XXXXX X. XXXXX
00 XXXX XXXXX XXXX
XXXX XXXXXXXX, XX 00000
July 2, 1999
Xx. Xxxxxx X. Xxxxx, Vice President
SLC Investments, Inc.
C/O Chase Enterprises
000 Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Re: Loan of Common Stock of @Entertainment, Inc.
This letter will set forth and confirm the agreement entered into between
SLC Investments, Inc. a Connecticut corporation ("Borrower") and Xxxxx X.
Xxxxx, of West Hartford ("Lender") regarding shares of common stock of
@Entertainment, Inc., a Delaware corporation (the "Company").
1. Xxxxxx xxxxxx confirms that on the date hereof she has loaned to
Borrower 505,000 shares of the common stock of the company ("Borrowed
Securities").
2. Until this Agreement is terminated, Borrower shall have the full use of
the Borrowed Securities including the right to sell, pledge or otherwise
transfer or encumber such securities to others.
3. Upon the termination of this Agreement, Borrower shall deliver to
Lender securities identical in kind and amount to the Borrowed Securities and
including all dividends and distributions in the form of stock, rights,
warrants or other securities which the Company has made during the term of
this Agreement with respect to the Borrowed Securities. During the term of
this agreement and from time to time but in no event later than ten (10)
days after the date of any distributions, Borrower shall pay over to Lender
in cash the amount of any cash dividends or distributions made by the
Company respecting the Borrowed Securities. In the event of a
recapitalization, stock split or other exchange by the Company with respect
to the Borrowed Securities, the exchanged or newly issued shares shall be
deemed identical in kind to the Borrowed Securities.
4. Xxxxxxxx agrees to pay Xxxxxx a service fee for the use of the Borrowed
Securities. The service fee shall be six percent (6%) per annum of the
average monthly market value of the Borrowed Securities pro rated over the
number of days this Agreement is in effect. Such fee shall be due and
payable quarterly on the last day of each March, June, September and
December for which this Agreement is in effect.
5. Upon demand, Borrower will secure its obligations under this agreement
by delivering the Lender marketable securities, or other property having a
market value of at least one hundred and five percent (105%) of the market
value of the Borrowed Securities. Such transfer of property as security
shall be accompanied by such instruments and documents as shall be adequate
to provide Lender with a good and valid security interest therein. The
said security interest shall give Borrower the right to substitute
collateral. Except in the event of default by Xxxxxxxx, Lender shall not
have any right to sell or otherwise dispose of the collateral.
6. Xxxxxx and Xxxxxxxx agree that the loan of the Borrowed Securities
shall not reduce Lender's risk of loss or opportunity for gain respecting the
Borrowed Securities.
7. Borrower and Xxxxxx agree that they shall maintain their respective
books and records with respect to the Borrowed Securities to reflect the
transfer of said securities under this Agreement; to record any obligation that
may arise with respect to any dividends or distributions respecting the
Borrowed Securities which may be made by the Company; to record the
transfer of any property or cash in satisfaction of any dividend or
distribution obligation; and to record the transfer of stock in whole or
partial satisfaction of the obligation respecting return of the Borrowed
Securities. Xxxxxxxx and Xxxxxx further agree that they will, upon
reasonable request, confirm to the other or any auditors of the other their
respective obligations with respect to the Borrowed Securities.
8. Unless otherwise sooner terminated as herein provided, this Agreement
shall terminate on November 30, 1999. Borrower reserves the right to terminate
this Agreement by return of the Borrowed Securities upon two (2) days'
notice to Lender. Such right of termination shall be exercisable in whole
or in apart. Lender reserves the right to terminate this agreement on
written notice to Borrower of five (5) business days at which time Borrower
shall fulfill its obligations to Lender as provided in paragraphs 3 hereof.
9. This Agreement shall be binding upon the respective successors and
assigns of Xxxxxx and Xxxxxxxx.
Please confirm that the foregoing sets forth our understanding regarding
the Borrowed Securities by signature below.
Very truly yours,
/s/ Xxxxx X. Xxxxx
Xxxxx X. Xxxxx
THE FOREGOING IS XXXXXX
CONFIRMED AND AGREED TO:
SLC INVESTMENTS, INC.
/s/ Xxxxxx X.Xxxxx
Xxxxxx X Xxxxx, duly authorized
