Right of First Refusal.
Right
of First Refusal.
(a) Pursuant
to the Recapitalization Agreement, dated as of October 24, 2007, by and among
Xxxxx Xxxxxxx (“Xxxxxxx”),
Xxxx
Xxxxxxx and West Coast Pictures, LLC (the “Company”),
Behring granted West Coast Pictures a right of first refusal with respect to
460,000 shares (the “Behring
Shares”)
of
common stock of King’s Road Entertainment, Inc. (“KRE”)
to be
acquired by Behring in connection with the Company’s investment in
KRE.
(b) On
November 13, 2007, Behring acquired the Behring Shares, and the parties to
the
Recapitalization Agreement wish to confirm their respective rights and
obligations with respect to the “Right of First Refusal”.
(c) As
used
herein, “Transfer”
means
any gift, sale, assignment, pledge, hypothecation, encumbrance or other creation
of a security interest, attachment, the creation of any interest in the Behring
Shares.
(d) At
least
fourteen days (14) days prior to Behring making any Transfer of any Behring
Shares other than pursuant to a “broker’s transaction” within the meaning of
Section 4(4) of the Securities Act (a “Broker’s
Transaction”),
Behring shall give the Company a written notice (a “Transfer
Notice”)
setting forth in reasonable detail the number of Behring Shares to be
transferred (“Offered
Shares”),
the
identity of the prospective transferee and the proposed terms of the Transfer;
provided,
however,
that
the purchase price may only be payable in cash. Upon receipt of such Transfer
Notice, the Company shall have the right, but not the obligation to purchase
all, but not less than all, of the Offered Shares on the terms specified in
such
Transfer Notice and in accordance with this Section (d). If the Company elects
to purchase all of the Offered Shares, the Transfer will be consummated as
soon
as practicable, but in any event within thirty (30) days after the Transfer
Notice is given. If the Company does not elect to purchase all of the Offered
Shares then, within ninety (90) days after the Transfer Notice is given, Behring
may Transfer all of the Offered Shares to the transferee specified in the
Transfer Notice at a price not less than the price per Offered Share specified
in the Transfer Notice and on other terms no more favorable to the transferee
in
any material respect than the terms specified in the Transfer Notice. If Behring
does not transfer such Offered Shares in accordance with the immediately
preceding sentence within ninety (90) days of the Transfer Notice, he may not
Transfer the Offered Shares without delivering a new Transfer Notice and
offering the Company a “right of first refusal” in accordance
herewith.
(e) At
least
fourteen days (14) days prior to Behring making any Transfer of any Behring
Shares pursuant to a Broker’s Transaction, Behring shall give the Company a
Transfer Notice setting forth in reasonable detail the number of Offered Shares
and stating that Behring intends to Transfer such Offered Shares in a Broker’s
Transaction. Upon receipt of such Transfer Notice, the Company shall have the
right, but not the obligation to purchase all, but not less than all, of the
Offered Shares at a price per share equal to the Current Market Price as of
the
date the Company notifies Behring of its intention to purchase the Offered
Shares. If the Company elects to purchase all of the Offered Shares, the Company
will purchase such Offered Shares as soon as practicable, but in any event
within thirty (30) days after the Transfer Notice is given. If the Company
does
not elect to purchase all of the Offered Shares then, within ninety (90) days
after the Transfer Notice is given, Behring may Transfer all of the Offered
Shares in a Broker’s Transaction. If Behring does not transfer such Offered
Shares in a Broker’s Transaction within ninety (90) days of the Transfer Notice,
he may not Transfer the Offered Shares without delivering a new Transfer Notice
and offering the Company a “right of first refusal” in accordance herewith. As
used herein, “Current
Market Price”
as
of
any date of determination means the average of the daily market prices per
share
KRE common stock for twenty (20) consecutive business days immediately preceding
such date of determination with the market price for each business day being,
the last sale price per share of KRE common stock on the immediately preceding
business day on a national securities exchange or in the over-the-counter market
or, if there was no sale on such immediately preceding business day, the last
sale price on the next preceding business day on which there was a
sale.
(f) In
addition to complying with the provisions of this Section 7, Behring shall
comply with all provisions of the Rule 144 representation letter delivered
to
KRE and the Company prior to Transferring any Behring Shares.
REMAINDER
OF PAGE HAS BEEN INTENTIONALLY LEFT BLANK
IN
WITNESS WHEREOF, each party has duly executed this Agreement, all as of November
21, 2007.
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XXXX
XXXXXXX
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/s/
Xxxx Xxxxxxx
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XXXXX
BEHRING
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/s/
Xxxxx Xxxxxxx
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WEST
COAST PICTURES, LLC
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/s/
Xxxx Xxxxxxx
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Name: Xxxx
Xxxxxxx
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Title: Manager
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