EXHIBIT 4.7
RESALE REGISTRATION RIGHTS AGREEMENT
among
ALLOY, INC.
and
XXXXXX BROTHERS INC.
CIBC WORLD MARKETS CORP.
XX XXXXXX SECURITIES, INC.
XX XXXXX SECURITIES CORPORATION
DATED AS OF JULY 23, 2003
TABLE OF CONTENTS
PAGE
1. Definitions...............................................................1
2. Shelf Registration........................................................3
3. Additional Amounts........................................................5
4. Registration Procedures...................................................6
5. Registration Expenses....................................................12
6. Indemnification and Contribution.........................................13
7. Rule 144A................................................................16
8. Participation in Underwritten Registrations..............................16
9. Miscellaneous............................................................16
RESALE REGISTRATION RIGHTS AGREEMENT, dated as of July 23, 2003, among
Alloy, Inc., a Delaware corporation (the "COMPANY"), and Xxxxxx Brothers
Inc., CIBC World Markets Corp., XX Xxxxxx Securities Inc. and XX Xxxxx
Securities Corporation (collectively, the "INITIAL PURCHASERS"). Pursuant to the
Purchase Agreement, dated July 17, 2003, among the Company and the Initial
Purchasers (the "PURCHASE AGREEMENT"), the Initial Purchasers have agreed to
purchase from the Company $65,000,000 ($78,000,000 if the Initial Purchasers
exercise their option thereunder in full) in aggregate principal amount of
Company's 5.375% Convertible Senior Debentures due August 1, 2023 (the
"DEBENTURES"). The Debentures will be convertible into fully paid, nonassessable
shares of common stock, par value $0.01 (the "CONVERSION SHARES") of the Company
on the terms, and subject to the conditions, set forth in the Indenture (as
defined herein). To induce the Initial Purchasers to purchase the Debentures,
the Company has agreed to provide the registration rights set forth in this
Agreement pursuant to Section 3(k) of the Purchase Agreement.
The parties hereby agree as follows:
1. Definitions. As used in this Agreement, the following capitalized terms shall
have the following meanings:
ADDITIONAL AMOUNT PAYMENT DATE: Each Interest Payment Date. For
purposes of this Agreement, if no Debentures are outstanding, "Additional Amount
Payment Date" shall mean each of August 1 and February 1.
ADDITIONAL AMOUNTS: As defined in Section 3(a) hereof.
AFFILIATE: As such term is defined in Rule 405 under the Securities
Act.
AGREEMENT: This Resale Registration Rights Agreement, as amended,
modified or otherwise supplemented from time to time in accordance with the
terms hereof.
BLUE SKY APPLICATION: As defined in Section 6(a) hereof.
BROKER-DEALER: Any broker or dealer registered under the Exchange Act.
BUSINESS DAY: A day other than a Saturday or Sunday or any day on which
banking institutions in New York City are authorized or obligated by law or
executive order to close.
CLOSING DATE: The date of this Agreement.
COMMISSION: Securities and Exchange Commission.
COMPANY: As defined in the preamble hereto.
CONVERSION SHARES: As defined in the preamble hereto.
1
DEBENTURES: As defined in the preamble hereto.
EFFECTIVENESS PERIOD: As defined in Section 2(a)(iii) hereof.
EFFECTIVENESS TARGET DATE: As defined in Section 2(a)(ii) hereof.
EXCHANGE ACT: Securities Exchange Act of 1934, as amended, and the
rules and regulations of the Commission thereunder.
HOLDER: A Person who owns, beneficially or otherwise, Transfer
Restricted Securities.
INDEMNIFIED HOLDER: As defined in Section 6(a) hereof.
INDENTURE: The Indenture, dated as of July 23, 2003, between the
Company, and Deutsche Bank Trust Company Americas, as trustee, pursuant to which
the Debentures are to be issued, as such Indenture is amended, modified or
supplemented from time to time in accordance with the terms thereof.
INITIAL PURCHASERS: As defined in the preamble hereto.
INTEREST PAYMENT DATE: As defined in the Indenture.
MAJORITY OF HOLDERS: Holders holding over 50% in aggregate principal
amount of the Debentures outstanding at the time of determination in question;
provided, however, that, for the purpose of this definition, a holder of
Conversion Shares that constitute Transfer Restricted Securities when issued
upon conversion of Debentures shall be deemed to hold an aggregate principal
amount of Debentures (in addition to the principal amount of Debentures held by
such holder) equal to the product of (x) the number of such Conversion Shares
held by such holder and (y) the prevailing conversion price, such prevailing
conversion price as determined in accordance with Section 12 of the Indenture.
NASD: National Association of Securities Dealers, Inc.
PERSON: An individual, partnership, corporation, unincorporated
organization, limited liability company, trust, joint venture or a government or
agency or political subdivision thereof.
PURCHASE AGREEMENT: As defined in the preamble hereto.
PROSPECTUS: The prospectus included in a Shelf Registration Statement,
as amended or supplemented by any prospectus supplement and by all other
amendments thereto, including post-effective amendments, and all material
incorporated by reference into such Prospectus.
2
QUALIFYING HOLDER: A Holder that has delivered to the Company (i) a
duly completed Questionnaire by the Questionnaire Deadline and (ii) such other
information as the Company reasonably may require to be delivered to it pursuant
to the provisions of Section 2(b).
QUESTIONNAIRE: As defined in Section 2(b) hereof.
QUESTIONNAIRE DEADLINE: As defined in Section 2(b) hereof.
RECORD HOLDER: With respect to any Additional Amount Payment Date, each
Person who is a Holder on the record date with respect to the Interest Payment
Date on which such Additional Amount Payment Date shall occur. In the case of a
Holder of shares of Conversion Shares, "Record Holder" shall mean each Person
who is a Holder of Conversion Shares that constitute Transfer Restricted
Securities on the 15th day preceding the relevant Additional Amount Payment
Date.
REGISTRATION DEFAULT: As defined in Section 3(a) hereof.
SALE NOTICE: As defined in Section 4(e) hereof.
SECURITIES ACT: Securities Act of 1933, as amended, and the rules and
resolutions of the Commission thereunder.
SHELF FILING DEADLINE: As defined in Section 2(a)(i) hereof.
SHELF REGISTRATION STATEMENT: As defined in Section 2(a)(i) hereof.
SUSPENSION NOTICE. As defined in Section 4(c) hereof.
SUSPENSION PERIOD. As defined in Section 4(b)(i) hereof.
TIA: Trust Indenture Act of 1939, as amended, and the rules and
regulations of the Commission thereunder, in each case, as in effect on the date
the Indenture is qualified under the TIA.
TRANSFER RESTRICTED SECURITIES: Each Debenture and each Conversion
Share issued upon conversion of the Debentures until the earliest to occur of:
(i) the date on which such Debenture or such Conversion Shares issued upon
conversion has been effectively registered under the Securities Act and disposed
of in accordance with the Shelf Registration Statement; (ii) the date on which
such Debenture or such Conversion Shares issued upon conversion (A) has been
transferred in compliance with Rule 144 under the Securities Act or (B) may be
sold or transferred by a person who is not an Affiliate of the Company pursuant
to Rule 144 under the Securities Act (or any other similar provision then in
force) without any volume or manner of sale restrictions thereunder; or (iii)
the date on which such Debenture or such Conversion Shares issued upon
conversion ceases to be outstanding (whether as a result of redemption,
repurchase and cancellation, conversion or otherwise).
3
TRUSTEE: As defined in Section 1.1 of the Indenture.
2. Shelf Registration.
(a) The Company shall:
(i) not later than 90 days after the date hereof (the "SHELF
FILING DEADLINE"), cause to be filed a registration statement pursuant to Rule
415 under the Securities Act (together with any amendments thereto, and
including any documents incorporated by reference therein, the "SHELF
REGISTRATION STATEMENT"), which Shelf Registration Statement shall provide for
resales of all Transfer Restricted Securities held by Holders that have timely
provided the information required pursuant to the terms of Section 2(b) hereof;
(ii) use its best efforts to cause the Shelf Registration
Statement to be declared effective by the Commission not later than 180 days
after the date hereof (the "EFFECTIVENESS TARGET DATE"); and
(iii) keep the Shelf Registration Statement continuously
effective, supplemented and amended as required by the provisions of Section
4(b) hereof to the extent necessary to ensure that (A) it is available for
resales by the Holders of Transfer Restricted Securities entitled to the benefit
of this Agreement and (B) conforms with the requirements of this Agreement and
the Securities Act, for a period (the "EFFECTIVENESS PERIOD") of the earliest
of:
(A) two years following the last date of original
issuance of Debentures;
(B) when all of the Holders of Transfer Restricted
Securities are able to sell all Transfer
Restricted Securities immediately without restriction pursuant to Rule 144(k)
under the Securities Act or any successor rule thereto; or
(C) when all of the Holders of Transfer Restricted
Securities that are owned by the Holders
who complete and timely deliver the Questionnaire are registered under the Shelf
Registration Statement and disposed of in accordance with the Shelf Registration
Statement.
(b) To have its Transfer Restricted Securities included in the
Shelf Registration Statement pursuant to this Agreement, each Holder shall
complete the Selling Securityholder Notice and Questionnaire, the form of which
is contained in Exhibit A to this Agreement (the "QUESTIONNAIRE"), and deliver
it to the Company prior to or on the 20th Business Day after the date of a
written request therefor by the Company (which request shall include a copy of
the Questionnaire) (such deadline, the "QUESTIONNAIRE DEADLINE"). Each Holder
4
may complete the Questionnaire and deliver it to the Company prior to such
request and, if the Questionnaire is so delivered, shall be entitled to have its
Transfer Restricted Securities included in the initial Shelf Registration
Statement filed with the Commission. In addition, upon receipt of written
request for additional information from the Company, each Holder who intends to
be named as a selling securityholder in the Shelf Registration Statement shall
furnish to the Company in writing, within 20 Business Days after such Holder's
receipt of such request, such additional information regarding such Holder and
the proposed distribution by such Holder of its Transfer Restricted Securities,
in connection with the Shelf Registration Statement or Prospectus or Preliminary
Prospectus included therein and in any application to be filed with or under
state securities law, as the Company may reasonably request. In connection with
all such requests for information from Holders of Transfer Restricted
Securities, the Company shall notify such Holders of the requirements set forth
in this paragraph regarding their obligation to provide the information
requested pursuant to this Section. Each Holder as to which the Shelf
Registration Statement is being effected agrees to furnish promptly to the
Company all information required to be disclosed in order to make information
previously furnished to the Company by such Holder not materially misleading.
3. Additional Amounts.
(a) If:
(i) the Shelf Registration Statement is not filed with the
Commission prior to or on the Shelf Filing Deadline;
(ii) the Shelf Registration Statement has not been declared
effective by the Commission prior to or on the Effectiveness Target Date;
(iii) except as provided in Section 4(b)(i) hereof, the Shelf
Registration Statement is filed and declared effective but, during the
Effectiveness Period, shall thereafter cease to be effective or shall cease to
be usable for its intended purpose without being succeeded within five Business
Days by a post-effective amendment to the Shelf Registration Statement, a
supplement to the Prospectus or a report filed with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act that cures such failure
and, in the case of a post-effective amendment, is itself immediately declared
effective; or
(iv) prior to or on the 45th or 60th day, as the case may be,
of any Suspension Period, such suspension has not been terminated. (each such
event referred to in foregoing clauses (i) through (iv), a "REGISTRATION
DEFAULT"),
the Company hereby agrees to pay additional amounts
("ADDITIONAL AMOUNTS") with respect to the Transfer Restricted Securities owned
by each Qualifying Holder from and including the day following the Registration
Default to but excluding the day on which the Registration Default has been
cured, accruing at a rate: (A) in respect of the Debentures, to each Qualifying
Holder of Debentures, (x) with respect to the first 90-day period during which a
5
Registration Default shall have occurred and be continuing, equal to 0.25% per
annum of the principal amount of the Debentures then held by the Qualifying
Holder, and (y) with respect to the period commencing on the 91st day following
the day the Registration Default shall have occurred and be continuing, equal to
0.50% per annum of the principal amount of the Debentures then held by the
Qualifying Holder; provided that in no event shall Additional Amounts accrue for
any Qualifying Holder at a rate per year exceeding 0.75% of the principal amount
of the Debentures owned by such Qualifying Holder; and (B) without duplication,
in respect of any Conversion Shares issued upon conversion of Debentures, to
each Qualifying Holder of such Conversion Shares, (x) with respect to the first
90- day period in which a Registration Default shall have occurred and be
continuing, equal to 0.25% per annum of the principal amount of the Debentures
converted into such Conversion Shares that are then held by such Qualifying
Holder, and (y) with respect to the period commencing the 91st day following the
day the Registration Default shall have occurred and be continuing, equal to
0.50% per annum of the principal amount of the Debentures converted into such
Conversion Shares that are then held by such Qualifying Holder; provided that in
no event shall Additional Amounts accrue in respect of any Conversion Shares for
any Qualifying Holder at a rate per year exceeding 0.75% of the principal amount
of the Debentures converted into such Conversion Shares that are then held by
such Qualifying Holder.
(b) All accrued Additional Amounts shall be paid in arrears to the
Record Holders entitled thereto by the Company on each Additional Amount Payment
Date by wire transfer of immediately available funds or by federal bank check.
Following the cure of all Registration Defaults relating to any particular
Debenture or Conversion Shares issued upon conversion of Debentures, the accrual
of Additional Amounts with respect to such Debenture or such Conversion Shares
shall cease. The Company agrees to deliver all notices, certificates and other
documents contemplated by the Indenture in connection with the payment of
Additional Amounts. All obligations of the Company set forth in this Section 3
that are outstanding with respect to any Transfer Restricted Security at the
time such security ceases to be a Transfer Restricted Security shall survive
until such time as all such obligations with respect to such Transfer Restricted
Security shall have been satisfied in full. The Additional Amounts set forth
above shall be the exclusive monetary remedy available to the Holders of
Transfer Restricted Securities for such Registration Default.
4. Registration Procedures.
(a) In connection with the Shelf Registration Statement, the Company
shall comply with all the provisions of Section 4(b) hereof and shall use its
best efforts to effect such registration to permit the sale of the Transfer
Restricted Securities being sold in accordance with the intended method or
methods of distribution thereof, and pursuant thereto, shall as expeditiously as
possible prepare and file with the Commission a Shelf Registration Statement
relating to the registration on any appropriate form under the Securities Act.
6
(b) In connection with the Shelf Registration Statement and any
Prospectus required by this Agreement to permit the sale or resale of Transfer
Restricted Securities, the Company shall:
(i) Subject to any notice by the Company in accordance with
this Section 4(b) of the existence of any fact or event of the kind described in
Section 4(b)(iii)(D), use its commercially reasonable efforts to keep the Shelf
Registration Statement continuously effective during the Effectiveness Period;
upon the occurrence of any event that would cause the Shelf Registration
Statement or the Prospectus contained therein (A) to contain a material
misstatement or omission or (B) not be effective and usable for the resale of
Transfer Restricted Securities during the Effectiveness Period, the Company
shall file promptly an appropriate amendment to the Shelf Registration
Statement, a supplement to the Prospectus or a report filed with the Commission
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, in the case
of clause (A), correcting any such misstatement or omission, and, in the case of
either clause (A) or (B), use its commercially reasonable efforts to cause such
amendment to be declared effective and the Shelf Registration Statement and the
related Prospectus to become usable for their intended purposes as soon as
practicable thereafter. Notwithstanding the foregoing, the Company may suspend
the effectiveness of the Shelf Registration Statement by written notice to the
Holders for a period not to exceed an aggregate of 45 days in any 90-day period
(each such period, a "SUSPENSION PERIOD") if:
(x) an event occurs and is continuing as a result of
which the Shelf Registration Statement
would, in the Company's reasonable judgment, contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and
(y) the Company reasonably determines that the
disclosure of such event at such time would have
a material adverse effect on the business of the Company (and its subsidiaries
taken as a whole); provided that in the event the disclosure relates to a
previously undisclosed proposed or pending material business transaction, the
disclosure of which would impede the Company's ability to consummate such
transaction, the Company may extend a Suspension Period from 45 days to 60 days;
provided, however, that Suspension Periods shall not exceed an aggregate of 90
days in any 360-day period.
(ii) Prepare and file with the Commission such amendments and
posteffective amendments to the Shelf Registration Statement as may be necessary
to keep the Shelf Registration Statement effective during the Effectiveness
Period; cause the Prospectus to be supplemented by any required Prospectus
supplement, and as so supplemented to be filed pursuant to Rule 424 under the
Securities Act, and to comply fully with the applicable provisions of Rules 424
under the Securities Act in a timely manner; and comply with the provisions of
the Securities Act with respect to the disposition of all securities covered by
the Shelf Registration Statement during the applicable period in accordance with
the intended method or methods of distribution by the sellers thereof set forth
in the Shelf Registration Statement or supplement to the Prospectus.
7
(iii) Advise the selling Holders promptly (but in any event
within five Business Days) and, if requested by such Persons, to confirm such
advice in writing: (A) when the Prospectus or any Prospectus supplement or
posteffective amendment has been filed, and, with respect to the Shelf
Registration Statement or any post-effective amendment thereto, when the same
has become effective, (B) of any request by the Commission for amendments to the
Shelf Registration Statement or amendments or supplements to the Prospectus or
for additional information relating thereto, (C) of the issuance by the
Commission of any stop order suspending the effectiveness of the Shelf
Registration Statement under the Securities Act or of the suspension by any
state securities commission of the qualification of the Transfer Restricted
Securities for offering or sale in any jurisdiction, or the initiation of any
proceeding for any of the preceding purposes, or (D) of the existence of any
fact or the happening of any event, during the Effectiveness Period, that makes
any statement of a material fact made in the Shelf Registration Statement, the
Prospectus, any amendment or supplement thereto, or any document incorporated by
reference therein untrue, or that requires the making of any additions to or
changes in the Shelf Registration Statement or the Prospectus in order to make
the statements therein not misleading. Each Holder of the Debentures, by
accepting the same, agrees to hold any communication from the Company pursuant
to paragraphs 4(b)(iii)(B) and 4(b)(iii)(D) in confidence.
If at any time the Commission shall issue any stop order suspending the
effectiveness of the Shelf Registration Statement, or any state securities
commission or other regulatory authority shall issue an order suspending the
qualification or exemption from qualification of the Transfer Restricted
Securities under state securities or Blue Sky laws, the Company shall use its
commercially reasonable efforts to obtain the withdrawal or lifting of such
order at the earliest possible time and will provide to the Initial Purchasers
and each Holder who is named in the Shelf Registration Statement prompt notice
of the withdrawal of any such order.
(iv) Make available at reasonable times for inspection by one
or more representatives of the selling Holders, designated in writing by a
Majority of Holders whose Transfer Restricted Securities are included in the
Shelf Registration Statement, and any attorney or accountant retained by such
selling Holders all financial and other records, pertinent corporate documents
and properties of the Company as shall be reasonably necessary to enable them to
exercise any applicable due diligence responsibilities, and cause the Company's
officers, directors, managers and employees to supply all information reasonably
requested by any such representative or representatives of the selling Holders,
attorney or accountant in connection with the Shelf Registration Statement after
the filing thereof and before its effectiveness, provided, however, that any
information designated by the Company as confidential at the time of delivery of
such information shall be kept confidential by the recipient thereof.
(v) If requested by any selling Holders promptly incorporate
in the Shelf Registration Statement or Prospectus, pursuant to a supplement or
post-effective amendment if necessary, such information as such selling Holders
may reasonably request to have included therein, including, without limitation:
(1) information relating to the "Plan of Distribution" of the Transfer
Restricted Securities, (2) information with respect to the principal amount of
8
Debentures or number of Conversion Shares being sold, (3) the purchase price
being paid therefor and (4) any other terms of the offering of the Transfer
Restricted Securities to be sold in such offering; provided, however, that with
respect to any information requested for inclusion by a selling Holder, this
clause (v) shall apply only to information that relates to the Transfer
Restricted Securities to be sold by such selling Holder; and make all required
filings of such Prospectus supplement or post-effective amendment as soon as
reasonably practicable after the Company is notified of the matters to be
incorporated in such Prospectus supplement or post-effective amendment.
(vi) Furnish to each selling Holder without charge, at least
one copy of the Shelf Registration Statement, as first filed with the
Commission, and of each amendment thereto (and any documents incorporated by
reference therein or exhibits thereto (or exhibits incorporated in such exhibits
by reference) as such Person may request).
(vii) Deliver to each selling Holder without charge, as many
copies of the Prospectus (including each preliminary prospectus) and any
amendment or supplement thereto as such Persons reasonably may request; subject
to any notice by the Company in accordance with this Section 4(b) of the
existence of any fact or event of the kind described in Section 4(b)(iii) (D),
the Company hereby consents to the use of the Prospectus and any amendment or
supplement thereto by each of the selling Holders in connection with the
offering and the sale of the Transfer Restricted Securities covered by the
Prospectus or any amendment or supplement thereto.
(viii) Before any public offering of Transfer Restricted
Securities, cooperate with the selling Holders, and their respective counsel in
connection with the registration and qualification of the Transfer Restricted
Securities under the securities or Blue Sky laws of such jurisdictions in the
United States as the selling Holders may reasonably request and do any and all
other acts or things necessary or advisable to enable the disposition in such
jurisdictions of the Transfer Restricted Securities covered by the Shelf
Registration Statement; provided, however, that the Company shall not be
required (A) to register or qualify as a foreign corporation or a dealer of
securities where it is not now qualified or to take any action that would
subject it to the service of process in any jurisdiction where it is not now so
subject or (B) to subject itself to taxation in any such jurisdiction if it is
not now so subject.
(ix) Cooperate with the selling Holders to facilitate the
timely preparation and delivery of certificates representing Transfer Restricted
Securities to be sold and not bearing any restrictive legends (unless required
by applicable securities laws); and enable such Transfer Restricted Securities
to be in such denominations and registered in such names as the Holders may
request at least five Business Days before any sale of Transfer Restricted
Securities.
(x) Use its commercially reasonable efforts to cause the
Transfer Restricted Securities covered by the Shelf Registration Statement to be
registered with or approved by such other U.S. governmental agencies or
authorities as may be necessary to enable the seller or sellers thereof to
consummate the disposition of such Transfer Restricted Securities.
9
(xi) Subject to Section 4(b)(i) hereof, if any fact or event
contemplated by Section 4(b)(iii)(D) hereof shall exist or have occurred, use
its commercially reasonable efforts to prepare a supplement or post-effective
amendment to the Shelf Registration Statement or related Prospectus or any
document incorporated therein by reference or file any other required document
so that, as thereafter delivered to the purchasers of Transfer Restricted
Securities, the Prospectus will not contain an 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, in light of the circumstances in which
they were made, not misleading.
(xii) Provide CUSIP numbers for all Transfer Restricted
Securities not later than the effective date of the Shelf Registration Statement
and provide the Trustee under the Indenture with certificates for the Debentures
that are in a form eligible for deposit with The Depository Trust Company.
(xiii) Cooperate and assist in any filings required to be made
with the NASD and in the performance of any due diligence investigation that is
required to be retained in accordance with the rules and regulations of the
NASD.
(xiv) Otherwise use its commercially reasonable efforts to
comply with all applicable rules and regulations of the Commission and all
reporting requirements under the Exchange Act.
(xv) Cause the Indenture to be qualified under the TIA not
later than the effective date of the Shelf Registration Statement required by
this Agreement, and, in connection therewith, cooperate with the Trustee and the
holders of Debentures to effect such changes to the Indenture as may be required
for such 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
thereunder to execute all documents that may be required to effect such changes
and all other forms and documents required to be filed with the Commission to
enable such Indenture to be so qualified in a timely manner.
(xvi) Cause all Conversion Shares covered by the Shelf
Registration Statement to be listed or quoted, as the case may be, on each
securities exchange or automated quotation system on which similar securities
issued by the Company are then listed or quoted.
(c) Each Holder agrees by acquisition of a Transfer Restricted Security
that, upon receipt of any notice (a "SUSPENSION NOTICE") from the Company of the
existence of any fact of the kind described in Section 4(b)(iii)(D) hereof, such
Holder will discontinue disposition of Transfer Restricted Securities pursuant
to the Shelf Registration Statement until:
(i) such Holder has received copies of the supplemented or
amended Prospectus contemplated by Section 4(b)(xi) hereof; or
10
(ii) such Holder is advised in writing by the Company that the
use of the Prospectus may be resumed, and has received copies of any additional
or supplemental filings that are incorporated by reference in the Prospectus.
If so directed by the Company, each Holder will deliver to the
Company (at the Company's expense) all copies, other than permanent file copies
then in such Holder's possession, of the Prospectus covering such Transfer
Restricted Securities that was current at the time of receipt of such notice of
suspension.
(d) Holders who do not complete the Questionnaire and deliver it to the
Company by the Questionnaire Deadline shall not be eligible to be named as
selling securityholders in the Prospectus or preliminary Prospectus included in
the Shelf Registration Statement and, therefore, (i) shall not be permitted to
sell any Transfer Restricted Securities pursuant to the Shelf Registration
Statement or (ii) receive any Additional Amounts, if any, to which they
otherwise would be entitled hereunder. Thereafter, upon receipt of a completed
Questionnaire, the Company shall as promptly as practicable, but in any event
within ten Business Days of receipt of such Questionnaire, file any amendments
or supplements to the Shelf Registration Statement to allow such Holder to be
named as a selling Holder in the Prospectus included therein. In addition, each
Holder who intends to be named as a selling Holder in the Shelf Registration
Statement shall promptly respond to the Company by providing such other
information as the Company may from time to time reasonably request in writing
regarding the Holder and the proposed distribution by such Holder of its
Transfer Restricted Securities in connection with the Shelf Registration
Statement or Prospectus or preliminary Prospectus included therein.
(e) Upon the effectiveness of the Shelf Registration Statement, each
Holder
shall notify the Company at least three Business Days prior to any intended
distribution of Transfer Restricted Securities pursuant to the Shelf
Registration Statement (a "SALE NOTICE"), which notice shall be effective for
five Business Days. Each Holder of Transfer Restricted Securities, by accepting
the same, agrees to hold any communication by the Company in response to a Sale
Notice in confidence.
5. Registration Expenses.
All expenses incident to the Company's performance of or compliance
with this Agreement shall be borne by the Company regardless of whether a Shelf
Registration Statement becomes effective, including, without limitation: (i) all
registration and filing fees and expenses (including filings made by any Initial
Purchasers or Holders with the NASD); (ii) all fees and expenses of compliance
with federal securities and state Blue Sky or securities laws; (iii) all
expenses of printing (including printing of Prospectuses and certificates for
Conversion Shares to be issued upon conversion of the Debentures), messenger and
delivery services and telephone; (iv) all fees and disbursements of counsel to
the Company and, subject to Section 6(c) below, the Holders of Transfer
Restricted Securities; (v) all application and filing fees in connection with
listing (or authorizing for quotation) the Conversion Shares on a national
11
securities exchange or automated quotation system pursuant to the requirements
hereof; and (vi) all fees and disbursements of independent certified public
accountants of the Company (including the expenses of any special audit and
comfort letters required by or incident to such performance).
The Company shall bear its internal expenses (including, without
limitation, all salaries and expenses of its officers and employees performing
legal, accounting or other duties), the expenses of any annual audit and the
fees and expenses of any Person, including special experts, retained by the
Company.
6. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless each Holder, such
Holder's officers, directors and employees and each person, if any, who controls
such Holder within the meaning of the Securities Act (each, an "INDEMNIFIED
Holder"), from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof (including, but not limited to, any
loss, claim, damage, liability or action relating to resales of the Transfer
Restricted Securities), to which such Indemnified Holder may become subject,
insofar as any such loss, claim, damage, liability or action arises out of, or
is based upon:
(i) any untrue statement or alleged untrue statement of a
material fact contained in (A) the Shelf Registration Statement or Prospectus or
any amendment or supplement thereto or (B) any blue sky application or other
document or any amendment or supplement thereto prepared or executed by the
Company (or based upon written information furnished by or on behalf of the
Company expressly for use in such blue sky application or other document or
amendment on supplement) filed in any jurisdiction specifically for the purpose
of qualifying any or all of the Transfer Restricted Securities under the
securities law of any state or other jurisdiction (such application or document
being hereinafter called a "BLUE SKY APPLICATION"); or
(ii) the omission or alleged omission to state therein any
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading;
and shall reimburse each Indemnified Holder promptly upon demand for any legal
or other expenses reasonably incurred by such Indemnified Holder in connection
with investigating or defending or preparing to defend against any such loss,
claim, damage, liability or action as such expenses are incurred; provided,
however, that the Company shall not be liable in any such case to the extent
that any such loss, claim, damage, liability or action arises out of, or is
based upon, (A) any untrue statement or alleged untrue statement or omission or
alleged omission made in the Shelf Registration Statement or Prospectus or
amendment or supplement thereto or Blue Sky Application or other document
referred to in Section 6(a)(i) hereof in reliance upon and in conformity with
written information furnished to the Company by or on behalf of any Holder (or
its related Indemnified Holder) specifically for use therein or (B) the failure
by the Holder or Indemnified Holder to deliver to any purchaser of its Transfer
12
Restricted Securities the Prospectus and any supplement or amendment thereto in
the form provided to such Holder or Indemnified Holder by the Company if such
Holder is required to so deliver pursuant to the prospectus delivery
requirements of the Securities Act. The foregoing indemnity agreement is in
addition to any liability which the Company may otherwise have to any
Indemnified Holder.
(b) Each Holder, severally and not jointly, shall indemnify and hold
harmless the Company, its officers, directors and employees and each person, if
any, who controls the Company within the meaning of the Securities Act, from and
against any loss, claim, damage or liability, joint or several, or any action in
respect thereof, to which the Company or any such officer, director, employee or
controlling person may become subject, insofar as any such loss, claim, damage
or liability or action arises out of, or is based upon:
(i) any untrue statement or alleged untrue statement of any
material fact contained in the Shelf Registration Statement or Prospectus or any
amendment or supplement thereto or any Blue Sky Application or other document
referred to in Section 6(a)(i) hereof; or
(ii) the omission or the alleged omission to state therein any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading;
but in each case only to the extent that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
such Holder (or its related Indemnified Holder) specifically for use therein,
and shall reimburse the Company and any such officer, employee or controlling
person promptly upon demand for any legal or other expenses reasonably incurred
by the Company or any such officer, employee or controlling person in connection
with investigating or defending or preparing to defend against any such loss,
claim, damage, liability or action as such expenses are incurred.
The foregoing indemnity agreement is in addition to any liability which
any Holder may otherwise have to the Company and any such officer, director,
employee or controlling person.
(c) Promptly after receipt by an indemnified party under this Section 6
of notice of any claim or the commencement of any action, the indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under this Section 6, notify the indemnifying party in writing of the
claim or the commencement of that action; provided, however, that the failure to
notify the indemnifying party shall not relieve it from any liability which it
may have under this Section 6 except to the extent it has been materially
prejudiced by such failure and, provided, further, that the failure to notify
the indemnifying party shall not relieve it from any liability which it may have
to an indemnified party otherwise than under this Section 6. If any such claim
or action shall be brought against an indemnified party, and it shall notify the
indemnifying party thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
13
counsel satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 6 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, if a
Majority of Holders have one or more legal defenses available to them and their
respective officers, employees and controlling persons that are different from
or additional to those available to the Company and its officers, directors,
employees and controlling persons, a Majority of Holders shall have the right to
employ a single counsel to represent jointly a Majority of Holders and their
respective officers, employees and controlling persons who may be subject to
liability arising out of any claim in respect of which indemnity may be sought
by a Majority of Holders against the Company under this Section 6, and the
reasonable fees and expenses of a single separate counsel shall be paid by the
Company. No indemnifying party shall:
(i) without the prior written consent of the indemnified
parties (which consent shall not be unreasonably withheld) settle or compromise
or consent to the entry of any judgment with respect to any pending or
threatened claim, action, suit or proceeding in respect of which indemnification
or contribution may be sought hereunder (whether or not the indemnified parties
are actual or potential parties to such claim or action) unless such settlement,
compromise or consent includes an unconditional release of each indemnified
party from all liability arising out of such claim, action, suit or proceeding,
or
(ii) be liable for any settlement of any such action effected
without its written consent (which consent shall not be unreasonably withheld),
but if settled with its written consent or if there be a final judgment for the
plaintiff in any such action, the indemnifying party agrees to indemnify and
hold harmless any indemnified party from and against any loss or liability by
reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 6 shall for any
reason be unavailable or insufficient to hold harmless an indemnified party
under Section 6(a) or 6(b) in respect of any loss, claim, damage or liability
(or action in respect thereof) referred to therein, each indemnifying party
shall, in lieu of indemnifying such indemnified party, contribute to the amount
paid or payable by such indemnified party as a result of such loss, claim,
damage or liability (or action in respect thereof):
(i) in such proportion as is appropriate to reflect the
relative benefits received by the Company from the offering and sale of the
Transfer Restricted Securities on the one hand and a Holder with respect to the
sale by such Holder of the Transfer Restricted Securities on the other, or
(ii) if the allocation provided by clause (6)(d)(i) is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause 6(d)(i) but also the relative
fault of the Company on the one hand and the Holders on the other in connection
with the statements or omissions or alleged statements or alleged omissions that
14
resulted in such loss, claim, damage or liability (or action in respect
thereof), as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand
and a Holder on the other with respect to such offering and such sale shall be
deemed to be in the same proportion as the total net proceeds from the offering
of the Debentures purchased under the Purchase Agreement (before deducting
expenses) received by the Company on the one hand, bear to the total proceeds
received by such Holder with respect to its sale of Transfer Restricted
Securities on the other. The relative fault of the parties shall be determined
by reference to whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company on the one hand or the Holders on the other,
the intent of the parties and their relative knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Company
and each Holder agree that it would not be just and equitable if the amount of
contribution pursuant to this Section 6(d) were determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the first sentence of this Section
6(d). The amount paid or payable by an indemnified party as a result of the
loss, claim, damage or liability, or action in respect thereof, referred to
above in this Section 6 shall be deemed to include, for purposes of this Section
6, any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending or preparing to defend any such
action or claim. 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 Transfer Restricted Securities purchased by it were
resold exceeds the amount of any damages which such Holder has otherwise been
required to pay by reason of any 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' obligations to contribute as provided in this
Section 6(d) are several and not joint.
7. Rule 144A.
In the event the Company is not subject to Section 13 or 15(d) of the
Exchange Act, the Company hereby agrees with each Holder, for so long as any
Transfer Restricted Securities remain outstanding, to make available to any
Holder or beneficial owner of Transfer Restricted Securities in connection with
any sale thereof and any prospective purchaser of such Transfer Restricted
Securities from such Holder or beneficial owner, the information required by
Rule 144A(d)(4) under the Securities Act in order to permit resales of such
Transfer Restricted Securities pursuant to Rule 144A.
8. Miscellaneous.
(a) REMEDIES. The Company acknowledges and agrees that any failure by
the Company to comply with its obligations under Section 2 hereof may result in
material irreparable injury to the Initial Purchasers or the Holders for which
there is no adequate remedy at law, that it will not be possible to measure
15
damages for such injuries precisely and that, in the event of any such failure,
the Initial Purchasers or any Holder may obtain such relief as may be required
to specifically enforce the Company's obligations under Section 2 hereof. The
Company further agrees to waive the defense in any action for specific
performance that a remedy at law would be adequate.
(b) ADJUSTMENTS AFFECTING TRANSFER RESTRICTED SECURITIES. The Company
shall not, directly or indirectly, take any action with respect to the Transfer
Restricted Securities as a class that would adversely affect the ability of the
Holders of Transfer Restricted Securities to include such Transfer Restricted
Securities in a registration undertaken pursuant to this Agreement.
(c) NO INCONSISTENT AGREEMENTS. The Company will not, on or after the
date of this Agreement, enter into any agreement with respect to its securities
that is inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof. In addition, the Company shall
not grant to any of its security holders (other than the Holders of Transfer
Restricted Securities in such capacity) the right to include any of its
securities in the Shelf Registration Statement provided for in this Agreement
other than the Transfer Restricted Securities. The Company has not previously
entered into any agreement (which has not expired or been terminated) granting
any registration rights with respect to its securities to any Person which
rights conflict with the provisions hereof.
(d) AMENDMENTS AND WAIVERS. This Agreement may not be amended, modified
or supplemented, and waivers or consents to or departures from the provisions
hereof may not be given, unless the Company has obtained the written consent of
a Majority of Holders or such greater percentage of the Holders as required by
the Indenture.
(e) NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, facsimile
transmission, or air courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the records of
the registrar under the Indenture or the transfer agent of the Conversion
Shares, as the case may be; and
(ii) if to the Company, to:
Alloy, Inc.
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxx XxXxxxx
with a copy to:
16
Katten Xxxxxx Xxxxx & Rosenman
0000 Xxxxxx Xxxxxxxxx Xx., X.X.
East Lobby, Suite 700
Washington, District of Columbia
20007-5201
Telecopy: (000) 000-0000
Attention: Xxxxxxx Xxxx
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt acknowledged, if transmitted by
facsimile; and on the next Business Day, if timely delivered to an air courier
guaranteeing overnight delivery.
(f) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of each of the parties,
including without limitation and without the need for an express assignment,
subsequent Holders of Transfer Restricted Securities; provided, however, that
(i) this Agreement shall not inure to the benefit of or be binding upon a
successor or assign of a Holder unless and to the extent such successor or
assign acquired Transfer Restricted Securities from such Holder and (ii) nothing
contained herein shall be deemed to permit any assignment, transfer or other
disposition of Transfer Restricted Securities in violation of the terms of the
Purchase Agreement or the Indenture. If any transferee of any Holder shall
acquire Transfer Restricted Securities, in any manner, whether by operation of
law or otherwise, such Transfer Restricted Securities shall be held subject to
all of the terms of this Agreement, and by taking and holding such Transfer
Restricted Securities such person shall be conclusively deemed to have agreed to
be bound by and to perform all of the terms and provisions of this Agreement.
(g) 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 an original and all of which taken
together shall constitute one and the same agreement.
(h) SECURITIES HELD BY THE COMPANY OR ITS AFFILIATES. Whenever the
consent or approval of Holders of a specified percentage of Transfer Restricted
Securities is required hereunder, Transfer Restricted Securities held by the
Company or its Affiliates shall not be counted in determining whether such
consent or approval was given by the Holders of such required percentage.
(i) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(j) GOVERNING LAW. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York.
17
(k) SEVERABILITY. If any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid, illegal
or unenforceable, the validity, legality and enforceability of any such
provision in every other respect and of the remaining provisions contained
herein shall not be affected or impaired thereby.
(l) ENTIRE AGREEMENT. This Agreement is intended by the parties as a
final expression of their agreement and 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. 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 Transfer Restricted Securities. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.
18
IN WITNESS WHEREOF, the parties have caused this Registration
Rights Agreement to be duly executed as of the date first written above.
ALLOY, INC.
By: /s/ Xxxx X. XxXxxxx
-----------------------------------------
Name: Xxxx X. XxXxxxx
Title: Vice President and General Counsel
XXXXXX BROTHERS INC.
CIBC WORLD MARKETS CORP.
X.X. XXXXXX SECURITIES INC.
XX XXXXX SECURITIES CORPORATION
By XXXXXX BROTHERS INC.
By: /s/ Xxxx X. Xxxxxxxxx
-----------------------------------------
Authorized Representative
19
ANNEX A
ALLOY, INC.
FORM OF SELLING SECURITYHOLDER NOTICE AND QUESTIONNAIRE
TO BE NAMED AS A SELLING SECURITYHOLDER IN THE PROSPECTUS,
BENEFICIAL OWNERS SHALL COMPLETE AND DELIVER THIS QUESTIONNAIRE WITHIN 20
BUSINESS DAYS AFTER THE DATE OF THE WRITTEN REQUEST THEREFOR BY THE COMPANY.
BENEFICIAL OWNERS THAT DO NOT COMPLETE THIS QUESTIONNAIRE AND DELIVER IT TO THE
COMPANY WILL NOT BE ELIGIBLE TO BE NAMED AS SELLING SECURITYHOLDERS IN THE
PROSPECTUS AND THEREFORE WILL NOT BE PERMITTED TO SELL ANY TRANSFER RESTRICTED
SECURITIES PURSUANT TO THE SHELF REGISTRATION STATEMENT.
The undersigned beneficial owner of 5.375% Senior Convertible Debentures due
2023 (CUSIP No.019855 AA 3) (the "debentures"), or common stock, par value $0.01
per share issuable upon conversion thereof (the "CONVERSION SHARES" and together
with the debentures, the "TRANSFER RESTRICTED SECURITIES") of Alloy, Inc., a
Delaware corporation (the "Company"), understands that the Company has filed, or
intends shortly to file, with the Securities and Exchange Commission (the
"COMMISSION") a registration statement on Form S-3 or such other form as may be
available (the "SHELF REGISTRATION STATEMENT"), for the registration and resale
under Rule 415 of the Securities Act of 1933, as amended (the "SECURITIES ACT"),
of the Transfer Restricted Securities in accordance with the terms of the Resale
Registration Rights Agreement, dated as of July 23, 2003 (the "REGISTRATION
RIGHTS AGREEMENT") between the Company and Xxxxxx Brothers Inc., CIBC World
Markets Corp., X.X. Xxxxxx Securities Inc. and XX Xxxxx Securities Corporation
as initial purchasers. A copy of the Registration Rights Agreement is available
from the Company upon request at the address set forth below. All capitalized
terms not otherwise defined herein have the meaning ascribed thereto in the
Registration Rights Agreement.
Each beneficial owner of Transfer Restricted Securities is
entitled to the benefits of the Registration Rights Agreement. In order to sell
or otherwise dispose of any Transfer Restricted Securities pursuant to the Shelf
Registration Statement, a beneficial owner of Transfer Restricted Securities
generally will be required to be named as a selling securityholder in the
related prospectus, deliver a prospectus to purchasers of Transfer Restricted
Securities and be bound by those provisions of the Registration Rights Agreement
applicable to such beneficial owner (including certain indemnification rights
and obligations, as described below).
Upon any sale of Transfer Restricted Securities pursuant to a
Shelf Registration Statement, the undersigned beneficial owner (the "SELLING
SECURITYHOLDER") will be required to deliver to the Company and the trustee for
the debentures the Notice to Transfer (completed and signed) set forth in
Exhibit 1 to this Notice and Questionnaire.
Certain legal consequences arise from being named as a selling
securityholder in the Shelf Registration Statement and the related prospectus.
Accordingly, holders and beneficial owners of Transfer Restricted Securities are
advised to consult their own securities law counsel regarding the consequences
A-1
of being named or not being named as a selling securityholder in the Shelf
Registration Statement and the related prospectus.
NOTICE
The Selling Securityholder of Transfer Restricted Securities
hereby gives notice to the Company of its intention to sell or otherwise dispose
of Transfer Restricted Securities beneficially owned by it and listed below in
Item 3 (unless otherwise specified under Item 3) pursuant to the Shelf
Registration Statement. The undersigned, by signing and returning this
Questionnaire, understands that it will be bound by the terms and conditions of
this Questionnaire and the Registration Rights Agreement.
Pursuant to the Registration Rights Agreement, the undersigned
has agreed to indemnify and hold harmless the Company, the Company's directors,
the Company's officers who sign the Shelf Registration Statement and each
person, if any, who controls the Company within the meaning of either Section 15
of the Securities Act or Section 20 of the Exchange Act, from and against
certain losses arising in connection with statements concerning the undersigned
made in the Shelf Registration Statement or the related prospectus in reliance
upon the information provided in this Questionnaire.
The undersigned hereby provides the following information to
the Company and represents and warrants that such information is accurate and
complete:
QUESTIONNAIRE
1. INFORMATION REGARDING SELLING SECURITYHOLDER
(a) Full legal name of Selling Securityholder:
______________________________________
(b) Full legal name of registered holder (if not the same as (a)
above) through which Transfer Restricted Securities listed in
Item (3) below are held:
---------------------------------------------------------------
(c) Full legal name of DTC participant (if applicable and if not
the same as (b) above) through which Transfer Restricted
Securities listed in Item (3) are held:
---------------------------------------------------------------
2. ADDRESS FOR NOTICES TO SELLING SECURITYHOLDER
Telephone: _____________________________
A-2
Fax: __________________________________
Contact Person: _________________________
3. BENEFICIAL OWNERSHIP OF TRANSFER RESTRICTED SECURITIES
Type of Transfer Restricted Securities beneficially owned, and
principal amount of debentures or number of
(a) Conversion Shares of the Company, as the case may be, beneficially
owned:
---------------------------------
(b) CUSIP No(s). of such Transfer Restricted Securities beneficially
owned:
---------------------------------
4. BENEFICIAL OWNERSHIP OF THE COMPANY'S SECURITIES OWNED BY THE SELLING
SECURITYHOLDER
Except as set forth below in this Item (4), the undersigned is not the
beneficial or registered owner of any securities of the Company other
than the Transfer Restricted Securities listed above in Item (3)
("OTHER SECURITIES").
(a) Type and amount of Other Securities beneficially owned by the
Selling Securityholder:
------------------------------------------------------------------
(b) CUSIP No(s). of such Other Securities beneficially owned:
-------------------------------------------------------------------
5. RELATIONSHIP WITH THE COMPANY
Except as set forth below, neither the undersigned nor any of
its affiliates, officers, directors or principal equity holders (5% or more) has
held any position or office or has had any other material relationship with the
Company (or its predecessors or affiliates) during the past three years.
State any exceptions here: _______________________________
A-3
6. PLAN OF DISTRIBUTION
Except as set forth below, the undersigned (including its
donees or pledgees) intends to distribute the Transfer Restricted Securities
listed above in Item (3) pursuant to the Shelf Registration Statement only as
follows (if at all). Such Transfer Restricted Securities may be sold from time
to time directly by the undersigned or, alternatively, through underwriters,
broker-dealers or agents. If the Transfer Restricted Securities are sold through
underwriters or broker-dealers, the Selling Securityholder will be responsible
for underwriting discounts or commissions or agent's commissions. Such Transfer
Restricted Securities may be sold in one or more transactions at fixed prices,
at prevailing market prices at the time of sale, at varying prices determined at
the time of sale, or at negotiated prices. Such sales may be effected in
transactions (which may involve crosses or block transactions):
o on any national securities exchange or quotation service on
which the Transfer Restricted Securities may be listed or
quoted at the time of sale;
o in the over-the-counter market;
o in transactions otherwise than on such exchanges or services
or in the over-the-counter market; or
o through the writing of options.
In connection with sales of the Transfer Restricted Securities
or otherwise, the undersigned may enter into hedging transactions with
broker-dealers, which may in turn engage in short sales of the Transfer
Restricted Securities and deliver Transfer Restricted Securities to close out
such short positions, or loan or pledge Transfer Restricted Securities to
broker-dealers that in turn may sell such securities.
State any exceptions here: __________________________________
--------------------------------------------------------------
Note: In no event will such method(s) of distribution take the
form of an underwritten offering of the Transfer Restricted Securities without
the prior agreement of the Company.
7. INSTRUCTIONS FOR DELIVERY OF QUESTIONNAIRE
Please return the completed and executed Questionnaire to
Alloy, Inc. at: Attention: Xxxx XxXxxxx, Alloy, Inc., 000 Xxxx 00xx Xx., 00xx
Xxxxx, Xxx Xxxx, XX 00000.
8. ACKNOWLEDGMENTS
The undersigned acknowledges that it understands its
obligation to comply with the provisions of the Exchange Act and the rules and
regulations promulgated thereunder relating to stock manipulation, particularly
A-4
Regulation M thereunder (or any successor rules or regulations), in connection
with any offering of Transfer Restricted Securities pursuant to the Shelf
Registration Statement. The undersigned agrees that neither it nor any person
acting on its behalf will engage in any transaction in violation of such
provisions.
The Selling Securityholder hereby acknowledges its obligations
under the Registration Rights Agreement to indemnify and hold harmless certain
persons as set forth therein. Pursuant to the Registration Rights Agreement, the
Company has agreed under certain circumstances to indemnify the Selling
Securityholders against certain liabilities.
In accordance with the undersigned's obligation under the
Registration Rights Agreement to provide such information as may be required by
law for inclusion in the Shelf Registration Statement, the undersigned agrees to
promptly notify the Company of any inaccuracies or changes in the information
provided herein that may occur subsequent to the date hereof at any time while
the Shelf Registration Statement remains effective. All notices hereunder and
pursuant to the Registration Rights Agreement shall be made in writing at the
address set forth above.
By signing below, the undersigned consents to the disclosure
of the information contained herein in its answers to items (1) through (6)
above and the inclusion of such information in the Shelf Registration Statement
and the related Prospectus. The undersigned understands that such information
will be relied upon by the Company in connection with the preparation or
amendment of the Shelf Registration Statement and the related Prospectus.
IN WITNESS WHEREOF, the undersigned, by authority duly given,
has caused this Questionnaire to be executed and delivered either in person or
by its duly authorized agent.
Beneficial Owner
By:_______________________________
Name:
Title:
Date:
A-5
EXHIBIT 1 TO ANNEX A
NOTICE OF TRANSFER PURSUANT
TO REGISTRATION STATEMENT
Alloy, Inc.
000 Xxxx 00xx Xxxxxx,
00xx Xxxxx
Xxx Xxxx, XX 00000
Re: Alloy, Inc. (the "Company") 5.375% Senior Convertible
Debentures due 2023 (the "debentures")
Dear Sirs:
Please be advised that has transferred $ aggregate principal
amount of the above-referenced debentures of the Company or the common stock
issued on conversion of the debentures (the "Common Stock"), pursuant to the
Registration Statement on Form S-3 (File No. ) filed by the Company.
We hereby certify that the prospectus delivery requirements,
if any, of the Securities Act of 1933, as amended, have been satisfied with
respect to the transfer described above and the above named beneficial owner of
the debentures or the common stock is named as a selling securityholder in the
prospectus dated , or in amendments or supplements thereto, and that the
aggregate principal amount of the debentures or number of share common stock
transferred are [all or a portion of] the debentures or the Common Stock listed
in such prospectus, as amended or supplemented, opposite such owner's name.
Very truly yours,
[name]
By:________________________________
(Authorized Signature)
Dated:
A-6
