting agreements, securities sales agreements and other documents
relating to the performance of and compliance with this Agreement, (iv) all
rating agency fees, if any, (v) the fees and disbursements of the Transfer
Agent and its counsel, (vi) the fees and disbursements of all counsel for
the Company (including all foreign counsel) and of counsel for the Holders
(including all foreign counsel) (which counsel shall be selected by the
Majority Holders and which counsel may also be counsel for MGPE) and
(vii) the fees and disbursements of the independent public accountants of
the Company, including the expenses of any special audits or "cold comfort"
letters required by or incident to such performance and compliance, but
excluding fees and expenses of counsel to the Underwriters (other than fees
and expenses set forth in clause (ii) above) or the Holders and
underwriting discounts and commissions and transfer taxes, if any, relating
to the sale or disposition of Cumulative Preference Shares by a Holder (it
being understood that Preference Registration Expenses shall not include as
to 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 include the Preference
Warrant Shelf Registration Statement and the Preference Warrant Stock Shelf
Registration Statement.
"PREFERENCE WARRANTS" shall have the meaning set forth in the
preamble.
"PROSPECTUS" shall mean the prospectus included in a Shelf
Registration Statement, including any preliminary prospectus, and any such
prospectus as amended or supplemented by any prospectus supplement,
including a prospectus supplement with respect to the terms of the offering
of any portion of the Cumulative Preference Shares covered by a Shelf
Registration Statement, and by all other amendments and supplements to such
prospectus, and in each case including all material incorporated by
reference therein.
"PURCHASE AGREEMENTS" shall have the meaning set forth in the preamble
to this Agreement.
"REGISTRATION RIGHT" shall mean the right attached to each Cumulative
Preference Share entitling the holder thereof to receive, under certain
circumstances, an additional dividend payment of the amount specified
pursuant to Section 2(c) hereof.
"SEC" shall mean the Securities and Exchange Commission.
"SHELF REGISTRATION STATEMENT" shall mean a "shelf" registration
statement of the Company that covers the sale by the Holders of all of the
Cumulative Preference Shares on an appropriate form under Rule 415 under
the 1933 Act, or any similar rule that may be adopted by the SEC, and all
amendments and supplements to 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.
"TRANSFER AGENT" shall mean Continental Stock Transfer & Trust Company
or its successors provided that any such successor is a participant in The
Depository Trust Company's full-FAST system.
"UNDERWRITERS" shall have the meaning set forth in Section 3 hereof.
"UNDERWRITTEN REGISTRATION" or "UNDERWRITTEN OFFERING" shall mean a
registration in which Cumulative Preference Shares are sold to an
Underwriter (as hereinafter defined) for reoffering to the public.
2. REGISTRATION UNDER THE 1933 ACT.
(a) To the extent not prohibited by any applicable law or
applicable interpretation of the staff of the SEC, the Company shall cause
a Shelf Registration Statement to be filed and shall:
(i) use its best efforts to have such Shelf Registration
Statement declared effective on or before July 7, 1999 and
(ii) use reasonable efforts to keep such Shelf Registration
Statement continuously effective until the expiration of the
period referred to in Rule 144(k) of the 1933 Act with
respect to all Holders.
The Company further agrees to supplement or amend such Shelf
Registration Statement if required by the rules, regulations or
instructions applicable to the registration form used by the Company for
such Shelf Registration Statement or by the 1933 Act or by any other rules
and regulations thereunder for shelf registration or if reasonably
requested by a Holder with respect to information relating to such Holder,
and to use its best efforts to cause any such amendment to become effective
and such Shelf Registration Statement to become usable as soon as
thereafter practicable. The Company agrees to furnish to the Holders of
Cumulative Preference Shares copies of any such supplement or amendment
promptly after its being used or filed with the SEC, as well as all legal
opinions, comfort letters, officers certificates and any other information
and documents required to be delivered by the Company as stipulated in
Section (3) hereof.
(b) The Company shall pay all Registration Expenses in
connection with the registration pursuant to Section 2(a) hereof. Each
Holder shall pay all underwriting discounts and commissions and transfer
taxes, if any, relating to the sale or disposition of such Holder's
Cumulative Preference Shares pursuant to the Shelf Registration Statement.
(c) A Shelf Registration Statement pursuant to Section 2(a)
hereof will not be deemed to have become effective unless it has been
declared effective by the SEC; PROVIDED, HOWEVER, that, if after it has
been declared effective the offering of Cumulative Preference Shares
pursuant to a Shelf Registration Statement is interfered with by any stop
order, injunction or other order or requirement of the SEC or any other
governmental agency or court, such Shelf Registration Statement will be
deemed not to have become effective during the period of such interference
until the offering of Cumulative Preference Shares pursuant to such Shelf
Registration Statement may legally resume.
In the event a Shelf Registration Statement covering all
Cumulative Preference Shares (i) is not declared effective on or before
July 7, 1999 or (ii) is unavailable during any 360-day period for a period
of more than 60 days or two periods of more than an aggregate of 90 days,
(A) the dividend rate applicable to the Cumulative Preference Shares shall
increase by 1% per annum (to a total of 13% per annum) from the date of the
deficiency under (i) or (ii), as the case may be, until the date such Shelf
Registration Statement is declared effective or is made available for use
without any restrictions or that during such time period dividends shall
accrue on the Cumulative Preference Shares at an annual rate of 13% of the
Accreted Liquidation Preference per share.
(d) In any 360-day period, the Company shall be entitled to
suspend the availability of a Shelf Registration Statement for no more than
one period of up to 60 days or two periods of no more than an aggregate of
90 days if the Board of Directors determines that such suspension would be
in the best interests of the Company.
(e) Without limiting the remedies available to the Purchasers
and the Holders, the Company acknowledges that any failure by the Company
to comply with its obligations under Section 2(a) hereof may result in
material irreparable injury to the Purchasers or the Holders for which
there is no adequate remedy at law, that it will not be possible to measure
damages for such injuries precisely and that, in the event of any such
failure, the Purchasers or any Holder may obtain such relief as may be
required to specifically enforce the Company's obligations under
Section 2(a) hereof.
3. REGISTRATION PROCEDURES.
In connection with the obligations of the Company with respect to the
Shelf Registration Statement pursuant to Section 2(a) hereof, the Company
shall:
(a) prepare and file with the SEC a Shelf Registration Statement
on the appropriate form under the 1933 Act, which form shall (i) be
selected by the Company and (ii) be available for the sale of the
Cumulative Preference Shares by the selling Holders thereof and
(iii) comply as to form in all material respects with the requirements
of the applicable form and include all financial statements required
by the SEC to be filed therewith, and use its best efforts to cause
such Shelf Registration Statement to become effective and remain
effective in accordance with Section 2 hereof;
(b) prepare and file with the SEC such amendments and post-
effective amendments to each Shelf Registration Statement as may be
necessary to keep such Shelf Registration Statement effective for the
applicable period and cause each Prospectus to be supplemented by any
required prospectus supplement and, as so supplemented, to be filed
pursuant to Rule 424 under the 1933 Act and keep each Prospectus
current;
(c) furnish to each Holder of Cumulative Preference Shares,
counsel for the Holders and each Underwriter of an Underwritten
Offering of Cumulative Preference Shares, if any, without charge, as
many copies of each Prospectus, including each preliminary Prospectus,
and any amendment or supplement thereto and such other documents as
such Holder or Underwriter may reasonably request, in order to
facilitate the public sale or other disposition of the Cumulative
Preference Shares; and the Company consents to the use of such
Prospectus and any amendment or supplement thereto in accordance with
applicable law by each of the selling holders of Cumulative Preference
Shares and any such Underwriters in connection with the offering and
sale of the Cumulative Preference Shares covered by and in the manner
described in such Prospectus or any amendment or supplement thereto in
accordance with applicable law;
(d) use its best efforts (i) to register or qualify, by the time
the Shelf Registration Statement is declared effective by the SEC, the
Cumulative Preference Shares under all applicable state securities or
"blue sky" laws and (ii) to cooperate with such Holder in connection
with any filings required to be made with the National Association of
Securities Dealers, Inc. and do any and all other acts and things
which may be reasonably necessary or advisable to enable such Holder
to consummate the disposition in each such jurisdiction of such
Cumulative Preference Shares owned by such Holder; PROVIDED, HOWEVER,
that the Company shall not be required to (A) qualify as a foreign
corporation or as a dealer in securities in any jurisdiction where it
would not otherwise be required to qualify but for this Section 3(d),
(B) file any general consent to service of process or (C) subject
itself to taxation in any such jurisdiction if it is not otherwise so
subject;
(e) notify each Holder of Cumulative Preference Shares and
counsel for the Holders promptly and, if requested by any such Holder
or counsel, confirm such advice in writing (i) when a Shelf
Registration Statement has become effective and when any post-
effective amendment thereto has been filed and becomes effective, (ii)
of any request by the SEC or any state securities authority for
amendments and supplements to a Shelf Registration Statement and
Prospectus or for additional information after the Shelf Registration
Statement has become effective, (iii) of the issuance by the SEC or
any state securities authority of any stop order suspending the
effectiveness of a Shelf Registration Statement or the initiation of
any proceedings for that purpose, (iv) if, between the effective date
of a Shelf Registration Statement and the closing of any sale of
Cumulative Preference Shares covered thereby, the representations and
warranties of the Company contained in any underwriting agreement,
securities sales agreement or other similar agreement, if any,
relating to the offering cease to be true and correct in all material
respects or if the Company receives any notification with respect to
the suspension of the qualification of the Cumulative Preference
Shares for sale in any jurisdiction or the initiation of any
proceeding for such purpose, (v) of the happening of any event during
the period a Shelf Registration Statement is effective which makes any
statement made in such Shelf Registration Statement or the related
Prospectus untrue in any material respect or which requires the making
of any changes in such Shelf Registration Statement or Prospectus in
order to make the statements therein not misleading and (vi) of any
determination by the Company that a post-effective amendment to a
Shelf Registration Statement would be appropriate;
(f) make every reasonable effort to obtain the withdrawal of any
order suspending the effectiveness of a Shelf Registration Statement
at the earliest possible moment and provide immediate notice to each
Holder of the withdrawal of any such order;
(g) furnish to each Holder of Cumulative Preference Shares,
without charge, at least one conformed copy of the Shelf Registration
Statement and any post-effective amendment thereto (without documents
incorporated therein by reference or exhibits thereto, unless
requested);
(h) cooperate with the selling Holders of Cumulative Preference
Shares to facilitate the timely preparation and delivery of
certificates representing Cumulative Preference Shares to be sold and
not bearing any restrictive legends and enable such Cumulative
Preference Shares to be in such denominations 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 Cumulative
Preference Shares;
(i) upon the occurrence of any event contemplated by Section
3(e)(v) hereof, use its best efforts to prepare a supplement or post-
effective amendment to a Shelf Registration Statement or the related
Prospectus or any document incorporated therein by reference or file
any other required document so that, as thereafter delivered to the
purchasers of the Cumulative Preference Shares, such Prospectus will
not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading. The
Company agrees to notify the Holders to suspend use of the Prospectus
as promptly as practicable after the occurrence of such an event, and
the Holders hereby agree to suspend use of the Prospectus until the
Company has amended or supplemented the Prospectus to correct such
misstatement or omission;
(j) within a reasonable time prior to the filing of any Shelf
Registration Statement, any Prospectus, any amendment to a Shelf
Registration Statement or amendment or supplement to a Prospectus or
any document which is to be incorporated by reference into a Shelf
Registration Statement or a Prospectus after the initial filing of a
Shelf Registration Statement, provide copies of such document to the
Purchasers and their counsel and the Holders and their counsel and
make such of the representatives of the Company as shall be reasonably
requested by the Purchasers or their counsel and the Holders or their
counsel, available for discussion of such document, and shall not at
any time file or make any amendment to the Shelf Registration
Statement, any Prospectus or any amendment of or supplement to a Shelf
Registration Statement or a Prospectus or any document which is to be
incorporated by reference into a Shelf Registration Statement or a
Prospectus, of which the Purchasers and their counsel and the Holders
and their counsel, shall not have previously been advised and
furnished a copy or to which the Purchasers or their counsel and the
Holders or their counsel shall object;
(k) obtain a CUSIP number for all Cumulative Preference Shares
not later than the effective date of a Shelf Registration Statement;
(l) make available for inspection by a representative of the
Holders of the Cumulative Preference Shares, any Underwriter
participating in any disposition pursuant to a Shelf Registration
Statement, and attorneys and accountants designated by the Holders, at
reasonable times and in a reasonable manner, all financial and other
records, pertinent documents and properties of the Company, and cause
the respective officers, directors and employees of the Company to
supply all information reasonably requested by any such
representative, Underwriter, attorney or accountant in connection with
a Shelf Registration Statement;
(m) if reasonably requested by any Holder of Cumulative
Preference Shares covered by a Shelf Registration Statement, (i)
promptly incorporate in a Prospectus supplement or post-effective
amendment such information with respect to such Holder as such Holder
reasonably requests to be included therein and (ii) make all required
filings of such Prospectus supplement or such post-effective amendment
as soon as the Company has received notification of the matters to be
incorporated in such filing;
(n) enter into such customary agreements and take all such other
actions in connection therewith (including those requested by the
Holders of a majority of the Cumulative Preference Shares being sold)
in order to expedite or facilitate the disposition of such Cumulative
Preference Shares including, but not limited to, an Underwritten
Offering;
(o) to the extent possible, make such representations and
warranties to any Holder or Underwriters of such Cumulative Preference
Shares with respect to the business of the Company and its
subsidiaries, the Shelf Registration Statement, Prospectus and
documents incorporated by reference or deemed incorporated by
reference, if any, in each case, in form, substance and scope as are
customarily made by issuers to underwriters in underwritten offerings
and confirm the same if and when requested,
(p) obtain opinions of counsel to the Company, including foreign
counsel, (which counsel and opinions, in form, scope and substance,
shall be reasonably satisfactory to such Underwriters and their
respective counsel) addressed to the Holders and each Underwriter of
Cumulative Preference Shares, covering the matters customarily covered
in opinions requested in underwritten offerings,
(q) use reasonable efforts to obtain "cold comfort" letters from
the independent certified public accountants of the Company (and, if
necessary, any other certified public accountant 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 Shelf Registration Statement) addressed to each
Underwriter of Cumulative Preference Shares, such letters to be in
customary form and covering matters of the type customarily covered in
"cold comfort" letters in connection with underwritten offerings, and
(r) to evidence the continued validity of the representations and
warranties of the Company made pursuant to clause (i) above and to
evidence compliance with any customary conditions contained in an
underwriting agreement (a) deliver such documents, opinions and
certificates as may be reasonably requested by the Holders of a
majority of the Cumulative Preference Shares being sold and (b)
deliver such documents, opinions and certificates as may be reasonably
requested by the Underwriters and which are customarily delivered in
underwritten offerings.
The Company may require each Holder of Cumulative Preference
Shares to furnish to the Company such information regarding the Holder and
the proposed distribution by such Holder of such Cumulative Preference
Shares as the Company may from time to time reasonably request in writing.
Each Holder agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section
3(e)(v) hereof, such Holder will forthwith discontinue disposition of
Cumulative Preference Shares pursuant to a Shelf Registration Statement
until such ▇▇▇▇▇▇'s receipt of the copies of the supplemented or amended
Prospectus contemplated by Section 3(i) hereof, and, if so directed by the
Company, such Holder will deliver to the Company (at its expense) all
copies in its possession, other than permanent file copies then in such
Holder's possession, of the Prospectus covering such Cumulative Preference
Shares current at the time of receipt of such notice. If the Company shall
give any such notice to suspend the disposition of Cumulative Preference
Shares pursuant to a Shelf Registration Statement, the Company shall extend
the period during which the Shelf Registration Statement shall be
maintained effective pursuant to this Agreement by the number of days
during the period from and including the date of the giving of such notice
to and including the date when the Holders shall have received copies of
the supplemented or amended Prospectus necessary to resume such
dispositions.
At any time after the Shelf Registration Statement is declared
effective, by issuance of a written notice to the Company of a request to
undertake an Underwritten Offering, the Holders of Cumulative Preference
Shares covered by a Shelf Registration Statement who desire to do so may
sell such Cumulative Preference Shares in an Underwritten Offering. In any
such Underwritten Offering, the investment banker or investment bankers and
manager or managers (the "Underwriters") that will administer the offering
will be selected by the Majority Holders of the Cumulative Preference
Shares included in such offering. To assist such Holders of the Cumulative
Preference Shares to complete an Underwritten Offering, the Company shall
enter into such customary agreements and take all such other actions in
connection therewith in order to expedite or facilitate the disposition of
such Cumulative Preference Shares including, but not limited to,
(i) to the extent possible, make such representations and
warranties to any Underwriters of such Cumulative Preference Shares
with respect to the business of the Company and its subsidiaries, the
Shelf Registration Statement, Prospectus and documents incorporated by
reference or deemed incorporated by reference, if any, in each case,
in form, substance and scope as are customarily made by issuers to
underwriters in underwritten offerings and confirm the same if and
when requested,
(ii) obtain opinions of counsel to the Company, including foreign
counsel, (which counsel and opinions, in form, scope and substance,
shall be reasonably satisfactory to such Underwriters and their
respective counsel) addressed to each Underwriter of Cumulative
Preference Shares, covering the matters customarily covered in
opinions requested in underwritten offerings,
(iii) obtain "cold comfort" letters from the independent
certified public accountants of the Company (and, if necessary, any
other certified public accountant 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 Shelf
Registration Statement) addressed to each Underwriter of Cumulative
Preference Shares, 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) make available for inspection by a representative of the
Holders of the Cumulative Preference Shares, any Underwriter
participating in any disposition pursuant to a Shelf Registration
Statement, and attorneys and accountants designated by the Holders, at
reasonable times and in a reasonable manner, all financial and other
records, pertinent documents and properties of the Company, and cause
the respective officers, directors and employees of the Company to
supply all information reasonably requested by any such
representative, Underwriter, attorney or accountant in connection with
a Shelf Registration Statement, and
(v) to evidence the continued validity of the representations and
warranties of the Company made pursuant to clause (i) above and to
evidence compliance with any customary conditions contained in an
underwriting agreement (a) deliver such documents, opinions and
certificates as may be reasonably requested by the Holders of a
majority of the Cumulative Preference Shares being sold and (b)
deliver such documents, opinions and certificates as may be reasonably
requested by the Underwriters and which are customarily delivered in
underwritten offerings.
4. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless each Purchaser,
each Holder and each person, if any, who controls any Purchaser or any
Holder within the meaning of either Section 15 of the 1933 Act or Section
20 of the 1934 Act, or is under common control with, or is controlled by,
any Purchaser or any Holder, from and against all losses, claims, damages
and liabilities (including, without limitation, any legal or other expenses
reasonably incurred by any Purchaser, any Holder or any such controlling or
affiliated person in connection with defending or investigating any such
action or claim) caused by any untrue statement or alleged untrue statement
of a material fact contained in any Shelf Registration Statement (or any
amendment thereto) pursuant to which Cumulative Preference Shares were
registered under the 1933 Act, including all documents incorporated therein
by reference, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, or caused by any untrue statement or
alleged untrue statement of a material fact contained in any Prospectus (as
amended or supplemented if the Company shall have furnished any amendments
or supplements thereto), or caused by any omission or alleged omission to
state therein a material fact necessary to make the statements therein in
light of the circumstances under which they were made not misleading,
except insofar as such losses, claims, damages or liabilities are caused by
any such untrue statement or omission or alleged untrue statement or
omission based upon information relating to any Purchaser or any Holder
furnished to the Company in writing by any Purchaser or any selling Holder
expressly for use therein. In connection with any Underwritten Offering
permitted by Section 3, the Company will also indemnify the Underwriters,
if any, selling brokers, dealers and similar securities industry
professionals participating in the distribution, their officers and
directors and each Person who controls such Persons (within the meaning of
the 1933 Act and the 1934 Act) to the same extent as provided above with
respect to the indemnification of the Holders, if requested in connection
with any Shelf Registration Statement.
(b) Each Holder agrees, severally and not jointly, to indemnify and
hold harmless the Company, the Purchasers and the other selling Holders,
and each of their respective directors, officers who sign the Shelf
Registration Statement and each Person, if any, who controls the Company,
the Purchasers and any other selling Holder within the meaning of either
Section 15 of the 1933 Act or Section 20 of the 1934 Act to the same extent
as the foregoing indemnity from the Company to the Purchasers and the
Holders, but only with reference to information relating to such Holder
furnished to the Company in writing by such Holder expressly for use in any
Shelf Registration Statement (or any amendment thereto) or any Prospectus
(or any amendment or supplement thereto).
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may
be sought pursuant to either paragraph (a) or paragraph (b) above, such
person (the "indemnified party") shall promptly notify the person against
whom such indemnity may be sought (the "indemnifying party") in writing and
the indemnifying party, upon request of the indemnified party, shall retain
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may designate in
such proceeding and shall pay the fees and disbursements of such counsel
related to such proceeding. In any such proceeding, any indemnified party
shall have the right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such indemnified party unless
(i) the indemnifying party and the indemnified party shall have mutually
agreed to the retention of such counsel or (ii) the named parties to any
such proceeding (including any impleaded parties) include both the
indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that the
indemnifying party shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for (a) the fees and
expenses of more than one separate firm (in addition to any local counsel)
for the Purchasers and all persons, if any, who control the Purchasers
within the meaning of either Section 15 of the 1933 Act or Section 20 of
the 1934 Act, (b) the fees and expenses of more than one separate firm (in
addition to any local counsel) for the Company, its directors, its officers
who sign the Shelf Registration Statement and each person, if any, who
controls the Company within the meaning of either such Section and (c) the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all Holders and all persons, if any, who control any Holders
within the meaning of either such Section, and that all such fees and
expenses shall be reimbursed as they are incurred. In such case involving
the Purchasers and persons who control the Purchasers, such firm shall be
designated in writing by the Purchasers. In such case involving the
Holders and such persons who control Holders, such firm shall be designated
in writing by the Majority Holders. In all other cases, such firm shall be
designated by the Company. The indemnifying party shall not be liable for
any settlement of any proceeding effected without its written consent but,
if settled with such consent or if there be a final judgment for the
plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse
the indemnified party for fees and expenses of counsel as contemplated by
the second and third sentences of this paragraph, the indemnifying party
agrees that it shall be liable for any settlement of any proceeding
effected without its written consent if (i) such settlement is entered into
more than 30 days after receipt by such indemnifying party of the aforesaid
request and (ii) such indemnifying party shall not have reimbursed the
indemnified party for such fees and expenses of counsel in accordance with
such request prior to the date of such settlement. No indemnifying party
shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened proceeding in respect of which
such indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party, unless such
settlement includes an unconditional release of such indemnified party from
all liability on claims that are the subject matter of such proceeding.
(d) If the indemnification provided for in paragraph (a) or paragraph
(b) of this Section 4 is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities, then
each indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims,
damages or liabilities in such proportion as is appropriate to reflect the
relative fault of the indemnifying party or parties on the one hand and of
the indemnified party or parties on the other hand in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative fault of the Company and the Holders shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company or by the
Holders and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The
Holders' respective obligations to contribute pursuant to this Section 4(d)
are several in proportion to the respective number of shares of Cumulative
Preference Shares of such Holder that were registered pursuant to a Shelf
Registration Statement.
(e) The Company and each Holder agree that it would not be just or
equitable if contribution pursuant to this Section 4 were determined by PRO
RATA allocation or by any other method of allocation that does not take
account of the equitable considerations referred to in paragraph (d) above.
The amount paid or payable by an indemnified party as a result of the
losses, claims, damages and liabilities referred to in paragraph (d) above
shall be deemed to include, subject to the limitations set forth above, any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 4, no Holder shall be
required to indemnify or contribute any amount in excess of the amount by
which the total price at which the Cumulative Preference Shares were sold
by such Holder exceeds the amount of any damages that such Holder has
otherwise been required to pay by reason of 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 1933 Act)
shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The remedies provided for in this
Section 4 are not exclusive and shall not limit any rights or remedies
which may otherwise be available to any indemnified party at law or in
equity.
The indemnity and contribution provisions contained in this Section 4
shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf
of the Purchasers, any Holder or any person controlling the Purchasers or
any Holder, or by or on behalf of the Company, its officers or directors or
any person controlling the Company, (iii) acceptance of any of the
Cumulative Preference Shares and (iv) any sale of Cumulative Preference
Shares pursuant to a Shelf Registration Statement.
5. MISCELLANEOUS.
(a) NO INCONSISTENT AGREEMENTS. The Company has not entered into,
and on or after the date of this Agreement will not enter into, any
agreement which is inconsistent with the rights granted to the Holders of
Cumulative Preference Shares 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
under any such agreements. The Preference Registration Statements may also
include securities issued in the Units Offering and securities issuable
upon conversion of such securities.
(b) 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 unless the Company has obtained the written consent
of Holders of at least a majority of the outstanding shares of Cumulative
Preference Shares affected by such amendment, modification, supplement,
waiver or consent; PROVIDED, HOWEVER, that no amendment, modification,
supplement, waiver or consents to any departure from the provisions of
Section 5 hereof shall be effective as against any Holder of Cumulative
Preference Shares unless consented to in writing by such Holder.
(c) NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telex, telecopier, or any courier guaranteeing delivery
by a specific date (i) if to a Holder, at the most current address given by
such Holder to the Company by means of a notice given in accordance with
the provisions of this Section 5(c), which address initially is, with
respect to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Private Equity Limited, ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇; in the case of ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇ or ▇▇▇▇▇ ▇▇▇▇▇ to such person c/o Chase Enterprises, Inc., ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-3585 Attn: ▇▇▇▇ ▇▇▇▇▇▇▇;
and, in the case of ▇▇▇▇▇▇▇, to The ▇▇▇▇▇▇▇ Trust, c/o Chase Enterprises,
Inc., One Commercial Plaza, Hartford, Connecticut 06103-3585 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 at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇-3585,
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇, with a copy to ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇.▇. 2006, Attention: ▇▇▇▇
▇. ▇▇▇▇, and thereafter at such other address, notice of which is given in
accordance with the provisions of this Section 5(c).
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 on a specific date.
Copies of all such notices, demands, or other communications shall be
concurrently delivered by the person giving the same to the Transfer Agent,
at Continental Stock Transfer & Trust Company, ▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇.
(d) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors, assigns and transferees of
each of the parties, including, without limitation and without the need for
an express assignment, subsequent Holders; PROVIDED that nothing herein
shall be deemed to permit any assignment, transfer or other disposition of
outstanding shares of Cumulative Preference Shares in violation of the
terms of the Purchase Agreement. If any transferee of any Holder shall
acquire outstanding shares of Cumulative Preference Shares, in any manner,
whether by operation of law or otherwise, such then outstanding shares of
Cumulative Preference Shares shall be held subject to all of the terms of
this Agreement, and by taking and holding such outstanding shares of
Cumulative Preference Shares, 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 Purchasers shall have no liability or obligation to the
Company with respect to any failure by a Holder to comply with, or any
breach by any Holder of, any of the obligations of such Holder under this
Agreement.
(e) PURCHASES AND SALES. The Company shall not, and shall use its
best efforts to cause its affiliates (as defined in Rule 405 under the 1933
Act) not to, purchase and then resell or otherwise transfer any Cumulative
Preference Shares.
(f) THIRD PARTY BENEFICIARY. The Holders shall be third party
beneficiaries to the agreements made hereunder between the Company, on the
one hand, and the Purchasers, on the other hand, and shall have the right
to enforce such agreements directly to the extent it deems such enforcement
necessary or advisable to protect its rights or the rights of Holders
hereunder.
(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) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(i) GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of New York.
(j) SEVERABILITY. In the event that any one or more of the
provisions contained herein, or the application thereof in any
circumstance, is held invalid, illegal or unenforceable, the validity,
legality and enforceability of any such provision in every other respect
and of the remaining provisions contained herein shall not be affected or
impaired thereby.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
@ENTERTAINMENT, INC.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇
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By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇
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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