EXHIBIT 10.10

 

AMENDMENT AND EXCHANGE AGREEMENT

 

THIS AMENDMENT AND EXCHANGE AGREEMENT (this “Agreement”) is entered into on
August 19, 2016 (the “Execution Date”) by and between RLJ Entertainment, Inc., a
Nevada corporation (the “Company”) and the person named on the signature page to
this Agreement (the “Holder”). The Holder and the Company may be referred to
herein as the “Parties”.

 

RECITALS

 

 

A.

The Company and the Holder entered into a securities purchase agreement, dated
as of May 14, 2015 (the “SPA”)

 

B.

The Holder is the record owner of such aggregate number of shares of Series A-1
preferred stock in Company (the “Existing Preferred Shares”) as set forth on the
signature page of the Holder hereto;

 

C.

The Holder is also the record owners of a warrant (the “Existing Warrant”)
granting the Holder rights to purchase such aggregate number of shares of the
Company’s common stock, $0.001 par value, (the “Common Stock”) as set forth on
the signature page of the Holder attached hereto;

 

D.

Concurrent with the execution of this Agreement, the Company is entering into
that certain Investment Agreement (the “Investment Agreement”) with Digital
Entertainment Holdings LLC, a Delaware limited liability company (the
“Investor”) whereby the Investor will extend a senior secured loan to the
Company (the “Senior Secured Loan”) and the Company will issue to the Investor a
warrant granting the Investor rights to convert the Senior Secured Loan into
Common Stock; and

 

E.

In connection with entering into the Investment Agreement, the Company has
requested that the Holder (i) agree to certain amendments to the SPA; and (ii)
agree to exchange (x) the Existing Preferred Shares for an identical number of
shares of a new series of preferred stock (the “New Preferred Shares”) with such
preferences and rights as set forth on the certificate of designations and
rights of the New Preferred Shares attached hereto as Exhibit B (the “New
Certificate of Designations”); and (y) the Existing Warrant for a new warrant to
purchase an identical number of shares of Common Stock in the form attached
hereto as Exhibit C (the “New Warrant”).

 

F.

The exchange of the Existing Preferred Shares for the New Preferred Shares and
the Existing Warrant for the New Warrant is being made in reliance upon the
exemption from registration provided by Section 3(a)(9) of the Securities Act of
1933, as amended (the “Securities Act”)

AGREEMENT

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the Parties hereby agree as follows:

 

1.The Exchange. On the Effective Date (as defined below), pursuant to Section
3(a)(9) of the Securities Act, the Holder hereby agrees to convey, assign and
transfer the Existing Preferred Shares and Existing Warrant to the Company in
exchange for which the Company agrees to issue the New Preferred Shares and the
New Warrant to the Holder as follows (such transactions in this Section 1, the
“Exchange”).

 

 

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(a)In exchange for the Existing Preferred Shares, on the Effective Date the
Company shall deliver or cause to be delivered to the Holder (or its designee) a
certificate with respect to an identical number of New Preferred Shares at the
address for delivery set forth on the signature page of the Holder.   

 

(b)In exchange for the Existing Warrants, on the Effective Date the Company
shall deliver or cause to be delivered to the Holder (or its designee) the New
Warrant, initially exercisable into an identical number of shares of Common
Stock as the Existing Warrant as of the Effective Date (without regard to any
limitations on exercise set forth therein) at the address for delivery set forth
on the signature page of the Holder.  

 

(c)Upon the Company delivering or causing to be delivered to the Holder such
certificate with respect to the New Preferred Shares and the New Warrant, the
Existing Preferred Shares and the Existing Warrant shall be deemed to be
cancelled. The Holder shall deliver or cause to be delivered to the Company (or
its designee) the certificates representing the Existing Preferred Shares and
the Existing Warrant as soon as commercially practicable following the Effective
Date.

 

(d)The Company and the Holder shall execute and/or deliver such other documents
and agreements as are customary and reasonably necessary to effectuate the
Exchange.

 

2.  Effective Date.  This Agreement shall be effective upon the later of (a) the
date the Company shall have executed and filed the New Certificate of
Designations with the Nevada Secretary of State, (b) the closing of the
transactions contemplated by the Investment Agreement and (c) the date the
Company shall have obtained the approval of its stockholders for the issuance of
all shares of Common Stock issuable upon conversion of the New Preferred Shares
and New Warrants (without regard to any limitations on conversion or exercise in
connection therewith) in compliance with the rules and regulations of the Nasdaq
Capital Market (such later date, the “Effective Date”).

 

3.  Amendments.  

 

(a)Amendments to Transaction Documents.  Effective as of the Effective Date,
each of the Transaction Documents are hereby amended as follows, mutatis
mutandis:

 

(i)  The defined term “Preferred Stock” is hereby amended to include the “New
Preferred Shares” (as defined in the those certain Amendment and Exchange
Agreements, dated August 19, 2016, by and between the Company and the Purchaser
signatory thereto (the “Exchange Agreement”))”.

 

(ii)  The defined term “Certificate of Designation” is hereby amended to include
the “New Certificate of Designations” (as defined in the Exchange Agreements)”.

 

(iii) The defined term “Warrants” is hereby amended to include the “New
Warrants” (as defined in the Exchange Agreements)”

 

(iv)  The defined term “Transaction Documents” shall be amended to include this
Agreement.

 

(b)Amendments to SPA.  Effective as of Effective Date, the SPA is hereby amended
as

set forth in the amendment to securities purchase agreement attached hereto as
Exhibit A (the “SPA Amendment”).

 

 

 

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4.Representations and Warranties.

 

(a)Company Bring Down.  Except as set forth on Schedule 3(a) attached hereto,
the Company hereby makes the representations and warranties to the Holder as set
forth in Section 3.1(b), (c), (d), (e), (f), (h) and (i) of the SPA (as amended
hereby) as if such representations and warranties were made as of the date
hereof and as of the Effective Date and set forth in their entirety in this
Agreement, mutatis mutandis.

 

(b)Holder Bring Down; Ownership Representation.  The Holder hereby makes the
representations and warranties as to itself only as set forth in Section 3.2 of
the SPA (as amended hereby) as if such representations and warranties were made
as of the date hereof and set forth in their entirety in this Agreement, mutatis
mutandis.  The Holder owns the Existing Preferred Shares and the Existing
Warrants free and clear of any liens (other than the obligations pursuant to
this Agreement, the Transaction Documents and applicable securities laws).

 

5.Disclosure of Transaction. The Company shall, on or before 8:30 a.m., New York
City Time, on or prior to the first business day after the date of this
Agreement, file a Current Report on Form 8-K describing the terms of the
transactions contemplated hereby in the form required by the 1934 Act and
attaching the this Agreement, to the extent they are required to be filed under
the 1934 Act, that have not previously been filed with the SEC by the Company
(including, without limitation, the form of New Warrant and the form of New
Certificate of Designations and this Agreement) as exhibits to such filing
(including all attachments, the “8-K Filing”). From and after the filing of the
8-K Filing, the Company shall have disclosed all material, non-public
information (if any) provided up to such time to the Holder by the Company or
any of its Subsidiaries or any of their respective officers, directors,
employees or agents. In addition, effective upon the filing of the 8-K Filing,
the Company acknowledges and agrees that any and all confidentiality or similar
obligations under any agreement with respect to the transactions contemplated by
the Exchange Documents or as otherwise disclosed in the 8-K Filing, whether
written or oral, between the Company, any of its Subsidiaries or any of their
respective officers, directors, affiliates, employees or agents, on the one
hand, and any of the Holder or any of their affiliates, on the other hand, shall
terminate. Neither the Company, its Subsidiaries nor the Holder shall issue any
press releases or any other public statements with respect to the transactions
contemplated hereby; provided, however, the Company shall be entitled, without
the prior approval of the Holder, to make a press release or other public
disclosure with respect to such transactions (i) in substantial conformity with
the 8-K Filing and contemporaneously therewith or (ii) as is required by
applicable law and regulations (provided that in the case of clause (i) the
Holder shall be consulted by the Company in connection with any such press
release or other public disclosure prior to its release). Without the prior
written consent of the Holder (which may be granted or withheld in the Holder’s
sole discretion), except as required by applicable law, the Company shall not
(and shall cause each of its Subsidiaries and affiliates to not) disclose the
name of the Holder in any filing, announcement, release or otherwise.

 

6.Fees.  The Company shall promptly reimburse Kelley Drye & Warren, LLP (counsel
to the holder of Series A-1 Preferred Stock of the Company), on demand, for all
reasonable, documented costs and expenses incurred by it in connection with
preparing and delivering this Agreement (including, without limitation, all
reasonable, documented legal fees and disbursements in connection therewith, and
due diligence in connection with the transactions contemplated thereby), not to
exceed $[▪].  The Holder acknowledges and agrees that Kelley Drye & Warren, LLP
solely represents the holder of Series A-1 Preferred Stock of the Company and
does not represent any other holder of securities of the Company.

 

7.Holding Period. For the purposes of Rule 144 of the Securities Act, the
Company acknowledges that the holding period of the New Preferred Shares and New
Warrants, respectively, may be tacked onto

 

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the holding period of the Existing Preferred Shares and Existing Warrants,
respectively, and the Company agrees not to take a position contrary to this
Section 7.  The Company acknowledges and agrees that (assuming the Holder is not
an affiliate of the Company) (i) upon issuance in accordance with the terms of
the New Certificate of Designations, the shares of Common Stock issuable upon
conversion of the New Preferred Shares are, as of the date hereof, eligible to
be resold pursuant to Rule 144 of the Securities Act, (ii) upon issuance in
accordance with the terms of the New Warrants (assuming a cashless exercise
thereof), the shares of Common Stock issuable upon exercise of the New Warrants
are, as of the date hereof, eligible to be resold pursuant to Rule 144 of the
Securities Act, (iii) the Company is not aware of any event reasonably likely to
occur that would reasonably be expected to result in the shares of Common Stock
issuable upon conversion of the New Preferred Shares or exercise of the New
Warrants becoming ineligible to be resold by the Holder pursuant to Rule 144 of
the Securities Act and (ii) in connection with any resale of the shares of
Common Stock issuable upon conversion of the New Preferred Shares or exercise of
the New Warrants pursuant to Rule 144 of the Securities Act, the Holder shall
solely be required to provide reasonable assurances that such shares of Common
Stock are eligible for resale, assignment or transfer under Rule 144 of the
Securities Act, which shall not include an opinion of Holder’s counsel.  The
Company shall be responsible for any transfer agent fees or DTC fees or legal
fees of the Company’s counsel with respect to the removal of legends, if any, or
issuance of shares of Common Stock in accordance herewith or pursuant to the New
Certificate of Designations or the New Warrants. 

 

8.Termination. Notwithstanding anything contained in this Agreement to the
contrary, if the Effective Date has not occurred and the Company does not
deliver New Preferred Shares and the New Warrants to the Holder in accordance
with Section 1 hereof on or prior to December 31, 2016, then, at the election of
the Holder delivered in writing to the Company at any time thereafter, this
Agreement shall be terminated and be null and void ab initio, the Exchange shall
not occur, no amendments hereunder to any of the Transaction Documents shall be
effective and the Existing Preferred Shares and the Existing Warrants shall
remain outstanding as if this Agreement never existed.

 

9.Miscellaneous Provisions.  Sections 5.3 to 5.22 of the SPA are hereby
incorporated by reference herein, mutatis mutandis.

 

*Signatures on Next Page*

 

 

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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Execution
Date set forth above.

 

COMPANY

RLJ ENTERTAINMENT, INC.,

By:/s/ NAZIR ROSTOM
Name: Nazir Rostom
Title: Chief Financial Officer

HOLDER

WOLVERINE FLAGSHIP FUND TRADING LIMITED

 

By: /s/ NIRAJ M. PATEL
Name: Niraj M. Patel
Title: Authorized Signatory

Aggregate number of Existing Preferred Shares:

______________________________________

Aggregate number of shares of Common Stock issuable upon exercise of the
Existing Warrants (without regard to any limitations on exercise set forth
therein:

______________________________________

Address for Delivery of New Preferred Shares and New Warrants:

______________________________________

______________________________________

______________________________________

[Signature Page to Amendment and Exchange Agreement]

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EXHIBIT A

SPA Amendment

 

 

 

 

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EXHIBIT B

New Certificate of Designations

 

 

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EXHIBIT C

New Warrant