EXHIBIT 5
EXECUTION COPY
______________________________________________________________________________
______________________________________________________________________________
@ENTERTAINMENT, INC.
(a Delaware corporation)
5,000 Shares of Series B Cumulative Preference Stock and
5,000 Warrants to Purchase an Aggregate of
550,000 Shares of Common Stock
PURCHASE AGREEMENT
Dated: January 22, 1999
______________________________________________________________________________
______________________________________________________________________________
Table of Contents
PURCHASE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . 3
(a) REPRESENTATIONS AND WARRANTIES BY THE COMPANY. . . . . . . . 3
(i) SIMILAR OFFERINGS . . . . . . . . . . . . . . . . . 3
(ii) PREFERENCE OFFERING MEMORANDUM. . . . . . . . . . . 3
(iii) INDEPENDENT ACCOUNTANTS . . . . . . . . . . . . . . 4
(iv) FINANCIAL STATEMENTS. . . . . . . . . . . . . . . . 4
(v) NO MATERIAL ADVERSE CHANGE IN BUSINESS. . . . . . . 4
(vi) GOOD STANDING OF THE COMPANY. . . . . . . . . . . . 4
(vii) CORPORATE STANDING OF DESIGNATED SUBSIDIARIES . . . 5
(viii) RESTRICTIONS ON PAYMENTS OF DIVIDENDS . . . . . . . 5
(ix) CAPITALIZATION. . . . . . . . . . . . . . . . . . . 6
(x) AUTHORIZATION OF AGREEMENT. . . . . . . . . . . . . 6
(xi) AUTHORIZATION OF THE PREFERENCE REGISTRATION RIGHTS
AGREEMENT . . . . . . . . . . . . . . . . . . . . . 6
(xii) AUTHORIZATION OF THE CERTIFICATE OF DESIGNATION AND
THE PREFERENCE SHARES . . . . . . . . . . . . . . . 6
(xiii) AUTHORIZATION OF THE PREFERENCE WARRANT AGREEMENT . 6
(xiv) AUTHORIZATION OF THE PREFERENCE WARRANTS. . . . . . 7
(xv) AUTHORIZATION OF THE PREFERENCE WARRANT SHARES. . . 7
(xvi) AUTHORIZATION OF THE PREFERENCE WARRANT REGISTRATION
RIGHTS AGREEMENT. . . . . . . . . . . . . . . . . . 7
(xvii) AUTHORIZATION OF THE INDENTURE. . . . . . . . . . . 8
(xviii) AUTHORIZATION OF THE NOTES. . . . . . . . . . . . . 8
(xix) AUTHORIZATION OF THE NOTE REGISTRATION RIGHTS
AGREEMENT . . . . . . . . . . . . . . . . . . . . . 8
(xx) AUTHORIZATION OF THE NOTE WARRANT AGREEMENT . . . . 8
(xxi) AUTHORIZATION OF THE NOTE WARRANT REGISTRATION
RIGHTS AGREEMENT. . . . . . . . . . . . . . . . . . 9
(xxii) DESCRIPTION OF THE PREFERENCE REGISTRATION RIGHTS
AGREEMENT, THE PREFERENCE WARRANT REGISTRATION
RIGHTS AGREEMENT, THE PREFERENCE SHARES, THE
PREFERENCE WARRANTS, THE COMMON STOCK, THE
PREFERENCE WARRANT AGREEMENT, THE MG SECURITIES, THE
NOTE SECURITIES, AND THE NOTE AGREEMENTS. . . . . . 9
(xxiii) ABSENCE OF DEFAULTS AND CONFLICTS . . . . . . . . . 9
(xxiv) ABSENCE OF LABOR DISPUTE. . . . . . . . . . . . . .10
(xxv) ABSENCE OF PROCEEDINGS. . . . . . . . . . . . . . .10
(xxvi) POSSESSION OF INTELLECTUAL PROPERTY . . . . . . . .11
(xxvii) ABSENCE OF FURTHER REQUIREMENTS . . . . . . . . . .11
(xxviii) POSSESSION OF LICENSES AND PERMITS. . . . . . . . .12
(xxix) NO ADDITIONAL DOCUMENTS . . . . . . . . . . . . . .12
(xxx) MANAGEMENT AGREEMENTS . . . . . . . . . . . . . . .12
(xxxi) TITLE TO PROPERTY . . . . . . . . . . . . . . . . .13
(xxxii) TAX RETURNS . . . . . . . . . . . . . . . . . . . .13
(xxxiii) ENVIRONMENTAL LAWS. . . . . . . . . . . . . . . . .13
(xxxiv) INVESTMENT COMPANY ACT. . . . . . . . . . . . . . .14
(xxxv) INTERNAL CONTROLS . . . . . . . . . . . . . . . . .14
(xxxvi) TAXES ON SUBSIDIARY INDEBTEDNESS. . . . . . . . . .14
(xxxvii) INSURANCE . . . . . . . . . . . . . . . . . . . . .15
(xxxviii)RULE 144A ELIGIBILITY . . . . . . . . . . . . . . .15
(xxxix) NO GENERAL SOLICITATION . . . . . . . . . . . . . .15
(xl) NO REGISTRATION REQUIRED. . . . . . . . . . . . . .15
(xli) REPORTING COMPANY . . . . . . . . . . . . . . . . .15
(xlii) FUNDS . . . . . . . . . . . . . . . . . . . . . . .15
(xliii) SUBSCRIBERS . . . . . . . . . . . . . . . . . . . .16
(b) OFFICERS' CERTIFICATES . . . . . . . . . . . . . . . . . . .16
SECTION 2. SALE AND DELIVERY TO THE PURCHASER; CLOSING. . . . . . . . .16
(a) PREFERENCE SECURITIES. . . . . . . . . . . . . . . . . . . .16
(b) PAYMENT. . . . . . . . . . . . . . . . . . . . . . . . . . .16
(c) QUALIFIED INSTITUTIONAL BUYER. . . . . . . . . . . . . . . .16
(d) DENOMINATIONS; REGISTRATION. . . . . . . . . . . . . . . . .16
SECTION 3. COVENANTS OF THE COMPANY . . . . . . . . . . . . . . . . . .17
(a) PREFERENCE OFFERING MEMORANDUM . . . . . . . . . . . . . . .17
(b) NOTICE AND EFFECT OF MATERIAL EVENTS . . . . . . . . . . . .17
(c) RESERVED . . . . . . . . . . . . . . . . . . . . . . . . . .17
(d) RESERVED . . . . . . . . . . . . . . . . . . . . . . . . . .17
(e) RESERVED . . . . . . . . . . . . . . . . . . . . . . . . . .17
(f) DTC. . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
(g) USE OF PROCEEDS. . . . . . . . . . . . . . . . . . . . . . .17
(h) RESERVED . . . . . . . . . . . . . . . . . . . . . . . . . .17
(I) NOTIFICATION OF CURRENT ACCUMULATED EARNINGS AND PROFITS . .17
SECTION 4. PAYMENT OF EXPENSES. . . . . . . . . . . . . . . . . . . . .17
(a) EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . .17
(b) TERMINATION OF AGREEMENT . . . . . . . . . . . . . . . . . .18
SECTION 5. CONDITIONS OF THE CHASE PURCHASERS' OBLIGATIONS. . . . . . .18
(a) RESERVED . . . . . . . . . . . . . . . . . . . . . . . . . .18
(b) RESERVED . . . . . . . . . . . . . . . . . . . . . . . . . .18
(c) RESERVED . . . . . . . . . . . . . . . . . . . . . . . . . .18
(d) OFFICERS' CERTIFICATE. . . . . . . . . . . . . . . . . . . .18
(e) RESERVED . . . . . . . . . . . . . . . . . . . . . . . . . .18
(f) RESERVED . . . . . . . . . . . . . . . . . . . . . . . . . .19
(g) CONSUMMATION OF SALE OF MG SECURITIES AND NOTE SECURITIES. .19
(h) RESERVED . . . . . . . . . . . . . . . . . . . . . . . . . .19
(i) ADDITIONAL DOCUMENTS . . . . . . . . . . . . . . . . . . . .19
(j) EXECUTION OF AGREEMENTS. . . . . . . . . . . . . . . . . . .19
(k) TERMINATION OF AGREEMENT . . . . . . . . . . . . . . . . . .19
SECTION 6. RESALES OF THE PREFERENCE SECURITIES . . . . . . . . . . . .19
(a) REPRESENTATION AND WARRANTY OF THE CHASE PURCHASERS. . . . .19
(c) COVENANTS OF THE COMPANY . . . . . . . . . . . . . . . . . .20
(i) DUE DILIGENCE . . . . . . . . . . . . . . . . . . . .20
(ii) INTEGRATION . . . . . . . . . . . . . . . . . . . . .20
(iii) RULE 144A INFORMATION . . . . . . . . . . . . . . . .20
(d) RESALES. . . . . . . . . . . . . . . . . . . . . . . . . . .21
(e) OFFERS AND SALES IN POLAND AND THE NETHERLANDS . . . . . . .21
(f) OFFERS AND SALES IN THE UNITED KINGDOM . . . . . . . . . . .21
(g) XXXXXXX. . . . . . . . . . . . . . . . . . . . . . . . . . .22
SECTION 7. INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . .22
(a) INDEMNIFICATION OF THE CHASE PURCHASERS. . . . . . . . . . .22
(b) INDEMNIFICATION OF THE COMPANY, DIRECTORS AND OFFICERS . . .22
(c) ACTIONS AGAINST PARTIES; NOTIFICATION. . . . . . . . . . . .23
(d) SETTLEMENT WITHOUT CONSENT IF FAILURE TO REIMBURSE . . . . .23
SECTION 8. CONTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . .23
SECTION 9. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY . . . . . . . . . . . . . . . . . . . . . . . . . .25
SECTION 10. TERMINATION OF AGREEMENT. . . . . . . . . . . . . . . . . .25
(a) TERMINATION; GENERAL. . . . . . . . . . . . . . . . . . . .25
(b) LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . .26
SECTION 11. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . .26
SECTION 12. PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . .26
SECTION 13. GOVERNING LAW AND TIME. . . . . . . . . . . . . . . . . . .26
SECTION 14. EFFECT OF HEADINGS. . . . . . . . . . . . . . . . . . . . .26
SECTION 15. COUNTERPARTS. . . . . . . . . . . . . . . . . . . . . . . .26
EXHIBITS
Exhibit A - Form of Certificate of Designation . . . . . . . . . .A-1
Exhibit B - Form of Preference Warrant Agreement . . . . . . . . .B-1
Exhibit C - Form of Preference Registration Rights Agreement . . .C-1
Exhibit D - Form of Preference Warrant Registration Rights
Agreement. . . . . . . . . . . . . . . . . . . . . . .D-1
@ENTERTAINMENT, INC.
(a Delaware corporation)
5,000 Shares of Series B Cumulative Preference Stock and
5,000 Warrants to Purchase an Aggregate of
4,950,000 Shares of Common Stock
PURCHASE AGREEMENT
------------------
January 22, 1999
Xx. Xxxxxx Xxxxx
Ms. Xxxxxx Xxxxx
Xx. Xxxxx Xxxxx
c/x Xxxxx Enterprises
Xxx Xxxxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 06103-3585
Ladies and Gentlemen:
@Entertainment, Inc., a Delaware corporation (the "Company"), confirms
its agreement with Xx. Xxxxxx Xxxxx, Ms. Xxxxxx Xxxxx and Xx. Xxxxx Xxxxx
(the "Xxxxx Purchasers") with respect to the issue and sale by the Company
and the purchase by the Chase Purchasers, severally and not jointly, of an
aggregate of 5,000 of the Company's Series B Cumulative Preference Shares
(the "Preference Shares") and 5,000 warrants (each a "Preference Warrant"
and collectively, the "Preference Warrants" and, together with the
Preference Shares, the "Preference Securities"). The Preference Warrants
entitling the holders thereof to purchase an aggregate of 550,000 shares of
common stock, par value $0.01 per share (the "Common Stock"), of the
Company. The number of Preference Shares and Preference Warrants to be
purchased, severally and not jointly, by each of the Chase Purchasers is
set forth on Schedule A. The Preference Shares and Preference Warrants are
more fully described in Schedule B hereto. The Preference Shares are to be
issued pursuant to the Certificate of Designation of the Company in
substantially the form attached hereto as Exhibit A and the Preference
Warrants are to be issued pursuant to a warrant agreement dated as of
January 27, 1999 (the "Preference Warrant Agreement"), between the Company
and Bankers Trust Company, as warrant agent (the "Preference Warrant
Agent") in substantially the form attached hereto as Exhibit A. Under the
Preference Warrant Agreement, the Chase Purchasers will have certain
preemptive rights in relation to the Company's Common Stock. Preference
Securities issued in book-entry form will be issued to Cede & Co. as
nominee of The Depository Trust Company ("DTC") pursuant to a letter
agreement, to be dated as of the Closing Time (as defined in Section 2(b))
(the "DTC Agreement"), among the Company, the Trustee and DTC.
Concurrently, the Company has entered into a separate purchase
agreement (the "MG Purchase Agreement") for the sale of an aggregate of
45,000 of the Company's Series A Cumulative Preference Shares (the "Series
A Preference Shares") and 45,000 Warrants (the MG Warrants") to purchase
and aggregate of 4,950,000 shares of Common Stock to Xxxxxx Xxxxxxxx
Private Equity Limited (the "MG Purchaser"). The MG Warrants will be
issued pursuant to the Preference Warrant Agreement. The Series A
Preference Shares and the MG Warrants being sold to the MG Purchaser are
sometimes hereinafter referred to as the "MG Securities."
The holders of Preference Shares and the Series A Preference Shares
will be entitled to the benefits of a Registration Rights Agreement, in
substantially the form attached hereto as Exhibit C with such changes as
shall be agreed to by the parties hereto and the MG Purchaser (the
"Preference Registration Rights Agreement"), pursuant to which the Company
will file a registration statement (the "Preference Registration
Statement") with the Securities and Exchange Commission (the "Commission")
registering the Preference Shares and the Series A Preference Shares under
the Securities Act of 1933, as amended (the "1933 Act").
The holders of Preference Warrants and the MG Warrants will be
entitled to the benefits of a Preference Warrant Registration Rights
Agreement in substantially the form attached hereto as Exhibit D, with such
changes as shall be agreed to by the parties hereto and the MG Purchaser
(the "Preference Warrant Registration Rights Agreement") which provides for
the registration of the Preference Warrants and the MG Warrants under the
1933 Act under certain circumstances set forth therein.
Pursuant to the terms of the Preference Securities, investors that
acquire Preference Securities may only resell or otherwise transfer such
Preference Securities if such Preference Securities are hereafter
registered under the 1933 Act or if an exemption from the registration
requirements of the 1933 Act is available (including the exemption afforded
by Rule 144A ("Rule 144A") of the rules and regulations promulgated under
the 1933 Act by the Commission).
The Company has prepared and will deliver to the Chase Purchasers, on
the date hereof or the next succeeding day, copies of an offering
memorandum dated January 22, 1999 which was prepared by the Company in
connection with the sale of the MG Securities. "Preference Offering
Memorandum" means with respect to any date or time referred to in this
Agreement, the final Preference Offering Memorandum (including any
amendment or supplement thereto) including exhibits thereto and any
documents incorporated by reference, which has been prepared and delivered
by the Company to the Chase Purchasers in connection with the sale of the
MG Securities.
Simultaneously with the execution of this Agreement , the Company is
entering into a separate purchase agreement (the "Note Purchase Agreement")
for the sale of 256,800 the Company's units (the "Note Units"), each Note
Unit consisting of $1,000 aggregate principal amount at maturity of the
Company's 14 1/2 Senior Discount Notes due 2009 (the "Notes") and four
warrants (each a "Note Warrant" and collectively, the "Note Warrants" and,
together with the Note Units and the Notes, the "Note Securities"). The
Note Warrants entitle the holders thereof to purchase an aggregate of
1,813,665 shares of Common Stock. The Notes are to be issued pursuant to
an indenture dated as of January 27, 1999 (the "Indenture") between the
Company and Bankers Trust Company, as trustee (the "Trustee") and the Note
Warrants are to be issued pursuant to a warrant agreement dated as of
January 27,1999 (the "Note Warrant Agreement") between the Company and
Bankers Trust Company, as warrant agent (the "Note Warrant Agent"). The
holders of the Note and the Note Warrants will be entitled to the benefits
of two Registration Rights Agreements (the "Note Registration Rights
Agreement" and the "Note Warrant Registration Rights Agreement",
respectively) which provide for the registration of the Notes and the Note
Warrants under the 1933 Act under certain circumstances set forth therein.
The Indenture, the Note Warrant Agreement, the Note Registration Rights
Agreement and the Note Warrant Registration Rights Agreement are sometimes
referred to herein as the "Note Agreements."
All references in this Agreement to financial statements and schedules
and other information which are "contained," "included" or "stated" in the
Preference Offering Memorandum (or other references of like import) shall
be deemed to mean and include all such financial statements and schedules
and other information, if any, which are incorporated by reference in the
Preference Offering Memorandum.
SECTION 1. REPRESENTATIONS AND WARRANTIES.
(a) REPRESENTATIONS AND WARRANTIES BY THE COMPANY. The Company
represents and warrants to the Chase Purchasers as of the date hereof and
as of the Closing Time referred to in Section 2(b) hereof, and agrees with
the Chase Purchasers as follows:
(i) SIMILAR OFFERINGS. The Company and its Affiliates (as
defined in Section 1(a)(xxxv)) have not, directly or indirectly,
solicited any offer to buy or offered to sell, and will not, directly
or indirectly, solicit any offer to buy or offer to sell, in the
United States or to any United States citizen or resident, any
security which is or would be integrated with the sale of the
Preference Securities in a manner that would require the Preference
Securities to be registered under the 1933 Act.
(ii) PREFERENCE OFFERING MEMORANDUM. Neither of its date nor as
of the Closing Time the Preference Offering Memorandum, including any
amendment or supplement thereto, includes or will include an untrue
statement of a material fact or omits or will omit to state a material
fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
(iii) INDEPENDENT ACCOUNTANTS. The accountants who certified the
financial statements and supporting schedules included in the
Preference Offering Memorandum are independent certified public
accountants with respect to the Company and its subsidiaries within
the meaning of Regulation S-X under the 1933 Act.
(iv) FINANCIAL STATEMENTS. The financial statements, together
with the related schedules and notes, of the Company included in the
Preference Offering Memorandum present fairly the financial position
of the Company and its consolidated subsidiaries at the dates
indicated and the statement of operations, stockholders' equity and
cash flows of the Company and its consolidated subsidiaries for the
periods specified; said financial statements have been prepared in
conformity with United States generally accepted accounting principles
("GAAP") applied on a consistent basis throughout the periods
involved. The supporting schedules, if any, included in the
Preference Offering Memorandum present fairly in accordance with GAAP
the information required to be stated therein. The selected financial
data and the summary financial information included in the Preference
Offering Memorandum present fairly the information shown therein and
have been compiled on a basis consistent with that of the audited
financial statements included in the Preference Offering Memorandum.
(v) NO MATERIAL ADVERSE CHANGE IN BUSINESS. Since the respective
dates as of which information is given in the Preference Offering
Memorandum, except as otherwise stated therein, (A) there has been no
material adverse change in the condition, financial or otherwise, or
in the earnings, business affairs or business prospects of the Company
and its subsidiaries considered as one enterprise (a "Material Adverse
Effect"), whether or not arising in the ordinary course of business,
(B) there have been no transactions entered into by the Company or any
of its subsidiaries, other than transactions entered into in the
ordinary course of business, which are material with respect to the
Company and its subsidiaries considered as one enterprise, and
(C) there has been no dividend or distribution of any kind declared,
paid or made by the Company on any class of its capital stock.
(vi) GOOD STANDING OF THE COMPANY. The Company has been duly
organized and is validly existing as a corporation in good standing
under the laws of the State of Delaware and has corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Preference Offering Memorandum and to
enter into and perform its obligations under this Agreement, the
Preference Warrant Agreement, the Preference Registration Rights
Agreement, the Preference Warrant Registration Rights Agreement, the
Certificate of Designation, the Note Securities, the Note Agreements,
and the Preference Securities; and the Company is duly qualified as a
foreign corporation to transact business and is in good standing in
each other jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or to be
in good standing would not result in a Material Adverse Effect.
(vii) CORPORATE STANDING OF DESIGNATED SUBSIDIARIES. Each
subsidiary of the Company that (i) is a "significant subsidiary" (as
that term is defined in Regulation S-X under the 1933 Act) or (ii)
that holds any valid permits or licenses to operate the cable
television business in Poland or a digital direct-to-home business
uplinking from the United Kingdom is listed on Schedule C hereto (each
subsidiary listed on Schedule C hereto is hereinafter referred to as a
"Designated Subsidiary" and, collectively, the "Designated
Subsidiaries"), and has been duly organized and is validly existing as
a corporation under the laws of the jurisdiction of its incorporation,
has corporate power and corporate authority to own, lease and operate
its properties and to conduct its business as described in the
Preference Offering Memorandum and is not required to be qualified as
a foreign corporation to transact business or to own or lease property
in any jurisdiction where it owns or leases property or transacts
business; except as otherwise disclosed in the Preference Offering
Memorandum or in Schedule C, all of the issued and outstanding capital
stock of each Designated Subsidiary has been duly authorized and
validly issued, is fully paid and non-assessable and is owned by the
Company, directly or through subsidiaries, free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or
equity, except for (i) in the case of any Polish limited liability
company, any statutory liability for taxes, (ii) the pledge of
3,583,457 shares of Polska Telewizja Kablowa Warszawa S.A. and of
2,514,291 shares of Polska Telewizja Kablowa Krakw S.A. held by
Poland Cablevision (Netherlands) B.V. ("PCBV") and 2,400 shares of
Polska Telewizja Kablowa Lublin S.A. held by Poltelkab Sp. z o.o. as
security for the loan of $6.5 million granted on August 28, 1996 by
the American Bank in Poland to Poland Communications, Inc. ("PCI"),
and (iii) the pledge of 1,818 shares of Szczeciska Telewizja
Kablowa Sp. z o.o. ("SzTK") for the security of certain obligations
undertaken by PTK Szczecin Sp. z o.o. ("PTK Szczecin") with respect to
the sellers of those shares (collectively, the "Share Pledges"); none
of the outstanding shares of capital stock of the Designated
Subsidiaries was issued in violation of any preemptive or similar
rights arising by operation of law, or under the statute or by-laws
(or other similar organizational documents) of any Designated
Subsidiary or under any agreement to which the Company or any
Designated Subsidiary is a party. The subsidiaries of the Company
other than the Designated Subsidiaries, considered in the aggregate as
a single subsidiary, do not constitute a "significant subsidiary" as
defined in Rule 1-02 of Regulation S-X.
(viii) RESTRICTIONS ON PAYMENTS OF DIVIDENDS. There are no
restrictions (legal, contractual or otherwise) on the ability of the
Designated Subsidiaries to declare and pay dividends or make any
payment or transfer of property or assets to their shareholders other
than those referred to in the Preference Offering Memorandum and
except for (i) restrictions relating to the Share Pledges, (ii)
encumbrances on certain assets of Telewizja Kablowa GOSAT Sp. z o.o.
("GOSAT") consisting of the transfer of title to such assets as
security for the loan of $0.5 million granted on October 7, 1996 by
Polski Bank Rozwoju (which was bought by Bank Rozucju Eksportu S.A. in
July of 1998) to GOSAT, and (iii) the restrictions discussed in
Schedule D to the Indenture (collectively, the "Asset Encumbrances").
(ix) CAPITALIZATION. The authorized, issued and outstanding
capital stock of the Company at September 30, 1998 was as set forth
under the caption "Capitalization" under the heading "Actual" in the
Preference Offering Memorandum and, as of the date hereof, there has
been no material change in the authorized, issued and outstanding
capital stock since the date of the Preference Offering Memorandum other
than (i) issuances of shares of Common Stock upon the exercise of options
disclosed to be outstanding in the Preference Offering Memorandum and
(ii) the authorization and issuance of the Preference Shares, the
Warrants, the Series A Preference Shares, the MG Warrants and the Note
Securities as described in The Preference Offering Memorandum. The
shares of issued and outstanding capital stock of the Company have
been duly authorized and validly issued and are fully paid and non-
assessable; none of the outstanding shares of capital stock of the
Company was issued in violation of the preemptive or other similar
rights of any securityholder of the Company.
(x) AUTHORIZATION OF AGREEMENT. This Agreement has been duly
authorized, executed and delivered by the Company.
(xi) AUTHORIZATION OF THE PREFERENCE REGISTRATION RIGHTS
AGREEMENT. The Preference Registration Rights Agreement has been duly
authorized by the Company, and, at the Closing Time, will have been
duly executed and delivered by the Company and, when executed and
delivered by the MG Purchaser and the Chase Purchasers, will
constitute a valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms except as (x) the
enforceability thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or other similar laws relating
to or affecting enforcement of creditors' rights generally, (y) the
enforceability thereof may be limited by general principles of equity
(regardless of whether enforcement is considered in a proceeding in
equity or at law) and (z) any rights to indemnity and contribution may
be limited by federal and state securities laws and public policy
considerations.
(xii) AUTHORIZATION OF THE CERTIFICATE OF DESIGNATION AND THE
PREFERENCE SHARES. The Certificate of Designation has been duly
authorized by the Board of Directors of the Company and, at the
Closing Time, will have been duly filed with the Secretary of State of
Delaware. The Preference Shares have been duly authorized by the
Company for issuance and sale to the Chase Purchasers pursuant to this
Agreement and the Preference Shares when issued and delivered against
payment therefor in accordance with the terms hereof, will be validly
issued, fully paid and non-assessable and the Chase Purchasers will
receive title to the Preference Shares free and clear of all liens and
encumbrances. The security holders of the Company have no preemptive
rights with respect to the Preference Shares.
(xiii) AUTHORIZATION OF THE PREFERENCE WARRANT AGREEMENT. The
Preference Warrant Agreement has been duly authorized by the Company
and, at the Closing Time, will have been duly executed and delivered
by the Company and, when duly executed and delivered by the Preference
Warrant Agent, will constitute a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms,
except as enforceability thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or other similar
laws relating to or affecting enforcement of creditors' rights
generally or by general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law).
(xiv) AUTHORIZATION OF THE PREFERENCE WARRANTS. The Preference
Warrants have been duly authorized by the Company and, at the Closing
Time, will have been duly executed by the Company and, when executed
and issued in the manner provided for in the Preference Warrant
Agreement and delivered against payment of the purchase price therefor
as provided in this Agreement, (A) will constitute valid and binding
obligations of the Company, enforceable against the Company in
accordance with their terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfers), reorganization, moratorium or
similar laws affecting enforcement of creditors' rights generally and
except as enforcement thereof is subject to general principles of
equity (regardless of whether enforcement is considered in a
proceeding in equity or at law), and (B) will be in the form
contemplated by, and entitled to the benefits of, the Preference
Warrant Agreement and the Preference Warrant Registration Rights
Agreement.
(xv) AUTHORIZATION OF THE PREFERENCE WARRANT SHARES. The shares
of Common Stock issuable upon exercise of the Preference Warrants (the
"Preference Warrant Shares") have been duly authorized and reserved by
the Company and, when executed by the Company and countersigned by the
Preference Warrant Agent and issued and delivered upon exercise of the
Preference Warrants in accordance with the terms of the Preference
Warrants and the Preference Warrant Agreement, will be validly issued,
fully paid and non-assessable and will not be subject to any
preemptive or similar rights.
(xvi) AUTHORIZATION OF THE PREFERENCE WARRANT REGISTRATION RIGHTS
AGREEMENT. The Preference Warrant Registration Rights Agreement has
been duly authorized by the Company and, at the Closing Time, will
have been duly executed and delivered by the Company and, when
executed and delivered by the MG Purchaser and the Chase Purchasers,
will constitute a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms except as
(x) the enforceability thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or other similar
laws relating to or affecting enforcement of creditor's rights
generally, (y) the enforceability thereof may be limited by general
principles of equity (regardless of whether enforcement is considered
in a proceeding in equity or at law) and (z) any rights to indemnity
and contribution may be limited by federal and state securities laws
and public policy considerations.
(xvii) AUTHORIZATION OF THE INDENTURE. The Indenture has been
duly authorized by the Company and, at the Closing Time, will have
been duly executed and delivered by the Company and, when executed and
delivered by the Trustee, will constitute a valid and binding
agreement of the Company, enforceable against the Company in
accordance with its terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfers), reorganization, moratorium or
other similar laws relating to or affecting enforcement of creditors'
rights generally or by general principles of equity (regardless of
whether enforcement is considered in a proceeding in equity or at law)
and the waiver contained in Section 514 thereof may be unenforceable
due to interests of public policy.
(xviii) AUTHORIZATION OF THE NOTES. The Notes have been duly
authorized and, at the Closing Time, will have been duly executed by
the Company and, when authenticated in the manner provided for in the
Indenture and delivered against payment of the purchase price therefor
will constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, except
as the enforceability thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or other similar laws relating
to or affecting enforcement of creditors' rights generally or by
general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law), and will be in the
form contemplated by, and entitled to the benefits of, the Indenture
and the Note Registration Rights Agreement.
(xix) AUTHORIZATION OF THE NOTE REGISTRATION RIGHTS AGREEMENT.
The Note Registration Rights Agreement has been duly authorized by the
Company, and, at the Closing Time, will have been duly executed and
delivered by the Company and will, when executed and delivered by the
Initial Purchasers, constitute a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms
except as (x) the enforceability thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or other similar laws relating to or
affecting enforcement of creditors' rights generally, (y) the
enforceability thereof may be limited by general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity
or at law) and (z) any rights to indemnity and contribution may be limited
by federal and state securities laws and public policy considerations.
(xx) AUTHORIZATION OF THE NOTE WARRANT AGREEMENT. The Note
Warrant Agreement has been duly authorized by the Company and, at the
Closing Time, will have been duly executed and delivered by the
Company and, when duly executed and delivered by the Note Warrant
Agent, will constitute a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except
as enforceability thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or other similar laws relating
to or affecting enforcement of creditors' rights generally or by
general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law).
(xxi) AUTHORIZATION OF THE NOTE WARRANT REGISTRATION RIGHTS
AGREEMENT. The Note Warrant Registration Rights Agreement has been duly
authorized by the Company and, at the Closing Time, will have been duly
executed and delivered by the Company and, when executed and delivered by
the Initial Purchasers, will constitute a valid and binding agreement of
the Company, enforceable against the Company in accordance with its terms
except as (x) the enforceability thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or other similar laws relating to or
affecting enforcement of creditor's rights generally, (y) the
enforceability thereof may be limited by general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity
or at law) and (z) any rights to indemnity and contribution may be limited
by federal and state securities laws and public policy considerations.
(xxii) DESCRIPTION OF THE PREFERENCE REGISTRATION RIGHTS
AGREEMENT, THE PREFERENCE WARRANT REGISTRATION RIGHTS AGREEMENT, THE
PREFERENCE SHARES, THE PREFERENCE WARRANTS, THE COMMON STOCK, THE
PREFERENCE WARRANT AGREEMENT, THE MG SECURITIES, THE NOTE SECURITIES,
AND THE NOTE AGREEMENTS. The Preference Registration Rights
Agreement, the Preference Warrant Registration Rights Agreement, the
Preference Shares, the Preference Warrants, the Common Stock, the
Preference Warrant Agreement, the MG Securities, the Note Securities
and the Note Agreements will conform in all material respects to the
respective statements relating thereto contained in the Preference
Offering Memorandum and will be in substantially the respective forms
previously delivered to the Chase Purchasers.
(xxiii) ABSENCE OF DEFAULTS AND CONFLICTS. Neither the Company
nor any of its subsidiaries is (1) in violation of its charter or
statute, as applicable, or by-laws (or other similar organizational
documents), (2) in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which or any of
them may be bound, or to which any of the property or assets of the
Company or any of its subsidiaries is subject (collectively,
"Agreements and Instruments"), except as described in the Preference
Offering Memorandum and except for such defaults that would not result
in a Material Adverse Effect or (3) in violation of any applicable
law, statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over the Company or any of its subsidiaries or any
of their assets or properties, except as described in the Preference
Offering Memorandum; and the execution, delivery and performance of
this Agreement, the Preference Warrant Agreement, the Preference
Registration Rights Agreement, the Preference Warrant Registration
Rights Agreement, the Certificate of Designation, the Preference
Securities, the Note Securities, the Note Agreements, and any other
agreement or instrument entered into or issued or to be entered into
or issued by the Company or any Designated Subsidiary in connection
with the transactions contemplated hereby or thereby or in the
Preference Offering Memorandum and the consummation of the
transactions contemplated herein and in the Note Purchase Agreement
and the Preference Offering Memorandum (including the issuance and
sale of the Preference Securities and the Note Securities and the use
of the proceeds from the sale of the Preference Securities and the
Note Securities as described in the Preference Offering Memorandum
under the caption "Use of Proceeds") and compliance by the Company
with its obligations hereunder have been duly authorized by all
necessary corporate action and do not and will not, whether with or
without the giving of notice or passage of time or both, conflict with
or constitute a breach of, or default or Repayment Event (as defined
below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or
any of its subsidiaries pursuant to, the Agreements and Instruments
except for such conflicts, breaches, Repayment Events or defaults or
liens, charges or encumbrances that, singly or in the aggregate, would
not result in a Material Adverse Effect, nor will such action result
in any violation of the provisions of the charter or statute, as
applicable, or by-laws (or other similar organizational documents) of
the Company or any of its subsidiaries or any applicable law, statute,
rule, regulation, judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any of its subsidiaries or any of
their assets or properties, assuming that the Chase Purchasers comply
with all of its obligations under Section 6 hereof. As used herein, a
"Repayment Event" means any event or condition which gives the holder
of any note, debenture or other evidence of indebtedness (or any
person acting on such holder's behalf) the right to require the
repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company or any of its subsidiaries.
(xxiv) ABSENCE OF LABOR DISPUTE. No labor dispute with the
employees of the Company or any of its subsidiaries exists or, to the
knowledge of the Company, is imminent, and the Company is not aware of
any existing or imminent labor disturbance by the employees of any of
its or any of its subsidiaries' principal suppliers, customers or
contractors, which, in either case, may reasonably be expected to
result in a Material Adverse Effect.
(xxv) ABSENCE OF PROCEEDINGS. Except as disclosed in the
Preference Offering Memorandum, there is no action, suit, proceeding,
inquiry or investigation before or by any court or governmental agency
or body, domestic or foreign, now pending, or, to the knowledge of the
Company, threatened, against or affecting the Company or any
subsidiary thereof, which would be required to be disclosed in the
Preference Offering Memorandum (other than as disclosed therein) if it
were a prospectus filed as part of a registration statement on Form S-
1 under the 1933 Act, or which might reasonably be expected to result
in a Material Adverse Effect, or which might reasonably be expected to
adversely affect the properties or assets of the Company or any of its
subsidiaries in a manner that is material and adverse to the Company
and its subsidiaries considered as one enterprise or the consummation
of the transactions contemplated by this Agreement, the Preference
Warrant Agreement, the Preference Registration Rights Agreement, the
Preference Warrant Registration Rights Agreement, the Certificate of
Designation, the Preference Securities, the Note Securities or the
Note Agreements, or the performance by the Company of its obligations
hereunder or thereunder. The aggregate of all pending legal or
governmental proceedings to which the Company or any subsidiary
thereof is a party or of which any of their respective property or
assets is the subject which are not described in the Preference
Offering Memorandum, including ordinary routine litigation incidental
to the business, could not reasonably be expected to result in a
Material Adverse Effect.
(xxvi) POSSESSION OF INTELLECTUAL PROPERTY. Except as disclosed
in the Preference Offering Memorandum, the Company and its
subsidiaries own or possess, or can acquire on reasonable terms,
adequate patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks, trade names or other
intellectual property (collectively, "Intellectual Property")
necessary to carry on the business now operated by them. Except as
disclosed in the Preference Offering Memorandum, neither the Company
nor any of its subsidiaries has received any notice or is otherwise
aware of any infringement of or conflict with asserted rights of
others with respect to any Intellectual Property or of any facts or
circumstances which would render any Intellectual Property invalid or
inadequate to protect the interest of the Company or any of its
subsidiaries therein, and which infringement or conflict (if the
subject of any unfavorable decision, ruling or finding) or invalidity
or inadequacy, singly or in the aggregate, would result in a Material
Adverse Effect.
(xxvii) ABSENCE OF FURTHER REQUIREMENTS. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency (other than (A) under the 1933 Act and the rules and
regulations thereunder with respect to the Preference Registration
Rights Agreement, the Preference Warrant Registration Rights
Agreement, the Note Registration Rights Agreement, the Note Warrant
Registration Rights Agreement, and the transactions contemplated
thereunder, (B) under the securities or "blue sky" laws of the various
states and (C) the Polish Anti-Monopoly Act) is necessary or required
(x) for the performance by the Company of its obligations hereunder,
in connection with the offering, issuance or sale of the Preference
Securities hereunder or the consummation of the transactions
contemplated by this Agreement, the Preference Warrant Agreement, the
Preference Registration Rights Agreement, the Preference Warrant
Registration Rights Agreement, the Note Registration Rights Agreement,
the Note Warrant Registration Rights Agreement, or the Preference
Offering Memorandum or (y) to permit the Company to (1) effect
payments of dividends on or redemption of the Preference Shares, or
(2) perform its other obligations under the Certificate of
Designation, the Preference Warrant Agreement, the Preference Warrant
Registration Rights Agreement, the Note Registration Rights Agreement,
and the Note Warrant Registration Rights Agreement.
(xxviii) POSSESSION OF LICENSES AND PERMITS. Except as disclosed
in the Preference Offering Memorandum, the Company and its subsidiaries
possess such permits, licenses, approvals, concessions, consents and
other authorizations (including, without limitation, all permits
required for the operation of the business of the Company and its
subsidiaries by the Republic of Poland and the United Kingdom)
(collectively, "Governmental Licenses") issued by the appropriate
domestic or foreign regulatory agencies or bodies, other governmental
authorities or self regulatory organizations necessary to conduct the
business now operated by them or any business currently proposed to be
conducted by them as described in the Preference Offering Memorandum;
the Company and its subsidiaries, except as disclosed in the
Preference Offering Memorandum and except where the failure to so
comply would not, singly or in the aggregate, have a Material Adverse
Effect, are in compliance with the terms and conditions of all such
Governmental Licenses; all of the Governmental Licenses are valid and
in full force and effect, except as disclosed in the Preference
Offering Memorandum and except when the invalidity of such
Governmental Licenses or the failure of such Governmental Licenses to
be in full force and effect would not have a Material Adverse Effect;
and except as disclosed in the Preference Offering Memorandum, neither
the Company nor any of its subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such
Governmental Licenses which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would result in
a Material Adverse Effect. To the knowledge of the Company, except as
described in the Preference Offering Memorandum, there exists no
reason or cause that could justify the variation, suspension,
cancellation or termination of any such Governmental Licenses held by
the Company or any of its subsidiaries with respect to the
construction or operation of their respective businesses, which
variation, suspension, cancellation or termination could reasonably be
expected to have a Material Adverse Effect.
(xxix) NO ADDITIONAL DOCUMENTS. There are no contracts or
documents of a character that would be required to be described in the
Preference Offering Memorandum, if it were a prospectus filed as part
of a registration statement on Form S-3 under the 1933 Act, that are
not described as would be so required. All such contracts to which
the Company is party have been duly authorized, executed and delivered
by the Company and constitute valid and binding agreements of the
Company.
(xxx) MANAGEMENT AGREEMENTS. Each of the Management Agreements
(as such term is defined in the Indenture) to which any subsidiary of
the Company is a party has been duly authorized, executed and
delivered by each of the parties thereto and constitutes a valid and
binding agreement of each of the parties thereto.
(xxxi) TITLE TO PROPERTY. The Company and its subsidiaries own no
real property, except as described in the Preference Offering
Memorandum and except for approximately 3,200 square meters of real
property owned by a Designated Subsidiary, and have good title to all
other properties owned by them, in each case, free and clear of all
mortgages, pledges, liens, security interests, claims, restrictions or
encumbrances of any kind except such as (a) are described in the
Preference Offering Memorandum or (b) do not, singly or in the
aggregate, materially affect the value of such property and do not
interfere with the use made and proposed to be made of such property
by the Company or any of its subsidiaries; and all of the leases and
subleases material to the business of the Company and its
subsidiaries, considered as one enterprise, and under which the
Company or any of its subsidiaries holds properties described in the
Preference Offering Memorandum, are in full force and effect, and
neither the Company nor any of its subsidiaries has any notice of any
claim of any sort that has been asserted by anyone adverse to the
rights of the Company or any of its subsidiaries under any of the
leases or subleases mentioned above, or affecting or questioning the
rights of the Company or any subsidiary thereof to the continued
possession of the leased or subleased premises under any such lease or
sublease, except for such claims as could not reasonably be expected
to result in a Material Adverse Effect.
(xxxii) TAX RETURNS. Except as disclosed in the Preference Offering
Memorandum, the Company and its subsidiaries have filed all domestic
and foreign tax returns that are required to be filed or have duly
requested extensions thereof and have paid all taxes required to be
paid by any of them and any related assessments, fines or penalties,
except for any such tax, assessment, fine or penalty that is being
contested in good faith and by appropriate proceedings, and except for
such claims as could not result in a Material Adverse Effect; and
adequate charges, accruals and reserves have been provided for in the
financial statements referred to in Section 1(a)(iv) above in respect
of all domestic and foreign taxes for all periods as to which the tax
liability of the Company or any of its subsidiaries has not been
finally determined or remains open to examination by applicable taxing
authorities.
(xxxiii) ENVIRONMENTAL LAWS. Except as described in the Preference
Offering Memorandum and except such matters as would not, singly or in
the aggregate, result in a Material Adverse Effect, (A) neither the
Company nor any of its subsidiaries is in violation of any domestic or
foreign statute, law, rule, regulation, ordinance, code, policy or
rule of common law or any judicial or administrative interpretation
thereof including any judicial or administrative order, consent,
decree or judgment, relating to pollution or protection of human
health, the environment (including, without limitation, ambient air,
surface water, groundwater, land surface or subsurface strata) or
wildlife, including, without limitation, laws and regulations relating
to the release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances,
petroleum or petroleum products (collectively, "Hazardous Materials")
or to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous Materials
(collectively, "Environmental Laws"), (B) the Company and its
subsidiaries have all permits, authorizations and approvals required
under any applicable Environmental Laws and are each in compliance
with their requirements, (C) there are no pending or threatened
administrative, regulatory or judicial actions, suits, demands, demand
letters, claims, liens, notices of noncompliance or violation,
investigation or proceedings relating to any Environmental Law against
the Company or any of its subsidiaries and (D) there are no events or
circumstances that might reasonably be expected to form the basis of
an order for clean-up or remediation, or an action, suit or proceeding
by any private party or governmental body or agency, against or
affecting the Company or any of its subsidiaries relating to Hazardous
Materials or Environmental Laws.
(xxxiv) INVESTMENT COMPANY ACT. The Company is not, and upon the
issuance and sale of the Preference Securities, the MG Securities and
the Note Securities as herein contemplated and the application of the
net proceeds therefrom as described in the Preference Offering
Memorandum will not be, an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in
the Investment Company Act of 1940, as amended (the "1940 Act").
(xxxv) INTERNAL CONTROLS. The Company and each of its subsidiaries
maintain a system of internal accounting controls sufficient to
provide reasonable assurances that (A) transactions are executed in
accordance with management's general or specific authorization;
(B) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (C) access to
assets is permitted only in accordance with management's general or
specific authorization; and (D) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences. The
Company and its subsidiaries have not made, and, to the knowledge of
the Company, no employee or agent of the Company or any subsidiary has
made, any payment of the Company's funds or any subsidiary's funds or
received or retained any funds (A) in violation of the Foreign Corrupt
Practices Act, as amended, or (B) in violation of any other applicable
law, regulation or rule (except, in the case of this clause (B), for
such violations as could not reasonably be expected to result in a
Material Adverse Effect) or that would be required to be disclosed in
the Preference Offering Memorandum if it were a prospectus filed as
part of a registration statement on Form S-1 under the 1933 Act.
(xxxvi) TAXES ON SUBSIDIARY INDEBTEDNESS. Except as described in
the Preference Offering Memorandum, as of the date hereof, no material
income, stamp or other taxes or levies, imposts, deductions, charges,
compulsory loans or withholdings whatsoever are or will be, under
applicable law in the Republic of Poland, imposed, assessed, levied or
collected by the Republic of Poland or any political subdivision or
taxing authority thereof or therein or on or in respect of principal,
interest, premiums, penalties or other amounts payable under any
indebtedness of any of the Company's subsidiaries held by the Company.
(xxxvii) INSURANCE. Except as otherwise disclosed in the Preference
Offering Memorandum, the Company and each of its subsidiaries carry,
or are covered by, insurance in such amounts and covering such risks
as is adequate for the conduct of their respective businesses and the
value of their respective properties and as is customary for companies
engaged in similar businesses or similar industries in similar
locations.
(xxxviii) RULE 144A ELIGIBILITY. The Preference Securities are
eligible for resale pursuant to Rule 144A and will not be, at the
Closing Time, of the same class as securities listed on a national
securities exchange registered under Section 6 of the Securities
Exchange Act of 1934, as amended (the "1934 Act"), or quoted in a U.S.
automated interdealer quotation system.
(xxxix) NO GENERAL SOLICITATION. None of the Company, its
affiliates, as such term is defined in Rule 501(b) under the 1933 Act
("Affiliates"), or any person acting on its or any of their behalf
(other than Chase Purchasers, the MG Purchaser and the Initial
Purchasers, as to whom the Company makes no representation) has
engaged or will engage, in connection with the offering of the
Preference Securities, in any form of general solicitation or general
advertising within the meaning of Rule 502(c) under the 1933 Act.
(xl) NO REGISTRATION REQUIRED. Subject to compliance by the
Chase Purchasers with the representations and warranties set forth in
Section 2 and the procedures set forth in Section 6 hereof, it is not
necessary in connection with the offer, sale and delivery of the
Preference Securities to the Chase Purchasers in the manner
contemplated by this Agreement, the Preference Warrant Agreement and
the Preference Offering Memorandum to register the Preference
Securities under the 1933 Act.
(xli) REPORTING COMPANY. The Company is subject to, and has
complied with all applicable reporting requirements of Section 13 or
Section 15(d) of the 1934 Act.
(xlii) FUNDS. With the net proceeds of the sale of the Preference
Securities and the MG Securities pursuant to this Agreement and the MG
Purchase Agreement, respectively, the sales of the Note Securities
pursuant to the Note Purchase Agreement and the sale of the Company's
Series C Senior Discount Notes which was consummated on January 20,
1999, together with cash on hand, the Company has sufficient capital
to fulfill its current business plan and to fund its commitments until
the Company achieves positive cash flow from operations, subject to
the matters disclosed in the Preference Offering Memorandum.
(xliii) SUBSCRIBERS. As of December 31, 1998, the Company had at
least 675,000 basic cable subscribers and had sold approximately
125,000 Wizja TV packages to authorized retailers in Poland (as
described in the Preference Offering Memorandum).
(b) OFFICERS' CERTIFICATES. Any certificate titled "Officers'
Certificate" or "Secretary's Certificate" signed by any officer of the
Company or any of its subsidiaries which is delivered to the Chase
Purchasers or to counsel for the Chase Purchasers shall be deemed a
representation and warranty by the Company to the Chase Purchasers as to
the matters covered thereby.
SECTION 2. SALE AND DELIVERY TO THE PURCHASER; CLOSING.
(a) PREFERENCE SECURITIES. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein
set forth, the Company agrees to sell to the Chase Purchasers and the Chase
Purchasers, severally and not jointly, agree to purchase from the Company,
at an aggregate purchase price of $5,000,000 (less a commission of
$150,000), the aggregate number of Preference Shares and Preference
Warrants set forth in Schedule A opposite its name.
(b) PAYMENT. Payment of the purchase price for, and delivery of
certificates for, the Preference Securities shall be made at the office of
Shearman & Sterling, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at
such other place as shall be agreed upon by the Chase Purchasers and the
Company, at 9:00 A.M. on the third business day after the date hereof
(unless postponed in accordance with the provisions of Section 11), or such
other time not later than ten business days after such date as shall be
agreed upon by the Chase Purchasers and the Company (such time and date of
payment and delivery being herein called the "Closing Time").
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against
delivery to each of the Chase Purchasers for the account of such Chase
Purchasers of certificates for the Preference Securities to be purchased by
it.
(c) QUALIFIED INSTITUTIONAL BUYER. Each Chase Purchaser represents
and warrants to, and agrees with, the Company that it is an "accredited
investor" within the meaning of Rule 501(a) under the 1933 Act (an
"Accredited Investor").
(d) DENOMINATIONS; REGISTRATION. Certificates for the Preference
Securities shall be in such denominations and registered in such names as
the Chase Purchasers may request in writing at least one full business day
before the Closing Time. The certificates representing the Preference
Shares and the Preference Warrants shall be registered in the name of Cede
& Co. pursuant to the DTC Agreement and shall be made available for
examination and packaging by the Chase Purchasers in the City of New York
not later than 10:00 A.M. on the last business day prior to the Closing
Time.
SECTION 3. COVENANTS OF THE COMPANY. The Company covenants with the
Chase Purchasers as follows:
(a) PREFERENCE OFFERING MEMORANDUM. The Company, as promptly as
possible, will furnish to each Chase Purchaser, without charge, such number
of copies of the Preference Offering Memorandum and any amendments and
supplements thereto and documents incorporated by reference therein as the
Chase Purchaser may reasonably request.
(b) NOTICE AND EFFECT OF MATERIAL EVENTS. The Company will
immediately notify the Chase Purchasers, and confirm such notice in
writing, of any filing made by the Company of information relating to the
offering of the Preference Securities with any securities exchange or any
other regulatory body in the United States or any other jurisdiction.
(c) RESERVED.
(d) RESERVED.
(e) RESERVED.
(f) DTC. The Company will cooperate with the Chase Purchasers and
use its best efforts (i) to permit the Preference Securities to be eligible
for clearance and settlement through the facilities of DTC.
(g) USE OF PROCEEDS. The Company will use the net proceeds received
by it from the sale of the Preference Securities in the manner specified in
the Preference Offering Memorandum under "Use of Proceeds."
(h) RESERVED.
(i) NOTIFICATION OF CURRENT ACCUMULATED EARNINGS AND PROFITS. The
Company will disclose its current and accumulated earnings and profits, if
any, for each fiscal year in its annual report on Form 10-K so long as it
is required to file such a report. Thereafter, the Company will provide
such information to any holder of Preference Securities upon receipt of a
written request from such holder.
SECTION 4. PAYMENT OF EXPENSES.
(a) EXPENSES. The Company will pay all expenses incident to the
performance of its obligations under this Agreement, including (i) the
preparation, printing and any filing of the Preference Offering Memorandum
(including financial statements and any schedules or exhibits and any
document incorporated therein by reference) and of each amendment or
supplement thereto, (ii) the preparation, printing and delivery to the
Chase Purchasers of this Agreement, the Preference Warrant Agreement, the
Preference Registration Rights Agreement, the Preference Warrant
Registration Rights Agreement, the Certificate of Designation and such
other documents as may be required in connection with the offering,
purchase, sale, issuance or delivery of the Preference Securities,
(iii) the preparation, issuance and delivery of the certificates for the
Preference Securities to the Chase Purchasers, including any charges of DTC
in connection therewith, (iv) the fees and disbursements of the Company's
counsel, accountants and other advisors, (v) any filing for review of the
offering with the National Association of Securities Dealers (the "NASD"),
and (vi) any fees payable to the NASD.
(b) TERMINATION OF AGREEMENT. If this Agreement is terminated by the
Chase Purchasers in accordance with the provisions of Section 5 or
Section 10(a)(i) hereof, the Company shall reimburse the Chase Purchasers
for all of its out-of-pocket expenses, including the reasonable fees and
disbursements of counsel for the Chase Purchasers incurred through the date
of termination.
SECTION 5. CONDITIONS OF THE CHASE PURCHASERS' OBLIGATIONS. The
obligations of the Chase Purchasers hereunder are subject to the accuracy
of the representations and warranties of the Company contained in Section 1
hereof or in certificates of any officer of the Company or any of its
subsidiaries delivered pursuant to the provisions hereof, to the
performance by the Company of its covenants and other obligations
hereunder, and to the following further conditions:
(a) RESERVED
(b) RESERVED
(c) RESERVED
(d) OFFICERS' CERTIFICATE. At the Closing Time, there shall not have
been, since the date hereof or since the respective dates as of which
information is given in the Preference Offering Memorandum, any material
adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, and the Chase Purchasers shall have received a
certificate of the chief executive officer of the Company and of the chief
financial or chief accounting officer of the Company, dated as of the
Closing Time, to the effect that (i) there has been no such material
adverse change, (ii) the representations and warranties in Section 1 hereof
are true and correct with the same force and effect as though expressly
made at and as of the Closing Time, and (iii) the Company has complied with
all agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to the Closing Time.
(e) RESERVED
(f) RESERVED
(g) CONSUMMATION OF SALE OF MG SECURITIES AND NOTE SECURITIES. The
sale of the Note Securities and the sale of MG Securities to the MG
Purchasers pursuant to the MG Purchase Agreement shall have been
consummated at the Closing Time.
(h) RESERVED
(i) ADDITIONAL DOCUMENTS. At the Closing Time, counsel for the Chase
Purchasers shall have been furnished with such documents and opinions as it
may require for the purpose of enabling it to pass upon the issuance and
sale of the Preference Securities as herein contemplated, or in order to
evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company in connection with the issuance and sale of the
Preference Securities as herein contemplated shall be satisfactory in form
and substance to the Chase Purchasers and counsel for the Chase Purchasers.
(j) EXECUTION OF AGREEMENTS. At the Closing Time, the Preference
Warrant Agreement, the Preference Registration Rights Agreement, the
Preference Warrant Registration Rights Agreement and the Certificate of
Designation, each in form and substance reasonably satisfactory to the
Chase Purchasers, shall have been duly executed and delivered and shall be
in full force and effect.
(k) TERMINATION OF AGREEMENT. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled,
this Agreement may be terminated by the Chase Purchasers by notice to the
Company at any time at or prior to the Closing Time, and such termination
shall be without liability of any party to any other party except as
provided in Section 4 and except that Sections 1, 7, 8 and 9 shall survive
any such termination and remain in full force and effect.
SECTION 6. RESALES OF THE PREFERENCE SECURITIES.
(a) REPRESENTATION AND WARRANTY OF THE CHASE PURCHASERS. Each Chase
Purchaser represents and agrees that (i) it has not entered and will not
enter into any contractual arrangements with respect to the distribution of
the Preference Securities, except with its affiliates or with the prior
written consent of the Company; (ii) it has received and carefully reviewed
the Preference Offering Memorandum prior to the execution of this
Agreement; (iii) it has been furnished by the Company during the course of
this transaction with all information regarding the Company which it had
requested or desired to know, all documents which could be reasonably
provided have been made available for its inspection and review and it has
been afforded the opportunity to ask questions of and receive answers from
duly authorized officers or other representatives of the Company concerning
the terms and conditions of the offering and any additional information
which it had requested; (iv) except as set forth herein, no representations
or warranties have been made to it by the Company or any agent, employee or
affiliate of the Company and in entering into this transaction, it is not
relying on any information, other than that contained herein or in the
Preference Offering Memorandum and the results of its independent
investigation; (v) no person other than the Company has made any
representations to the Chase Purchaser concerning this Offering and the
Chase Purchaser has relied on no representations or documentation other
than that supplied by the Company and in particular, for avoidance of
doubt, the Chase Purchaser is not relying on information supplied in
connection with (X) the concurrent sale of the Note Securities by the
Initial Purchasers or (Y) the sale of the Company's Series C Senior
Discount Notes which was consummated on January 20, 1999; (vi) it is
purchasing the Preference Securities for investment purposes only for its
account and not with any view toward a distribution thereof; and (vii) it
has evaluated the risks of investing in the Preference Securities and has
determined that the Preference Securities are a suitable investment, and
that it can bear the economic risk of this investment and can afford a
complete loss of its investment.
(b) RESTRICTIONS ON TRANSFER. The transfer restrictions and the
other provisions set forth in the Preference Offering Memorandum under the
heading "Notice to Investors", including the legend required thereby, shall
apply to the Preference Securities except as otherwise agreed by the
Company and the Chase Purchasers.
(c) COVENANTS OF THE COMPANY. The Company covenants with the Chase
Purchasers as follows:
(i) DUE DILIGENCE. In connection with the original purchase of
the Preference Securities, the Company agrees that, prior to any offer
or resale of the Preference Securities by the Chase Purchasers, the
Chase Purchasers and counsel for the Chase Purchasers shall have the
right to make reasonable inquiries into the business of the Company
and its subsidiaries.
(ii) INTEGRATION. The Company agrees that it will not and will
cause its Affiliates not to solicit any offer to buy or make any offer
or sale of, or otherwise negotiate in respect of, securities of the
Company of any class if, as a result of the doctrine of "integration"
referred to in Rule 502 under the 1933 Act, such offer or sale would
render invalid (for the purpose of the sale of the Preference
Securities by the Company to the Chase Purchasers the exemption from
the registration requirements of the 1933 Act provided by Section 4(2)
thereof or otherwise.
(iii) RULE 144A INFORMATION. The Company agrees that, in order
to render the Preference Securities eligible for resale pursuant to
Rule 144A under the 1933 Act, while any of the Preference Securities
remain outstanding, it will make available, upon request, to any
holder of Preference Securities or prospective purchasers of
Preference Securities the information specified in Rule 144A(d)(4),
unless the Company furnishes information to the Commission pursuant to
Section 13 or 15(d) of the 1934 Act (such information, whether made
available to holders or prospective purchasers or furnished to the
Commission, is herein referred to as "Additional Information").
(d) RESALES. The Chase Purchasers understand that the Preference
Securities have not been and will not be registered under the 1933 Act and
may not be offered or sold within the United States or to, or for the
account or benefit of, U.S. persons except pursuant to an exemption from
the registration requirements of the 1933 Act. Each Chase Purchaser
represents and agrees, that it will offer and sell Preference Securities at
any time only in accordance with an applicable exemption from the
registration provisions of the 1933 Act. Each Chase Purchaser agrees that,
at or prior to confirmation of a sale of Preference Securities it will have
sent to each distributor, dealer or person receiving a selling concession,
fee or other remuneration that purchases Preference Securities from it or
through it during the restricted period a confirmation or notice to
substantially the following effect:
"The securities covered hereby have not been registered
under the United States Securities Act of 1933 (the
"Securities Act") and may not be offered or sold within
the United States or to or for the account or benefit
of U.S. persons as part of their distribution at any
time except in accordance with an exemption from the
registration requirements of the Securities Act."
(e) OFFERS AND SALES IN POLAND AND THE NETHERLANDS. Each Chase
Purchaser has advised the Company and hereby represents and warrants to and
agrees with the Company that it will not offer or sell the Preference
Securities in Poland except in accordance with Polish foreign exchange
regulations under circumstances which do not constitute a public offering
or distribution of securities under Polish laws and regulations. Each
Chase Purchaser further agrees it will not offer or sell the Preference
Securities in The Netherlands except under circumstances which do not
constitute a public offering or distribution (AANBOD BUITEN BESLOTEN XXXXX)
of securities under the laws and regulations of The Netherlands.
(f) OFFERS AND SALES IN THE UNITED KINGDOM. Each Chase Purchaser
hereby represents, warrants and agrees that (i) it has not offered or sold
and prior to the expiration of the period six months after the date of
issue of the Preference Securities will not offer to sell by means of any
document any Preference Securities to persons in the United Kingdom except
to persons whose ordinary activities involve them in acquiring, holding,
managing or disposing of investments (as principal or agent) for the
purposes of their businesses or otherwise in circumstances which have not
resulted and will not result in an offer to the public in the United
Kingdom within the meaning of the Public Offers of Securities Regulations
1995; (ii) it has complied and will comply with all applicable provisions
of the Financial Services Act 1986 with respect to anything done by it in
relation to the Preference Securities in, from or otherwise involving the
United Kingdom and (iii) it has only issued or passed on, and will only
issue or pass on in the United Kingdom any document received by it in
connection with the issue of the Preference Securities to a person who is
of a kind described in Article 11(3) of the Financial Services Act 1986
(Investment Advertisements) (Exemptions) Order 1995 or is a person to whom
such document may otherwise lawfully be issued or passed on.
(g) XXXXXXX. Xxxxxx Xxxxx may assign any or all of her right to
purchase Preference Securities to The Xxxxxxx Trust and the Company hereby
consents to such assignment.
SECTION 7. INDEMNIFICATION.
(a) INDEMNIFICATION OF THE CHASE PURCHASERS. The Company agrees to
indemnify and hold harmless each of the Chase Purchasers and each person,
if any, who controls the Chase Purchasers within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement
or alleged untrue statement of a material fact contained in the
Preference Offering Memorandum (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 based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission; provided that (subject to Section 7(d) below) any such
settlement is effected with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by the
Purchaser), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding
by any 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 (i) or (ii) above;
PROVIDED, HOWEVER, that this indemnity agreement shall not apply to any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made
in reliance upon and in conformity with written information furnished to
the Company by the Chase Purchasers or the Initial Purchasers expressly for
use in the Preference Offering Memorandum (or any amendment thereto) and
provided further that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission which was, at
any time prior to the sales of the Preference Securities by the Chase
Purchaser, known or believed to be untrue or omitted by the Chase
Purchaser seeking indemnification.
(b) INDEMNIFICATION OF THE COMPANY, DIRECTORS AND OFFICERS. Each
Chase Purchaser agrees to indemnify and hold harmless the Company and each
person, if any, who controls the Company within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act against any and all loss,
liability, claim, damage and expense described in the indemnity contained
in subsection (a) of this Section, as incurred, but only with respect to
untrue statements or omissions, or alleged untrue statements or omissions,
made in the Preference Offering Memorandum in reliance upon and in
conformity with written information furnished to the Company by the Chase
Purchasers expressly for use in the Preference Offering Memorandum.
(c) ACTIONS AGAINST PARTIES; NOTIFICATION. Each indemnified party
shall give notice as promptly as reasonably practicable to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, 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. In the case of
parties indemnified pursuant to Section 7(a) above, counsel to the
indemnified parties shall be selected by Xxxxxx Xxxxx, and, in the case of
parties indemnified pursuant to Section 7(b) above, counsel to the
indemnified parties shall be selected by the Company. An indemnifying
party may participate at its own expense in the defense of any 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 parties be liable
for 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 7 or Section 8 hereof (whether or not
the indemnified parties are actual or potential parties thereto), 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) SETTLEMENT WITHOUT CONSENT IF FAILURE TO REIMBURSE. If at any
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for reasonable fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 7(a)(ii) effected without
its written consent if (i) such settlement is entered into more than 45
days after receipt by such indemnifying party of the aforesaid request,
(ii) such indemnifying party shall have received notice of the terms of
such settlement at least 30 days prior to such settlement being entered
into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
SECTION 8. CONTRIBUTION. If the indemnification provided for in
Section 7 hereof 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, (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Chase Purchasers
on the other hand from the offering of the Preference Securities pursuant
to this Agreement or (ii) if the allocation provided by clause (i) is not
permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company on the one hand and of the Chase
Purchasers 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 benefits received by the Company on the one hand and the
Chase Purchasers on the other hand in connection with the offering of the
Preference Securities pursuant to this Agreement shall be deemed to be in
the same respective proportions as the total net proceeds from the offering
of the Preference Securities pursuant to this Agreement (before deducting
expenses) received by the Company and the total commission received by the
Chase Purchasers, bear to the aggregate initial offering price of the
Preference Securities.
The relative fault of the Company on the one hand and the Chase
Purchasers 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 the Company or by the Chase Purchasers
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Company and the Chase Purchasers agree that it would not be just
and equitable if contribution pursuant to this Section 8 were determined by
pro rata allocation or by any other method of allocation which does not
take account of the equitable considerations referred to above in this
Section 8. The aggregate amount of losses, liabilities, claims, damages
and expenses incurred by an indemnified party and referred to above in this
Section 8 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 any
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.
Notwithstanding the provisions of this Section 8, the Chase Purchasers
shall not be required to contribute any amount in excess of the amount by
which the total price at which the Preference Securities purchased by it
and distributed to the subsequent purchasers were offered to the subsequent
purchasers exceeds the amount of any damages which the Chase Purchasers 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.
For purposes of this Section 8, each person, if any, who controls the
Chase Purchasers within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as
the Chase Purchasers, and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934
Act shall have the same rights to contribution as the Company.
SECTION 9. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or any of its
subsidiaries submitted pursuant hereto shall remain operative and in full
force and effect, regardless of any investigation made by or on behalf of
the Chase Purchasers or controlling person, or by or on behalf of the
Company, and shall survive delivery of the Preference Securities to the
Chase Purchasers.
SECTION 10. TERMINATION OF AGREEMENT.
(a) TERMINATION; GENERAL. The Chase Purchasers may terminate this
Agreement, by notice to the Company, at any time at or prior to the Closing
Time (i) if there has been, since the time of execution of this Agreement
or since the respective dates as of which information is given in the
Preference Offering Memorandum, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, or
(ii) if there has occurred any material adverse change in the financial
markets in the United States, the Republic of Poland or the international
financial markets, any outbreak of hostilities or escalation thereof or
other calamity or crisis or any change or development involving a
prospective change in national or international political, financial or
economic conditions, or in Polish taxation affecting the Company or any
subsidiary thereof or the transactions contemplated by the Preference
Offering Memorandum, or currency exchange rates for the U.S. dollar into
the Polish Zloty or exchange controls applicable to the U.S. dollar or the
Polish Zloty, in each case the effect of which is such as to make it, in
the judgment of the Chase Purchasers, impracticable to market the
Preference Securities or to enforce contracts for the sale of the
Preference Securities, or (iii) if trading in any securities of the Company
has been suspended or materially limited by the Commission, or if trading
generally on the American Stock Exchange, the New York Stock Exchange or in
the Nasdaq National Market has been suspended or materially limited, or
minimum or maximum prices for trading have been fixed, or maximum ranges
for prices have been required, by any of said exchanges or by such system
or by order of the Commission, the National Association of Securities
Dealers, Inc. or any other governmental authority, or (iv) if a banking
moratorium has been declared by Polish, United States Federal or New York
authorities.
(b) LIABILITIES. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any
other party except as provided in Section 4 hereof, and PROVIDED FURTHER
that Sections 1, 7, 8 and 9 shall survive such termination and remain in
full force and effect.
SECTION 11. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed,
sent by courier or express delivery company or transmitted by any standard
form of telecommunication. Notices to the Chase Purchasers shall be
directed to the Chase Purchasers c/o Chase Enterprises, Inc., Xxx
Xxxxxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000-3585, attention of Xxxx
Xxxxxxx. Notices to the Company shall be directed to it at Xxx Xxxxxxxxxx
Xxxxx, Xxxxxxxx, Xxxxxxxxxxx 06103-3585, attention of Xxxxxx X. Xxxxxx,
III.
SECTION 12. PARTIES. This Agreement shall inure to the benefit of and
be binding upon the Chase Purchasers and the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended
or shall be construed to give any person, firm or corporation, other than
the Chase Purchasers and the Company and their respective successors and
the controlling persons and officers and directors referred to in
Sections 7 and 8 and their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this Agreement or
any provision herein contained. This Agreement and all conditions and
provisions hereof are intended to be for the sole and exclusive benefit of
the Chase Purchasers and the Company and their respective successors, and
said controlling persons and officers and directors and their heirs and
legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Preference Securities from the Chase
Purchasers shall be deemed to be a successor by reason merely of such
purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 14. EFFECT OF HEADINGS. The Article and Section headings
herein and the Table of Contents are for convenience only and shall not
affect the construction hereof.
SECTION 15. COUNTERPARTS. This Agreement may be executed in one or
more counterparts and when a counterpart has been executed by each party,
all such counterparts taken together shall constitute one and the same
agreement.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a
binding agreement between the Chase Purchasers and the Company in
accordance with its terms.
Very truly yours,
@ENTERTAINMENT, INC.
By /s/ Xxxxxx X. Xxxxxx XXX
------------------------
Title:
By /s/ Xxxxxx Xxxxxx-Xxxxx
------------------------
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXXX XXXXX XXXXXX XXXXX
/s/ Xxxxxx Xxxxx /s/ Xxxxxx Xxxxx
------------------- ---------------------
Xxxxxx Xxxxx Xxxxxx Xxxxx
XXXXX XXXXX
/s/ Xxxxx Xxxxx
-------------------
Xxxxx Xxxxx
SCHEDULE A
Number of Number of
Name Preference Shares Preference Warrants
Price
---------------------------------------------------------------------------------------------------
$2,000,000 (less a
Xxxxxx Xxxxx 2,000 2,000
commission of $60,000)
$2,000,000 (less a
Xxxxxx Xxxxx* 2,000 2,000
commission of $60,000)
$1,000,000 (less a
Xxxxx Xxxxx 1,000 1,000
commission of $30,000)
________ _______
$5,000,000 (less
Total . . . . . . . 5,000 5,000
commissions of $150,000)
======== ========
* Xxxxxx Xxxxx has assigned her right to purchase 1,000 Preference Shares
and 1,000 Preference Warrants for a price of $1,000,000 (less a commission
of $30,000) to The Xxxxxxx Trust.
SCHEDULE B
@ENTERTAINMENT, INC.
[Separately Attached]
SCHEDULE C
LIST OF DESIGNATED SUBSIDIARIES
1. ETV Sp. z o.o.
2. Telewizja Kablowa GOSAT Sp. z o.o.
3. Ground Zero Media Sp. z o.o.
4. Otwocka Telewizja Kablowa Sp. z o.o.
5. Polska Telewizja Kablowa S.A.
6. Polska Telewizja Kablowa Krakow S.A.
7. Polska Telewizja Kablowa Lublin S.A.
8. Polska Telewizja Kablowa Operator Sp. z o.o.
9. Polska Telewizja Kablowa Szczecin Sp. z o.o.
10. Polska Telewizja Kablowa Warszawa S.A.
11. Poltelkab Sp. z o.o.
12. Szczecinska Telewizja Kablowa Sp. z o.o.
13. TV Kabel Sp. z o.o.
14. At Entertainment Limited
15. Poland Communications, Inc.
16. Poland Cablevision (Netherlands) B.V.
17. Sereke Holding B.V.
18. Wizja TV Sp. z o.o.
19. WPTS Sp. z o.o.
20. @Entertainment Programming, Inc.
21. ProCable Sp. z o.o.
