EXHIBIT 1
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement"), dated as of the
22nd day of June 1997 (the "Effective Date"), among @Entertainment, Inc., a
Delaware corporation (the "Company"), Polish Investments Holding L.P., a
Delaware limited partnership ("PIHLP"), ECO Holdings III Limited
Partnership, a Delaware limited partnership ("ECO"), Xxxxx X. Xxxxxxxx, an
individual resident of the State of Connecticut ("RMF"), Xxxxxx LLC., a
Connecticut limited liability company ("Xxxxxx"), The AESOP Fund, L.P., a
Delaware limited partnership ("AESOP"), and The Xxxxxx Xxxx Xxxxx Marital
Trust, a Connecticut Trust ("CACMT"). PIHLP, ECO, RMF, Xxxxxx, AESOP and
CACMT shall hereinafter be referred to as the "Shareholders."
W I T N E S S E T H:
WHEREAS, the Company and the Shareholders are on this date entering
into a Contribution Agreement to which this Agreement is an Exhibit,
whereby the Shareholders will exchange certain of their shares of capital
stock of Poland Communications, Inc. ("PCI") for capital stock of the
Company in a tax-free reorganization pursuant to Section 351 of the
Internal Revenue Code of 1986, as amended (the "Code");
WHEREAS, the Shareholders constitute all of the shareholders of the
Company and on this date are entering into that certain Shareholders
Agreement (the "Shareholders Agreement"), whereby the parties will agree,
among other things, to the terms upon which the Company will conduct its
activities and upon which the relations between the shareholders of the
Company will be regulated; and
WHEREAS, in order to induce the Shareholders to enter into and perform
the Contribution Agreement and the Shareholders Agreement, the Company has
agreed to provide the Shareholders with certain rights in respect of the
registration of its common stock, par value one cent ($0.01) per share
("Common Stock").
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and the Shareholders agree as follows:
1. DEFINITIONS. As used in this Agreement, the following terms
shall have the respective meanings set forth below (such meanings to be
equally applicable to both the singular and plural forms of the terms
defined):
"DEMAND SHAREHOLDER" means PIHLP or ECO or, if used in the plural
form, means PIHLP and ECO, and permitted assignees of same under Section
5(g).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"FOLLOWING SHAREHOLDER" means RMF, Xxxxxx, AESOP or CACMT or, if
used in the plural form, means RMF, Xxxxxx, AESOP and CACMT or any two of
them.
"NATIONAL SECURITIES EXCHANGE" means the New York Stock Exchange,
American Stock Exchange, National Association of Securities Dealers
Automated Quotation System, or National Market System of the National
Association of Securities Dealers, as selected by the Company, and
reasonably acceptable to the Demand Shareholder.
"PERSON" shall mean and include any individual, partnership,
joint venture, corporation, trust, unincorporated organization or
association or any other entity or association of any kind and any
authority, federal, state, local or foreign government, any political
subdivision of any thereof and any court, panel, judge, board, bureau,
commission, agency or other entity or body exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to any government.
"REGISTRABLE SHARES" means (i) shares of Common Stock held by any
of the Shareholders on the date hereof or acquired thereafter (including
any shares of Common Stock issuable upon conversion of Series B Preferred),
and (ii) any Common Stock issued in respect of such shares including,
without limitation, upon any stock split, stock dividend, recapitalization
or as a distribution; provided however, that Registrable Shares shall not
include any shares of Common Stock which have been sold pursuant to
registration under the Securities Act.
"REQUESTING SHAREHOLDER" means either of the Demand Shareholders
or any of the Following Shareholders when the same shall have requested the
Company to register some or all of its/their Registerable Shares pursuant
to this Agreement, and permitted assignees of same under Section 5(g).
"REQUESTING SHAREHOLDER REGISTRATION EXPENSES" means with respect
to any Requesting Shareholder, (i) underwriting discounts and commissions
relating to the sale of such Requesting Shareholder's Registrable Shares,
(ii) any transfer taxes attributable to the sale of such Registrable
Shares, and (iii) the fees and disbursements of counsel incurred by such
Requesting Shareholder on its own behalf.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SHAREHOLDERS" means PIHLP, ECO, RMF, Xxxxxx, AESOP and CACMT,
and permitted assignees of same under Section 5(g).
"COMPANY REGISTRATION EXPENSES" means any and all expenses
incident to the Company's performance of its obligations under Section 2,
other than Requesting Shareholder Registration Expenses. Company
Registration Expenses shall include but not be limited to (i) registration
and filing fees with the SEC and a National Securities Exchange, (ii) fees
and expenses of compliance with state securities or "blue sky laws
(including reasonable fees and disbursements of counsel for the
underwriters in connection with blue sky qualifications of Registrable
Shares), (iii) printing expenses, (iv) registrars and transfer agents fees,
(v) the fees and expenses incurred in connection with the listing or
quotation of Registrable Shares on any National Securities Exchange, and
(vi) fees and expenses of counsel for the Company and the independent
certified public accountants for the Company.
2. REGISTRATION RIGHTS.
(a) DEMAND REGISTRATION. Each Demand Shareholder shall be
entitled to request that the Company effect a registration under the
Securities Act with respect to some or all of the Registrable Shares
held by it upon the following terms and conditions:
(i) REQUEST FOR REGISTRATION OF REGISTRABLE SHARES. In the
event that the Company shall receive from a Demand Shareholder a
written request that the Company effect a registration under the
Securities Act with respect to all or any part of the Registrable
Shares held by such Demand Shareholder, the Company shall use its
best efforts to effect, at the earliest practicable date, such
registration, qualification and compliance (including, without
limitation, the execution of an undertaking to file post-
effective amendments, the execution and filing of a listing
agreement with a National Securities Exchange, appropriate
qualification under applicable blue sky or other state securities
laws, and appropriate compliance with applicable regulations
issued under the Securities Act) as may be so requested and as
would permit or facilitate the sale and distribution of such
Registrable Shares on such National Securities Exchange as is
specified in such request (or if the Common Stock is then listed
on a National Securities Exchange, such National Securities
Exchange); PROVIDED that the Company shall not be obligated to
take any action to effect any such registration, qualification or
compliance pursuant to this Section 2(a): (A) if the Company has
effected a previous registration for any Demand Shareholder
pursuant to this Section 2(a)(i) during the preceding six-month
period; (B) if such Demand Shareholder has previously effected
three such registrations pursuant to this Section 2(a), which
registrations have been declared or ordered effective by the SEC;
(C) during the period stalling with the date sixty (60) days
prior to the Company's estimated date of filing of, and ending on
the date ninety (90) days immediately following the effective
date of, any registration statement pertaining to a pubic
offering of securities of the Company; or (D) prior to the third
anniversary of this Agreement.
Subject to the foregoing clauses (A) through (D) the Company
shall file a registration statement covering such Registrable
Shares so requested to be registered as soon as practicable after
receipt of the request of the Requesting Shareholder. Provided,
however, that the Company may upon giving notice to the
Requesting Shareholder postpone for a reasonable period, not to
exceed 90 days, the filing or the effectiveness of such
registration statement, if there exists at the time material non-
public information which, in the reasonable opinion of the
Company, if disclosed would have a material adverse effect on its
business. During such period the Company shall continue to use
its best efforts to prepare such registration statement and
update such registration statement with all information necessary
to make such registration statement ready for filing and
effectiveness as soon as practicable after the end of such
period.
ECO shall not be required to convert its Series B Preferred
shares into Common Stock prior to exercising its demand
registration rights hereunder with respect to shares of Common
Stock which would result from such conversion.
At no time shall any Demand Shareholder demand that less
than twenty-five percent (25%) of the number of shares of Common
Stock held by such Demand Shareholder on the date of execution of
this Agreement be registered pursuant to this Section 2(a);
provided, however, that if at any time such Demand Shareholder
holds less than twenty-five percent (25%) of the number of shares
of Common Stock held by such Demand Shareholder on the date of
execution of this Agreement, such Demand Shareholder shall have
the right to demand registration of all its Registrable Shares
pursuant to this Section 2(a).
(ii) UNDERWRITING. The right of the Requesting Shareholder
to registration pursuant to this Section 2(a) shall be
conditioned upon the Requesting Shareholder's participation in
the underwriting arrangements required by this Section 2 and the
inclusion in the underwriting of the Registrable Shares requested
to be registered.
The Company and the Requesting Shareholder shall enter into
an underwriting agreement in customary form with the managing
underwriter selected for such underwriting by the Company from
the following list: (A) Xxxxxxx, Xxxxx & Co.; (B) Xxxxxx Xxxxxxx
& Co. Incorporated; (C) Xxxxxxx Xxxxx & Co., Inc.; (D) CS First
Boston Inc.; and (E) Xxxxxxxxx, Lufkin and Xxxxxxxx Inc. the
Company may select a managing underwriter for such underwriting
not on the aforementioned list, so long as such managing
underwriter is acceptable to the Requesting Shareholder.
Notwithstanding any other provision of this Section 2(a), if the
managing underwriter determines, in good faith, that marketing
factors require a limitation of the number of shares to be
underwritten, the managing underwriter may limit the number of
Registrable Shares to be included in the registration and
underwriting to the extent such managing underwriter deems
necessary. The Company shall so advise the Requesting
Shareholder, and the number of Registrable Shares that may be
included in the registration and underwriting shall be limited
accordingly.
(iii) OTHER HOLDERS OF COMMON STOCK. Other holders of
Common Stock (including, without limitation, the other Demand
Shareholder and the Following Shareholders) to whom the Company
has granted registration rights may include their respective
securities for their own accounts in such registration if the
managing underwriter so agrees. If the managing underwriter
determines, in good faith, that marketing factors require a
limitation of the number of shares to be underwritten, the
managing underwriter may limit the number of Registrable Shares
to be included by all holders of Common Stock requesting
registration hereunder (including the Demand Shareholder
exercising its demand rights under this Section 2(a)) based on
the ratio of the number of shares requested to be registered by
each such holder to the total number of shares requested to be
registered by all such holders.
(iv) EXPENSES OF REQUESTED REGISTRATION. The Company shall
pay all Company Registration Expenses incurred in connection with
each registration, qualification or compliance pursuant to
Section 2(a), and the Requesting Shareholder will pay its
Requesting Shareholder Registration Expenses.
(b) PIGGY-BACK REGISTRATION.
(i) REGISTRATION INITIATED BY THE COMPANY. If the Company
at any time proposes to register an offering of its securities
under the Securities Act other than registrations in connection
with employee stock ownership plans, offerings of debt securities
and shelf registrations made pursuant to Section 2(c), either for
its own account or for the account of a security holder or
holders, and the registration form to be used may be used for the
registration of Registrable Shares, the Company will:
(A) give written notice thereof to the Demand
Shareholders and the Following Shareholders (which shall
include a list of the jurisdictions in which the Company
intends to attempt to qualify such securities under the
applicable blue sky or other state securities laws) within
10 days of its receipt of a request from a security holder
or holders to register securities or from its decision to
effect a registration of securities for its own account; and
(B) use its best efforts to include in such
registration (and any related qualification under blue sky
laws or other compliance), and in any underwriting involved
therein, all the Registrable Shares specified in a written
request by any Demand Shareholder or Following Shareholder
made within 30 days after receipt of such written notice
from the Company, except as set forth in Sections 2(b)(ii)
and 2(b)(iii) below; PROVIDED, that if at any time after
giving written notice to the Demand Shareholders and the
Following Shareholders of its intention to register the
Company securities under the Securities Act (x) the Company
in good faith shall determine not to register such
securities, the Company may, at its election, give written
notice of such determination to the Demand Shareholders and
the Following Shareholders and, thereupon, shall be relieved
of its obligation to register such Registrable Shares
pursuant to this Section 2(a) in connection with such
registration, without prejudice, however, to any rights of
either Demand Shareholder to request that such registration
be effected as a registration under Section 2(a), or (y) the
Company shall determine to delay the registration of such
securities, the Company shall be permitted to delay the
registration of such Registrable Shares for the same period
as the delay in registering the securities to be registered
by the Company for its own account or for others.
(ii) AMOUNT TO BE INCLUDED. In the event that Registrable
Shares are requested to be included in any registration initiated
pursuant to Section 2(b)(i) that contemplates an underwritten
public offering, and if, in the good faith judgment of the
managing underwriting of such public offering, the inclusion of
all of the Registrable Shares covered by such request for
registration, together with the number or amount of securities
that were intended to be offered by the Company or other security
holders who hold registration rights, would interfere with the
successful marketing of such securities, then, such managing
underwriter may limit the number or amount of securities to be
included in the registration such that (A) the Company shall
include in such registration the securities it intended to offer
and (B) with respect to any additional securities which may be
included in such registration (after inclusion of the securities
referred to in clause (A)), all holders of securities (including
the holders of Registrable Shares) who hold registration rights
and who have requested registration (collectively, "Security
Holders") shall participate in the underwritten public offering
PRO RATA based upon the ratio of the number of shares requested
to be registered by each such Security Holder to the total number
of shares requested to be registered by all such Security
Holders.
(iii) UNDERWRITING. If the registration of which the
Company gives notice is for a registered public offering
involving an underwriting, the Company shall so advise the Demand
Shareholders and the Following Shareholders as a part of the
written notice given pursuant to Section 2(b)(i) (A). In such
event, the right of each Requesting Shareholder to registration
pursuant to this Section 2(b) shall be conditioned upon its
participation in such underwriting and the inclusion of the
Registrable Shares in the underwriting to the extent provided
herein. The Requesting Shareholder shall (together with the
Company and the other holders (if any) distributing their
securities through such underwriting) enter into an underwriting
agreement in customary form with the underwriter or underwriters
selected for such underwriting by the Company from the following
list: (A) Xxxxxxx, Sachs & Co.; (B) Xxxxxx Xxxxxxx & Co.
Incorporated; (C) Xxxxxxx Xxxxx & Co.; (D) CS First Boston; and
(E) Xxxxxxxxx, Lufkin & Xxxxxxxx Inc. The Company may select a
managing underwriter for such underwriting not on the
aforementioned list, so long as such managing underwriter is
acceptable to the Demand Shareholders participating in such
offering. If the Requesting Shareholder disapproves of the terms
of any such underwriting, it may elect to withdraw therefrom by
written notice to the Company and the underwriter. Any
Registrable Shares excluded or withdrawn from such underwriting
shall be withdrawn from such registration.
(iv) EXPENSES OF REGISTRATION. The Company shall bear all
Company Registration Expenses incurred in connection with each
registration, qualification or compliance pursuant to Section
2(b), and each Requesting Shareholder shall pay its own
Requesting Shareholder Registration Expenses.
(c) SHELF REGISTRATION.
(i) REGISTRATION FOLLOWING MARCH 29, 2001. In the event
that the Company shall receive from a Demand Shareholder a
written request that the Company effect a registration under the
Securities Act with respect to all of the Registrable Shares
pursuant to this Section 2(c). The Company will use its best
efforts to effect, at the earliest practicable date, a shelf
registration statement on an appropriate form pursuant to Rule
415 (or any successor provision then in force) under the
Securities Act with respect to such Registrable Shares; PROVIDED,
HOWEVER, that the Company shall not be obligated to take any such
action to effect any such registration pursuant to this SECTION
2(C): (A) if the Company has effected a previous registration
for such Demand Shareholder pursuant to this Section 2(c); (B) if
registration pursuant to Rule 415 (or any successor provision
then in force) is not available for such offering by the Demand
Shareholder; or (C) prior to March 29, 2001. The Company shall
use its best efforts to keep such registration statement
continuously effective until all of the Registrable Shares
covered by such registration are sold, and shall seek such
qualification and compliance (including, without limitation, the
execution of an undertaking to file post-effective amendments,
appropriate qualification under blue sky or other state
securities laws and appropriate compliance with applicable
regulations issued under the Securities Act) as may be requested
by the Requesting Shareholder.
(ii) EXPENSES OF SHELF REGISTRATION. The Company shall bear
all Company Registration Expenses incurred in connection with
each registration, qualification or compliance pursuant to
Section 2(c), and the Requesting Shareholder will pay its
Requesting Shareholder Registration Expenses.
(d) REGISTRATION PROCEDURES. In the case of each registration,
qualification or compliance effected by the Company pursuant to this
Section 2 pursuant to which Registrable Shares are included therein,
the Company will keep each Requesting Shareholder advised in writing
as to the initiation of such registration, qualification and
compliance and as to the completion thereof, at its expense, the
Company shall:
(i) prepare and file with the SEC any amendments (including
post-effective amendments) and supplements as may be necessary to
keep such registration, qualification or compliance current and
effective and to comply with the provisions of the Securities Act
and the rules and regulations promulgated thereunder, and the
rules and regulations of any applicable securities exchange, with
respect to the distribution of the Registrable Shares covered by
such registration, qualification and compliance for a period of
(x) in the case of a registration, qualification and compliance
pursuant to Sections 2(a) or 2(b) hereof at least 180 days or
until the Requesting Shareholder has completed the distribution
described in the registration statement relating thereto,
whichever first occurs or (y) in the case of a registration,
qualification and compliance pursuant to Section 2(c) until all
of the Registrable Shares have been sold;
(ii) immediately notify each Requesting Shareholder and the
underwriter, if any, and confirm such notification in writing (w)
when such registration statement becomes effective, (x) when the
filing of any post-effective amendment to such registration
statement or supplement to the prospectus is required, when the
same is filed and, in the case of a post-effective amendment,
when the same becomes effective, (y) of any request by the SEC
for any amendment of or supplement to such registration statement
or the prospectus or for additional information, and (z) of the
entry of any stop order suspending the effectiveness of such
registration statement or of the initiation of any proceedings
for that purpose, and, if such stop order shall be entered, the
Company shall use its best efforts promptly to obtain the lifting
thereof;
(iii) furnish to each Requesting Shareholder and any
underwriter acting on behalf of such Requesting Shareholder (x)
at a reasonable time prior to the filing thereof with the SEC a
copy of the registration statement in the form in which the
Company proposes to file the same, and not later than one day
prior to the filing thereof, a copy of any amendment (including
any post-effective amendment) to such registration statement, and
promptly following the effectiveness thereof, a conformed copy of
the registration statement as declared effective by the SEC and
of each post-effective amendment thereto, including financial
statements and all exhibits and reports incorporated therein by
reference, and (y) such number of copies of the preliminary, any
amended preliminary, and final prospectus and of each post-
effective amendment or supplement thereto, as may reasonably be
required in order to facilitate the disposition of the
Registrable Shares covered by such registration statement in
conformity with the requirements of the Securities Act and the
rules and regulations promulgated thereunder, but only while the
Company is required under the provisions hereof to cause the
registration statement to remain effective; and
(iv) list such Registrable Shares on each securities
exchange (if any) or qualify the Registrable Shares for trading
on any over the counter market (if any) on which the Common Stock
is then listed or traded, so long as such Registrable Shares are
eligible for such listing or qualification.
In connection with the registration of the Registrable Shares pursuant
to this Section 2, each Requesting Shareholder, for the purpose of Section
2(b) only hereby agrees as follows:
(v) the Requesting Shareholder shall cooperate with the
Company in connection with the preparation of the registration
statement, and for so long as the Company is obligated to file
and keep effective the registration statement, shall provide to
the Company, in writing, for use in the registration statement,
all such information regarding the Requesting Shareholder and its
plan of distribution of the Registrable Shares as may be
necessary to enable the Company to prepare the registration
statement and prospectus covering the Registrable Shares, to
maintain the currency and effectiveness thereof and otherwise to
comply with all applicable requirements of law in connection
therewith;
(vi) during such time as the Requesting Shareholder may be
engaged in a distribution of Registrable Shares, the Requesting
Shareholder shall comply with Rules l0b-2, l0b-6 and l0b-7
promulgated under the Exchange Act, to the extent applicable, and
pursuant thereto it shall, among other things: (w) not engage in
any stabilization activity in connection with the securities in
contravention of such Rules; (x) distribute the Registrable
Shares solely in the manner described in the registration
statement; (y) cause to be furnished to each broker through whom
the Registrable Shares may be offered, if any, or to the offeree
if an offer is not made through a broker, such copies of the
prospectus and any amendment or supplement thereto and documents
incorporated by reference therein as may be required by law; and
not bid for or purchase any securities of the Company or attempt
to induce any person to purchase any securities of the Company
other than as permitted under the Exchange Act;
(vii) upon receipt of a notice pursuant to Section
2(d)(ii)(x), (y) or (z), discontinue any distribution of
Registrable Shares if such discontinuance is required under the
Securities Act; and
(viii) at least five (5) days prior to any distribution of
the Registrable Shares other than in an underwritten offering,
the Requesting Shareholder will advise the Company in writing of
the dates on which the distribution is intended to commence and
terminate, the number of the Registrable Shares to be sold and
the terms and the manner of sale; such person also shall inform
the Company and any broker/dealers through whom sales of the
Registrable Shares may be made when each distribution of such
shares is completed.
(e) INDEMNIFICATION.
(i) If Registrable Shares held by a Demand Shareholder or a
Following Shareholder are included in the securities as to which
any registration, qualification or compliance is being effected,
the Company will indemnify each such Demand Shareholder and each
such Following Shareholder, each of its general and limited
partners, each of the officers and directors of it or any of its
general or limited partners and any person which controls, within
the meaning of Section 15 of the Securities Act, any of the
foregoing, each underwriter, if any, and each person who controls
any underwriter within the meaning of Section 15 of the
Securities Act, against all claims, losses, damages and
liabilities (and actions in respect thereof) ("Loss") arising out
of or based on any untrue statement (or alleged untrue statement)
of a material fact contained in any prospectus, offering circular
or other document (including any related registration statement,
notification or the like) incident to any such registration,
qualification or compliance, or based on 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 any violation by the Company of any rule or
regulation promulgated under the Securities Act, or of any other
federal, state or common law applicable to the Company and
relating to any action or inaction required of the Company in
connection with any such registration, qualification or
compliance, and will reimburse each such Demand Shareholder and
each such Following Shareholder, general or limited partners, or
such officers or directors of it or any of its general or limited
partners, any person which controls any of the foregoing and each
such underwriter and each person which controls such underwriter,
for any legal and any other expenses reasonably incurred in
connection with investigating or defending any such Loss;
PROVIDED, that the Company will not be liable to so indemnify or
reimburse in any such case to the extent that any such Loss
arises out of or is based on any untrue statement or omission
resulting from written information furnished to the Company by or
on behalf of such Demand Shareholder or such Following
Shareholder or such underwriter for use therein.
(ii) The Requesting Shareholder will, if Registrable Shares
held by the Requesting Shareholder are included in the securities
as to which such registration, qualification or compliance is
being effected, indemnify the Company, each of its directors and
officers, each other Security Holder, each other Requesting
Shareholder, the independent accountants and legal counsel of the
Company, each underwriter, if any, of the Company's securities
covered by such a registration statement, and each person who
controls any of the foregoing within the meaning of Section 15 of
the Securities Act, against all Loss arising out of or based on
any untrue statement (or alleged untrue statement) of a material
fact contained in any such registration statement, prospectus,
offering circular or other document, or 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 any violation by the Requesting Shareholder of any
rule or regulation promulgated under the Securities Act, or of
any other federal, state or common law applicable to the
Requesting Shareholder and relating to any action or inaction
required by the Requesting Shareholder in connection with any
such registration, qualification or compliance, and will
reimburse the Company, such directors, officers, accountants,
counsel, Security Holders, the other Requesting Shareholders,
underwriters, officers, directors and controlling persons for any
legal or any other expenses reasonably incurred in connection
with investigating or defending any such Loss in each case to the
extent, but only to the extent, that such untrue statement (or
alleged untrue statement) or omission (or alleged omission) is
made in such registration statement, prospectus, offering
circular or other document in reliance upon and in conformity
with written information furnished to the Company by or on behalf
of such Requesting Shareholder for use therein; PROVIDED,
HOWEVER, that (i) such obligations of such Requesting Shareholder
hereunder shall be limited to an amount equal to the aggregate
public offering price of the Registrable Shares of such
Requesting Shareholder sold as contemplated herein, unless such
liability arises out of or is based upon willful misconduct by
such Requesting Shareholder and (ii) the indemnity for untrue
statements or omissions described above, and the reimbursements
obligation relating thereto, shall not apply if such Requesting
Shareholder provides the Company with such additional written
information prior to the effectiveness of the registration
statement as is required to make the previously supplied written
information true and complete, together with a description in
reasonable detail of the information previously supplied which
was untrue or incomplete.
(iii) Each person entitled to indemnification under this
Section 2(e) (the "Indemnified Party") shall give notice to the
party required to provide indemnification (the "Indemnifying
Party") promptly after such Indemnified Party has actual
knowledge of any claim as to which indemnity may be sought, and
shall permit the Indemnifying Party to assume the defense of any
such claim or any litigation resulting therefrom; PROVIDED, that
counsel for the Indemnifying Party, who shall conduct the defense
of such claim or litigation, shall be approved by the Indemnified
Party (whose approval shall not unreasonably be withheld), and
the Indemnified Party may participate in such defense at such
Indemnified Party's expense, and PROVIDED FURTHER that the
failure of any Indemnified Party to give notice as provided
herein shall not relieve the Indemnifying Party of its
obligations under this Section 2(e). After notice from the
Indemnifying Party to the Indemnified Party of its election to
assume the defense of such claim or litigation, the Indemnifying
Party will not be liable to such Indemnified Party for any legal
or other expenses subsequently incurred by such Indemnified Party
in connection with the defense thereof other than reasonable
costs of investigation, unless the Indemnifying Party abandons
the defense of such claim or litigation. No Indemnifying Party in
the defense of any such claim or litigation, shall, except with
the consent of each Indemnified Party, consent to entry of any
judgment or enter into any settlement which does not include as
an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all
liability in respect to such claim or litigation.
(f) CONTRIBUTION. If the indemnification provided for in
subsections (i) or (ii) of Section 2(e) is unavailable to or
insufficient to hold the Indemnified Party harmless in respect of any
Loss referred to therein for any reason other than as specified
therein, then the Indemnifying Party shall contribute to the amount
paid or payable by such Indemnified Party as a result of such Loss in
such proportion as appropriate to reflect the relative fault of the
Indemnifying Party, on the one hand, and such Indemnified Party, on
the other, in connection with the statements or omissions which
resulted in such Loss, as well as any other relevant equitable
considerations. The relative fault 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 (or omitted to be
supplied by) the Indemnifying Party or the Indemnified Party and the
parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The
amount paid or payable by an Indemnified Party as a result of Loss
referred to in this subsection (f) shall be deemed to include any
legal or other expenses reasonably incurred by such Indemnified Party
in connection with investigating or defending any such action or
claim. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(g) INFORMATION FURNISHED BY THE REQUESTING SHAREHOLDERS. Each
Requesting Shareholder shall furnish to the Company such information
regarding itself, each of its general or limited partners, and each of
its directors and officers, and any person controlling any of the
foregoing, and the distribution proposed by such Requesting
Shareholder, as the Company may reasonably request in writing and as
shall be required in connection with any registration, qualification
or compliance referred to in this Section 2.
3. HOLDBACK AGREEMENTS. If any registration of Registrable Shares
or other securities of the Company pursuant to Section 2(a) or Section 2(b)
herein shall be in connection with an underwritten public offering, each
Requesting Shareholder agrees not to effect any public sale or
distribution, including any sale under Rule 144 (or any successor provision
then in effect) under the Securities Act, of any Registrable Shares or of
any shares of Common Stock or any security convertible into or exchangeable
or exercisable for any shares of Common Stock (in each case, other than as
part of such underwritten public offering) during the seven (7) days prior
to, and during the 180-day period (or such shorter period as may be
provided for in the applicable underwriting agreement) beginning on, the
effective date of the related registration statement.
4. TERMINATION.
(a) Notwithstanding any other provision of this Agreement, the
respective covenants, agreements and obligations contained in Section
2 of this Agreement shall continue until the latter of: (i) such date
as all of the Demand Shareholders and all of the Following
Shareholders cease to own any Registrable Shares; or (ii) March 29,
2004; provided that (x) such covenants, agreements and obligations
shall continue with respect to any request for registration of
Registrable Shares made hereunder March 29, 2004 of the date of this
Agreement, and (y) the indemnification obligations contained in
Section 2(e) and the contribution obligations contained in Section
2(f) shall survive for the period of the statute of limitations with
respect thereto.
5. MISCELLANEOUS.
(a) Each of the parties acknowledges and agrees that irreparable
damage would occur in the event any of the provisions of this
Agreement were not performed in accordance with their specific terms
or were otherwise breached. It is accordingly agreed that the parties
shall be entitled to an injunction or injunctions to prevent breaches
of the provisions of this Agreement and to enforce specifically the
terms and provisions hereof in any court of the United States or any
state thereof having jurisdiction, in addition to any other remedy to
which they may be entitled at law or equity.
(b) All notices and other communications hereunder shall be in
writing and shall be deemed given (i) when delivered personally, (ii)
when received if sent by registered or certified mail, return receipt
requested, or by air courier or (iii) when received by facsimile
transmission with electronic verification, in each case to the parties
at the following addresses (or at such other address as a party may
specify by like notice):
(A) If to the Company, addressed to: @ Entertainment, Inc.,
Xxx Xxxxxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000; facsimile:
(000) 000-0000, Attention: Xxxxxx Xxxx Xxxxx; with a copy thereof
addressed to Xxxxx & XxXxxxxx, 000 Xxxxxxxxxxx Xxxxxx, X.X.,
Xxxxxxxxxx, X.X. 00000-0000; facsimile: (000) 000-0000,
Attention: Xxxx X. Xxxx, Esq.;
(B) If to PIHLP, addressed to: Chase Polish Enterprises,
Inc., Xxx Xxxxxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000;
facsimile: (000) 000-0000, Attention: Xxxxxx Xxxxx Xxxxxxxx;
(C) If to ECO, addressed to: ECO Holdings III Limited
Partnership, c/o Advent International Corporation, 000 Xxxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000; facsimile: (000) 000-0000,
Attention: Xx. Xxxxx Xxxxxxxx; with a copy thereof addressed to
Advent International Plc, 000 Xxxxxxxxxx Xxxxxx Xxxx, Xxxxxx XX0X
0XX; facsimile: 00 (000) 000-0000, Attention: Xx. Xxxxx
Xxxxxxxx;
(D) If to RMF, addressed to: Xxxxx X. Xxxxxxxx, 00 Xxxxxxxx
Xxxxxx, Xxxx Xxxxxxxx, Xxxxxxxxxxx 00000; facsimile: (860) 231-
0551, with a copy thereof addressed to Xxxxxxxx & Xxxx, Xxx
Xxxxxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000; facsimile: (860)
231-0551, Attention: Xxxxxxx X. Xxxxxxxxx;
(E) As to Xxxxxx, addressed to: Xxxxxx LLC, 00 Xxxxxx
Xxxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxxx 00000; facsimile: (413) 567-
5160, Attention: Xxxxxxx X. Xxxxxx, Managing Member; with a copy
thereof addressed to Xxxxxxx Xxxxxxxx, Connecticut Financial
Center, New Haven, Connecticut; facsimile: (000) 000-0000,
Attention: Xxx Xxxxxxxx, Esq.;
(F) If to CACMT, addressed to: Chase Polish Enterprises,
Inc., Xxx Xxxxxxxxxx Xxxxx, Xxxxxxxx Xxxxxxxxxxx 00000;
facsimile: (000) 000-0000, Attention: Xxxxxx Xxxxx Xxxxxxxx; and
(G) As to AESOP, addressed to: The AESOP Fund, L.P. c/o
Capital Investors, Inc., 0000 00xx Xxxxxx, X.X., Xxxxxxxxxx, X.X.
00000; facsimile: (000) 000-0000, Attention: Xxxxx Xxxx; with a
copy thereof addressed to The AESOP Fund, L.P., 0000 Xxxxxxxxx
Xxxxxx Xxxxxxxx, Xxxxxxx, Xxxxxxxxxx 00000; facsimile: (206) 292-
8075, Attention: Duff Xxxxxxx.
(c) This Agreement supersedes all prior agreements between the
parties (written or oral) relating to registration of the Registrable
Shares under the Securities Act and is intended as a complete and
exclusive statement of the terms of the agreement between the parties
with respect to such matters.
(d) This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware and shall be
construed and enforced in accordance with the laws of such state
without regard to principles of conflicts of laws thereof.
(e) The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
(f) Any term or provision of this Agreement may be waived at any
time by an instrument in writing signed by the party which is entitled
to the benefits thereof and this Agreement may be amended or
supplemented at any time by an instrument in writing signed by all
parties hereto.
(g) Except as otherwise provided herein, the Company shall not
assign this Agreement or any part hereof or any rights or obligations
hereunder without the prior written consent of all other parties
hereto. Each Shareholder shall be entitled, without the consent of
any other party hereto, to assign and transfer any or all of its
rights hereunder to any transferee of its Registrable Shares to which
it is permitted to transfer such Registrable Shares under the
provisions of the Shareholders Agreement; provided, however, that a
Demand Shareholder may only assign and transfer any of its demand
registration rights under Section 2(a) to a permitted transferee
holding at least twenty-five (25%) of the Common Stock held by such
Demand Shareholder at the date of execution of this Agreement, and any
exercise of such demand registration rights by such transferee shall
be counted as a demand registration effected on behalf of such Demand
Shareholder for the purposes of Section 2(a)(i)(B). No assignment
shall release any party of any of its obligations under this
Agreement. Except as otherwise provided herein, this Agreement shall
be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns.
(h) If any term or other provision of this Agreement is invalid,
illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect. Upon such determination
that any term or other provision is invalid, illegal or incapable of
being enforced, the parties hereto shall negotiate in good faith to
modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner to the end that
the transactions contemplated hereby are fulfilled to the extent
possible.
(i) This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, but all of which
together shall constitute but one and the same agreement.
(j) The number of Registrable Shares and any references herein as
to specific number of shares shall be appropriately adjusted in the
event of any stock split, reverse split, stock dividend or other
reclassification or reorganization affecting the capital stock of the
Company which occurs after the date hereof.
(k) Any claim, suit, action, or proceeding among any or all of
the parties hereto relating to this Agreement, to any document,
instrument, or agreement delivered pursuant hereto, referred to
herein, or contemplated hereby, or in any other manner arising out of
or relating to the transactions contemplated by or referenced in this
Agreement, shall be commenced and maintained exclusively in the United
States District Court for the District of Delaware, or, if such Court
lacks jurisdiction over the subject matter, in a state court of
competent subject-matter jurisdiction sitting in the State of
Delaware. The parties hereby submit themselves unconditionally and
irrevocably to the personal jurisdiction of such courts. The parties
further agree that venue shall be exclusively in New Castle County in
the State of Delaware. The parties irrevocably waive any objection to
such personal jurisdiction or venue including, but not limited to, the
objection that any suit, action, or proceeding brought in the State of
Delaware has been brought in an inconvenient forum. The parties
irrevocably agree that process issuing from such courts may be served
on them, either personally or by certified mail, return receipt
requested, at the addresses given in Section 5(b) hereof; and further
irrevocably waive any objection to service of process made in such
manner and at such addresses, including without limitation any
objection that service in such manner and at such addresses is not
authorized by the local or procedural laws of the State of Delaware.
(l) In any suit or proceeding brought or instituted by any of the
parties to enforce or interpret any of the provisions of this
Agreement or on account of any damages claimed to be sustained by such
instituting party by reason of another party's violation of any of the
terms or provisions of this Agreement, the prevailing party shall be
entitled to recover reasonable attorneys' fees and court costs.
(m) This Agreement shall be effective as to all parties other
than AESOP as soon as all such other parties have signed it, and with
respect to AESOP's rights and obligations it shall be effective as
soon as all parties including AESOP have signed it.
IN WITNESS WHEREOF, the Company, PIHLP, ECO, RMF, Xxxxxx, AESOP and
CACMT have caused this Agreement to be duly executed by their respective
officers, each of whom is duly authorized, all as of the day and year first
above written.
@ ENTERTAINMENT, INC.,
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxx, III
-------------------------------------
Name: Xxxxxx X. Xxxxxx, III
------------------------------
Title: Chief Executive Officer
------------------------------
POLISH INVESTMENTS HOLDING L.P.,
a Delaware limited partnership
By: CHASE POLISH ENTERPRISES, INC.,
a Delaware corporation
MANAGING GENERAL PARTNER
By: /s/ Xxxxxx X. Xxxxx
--------------------------------
Name: Xxxxxx X. Xxxxx
Title: Exec. Vice President
ECO HOLDINGS III LIMITED PARTNERSHIP, a
Delaware limited partnership
By: Advent ECO III L.L.C., general partner
By: Global Private Equity II Limited
Partnership, member
By: Advent International Limited Partnership,
general partner
By: Advent International Corporation, general
partner
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
THE AESOP FUND, L.P.,
a Delaware limited partnership
By: Capitol Investments, Inc.
-------------------------------------
a General Partner
-------------------------------------
MANAGING GENERAL PARTNER
By: /s/ Duff Xxxxxxx
------------------------------------
Name: Duff Xxxxxxx
Title: Chairman
Xxxxx X. Xxxxxxxx
------------------------------------
Xxxxx X. Xxxxxxxx
XXXXXX LLC, a Connecticut limited liability
company
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Managing Member
THE XXXXXX XXXX XXXXX MARITAL TRUST
a Connecticut Trust
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Trustee, and not individually
or in any other capacity
By: /s/ Xxxxxxx Xxxxx Trustee
-------------------------------------
Name: Xxxxxxx Xxxxx
Title: Trustee, and not individually
or in any other capacity
