Exhibit 4.3
EXECUTION COPY
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REGISTRATION RIGHTS AGREEMENT
among
PLAYBOY ENTERPRISES, INC.
and
UBS SECURITIES LLC,
BANC OF AMERICA SECURITIES LLC
and
BEAR, STEARNS & CO. INC.,
as Initial Purchasers
Dated as of March 15, 2005
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TABLE OF CONTENTS
Page
SECTION 1. Defined Terms....................................................1
SECTION 2. Shelf Registration...............................................4
SECTION 3. Registration Procedures.........................................10
SECTION 4. Holder's Obligations............................................15
SECTION 5. Registration Expenses...........................................15
SECTION 6. Indemnification; Contribution...................................16
SECTION 7. Information Requirements........................................19
SECTION 8. No Conflicting Agreements.......................................19
SECTION 9. Amendments and Waivers..........................................19
SECTION 10. Notices........................................................20
SECTION 11. Approval of Holders; Majority of Registrable Securities........21
SECTION 12. Successors and Assigns.........................................21
SECTION 13. Counterparts...................................................21
SECTION 14. Headings.......................................................21
SECTION 15. Governing Law..................................................21
SECTION 16. Severability...................................................21
SECTION 17. Entire Agreement...............................................21
SECTION 18. Underwritten Registrations.....................................22
SECTION 19. Termination....................................................22
SECTION 20. Submission to Jurisdiction.....................................22
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of March 15, 2005 (this
"Agreement"), among Playboy Enterprises, Inc., a corporation organized under
the laws of Delaware (the "Company"), and UBS Securities LLC, Bear, Stearns &
Co. Inc. and Banc of America Securities LLC (collectively, the "Initial
Purchasers").
WHEREAS, the parties are entering into this Agreement pursuant to the
Purchase Agreement, dated as of March 9, 2005 (the "Purchase Agreement"),
among the Company and the Initial Purchasers;
WHEREAS, in order to induce the Initial Purchasers to enter into the
Purchase Agreement, the Company has agreed to provide the registration rights
set forth in this Agreement; and
WHEREAS, the execution of this Agreement is a condition to the
closing under the Purchase Agreement;
NOW, THEREFORE, for the benefit of the Initial Purchasers and for the
benefit of the beneficial owners (including the Initial Purchasers) from time
to time of the Notes (as defined herein) and the beneficial owners from time
to time of the Underlying Common Stock (as defined herein) issued upon
conversion of the Notes (each of the foregoing a "Holder" and together the
"Holders"), and in consideration of the promises and the mutual covenants and
agreements set forth herein, the parties hereto agree as follows:
SECTION 1. Defined Terms. Capitalized terms used herein without
definition shall have their respective meanings set forth in the Purchase
Agreement. As used in this Agreement, the following terms shall have the
following meanings:
"Additional Filing Deadline Date" has the meaning set forth in
Section 2(e) hereof.
"additional interest" has the meaning set forth in Section 2(e)
hereof.
"Additional Interest Accrual Period" has the meaning set forth in
Section 2(e) hereof.
"Additional Interest Amount" has the meaning set forth in Section
2(e) hereof.
"Additional Interest Payment Date" means each March 15 and September
15 of each year.
"Affiliate" means with respect to any specified person, an
"affiliate," as defined in Rule 144, of such person.
"Amendment Effectiveness Deadline Date" has the meaning set forth in
Section 2(d) hereof.
"Business Day" means each day on which the New York Stock Exchange is
open for trading.
"Common Stock" means the shares of the Company's Class B Common
Stock, par value U.S.$0.01 per share, and any other shares of capital stock as
may constitute "Common Stock" for purposes of the Indenture, including the
Underlying Common Stock.
"Company Indemnified Party" has the meaning set forth in Section 6(b)
hereof.
"Designated Counsel" has the meaning set forth in Section 3(a)
hereof.
"Effectiveness Deadline Date" has the meaning set forth in Section
2(a) hereof.
"Effectiveness Period" means a period (subject to extension pursuant
to Section 3(i) hereof ) that terminates on the first date when there are no
Registrable Securities outstanding.
"Event" has the meaning set forth in Section 2(e) hereof.
"Event Date" has the meaning set forth in Section 2(e) hereof.
"Exchange Act" means the U.S. Securities Exchange Act of 1934, as
amended, and the rules and regulations of the SEC promulgated thereunder.
"Filing Deadline Date" has the meaning set forth in Section 2(a)
hereof.
"Form S-1" means Form S-1 under the Securities Act.
"Form S-3" means Form S-3 under the Securities Act.
"Holder" has the meaning set forth in the recitals of this Agreement.
"Holder Indemnified Party" has the meaning set forth in Section 6(a)
hereof.
"Indemnified Party" has the meanings set forth in Section 6(c)
hereof.
"Indemnifying Party" has the meanings set forth in Section 6(c)
hereof.
"Indenture" means the Indenture, dated as of March 15, 2005, between
the Company and the Trustee, pursuant to which the Notes are being issued.
"Initial Purchasers" has the meaning set forth in the preamble
hereto.
"Initial Shelf Registration Statement" has the meaning set forth in
Section 2(a) hereof.
"Issue Date" means March 15, 2005.
"Material Event" has the meaning set forth in Section 3(i) hereof.
"Notes" means the 3.00% Convertible Senior Subordinated Notes due
2025 of the Company to be purchased pursuant to the Purchase Agreement.
"Notice and Questionnaire" means a written notice and questionnaire
delivered to the Company containing substantially the information called for
by the selling securityholder questionnaire attached as Annex A to the
Offering Memorandum. The plural form of such term is "Notices and
Questionnaires."
"Notice Holder" means, on a given date, any Holder that has delivered
a Notice and Questionnaire to the Company on or prior to such date, so long as
not all of such Holder's Registrable Securities that have been registered for
resale pursuant to a Notice and Questionnaire have been sold in accordance
with a Shelf Registration Statement.
"Offering Memorandum" means the offering memorandum of the Company,
dated March 9, 2005, relating to the Notes.
"Proceeding" has the meaning set forth in Section 6(c) hereof.
"Purchase Agreement" has the meaning set forth in the recitals of
this Agreement.
"Prospectus" means the prospectus included in any Shelf Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 415 promulgated under the
Securities Act), as amended or supplemented by any amendment or prospectus
supplement, including post-effective amendments, and all materials
incorporated by reference or explicitly deemed to be incorporated by reference
in such prospectus.
"Record Date" means (i) March 1 with respect to an Additional
Interest Payment Date that occurs on March 15 and (ii) September 1 with
respect to an Additional Interest Payment Date that occurs on September 15.
"Record Holder" means, with respect to an Additional Interest Payment
Date relating to a Registrable Security as to which any Additional Interest
Amount has accrued, a Notice Holder that was the holder of record of such
Registrable Security at the close of business on the Record Date relating to
such Additional Interest Payment Date.
"Registrable Securities" means the Notes until such Notes have been
converted into the Underlying Common Stock and, at all times subsequent to any
such conversion, the Underlying Common Stock and any securities into which
such Underlying Common Stock has been converted, and any security issued with
respect thereto upon any stock dividend, split or similar event until, in the
case of any such security, the earliest of (i) the date on which such security
has been effectively registered under the Securities Act and disposed of in
accordance with the Shelf Registration Statement, (ii) the date on which such
security may be resold without restriction pursuant to Rule 144(k) under the
Securities Act or any successor provision thereto, (iii) the date on which
such security has been publicly sold pursuant to Rule 144 and (iv) the date
that is two (2) years after the later of (x) the latest "additional time of
purchase" (as defined in the Purchase Agreement), if any, and (y) the Issue
Date.
"Registration Expenses" has the meaning set forth in Section 5
hereof.
"Registration Statement" means any registration statement of the
Company under the Securities Act that covers any of the Registrable Securities
pursuant to this Agreement, including the Prospectus, amendments and
supplements to such registration statement, including post-effective
amendments, all exhibits, and all materials incorporated by reference or
explicitly deemed to be incorporated by reference in such registration
statement.
"Rule 144" means Rule 144 under the Securities Act, as such Rule may
be amended from time to time, or any similar rule or regulation hereafter
adopted by the SEC.
"Rule 144A" means Rule 144A under the Securities Act, as such Rule
may be amended from time to time, or any similar rule or regulation hereafter
adopted by the SEC.
"SEC" means the U.S. Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, and
the rules and regulations promulgated by the SEC thereunder.
"Shelf Registration Statement" has the meaning set forth in Section
2(a) hereof.
"Subsequent Shelf Registration Statement" has the meaning set forth
in Section 2(b) hereof.
"Subsequent Shelf Registration Statement Effectiveness Deadline Date"
has the meaning set forth in Section 2(b) hereof.
"Suspension Notice" has the meaning set forth in Section 3(i) hereof.
"Suspension Period" has the meaning set forth in Section 3(i) hereof.
"TIA" means the Trust Indenture Act of 1939, as amended.
"Trustee" means J.P. Morgan Trust Company, National Association, as
trustee under the Indenture.
"Underlying Common Stock" means the Common Stock, if any, into which
the Notes are convertible or issued upon any such conversion.
SECTION 2. Shelf Registration(a) . (a) The Company shall prepare and
file or cause to be prepared and filed with the SEC, as soon as practicable
but in any event by the date (the "Filing Deadline Date") that is ninety (90)
days after the Issue Date, a Registration Statement for an offering to be made
on a delayed or continuous basis pursuant to Rule 415 of the Securities Act (a
"Shelf Registration Statement") registering for resale from time to time by
Holders thereof all of the Registrable Securities (the "Initial Shelf
Registration Statement") (or, if registration of Registrable Securities held
by Holders other than Notice Holders is not permitted by the rules and
regulations of the SEC, then registering for resale from time to time by
Notice Holders their Registrable Securities). The Initial Shelf Registration
Statement shall be on Form S-1 or Form S-3 or another appropriate form
permitting registration of such Registrable Securities for resale by such
Holders in accordance with the reasonable methods of distribution specified in
such Holders' Notices and Questionnaires and permitted by the form of selling
securityholder questionnaire included in the Offering Memorandum; provided,
however, that in no event shall such methods of distribution take the form of
an underwritten offering of Registrable Securities without the Company's prior
written consent, which the Company may withhold in its sole discretion. The
Company shall use its commercially reasonable efforts to cause the Initial
Shelf Registration Statement to become effective under the Securities Act as
promptly as reasonably practicable but in any event by the date (the
"Effectiveness Deadline Date") that is two hundred ten (210) days after the
Issue Date, and (except to the extent permitted under Section 3(i) hereof) to
keep the Initial Shelf Registration Statement (or any Subsequent Shelf
Registration Statement) continuously effective under the Securities Act until
the expiration of the Effectiveness Period. At the time the Initial Shelf
Registration Statement becomes effective under the Securities Act, each Holder
that became a Notice Holder on or prior to the date that is ten (10) Business
Days prior to such time of effectiveness shall be named as a selling
securityholder in the Initial Shelf Registration Statement and the related
Prospectus in such a manner as to permit such Notice Holder (assuming the
accuracy of the information in such Notice Holder's Notice and Questionnaire)
to deliver such Prospectus to purchasers of Registrable Securities in
accordance with the Securities Act.
(b) If the Initial Shelf Registration Statement or any Subsequent
Shelf Registration Statement ceases to be effective for any reason (except to
the extent permitted under Section 3(i) hereof) at any time during the
Effectiveness Period, the Company shall use its commercially reasonable
efforts to promptly cause such Shelf Registration Statement to become
effective under the Securities Act (including using its commercially
reasonable efforts to obtain the prompt withdrawal of any order suspending the
effectiveness thereof), and in any event shall within thirty (30) days of such
cessation of effectiveness amend the Shelf Registration Statement in a manner
reasonably expected to obtain the withdrawal of the order suspending the
effectiveness thereof, or file an additional Shelf Registration Statement
covering all of the securities that as of the date of such filing are
Registrable Securities (a "Subsequent Shelf Registration Statement") (or, if
registration of Registrable Securities held by Holders other than Notice
Holders is not permitted by the rules and regulations of the SEC, then
registering for resale from time to time by Notice Holders the Registrable
Securities they hold as of the date of such filing). If a Subsequent Shelf
Registration Statement is filed, the Company shall use its commercially
reasonable efforts to cause such Subsequent Shelf Registration Statement to
become effective under the Securities Act as promptly as is practicable after
such filing and, except to the extent permitted under Section 3(i) hereof, to
keep such Shelf Registration Statement (or another Subsequent Shelf
Registration Statement) continuously effective until the end of the
Effectiveness Period. Any such Subsequent Shelf Registration Statement shall
be on Form S-1 or Form S-3 or another appropriate form permitting registration
of such Registrable Securities for resale by such Holders in accordance with
the reasonable methods of distribution specified in such Holders' Notices and
Questionnaires and permitted by the form of selling securityholder
questionnaire included in the Offering Memorandum; provided, however, that in
no event shall such methods of distribution take the form of an underwritten
offering of Registrable Securities without the Company's prior written
consent, which the Company may withhold in its sole discretion.
(c) The Company shall, subject to Section 3(i), supplement and amend
any Shelf Registration Statement if required by the rules, regulations or
instructions applicable to the registration form used by the Company for such
Shelf Registration Statement, if required by the Securities Act or as
reasonably requested by the Initial Purchasers or by the Trustee on behalf of
the Holders of Registrable Securities covered by such Shelf Registration
Statement.
(d) Each Holder of Registrable Securities agrees that if such Holder
wishes to sell Registrable Securities pursuant to a Shelf Registration
Statement and related Prospectus, it will do so only in accordance with this
Section 2(d) and Section 3(i). Each Holder of Registrable Securities wishing
to sell Registrable Securities pursuant to a Shelf Registration Statement and
related Prospectus agrees to deliver a completed and executed Notice and
Questionnaire to the Company prior to any attempted or actual distribution of
Registrable Securities under the Shelf Registration Statement. From and after
the date the Initial Shelf Registration Statement becomes effective, the
Company shall, as promptly as reasonably practicable after the date a Holder
of Registrable Securities becomes a Notice Holder, but in any event within 20
days after such date (subject to the first proviso in this Section 2(d) and
subject to subclauses (x) and (y) of the immediately following clause (i)),
(i) if required by applicable law, file with the SEC a post-effective
amendment to the Shelf Registration Statement or, if required by applicable
law, prepare and file a supplement to the related Prospectus or a supplement
or amendment to any document incorporated therein by reference or file any
other required document so that such Notice Holder is named as a selling
securityholder in the Shelf Registration Statement and the related Prospectus
in such a manner as to permit such Notice Holder (assuming the accuracy of the
information in such Notice Holder's Notice and Questionnaire) to deliver such
Prospectus to purchasers of the Registrable Securities in accordance with the
Securities Act, except that, (x) the Company shall not be required to file
more than one such supplement during any 30-day period to name as a selling
securityholder any Holder of Registrable Securities that becomes a Notice
Holder after the date that is 45 days after the Initial Shelf Registration
Statement becomes effective under the Securities Act and (y) the Company shall
not be required to file more than one post-effective amendment or Subsequent
Shelf Registration Statement in any ninety-day period for the purpose of
permitting resales by Notice Holders where such post-effective amendment or
Subsequent Shelf Registration Statement is required by the rules and
regulations of the SEC in order to permit such resales; (ii) if the Company
shall have filed a post-effective amendment to the Shelf Registration
Statement or filed a Subsequent Shelf Registration Statement, use its
commercially reasonable efforts to cause such post-effective amendment or
Subsequent Shelf Registration Statement, as the case may be, to become
effective under the Securities Act as promptly as reasonably practicable, but
in any event by the date (the "Amendment Effectiveness Deadline Date," in the
case of a post-effective amendment, and the "Subsequent Shelf Registration
Statement Effectiveness Deadline Date," in the case of a Subsequent Shelf
Registration Statement) that is forty-five (45) days after the date such
post-effective amendment or Subsequent Shelf Registration Statement, as the
case may be, is required by this Section 2(d) to be filed with the SEC; (iii)
provide such Holder a reasonable number of copies of any documents filed
pursuant to clause (i) of this Section 2(d); and (iv) notify such Holder as
promptly as practicable after the effectiveness under the Securities Act of
any post-effective amendment filed pursuant to clause (i) of this Section
2(d); provided, that if such Notice and Questionnaire is received by the
Company during a Suspension Period, or a Suspension Period is put into effect
within 20 days after such date of receipt, the Company shall so inform the
Holder delivering such Notice and Questionnaire and shall take the actions set
forth in clauses (i), (ii) and (iii) above within five (5) Business Days after
expiration of the Suspension Period in accordance with Section 3(i); provided,
further, that if, under applicable law, the Company has more than one option
as to the type or manner of making any such filing, the Company shall make the
required filing or filings in the manner or of a type that is reasonably
expected to result in the earliest availability of the Prospectus for
effecting resales of Registrable Securities. Notwithstanding anything
contained herein to the contrary, the Company shall be under no obligation to
name any Holder that is not a Notice Holder as a selling securityholder in any
Shelf Registration Statement or related Prospectus; provided, however, that
any Holder that becomes a Notice Holder pursuant to the provisions of this
Section 2(d) (regardless of when such Holder became a Notice Holder) shall be
named as a selling securityholder in a Shelf Registration Statement or related
Prospectus in accordance with the requirements of this Section 2(d) or Section
2(a), as applicable.
(e) The parties hereto agree that the Holders of Notes that are
Registrable Securities will suffer damages, and that it would not be feasible
to ascertain the extent of such damages with precision, if (i) the Initial
Shelf Registration Statement has not been filed with the SEC on or prior to
the Filing Deadline Date, (ii) the Initial Shelf Registration Statement has
not become effective under the Securities Act on or prior to the Effectiveness
Deadline Date, (iii) either a supplement to a Prospectus, a post-effective
amendment or a Subsequent Shelf Registration Statement is required to be filed
with the SEC and fails to be filed with the SEC within the prescribed period
and in the manner set forth in Section 2(d) (the date such filing is required
to be made being an "Additional Filing Deadline Date") or, in the case of a
post-effective amendment or a Subsequent Shelf Registration Statement, such
post-effective amendment or Subsequent Shelf Registration Statement does not
become effective under the Securities Act by the Amendment Effectiveness
Deadline Date or the Subsequent Shelf Registration Statement Effectiveness
Deadline Date, as the case may be, (iv) the Initial Shelf Registration
Statement is filed and has become effective under the Securities Act but shall
thereafter cease to be effective (without being succeeded immediately by an
additional registration statement that has been filed with the SEC and has
become effective under the Securities Act) or usable for the offer and sale of
Registrable Securities for a period of time (including any Suspension Period)
which shall exceed (A) in any 90-day period, either (I) sixty (60) days in the
aggregate, if during such 90-day period the Company delivers a second
Suspension Notice, as permitted in Section 3(i), in respect of a Material
Event as to which a Suspension Period is then in effect or (II) forty-fivc
(45) days in the aggregate, if the Company has not delivered such a second
Suspension Notice, or (B) in any 360-day period, ninety (90) days in the
aggregate or (v) any Registration Statement or amendment thereto, at the time
it becomes effective under the Securities Act, or any Prospectus relating
thereto, at the time it is filed with the SEC or, if later, at the time the
Registration Statement to which such Prospectus relates becomes effective
under the Securities Act, shall fail to name a Holder as a selling
securityholder in such a manner as to permit such Holder to sell its
Registrable Securities pursuant to such Registration Statement and Prospectus
in accordance with the Securities Act, in each case to the extent such Holder
was entitled, pursuant to the terms of this Agreement, to be so named (each of
the events of a type described in any of the foregoing clauses (i) through (v)
are individually referred to herein as an "Event," and each of (A) the Filing
Deadline Date, in the case of clause (i), (B) the Effectiveness Deadline Date,
in the case of clause (ii), (C) the Additional Filing Deadline Date, the
Amendment Effectiveness Deadline Date or the Subsequent Shelf Registration
Statement Effectiveness Deadline Date, as the case may be, in the case of
clause (iii), (D) the date on which the duration of the ineffectiveness or
unusability of the Initial Shelf Registration Statement in any period exceeds
the number of days permitted by clause (iv), in the case of clause (iv), and
(E) the date the applicable Registration Statement or amendment thereto shall
become effective under the Securities Act, or the date the applicable
Prospectus is filed with the SEC or, if later, the time the Registration
Statement to which such Prospectus relates becomes effective under the
Securities Act, as the case may be, in the case of clause (v), being referred
to herein as an "Event Date"). Events shall be deemed to continue until the
following dates with respect to the respective types of Events: (A) the date
the Initial Shelf Registration Statement is filed with the SEC in the case of
an Event of the type described in clause (i); (B) the date the Initial Shelf
Registration Statement becomes effective under the Securities Act in the case
of an Event of the type described in clause (ii); (C) the date a supplement to
a Prospectus, a post-effective amendment or a Subsequent Shelf Registration
Statement, whichever is required, is filed with the SEC (in the case of a
supplement) or becomes effective under the Securities Act (in the case of a
post-effective amendment or a Subsequent Shelf Registration Statement), in the
case of an Event of the type described in clause (iii); (D) the date the
Initial Shelf Registration Statement becomes effective or usable again, or the
date a Subsequent Shelf Registration Statement filed with the SEC pursuant to
Section 2(b) becomes effective or usable again, in the case of an Event of the
type described in clause (iv); and (E) the date a supplement to the Prospectus
if filed with the SEC, or the date a post-effective amendment to the
Registration Statement becomes effective under the Securities Act, or the date
a Subsequent Shelf Registration Statement becomes effective under the
Securities Act, which supplement, post-effective amendment or Subsequent Shelf
Registration Statement, as the case may be, names as selling securityholders,
in such a manner as to permit them to deliver such Prospectus supplementm or
the Prospectus related to such post-effective amendment or Subsequent Shelf
Registration Statement, as the case may be, to purchasers of Registrable
Securities in accordance with the Securities Act, all Holders entitled as
herein provided to be so named, in the case of an Event of the type described
in clause (v). Notwithstanding anything herein to the contrary, all Events
described in clauses (ii), (iii) or (v) of this Section 2(e) shall be deemed
to be suspended during any Suspension Period, except to the extent the
duration of such Suspension Period exceeds (x) in any 90-day period, either
(I) sixty (60) days in the aggregate, if during such 90-day period the Company
delivers a second Suspension Notice, as permitted in Section 3(i), in respect
of a Material Event as to which a Suspension Period is then in effect or (II)
forty-fivc (45) days in the aggregate, if the Company has not delivered such a
second Suspension Notice, or (y) in any 360-day period, ninety (90) days in
the aggregate.
Accordingly, commencing on (and including) any Event Date and ending
on (but excluding) the next date on which there are no Events that have
occurred and are continuing (an "Additional Interest Accrual Period"), the
Company agrees to pay, as additional interest ("additional interest") and not
as a penalty, an amount (the "Additional Interest Amount") at the rate
described below, payable periodically on each Additional Interest Payment Date
to Record Holders of Notes that are Registrable Securities to the extent of,
for each such Additional Interest Payment Date, the unpaid Additional Interest
Amount that has accrued to (but excluding) such Additional Interest Payment
Date (or, if the Additional Interest Accrual Period shall have ended prior to
such Additional Interest Payment Date, to (but excluding) the day immediately
after the last day of such Additional Interest Accrual Period); provided, that
any unpaid Additional Interest Amount that has accrued with respect to any
Note or portion thereof called for redemption on a redemption date, converted
into Underlying Common Stock on a conversion date, delivered to the Company
for purchase on March 15, 2012, March 15, 2015 or March 15, 2020 (each such
date a "payment date") or delivered to the Company for repurchase on a
fundamental change repurchase date, as the case may be (in each case in
accordance with the Indenture), that is after the close of business on the
Record Date relating to such Additional Interest Payment Date and before such
Additional Interest Payment Date, shall, in any such event, be paid instead to
the Holder that submitted such Note or portion thereof for redemption,
conversion, purchase or repurchase on the applicable redemption date,
conversion date, purchase date or fundamental change repurchase date, as the
case may be, on such date. The Additional Interest Amount shall accrue at a
rate per annum equal to one-quarter of one percent (0.25%) for the first
90-day period beginning on, and including, the Event Date, and thereafter at a
rate per annum equal to one-half of one percent (0.50%) of the aggregate
principal amount of such Notes of which such Record Holders were holders of
record at the close of business on the applicable Record Date. Notwithstanding
the foregoing, (1) no Additional Interest Amounts shall accrue as to any Note
from and after the earliest of (x) the date such Note is no longer a
Registrable Security, (y) the date, and to the extent, such Note is converted
into cash and, if applicable, shares of Common Stock in accordance with the
Indenture and (z) the expiration of the Effectiveness Period; and (2) if a
Note ceases to be outstanding during an Additional Interest Accrual Period for
which an Additional Interest Amount would be payable with respect to such
Note, then the Additional Interest Amount payable hereunder with respect to
such Note shall be prorated on the basis of the number of full days such Note
is outstanding during such Additional Interest Accrual Period. The rate of
accrual of the Additional Interest Amount with respect to any period shall not
exceed the rate provided for in this Section 2(e) notwithstanding the
occurrence of multiple concurrent Events. Following the cure of all Events
requiring the payment by the Company of Additional Interest Amounts to the
Holders of Notes pursuant to this Section 2(e), the accrual of Additional
Interest Amounts shall cease (without in any way limiting the effect of any
subsequent Event requiring the payment of Additional Interest Amounts by the
Company). All installments of additional interest shall be paid in the same
manner as payments of interest pursuant to the Indenture.
The Trustee shall be entitled, on behalf of Holders of Notes, to seek
any available remedy for the enforcement of this Agreement, including for the
payment of any Additional Interest Amount. Notwithstanding the foregoing, the
parties agree that the sole damages payable for a violation of the terms of
this Agreement with respect to which additional interest is expressly provided
shall be such additional interest.
All of the Company's obligations set forth in this Section 2(e) that
are outstanding with respect to any Registrable Security at the time such
security ceases to be a Registrable Security shall survive until such time as
all such obligations with respect to such security have been satisfied in full
(notwithstanding termination of this Agreement pursuant to Section 18).
The parties hereto agree that the additional interest provided for in
this Section 2(e) constitutes a reasonable estimate of the damages in respect
of the Notes that may be incurred by Holders of the Notes by reason of an
Event relating to such Notes, including the failure of the Shelf Registration
Statement to be filed or declared effective or available for effecting resales
of Registrable Securities in accordance with the provisions hereof. Subject to
any rights that may arise pursuant to Section 6 hereof, the parties hereto
also agree that the Company shall have no liability to a Holder of Notes for
monetary damages with respect to an Event relating to such Notes other, than
the additional interest provided for in this Section 2(e).
SECTION 3. Registration Procedures. In connection with the
registration obligations of the Company under Section 2 hereof, the Company
shall:
(a) Prepare and file with the SEC a Shelf Registration Statement or
Shelf Registration Statements on Form S-1 or Form S-3 or any other appropriate
form under the Securities Act available for the sale of the Registrable
Securities by the Holders thereof in accordance with the reasonable methods of
distribution specified in such Holders' Notices and Questionnaires and
permitted by the form of selling securityholder questionnaire included in the
Offering Memorandum (provided, however, that in no event shall such methods of
distribution take the form of an underwritten offering of Registrable
Securities without the Company's prior written consent, which the Company may
withhold in its sole discretion), and use its commercially reasonable efforts
to cause each such Shelf Registration Statement to become effective under the
Securities Act and remain effective as provided herein; provided that, before
filing any Shelf Registration Statement or Prospectus or any amendments or
supplements thereto with the SEC, the Company shall furnish to the Initial
Purchasers and counsel for the Holders and the Initial Purchasers or, if
designated, one separate counsel designated in writing to the Company by
Holders of a majority of the Registrable Securities ("Designated Counsel")
copies of all such documents proposed to be filed and use its commercially
reasonable efforts to reflect in each such document when so filed with the SEC
such comments as the such counsel reasonably shall propose within two (2)
Business Days of the delivery of such copies to the Initial Purchasers and
such counsel.
(b) Prepare and file with the SEC such amendments and post-effective
amendments to each Shelf Registration Statement as may be necessary to keep
such Shelf Registration Statement continuously effective until the expiration
of the Effectiveness Period, except to the extent permitted under Section
3(i); cause the related Prospectus to be supplemented by any required
Prospectus supplement, and as so supplemented to be filed pursuant to Rule 424
(or any similar provisions then in force) under the Securities Act; and use
its commercially reasonable efforts to comply with the provisions of the
Securities Act applicable to it with respect to the disposition of all
securities covered by such Shelf Registration Statement during the
Effectiveness Period in accordance with the intended methods of disposition by
the sellers thereof set forth in such Shelf Registration Statement as so
amended or such Prospectus as so supplemented.
(c) As promptly as practicable, give notice to the Notice Holders,
the Initial Purchasers, counsel for the Initial Purchasers and, if applicable,
Designated Counsel (i) when any Prospectus, Prospectus supplement, Shelf
Registration Statement or post-effective amendment to a Shelf Registration
Statement has been filed with the SEC and, with respect to a Shelf
Registration Statement or any post-effective amendment, when the same has
become effective under the Securities Act, (ii) of any request, following the
effectiveness of the Initial Shelf Registration Statement under the Securities
Act, by the SEC or any other federal or state governmental authority for
amendments or supplements to any Shelf Registration Statement or related
Prospectus or for additional information, (iii) of the issuance by the SEC or
any other federal or state governmental authority of any stop order suspending
the effectiveness of any Shelf Registration Statement or the initiation or
threatening of any proceedings for that purpose, (iv) of the receipt by the
Company of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose, (v) after the effective date of any Shelf
Registration Statement filed pursuant to this Agreement of the occurrence of
(but not the nature of or details concerning) a Material Event and (vi) of the
determination by the Company that a post-effective amendment to a Shelf
Registration Statement will be filed with the SEC, which notice may, at the
discretion of the Company (or as required pursuant to Section 3(i)), state
that it constitutes a Suspension Notice, in which event the provisions of
Section 3(i) shall apply.
(d) Subject to Section 3(i), use its commercially reasonable efforts
to prevent the issuance of, and, if issued, to obtain the withdrawal of, any
order suspending the effectiveness of a Shelf Registration Statement or the
lifting of any suspension of the qualification (or exemption from
qualification) of any of the Registrable Securities for sale in any
jurisdiction in which they have been qualified for sale, in either case at the
earliest possible moment, and provide prompt notice to each Notice Holder and
the Initial Purchasers of the withdrawal of any such order.
(e) If requested by the Initial Purchasers or any Notice Holder, as
promptly as practicable incorporate in a Prospectus supplement or
post-effective amendment to a Shelf Registration Statement such information as
the Initial Purchasers, counsel for the Initial Purchasers and, if applicable,
Designated Counsel shall determine to be required to be included therein by
applicable law and make any required filings of such Prospectus supplement or
such post-effective amendment; provided, that the Company shall not be
required to take any actions under this Section 3(e) that, in the written
opinion of counsel for the Company, are not in compliance with applicable law.
(f) As promptly as practicable, furnish, upon request, to each Notice
Holder and the Initial Purchasers, without charge, at least one (1) conformed
copy of the Shelf Registration Statement and any amendment thereto, including
financial statements but excluding schedules, all documents incorporated or
deemed to be incorporated therein by reference and all exhibits (unless
requested in writing to the Company by such Notice Holder or the Initial
Purchasers).
(g) During the Effectiveness Period, deliver to each Notice Holder
and the Initial Purchasers as many copies of the Prospectus or Prospectuses
relating to such Registrable Securities (including each preliminary
prospectus) and any amendment or supplement thereto as such Notice Holder and
the Initial Purchasers may reasonably request; and the Company hereby consents
(except during such periods that a Suspension Notice is outstanding and has
not been revoked) to the use of such Prospectus or each amendment or
supplement thereto by each Notice Holder, in connection with any offering and
sale of the Registrable Securities covered by such Prospectus or any amendment
or supplement thereto in the manner set forth therein.
(h) Prior to any public offering of the Registrable Securities
pursuant to a Shelf Registration Statement, use its commercially reasonable
efforts to register or qualify or cooperate with the Notice Holders in
connection with the registration or qualification (or exemption from such
registration or qualification) of such Registrable Securities for offer and
sale under the securities or Blue Sky laws of such jurisdictions within the
United States as any Notice Holder reasonably requests in writing (which
request may be included in the Notice and Questionnaire); prior to any public
offering of the Registrable Securities pursuant to the Shelf Registration
Statement, use its commercially reasonable efforts to keep each such
registration or qualification (or exemption therefrom) effective during the
Effectiveness Period in connection with such Notice Holder's offer and sale of
Registrable Securities pursuant to such registration or qualification (or
exemption therefrom) and do any and all other acts or things reasonably
necessary or advisable to enable the disposition in such jurisdictions of such
Registrable Securities in the manner set forth in the relevant Shelf
Registration Statement and the related Prospectus; provided, that the Company
will not be required to (i) qualify generally to do business in any
jurisdiction where it is not then so qualified or (ii) take any action that
would subject it to general service of process in suits or to taxation in any
such jurisdiction where it is not then so subject.
(i) Upon (A) the issuance by the SEC of a stop order suspending the
effectiveness of any Shelf Registration Statement or the initiation of
proceedings with respect to any Shelf Registration Statement under Section
8(d) or 8(e) of the Securities Act, (B) the occurrence of any event or the
existence of any fact as a result of which any Shelf Registration Statement
shall contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading, or any Prospectus shall contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or (C) the occurrence or existence of
any pending corporate development, including because the effectiveness or use
of the Shelf Registration Statement and the related Prospectus would require
disclosure of confidential information or interfere with any financing,
acquisition, corporate reorganization or other transaction or development (a
"Material Event"), that, in the reasonable discretion of the Company, makes it
appropriate to suspend the availability of the Shelf Registration Statement
and the related Prospectus (i) in the case of clause (B) or (C) above, subject
to the next sentence, as promptly as practicable, prepare and file, if
necessary pursuant to the Securities Act, a post-effective amendment to such
Shelf Registration Statement or a supplement to the related Prospectus or any
document incorporated therein by reference or file any other required document
that would be incorporated by reference into such Shelf Registration Statement
and Prospectus so that such Shelf Registration Statement does not contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading, and so that such Prospectus does not contain any untrue statement
of a material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under which
they were made, not misleading (it being understood that the Company may rely
on information provided by each Notice Holder with respect to such Notice
Holder), as thereafter delivered to the purchasers of the Registrable
Securities being sold thereunder, and, in the case of a post-effective
amendment to a Shelf Registration Statement, subject to the next sentence, use
its commercially reasonable efforts to cause it to be declared effective under
the Securities Act as promptly as is practicable, and (ii) give notice to the
Notice Holders and counsel for the Holders and for the Initial Purchasers (or,
if applicable, Designated Counsel) that the availability of the Shelf
Registration Statement is suspended (a "Suspension Notice") and, upon receipt
of any Suspension Notice, each Notice Holder agrees not to sell any
Registrable Securities pursuant to such Shelf Registration Statement until
such Notice Holder's receipt of copies of the supplemented or amended
Prospectus provided for in clause (i) above, or until such Notice Holder is
advised in writing by the Company that the Prospectus may be used. The Company
will use its commercially reasonable efforts to ensure that the use of the
Prospectus may be resumed (x) in the case of clause (A) above, as promptly as
is practicable, (y) in the case of clause (B) above, as soon as, in the
reasonable judgment of the Company, the Shelf Registration Statement does not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading and the Prospectus does not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading, and (z) in the case of clause (C) above, as soon
as, in the reasonable discretion of the Company, such suspension is no longer
appropriate. The period during which the availability of the Shelf
Registration Statement and any Prospectus may be suspended (the "Suspension
Period") without the Company incurring any obligation to pay additional
interest pursuant to Section 2(e) shall not exceed (I) in any 90-day period,
either sixty (60) days in the aggregate, if during such 90-day period the
Company delivers a second Suspension Notice pursuant to the last sentence of
this Section 3(i), or forty-fivc (45) days in the aggregate, if the Company
has not delivered such a second Suspension Notice, or (II) in any 360-day
period, ninety (90) days in the aggregate. The Effectiveness Period shall be
extended by the number of days from and including the date of the giving of
the Suspension Notice to and including the date on which the Notice Holder
received copies of the supplemented or amended Prospectus provided in clause
(i) above, or the date on which it is advised in writing by the Company that
the Prospectus may be used, and has received copies of any additional or
supplemental filings that are incorporated or deemed incorporated by reference
in such Prospectus. The Company may deliver a second Suspension Notice in
accordance with clause (C) of this Section 3(i) in respect of a Material Event
relating to an acquisition, financing, recapitalization, business combination
or other similar transaction or a probable acquisition, financing,
recapitalization, business combination or other similar transaction as to
which Material Event a Suspension Period is then in effect, which second
Suspension Notice shall have the effect of extending the Suspension Period by
15 days or such shorter period of time as is specified in such second
Suspension Notice.
(j) Make available for inspection during normal business hours by
representatives for the Notice Holders of such Registrable Securities, and any
broker-dealers, attorneys and accountants retained by such Notice Holders, all
relevant financial and other records and pertinent corporate documents and
properties of the Company and its subsidiaries, and cause the appropriate
officers, directors and employees of the Company and its subsidiaries to make
available for inspection during normal business hours all relevant information
reasonably requested by such representatives for the Notice Holders, or any
such broker-dealers, attorneys or accountants in connection with such
disposition, in each case as is customary for similar "due diligence"
examinations; provided, however, that such persons shall first agree in
writing with the Company that any information that is confidential at the time
of delivery of such information shall be kept confidential by such persons and
shall be used solely for the purposes of exercising rights under this
Agreement, unless (i) disclosure of such information is required by court or
administrative order or is necessary to respond to inquiries of regulatory
authorities, (ii) disclosure of such information is required by law (including
any disclosure requirements pursuant to federal securities laws in connection
with the filing of any Shelf Registration Statement or the use of any
Prospectus referred to in this Agreement), (iii) such information becomes
generally available to the public other than as a result of a disclosure or
failure to safeguard by any such person or (iv) such information becomes
available to any such person from a source other than the Company and such
source is not bound by a confidentiality agreement or is not otherwise under a
duty of trust to the Company, and provided further, that the foregoing
inspection and information gathering shall, to the greatest extent possible,
be coordinated on behalf of all the Notice Holders and the other parties
entitled thereto by one counsel for such Notice Holders and such other
parties.
(k) Comply with all applicable rules and regulations of the SEC that
are applicable to any Shelf Registration Statement and make generally
available to its securityholders earning statements (which need not be
audited) satisfying the provisions of Section 11(a) of the Securities Act and
Rule 158 thereunder (or any similar rule promulgated under the Securities Act)
no later than 45 days after the end of any 12-month period (or 90 days after
the end of any 12-month period if such period is a fiscal year) commencing on
the first day of the first fiscal quarter of the Company commencing after the
effective date of a Shelf Registration Statement, which statements shall cover
said 12-month periods.
(l) Cooperate with each Notice Holder to facilitate the timely
preparation and delivery of certificates representing Registrable Securities
sold pursuant to a Shelf Registration Statement, which certificates shall not
bear any restrictive legends, and cause such Registrable Securities to be in
such denominations as are permitted by the Indenture and registered in such
names as such Notice Holder may request in writing at least two (2) Business
Days prior to any sale of such Registrable Securities.
(m) Provide a CUSIP number for all Registrable Securities covered by
each Shelf Registration Statement not later than the effective date of such
Shelf Registration Statement and provide the Trustee and the transfer agent
for the Common Stock with certificates for the Registrable Securities that are
in a form eligible for deposit with The Depository Trust Company.
(n) Cooperate and assist in any filings required to be made with the
National Association of Securities Dealers, Inc.
(o) Upon (i) the filing of the Initial Shelf Registration Statement
and (ii) the effectiveness of the Initial Shelf Registration Statement under
the Securities Act, announce the same, in each case by release through a
reputable national newswire service.
(p) Deliver such documents and certificates and take all such other
necessary actions as may be reasonably requested and as are customarily
delivered or taken in similar offerings to the holders of a majority of the
Registrable Securities being sold in order to expedite or facilitate
disposition of such Registrable Securities.
(q) Cause the Indenture to be qualified under the TIA not later than
the effective date of any Shelf Registration Statement; and, in connection
therewith, cooperate with the Trustee to effect such changes to the Indenture
as may be required for the Indenture to be so qualified in accordance with the
terms of the TIA and execute, and use its commercially reasonable efforts to
cause the Trustee to execute, all documents as may be required to effect such
changes, and all other forms and documents required to be filed with the SEC
to enable the Indenture to be so qualified in a timely manner.
SECTION 4. Holder's Obligations. Each Holder agrees, by acquisition
of the Registrable Securities, that no Holder of Registrable Securities shall
be entitled to sell any of such Registrable Securities pursuant to a Shelf
Registration Statement or to receive a Prospectus relating thereto, unless
such Holder has furnished the Company with a Notice and Questionnaire as
required pursuant to Section 2(d) hereof (including the information required
to be included in such Notice and Questionnaire) and the information set forth
in the next sentence. Each Notice Holder agrees promptly to furnish to the
Company all information required to be disclosed in order to make the
information previously furnished to the Company by such Notice Holder not
misleading and any other information regarding such Notice Holder and the
distribution of such Registrable Securities as the Company may from time to
time reasonably request. Any sale of any Registrable Securities by any Holder
shall constitute a representation and warranty by such Holder that the
information relating to such Holder and its plan of distribution is as set
forth in the Prospectus delivered by such Holder in connection with such
disposition, that such Prospectus does not as of the time of such sale contain
any untrue statement of a material fact relating to or provided by such Holder
or its plan of distribution and that such Prospectus does not as of the time
of such sale omit to state any material fact relating to or provided by such
Holder or its plan of distribution necessary in order to make the statements
in such Prospectus, in the light of the circumstances under which they were
made, not misleading. Each Holder shall keep confidential the receipt by it of
any Suspension Notice and the contents thereof, except as required pursuant to
applicable law. Upon receipt of any Suspension Notice, each Notice Holder
agrees not to sell any Registrable Securities pursuant to a Shelf Registration
Statement or the related Prospectus until such Notice Holder's receipt of
copies of the supplemented or amended Prospectus provided for in clause (C)(i)
of Section 3(i), or until such Notice Holder is advised in writing by the
Company that the such Prospectus may be used.
SECTION 5. Registration Expenses. The Company shall bear all fees and
expenses incurred in connection with the performance by the Company of its
obligations under Section 2 and Section 3 of this Agreement whether or not any
of the Shelf Registration Statements are declared effective. Such fees and
expenses ("Registration Expenses") shall include, without limitation, (i) all
registration and filing fees (including, without limitation, fees and expenses
(x) with respect to filings required to be made with the National Association
of Securities Dealers, Inc. and (y) of compliance with federal securities laws
and state securities or Blue Sky laws (including, without limitation,
reasonable fees and disbursements of counsel for the Holders in connection
with Blue Sky qualifications of the Registrable Securities under the laws of
such jurisdictions as the Notice Holders of a majority of the Registrable
Securities being sold pursuant to a Shelf Registration Statement may
designate), (ii) printing expenses (including, without limitation, expenses of
printing certificates for Registrable Securities in a form eligible for
deposit with The Depository Trust Company), (iii) duplication and mailing
expenses relating to copies of any Shelf Registration Statement or Prospectus
delivered to any Holders hereunder, (iv) fees and disbursements of counsel for
the Company in connection with the Shelf Registration Statement, (v) fees and
disbursements of the Trustee and its counsel and of the registrar and transfer
agent for the Common Stock and (vi) any Securities Act liability insurance
obtained by the Company in its sole discretion. In addition, the Company shall
pay the internal expenses of the Company (including, without limitation, all
salaries and expenses of officers and employees performing legal or accounting
duties), the expense of any annual audit, the fees and expenses incurred in
connection with the listing by the Company of the Registrable Securities on
any securities exchange on which similar securities of the Company are then
listed and the fees and expenses of any person, including special experts,
retained by the Company. Except as provided above, each Holder shall pay all
brokerage fees and commissions, all transfer taxes, the fees and expenses of
any advisors the Holder engages and all similar fees and costs relating to
such Holder's disposition of Registrable Securities.
SECTION 6. Indemnification; Contribution(a) . (a) The Company agrees
to indemnify, defend and hold harmless each Holder and each person who
controls any Holder within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act (each, a "Holder Indemnified Party"), from and
against any loss, damage, expense, liability or claim (including the
reasonable cost of investigation) which such Holder Indemnified Party may
incur under the Securities Act, the Exchange Act or otherwise, insofar as such
loss, damage, expense, liability or claim arises out of or is based upon any
untrue statement or alleged untrue statement of a material fact contained in
any Shelf Registration Statement or Prospectus or in any amendment or
supplement thereto or in any preliminary prospectus, or arises out of or is
based upon any omission or alleged omission to state a material fact required
to be stated in any Shelf Registration Statement or in any amendment or
supplement thereto or necessary to make the statements therein not misleading,
or arises out of or is based upon any omission or alleged omission to state a
material fact necessary in order to make the statements made in any Prospectus
or in any amendment or supplement thereto or in any preliminary prospectus, in
the light of the circumstances under which such statements were made, not
misleading, except insofar as any such loss, damage, expense, liability or
claim arises out of or is based upon any untrue statement or omission or
alleged untrue statement or omission of a material fact contained in, or
omitted from, and in conformity with information furnished in writing by or on
behalf of any Holder to the Company expressly for use therein, including,
without limitation, information provided by any such Holder in a Notice and
Questionnaire; provided that the indemnity hereunder shall not apply to any
loss, damage, damage, expense, liability or claim arising from an offer or
sale, occurring during a Suspension Period, of Registrable Securities by a
Holder to whom the Company theretofore provided a Suspension Notice in
accordance with Section 3(i).
(b) Each Holder, severally and not jointly, agrees to indemnify,
defend and hold harmless the Company, its directors, officers and employees
and any person who controls the Company within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act (each, a "Company
Indemnified Party") from and against any loss, damage, expense, liability or
claim (including the reasonable cost of investigation) which such Company
Indemnified Party may incur under the Securities Act, the Exchange Act or
otherwise, insofar as such loss, damage, expense, liability or claim arises
out of or is based upon (i) any untrue statement or alleged untrue statement
of a material fact contained in information furnished in writing by or on
behalf of such Holder to the Company expressly for use in any Shelf
Registration Statement or Prospectus or in any amendment or supplement thereto
or in any preliminary prospectus, or arises out of or is based upon any
omission or alleged omission to state a material fact required to be stated in
any Shelf Registration Statement or in any amendment or supplement thereto or
necessary to make the statements therein not misleading, or arises out of or
is based upon any omission or alleged omission to state a material fact
necessary in order to make the statements in any Prospectus or in any
amendment or supplement thereto or in any preliminary prospectus, in the light
of the circumstances under which they were made, not misleading, in connection
with such information, (ii) a sale by such Holder pursuant to a Shelf
Registration Statement in or with respect to which such Holder is named as a
selling security holder of Registrable Securities during a Suspension Period,
provided that the Company shall have theretofore provided such Holder a
Suspension Notice in accordance with Section 3(i) or (iii) a public sale of
Registrable Securities by such Holder without delivery, if required by the
Securities Act, of the most recent applicable Prospectus provided to such
Holder by the Company pursuant to Section 3(g) or clause (iii) of Section
2(d); and, subject to the limitation set forth in the immediately succeeding
clause, each Holder shall reimburse the Company for any legal or other
expenses reasonably incurred by the Company or any such controlling person in
connection with investigating or defending any loss, damage, expense,
liability or claim in respect thereof. This indemnity will be in addition to
any liability which such Holder may otherwise have to the Company or any of
its controlling persons. In no event shall the liability of any selling Holder
of Registrable Securities hereunder be greater in amount than the dollar
amount of the proceeds received by such Holder upon the sale of the
Registrable Securities pursuant to the Shelf Registration Statement giving
rise to such indemnification obligation.
(c) If any action, suit or proceeding (each, a "Proceeding") is
brought against any person in respect of which indemnity may be sought
pursuant to either subsection (a) or subsection (b) of this Section 6, such
person (the "Indemnified Party") shall promptly notify the person against whom
such indemnity may be sought (the "Indemnifying Party") in writing of the
institution of such Proceeding and the Indemnifying Party shall assume the
defense of such Proceeding; provided, however, that the omission to notify
such Indemnifying Party shall not relieve such Indemnifying Party from any
liability which it may have to such Indemnified Party or otherwise, except to
the extent such omission to notify materially prejudices the Indemnifying
Party. Such Indemnified Party shall have the right to employ its own counsel
in any such case, but the fees and expenses of such counsel shall be at the
expense of such Indemnified Party unless the employment of such counsel shall
have been authorized in writing by such Indemnifying Party in connection with
the defense of such Proceeding or such Indemnifying Party shall not have
employed counsel to have charge of the defense of such Proceeding within 30
days of the receipt of notice thereof or such Indemnified Party shall have
reasonably concluded upon the written advice of counsel that there may be one
or more defenses available to it that are different from, additional to or in
conflict with those available to such Indemnifying Party (in which case such
Indemnifying Party shall not have the right to direct that portion of the
defense of such Proceeding on behalf of the Indemnified Party, but such
Indemnifying Party may employ counsel and participate in the defense thereof
but the fees and expenses of such counsel shall be at the expense of such
Indemnifying Party), in any of which events such reasonable fees and expenses
shall be borne by such Indemnifying Party and paid as incurred (it being
understood, however, that such Indemnifying Party shall not be liable for the
expenses of more than one separate counsel in any one Proceeding or series of
related Proceedings together with reasonably necessary local counsel
representing the Indemnified Parties who are parties to such action). An
Indemnifying Party shall not be liable for any settlement of such Proceeding
effected without the written consent of such Indemnifying Party, but if
settled with the written consent of such Indemnifying Party, such Indemnifying
Party agrees to indemnify and hold harmless an Indemnified Party from and
against any loss or liability by reason of such settlement. No Indemnifying
Party shall, without the prior written consent of any Indemnified Party,
effect any settlement of any pending or threatened Proceeding in respect of
which such Indemnified Party is or could have been a party and indemnity could
have been sought hereunder by such Indemnified Party, unless such settlement
includes an unconditional release of such Indemnified Party from all liability
on claims that are the subject matter of such Proceeding and does not include
an admission of fault or culpability or a failure to act, by or on behalf of
such Indemnified Party.
(d) If the indemnification provided for in this Section 6 is
unavailable to an Indemnified Party under subsections (a) and (b) of this
Section 6 in respect of any losses, damages, expenses, liabilities, claims or
actions referred to therein, or insufficient to hold such Indemnified Party
harmless, then each applicable Indemnifying Party, in lieu of indemnifying
such Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such losses, damages, expenses, liabilities,
claims or actions (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Holders on
the other hand from the offering of the Registrable Securities or (ii) if the
allocation provided by clause (i) above 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 Holders, on the other hand, in connection with the
statements or omissions which resulted in such losses, damages, expenses,
liabilities, claims or actions, as well as any other relevant equitable
considerations. The relative fault of the Company, on the one hand, and of the
Holders, on the other hand, shall be determined by reference to, among other
things, whether the untrue statement or alleged untrue statement of a material
fact or omission or alleged omission relates to information supplied by the
Company or by the Holders 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 a party as a result of the losses,
damages, expenses, liabilities, claims and actions referred to above shall be
deemed to include any reasonable legal or other fees or expenses reasonably
incurred by such party in connection with investigating or defending any
Proceeding.
(e) The Company and the Holders agree that it would not be just and
equitable if contribution pursuant to this Section 6 were determined by pro
rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in subsection (d) above.
Notwithstanding the provisions of this Section 6, no Holder shall be required
to contribute any amount in excess of the amount by which the total price at
which the Registrable Securities giving rise to such contribution obligation
and sold by such Holder were offered to the public exceeds the amount of any
damages which it 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
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Holders' respective
obligations to contribute pursuant to this Section 6 are several in proportion
to the respective amount of Registrable Securities they have sold pursuant to
a Shelf Registration Statement, and not joint. The remedies provided for in
this Section 6 are not exclusive and shall not limit any rights or remedies
which may otherwise be available to any indemnified party at law or in equity.
(f) The indemnity and contribution provisions contained in this
Section 6 shall remain operative and in full force and effect regardless of
(i) any termination of this Agreement, (ii) any investigation made by or on
behalf of any Holder or any person controlling any Holder, or the Company, or
the Company's officers or directors or any person controlling the Company and
(iii) the sale of any Registrable Security by any Holder.
SECTION 7. Information Requirements. The Company covenants that, if
at any time before the end of the Effectiveness Period it is not subject to
the reporting requirements of the Exchange Act, it will cooperate with any
Holder of Registrable Securities and take such further action as any Holder of
Registrable Securities may reasonably request in writing (including, without
limitation, making such representations as any such Holder may reasonably
request), all to the extent required from time to time to enable such Holder
to sell Registrable Securities without registration under the Securities Act
within the limitation of the exemptions provided by Rule 144 and Rule 144A
under the Securities Act and customarily taken in connection with sales
pursuant to such exemptions. Upon the written request of any Holder of
Registrable Securities, the Company shall deliver to such Holder a written
statement as to whether the Company has complied with the reporting
requirements of the Exchange Act during the preceding 12 months, unless such a
statement has been included in the Company's most recent report filed with the
SEC pursuant to Section 13 or Section 15(d) of Exchange Act. Notwithstanding
the foregoing, nothing in this Section 7 shall be deemed to require the
Company to register any of its securities (other than the Common Stock) under
any section of the Exchange Act.
SECTION 8. No Conflicting Agreements. The Company is not, as of the
date hereof, a party to, nor shall it, on or after the date of this Agreement,
enter into, any agreement with respect to its securities that conflicts with
the rights granted to the Holders of Registrable Securities in this Agreement.
The Company represents and warrants that the rights granted to the Holders of
Registrable Securities hereunder do not in any way conflict with the rights
granted to the holders of the Company's securities under any other agreements.
SECTION 9. Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the Company has obtained the written consent of
Holders of a majority of the then outstanding Underlying Common Stock
constituting Registrable Securities (with Holders of Notes deemed to be the
Holders, for purposes of this Section, of the number of outstanding shares of
Underlying Common Stock into which such Notes are or would be convertible as
of the date on which such consent is requested). Notwithstanding the
foregoing, a waiver or consent to depart from the provisions hereof with
respect to a matter that relates exclusively to the rights of Holders of
Registrable Securities whose securities are being sold pursuant to a Shelf
Registration Statement and that does not directly or indirectly affect the
rights of other Holders of Registrable Securities may be given by Holders of
at least a majority of the Registrable Securities being sold by such Holders
pursuant to such Shelf Registration Statement; provided, that the provisions
of this sentence may not be amended, modified, or supplemented except in
accordance with the provisions of the immediately preceding sentence. Each
Holder of Registrable Securities outstanding at the time of any such
amendment, modification, supplement, waiver or consent or thereafter shall be
bound by any such amendment, modification, supplement, waiver or consent
effected pursuant to this Section 9, whether or not any notice, writing or
marking indicating such amendment, modification, supplement, waiver or consent
appears on the Registrable Securities or is delivered to such Holder.
SECTION 10. Notices. All notices and other communications provided
for or permitted hereunder shall be made in writing by hand delivery, by
telecopier, by courier guaranteeing overnight delivery or by first-class mail,
return receipt requested, and shall be deemed given (i) when made, if made by
hand delivery, (ii) upon confirmation, if made by telecopier, (iii) one (1)
Business Day after being deposited with such courier, if made by overnight
courier or (iv) on the date indicated on the notice of receipt, if made by
first-class mail, to the parties as follows:
(a) if to a Holder of Registrable Securities, at the most current
address given by such Holder to the Company in a Notice and Questionnaire or
any amendment thereto;
(b) if to the Company, to:
Playboy Enterprises, Inc.
680 North Lake Shore Drive
Chicago, Illinois 60611
Telecopy No.: (312) 266-2042
Confirm No.: (312) 373-2300
Attention: General Counsel
(c) if to the Initial Purchasers, to:
c/o UBS Securities LLC
299 Park Avenue
New York, New York 10171
Telecopy No.: (212) 821-3285
Confirm No.: (212) 821-3000
Attention: Syndicate Department
with a copy to (for informational purposes only):
c/o UBS Securities LLC
299 Park Avenue
New York, New York 10171
Telecopy No.: (212) 821-4042
Confirm No.: (212) 821-5791
Attention: Legal Department
or to such other address as such person may have furnished to the other
persons identified in this Section 10 in writing in accordance herewith.
SECTION 11. Approval of Holders; Majority of Registrable Securities.
Whenever the consent or approval of Holders of a specified percentage of
Registrable Securities is required hereunder, Registrable Securities held by
the Company or its affiliates (as such term is defined in Rule 405 under the
Securities Act) (other than the Initial Purchasers or subsequent Holders of
Registrable Securities if such subsequent Holders are deemed to be such
affiliates solely by reason of their holdings of such Registrable Securities)
shall not be counted in determining whether such consent or approval was given
by the Holders of such required percentage. For purposes of determining what
constitutes holders of a majority of Registrable Securities, as referred to in
this Agreement, a majority shall consist of a majority in aggregate principal
amount of Registrable Securities, treating each relevant holder of shares of
Underlying Common Stock of the Notes as a holder of the aggregate principal
amount of Notes in respect of which such Common Stock was issued.
SECTION 12. Successors and Assigns. Any person who purchases any
Registrable Securities from the Initial Purchasers or any Holder shall be
deemed, for purposes of this Agreement, to be an assignee of the Initial
Purchasers or such Holder, as the case may be. This Agreement shall inure to
the benefit of and be binding upon the successors and assigns of each of the
parties and shall inure to the benefit of and be binding upon each Holder of
any Registrable Securities.
SECTION 13. Counterparts. This Agreement may be executed in any
number of counterparts and by the parties hereto in separate counterparts,
each of which when so executed shall be deemed to be original and all of which
taken together shall constitute one and the same agreement.
SECTION 14. Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
SECTION 15. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York, without
regard to conflicts of laws principles thereof.
SECTION 16. Severability. If any term, provision, covenant or
restriction of this Agreement is held to be invalid, illegal, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall
in no way be affected, impaired or invalidated thereby, and the parties hereto
shall use its commercially reasonable efforts to find and employ an
alternative means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction, it being
intended that all of the rights and privileges of the parties shall be
enforceable to the fullest extent permitted by law.
SECTION 17. Entire Agreement. This Agreement is intended by the
parties as a final expression of their agreement and is intended to be a
complete and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein and the
registration rights granted by the Company with respect to the Registrable
Securities. Except as provided in the Purchase Agreement, there are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein, with respect to the registration rights granted by the
Company with respect to the Registrable Securities. This Agreement supersedes
all prior agreements and undertakings among the parties with respect to such
registration rights. No party hereto shall have any rights, duties or
obligations other than those specifically set forth in this Agreement.
SECTION 18. Underwritten Registrations. Notwithstanding anything in
this Agreement to the contrary, no Registrable Securities covered by a Shelf
Registration Statement may be sold in an underwritten offering pursuant to the
Shelf Registration Statement without the prior written consent of the Company,
which the Company may withhold in its sole discretion. No person may
participate in any underwritten registration hereunder unless such person (i)
agrees to sell such person's Registrable Securities on the basis reasonably
provided in any underwriting arrangements approved by the persons entitled
hereunder to approve such arrangements and (ii) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents reasonably required under the terms of such underwriting
arrangements.
SECTION 19. Termination. This Agreement and the obligations of the
parties hereunder shall terminate upon the end of the Effectiveness Period,
except for any liabilities or obligations under Section 4, 5 or 6 hereof and
the obligations to make payments of and provide for additional interest under
Section 2(e) hereof to the extent such damages accrue prior to the end of the
Effectiveness Period, each of which shall remain in effect in accordance with
its terms.
SECTION 20. Submission to Jurisdiction. Except as set forth below, no
Proceeding arising out of or in any way relating to this Agreement may be
commenced, prosecuted or continued in any court other than the courts of the
State of New York located in the City and County of New York or in the United
States District Court for the Southern District of New York, which courts
shall have jurisdiction over the adjudication of such matters, and the Company
hereby consents to the jurisdiction of such courts and personal service with
respect thereto. The Company hereby consents to personal jurisdiction, service
and venue in any court in which any Proceeding arising out of or in any way
relating to this Agreement is brought by any third party against the Initial
Purchasers. The Company hereby waives all right to trial by jury in any
Proceeding (whether based upon contract, tort or otherwise) in any way arising
out of or relating to this Agreement. The Company agrees that a final judgment
in any such Proceeding brought in any such court shall be conclusive and
binding upon the Company and may be enforced in any other courts in the
jurisdiction of which the Company is or may be subject, by suit upon such
judgment.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first above written.
PLAYBOY ENTERPRISES, INC.
By: /s/ Robert D. Campbell
--------------------------
Name: Robert D. Campbell
Title: Senior Vice President,
Treasurer and Strategic
Planning and Assistant
Secretary
Confirmed and accepted as of the
date first above written on
behalf of itself and the other
several Initial Purchasers:
UBS SECURITIES LLC
By: /s/ James Nappo
-----------------------------
Name: James Nappo
Title: Managing Director
By: /s/ Mark D. Spender
-----------------------------
Name: Mark D. Spender
Title: Associate Director