Exhibit 99.1
EXECUTION COPY
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PURCHASE AGREEMENT
among
PLAYBOY ENTERPRISES, INC.,
and
UBS SECURITIES LLC,
BANC OF AMERICA SECURITIES LLC
and
BEAR, XXXXXXX & CO. INC.,
as Initial Purchasers
Dated as of March 9, 2005
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PURCHASE AGREEMENT
March 9, 2005
UBS SECURITIES LLC
BANC OF AMERICA SECURITIES LLC
BEAR, XXXXXXX & CO. INC.
as Initial Purchasers
c/o UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Playboy Enterprises, Inc., a corporation organized under the laws of
Delaware, (the "Company"), proposes to issue and sell to the initial
purchasers named in Schedule A hereto (the "Initial Purchasers")
U.S.$100,000,000 aggregate principal amount of its 3.00% Convertible Senior
Subordinated Notes due 2025 (the "Firm Notes"). In addition, the Company
proposes to grant to the Initial Purchasers the option to purchase from the
Company up to an additional U.S.$15,000,000 aggregate principal amount of the
Company's 3.00% Convertible Senior Subordinated Notes due 2025 (the
"Additional Notes"). The Firm Notes and the Additional Notes are hereinafter
collectively sometimes referred to as the "Notes."
The Notes are to be issued pursuant to an indenture (the "Indenture")
to be dated as of March 15, 2005, between the Company and LaSalle Bank
National Association, as trustee (the "Trustee"). The Notes will be
convertible in accordance with their terms and the terms of the Indenture into
cash and, if applicable, shares of the Class B common stock (the "Common
Stock") of the Company, par value U.S.$0.01 per share (the "Shares").
The Notes and the Shares will be offered without being registered
under the U.S. Securities Act of 1933, as amended (the "Securities Act"), to
"qualified institutional buyers" in compliance with the exemption from
registration provided by Rule 144A under the Securities Act ("Rule 144A").
The Initial Purchasers and their direct and indirect transferees will
be entitled to the benefits of a Registration Rights Agreement to be entered
into at or prior to the time of purchase (as defined herein) between the
Company and the Initial Purchasers (the "Registration Rights Agreement").
In connection with the sale of the Notes, the Company has prepared a
preliminary offering memorandum (the "Preliminary Memorandum") and will
prepare a final offering memorandum (the "Final Memorandum" and, with the
Preliminary Memorandum, each a "Memorandum") including or incorporating by
reference a description of the terms of the Notes and the Shares, the terms of
the offering and a description of the Company. As used herein, the term
"Memorandum" shall include in each case the documents incorporated by
reference therein, if any. The terms "supplement", "amendment" and "amend" as
used herein with respect to a Memorandum shall include all documents deemed to
be incorporated by reference in such Memorandum, if any, that are filed
subsequent to the date of such Memorandum with the U.S. Securities and
Exchange Commission (the "Commission") pursuant to the U.S. Securities
Exchange Act of 1934, as amended (the "Exchange Act").
The Company and the Initial Purchasers agree as follows:
1. Sale and Purchase: Upon the basis of the warranties and
representations and subject to the other terms and conditions herein set
forth, the Company agrees to sell to the Initial Purchasers, and each of the
Initial Purchasers, severally and not jointly, agrees to purchase from the
Company, the aggregate principal amount of Firm Notes set forth opposite the
name of such Initial Purchaser in Schedule A hereto at a purchase price of 97%
of the principal amount thereof.
In addition, solely to cover over-allotments, the Company hereby
grants to the several Initial Purchasers the option to purchase from time to
time, and upon the basis of the representations and warranties and subject to
the other terms and conditions herein set forth, each Initial Purchaser shall
have the right to purchase from time to time from the Company, at a purchase
price of 97% of the principal amount thereof, plus accrued interest, if any,
from the time of purchase (as hereinafter defined) to the additional time of
purchase (as hereinafter defined), Additional Notes in an aggregate principal
amount proportional to the aggregate principal amount of Firm Notes set forth
opposite such Initial Purchaser's name on Schedule A hereto. This option may
only be exercised by UBS Securities LLC ("UBS"), on behalf of the Initial
Purchasers, at any time on or before the thirteenth day following the date the
Firm Notes are issued, by written notice to the Company. Such notice shall set
forth the aggregate initial principal amount of Additional Notes as to which
the option is being exercised, and the date and time when the Additional Notes
are to be delivered (such date and time being herein referred to as the
"additional time of purchase"); provided, however, that the additional time of
purchase shall not be earlier than (i) the time of purchase or (ii) the second
business day after the date on which the option shall have been exercised nor
later than the tenth business day after the date on which the option shall
have been exercised. As used herein, "business day" shall mean a day on which
the New York Stock Exchange is open for trading.
2. Payment and Delivery: Payment of the purchase price for the Firm
Notes shall be made to the Company by Federal (same day) funds, against
delivery of the Firm Notes to you, at the offices of Xxxxxx & Xxxxxxx LLP in
Chicago, Illinois, or at such other place as may be agreed upon by the parties
hereto, for the respective accounts of the Initial Purchasers. Such payment
and delivery shall be made at 10:00 a.m., central standard time, on March 15,
2005 (unless another time shall be agreed to by you and the Company). The time
at which such payment and delivery are actually made is herein called, from
time to time, the "time of purchase."
Payment of the purchase price for the Additional Notes shall be made
at the additional time of purchase in the same manner and at the same office
and time of day as the payment for the Firm Notes.
Certificates for the Notes shall be in definitive form or global
form, as specified by you, and registered in the names and in such
denominations as you shall request in writing not later than one full business
day prior to the time of purchase or the additional time of purchase, as the
case may be. For the purpose of expediting the checking of the certificates
for the Notes by you, the Company agrees to make such certificates available
to you for such purpose at least one full business day preceding the time of
purchase or the additional time of purchase, as the case may be.
3. Representations and Warranties of the Company: The Company
represents and warrants to each of the Initial Purchasers that:
(a) (i) Each document, if any, filed or to be filed pursuant to the
Exchange Act and incorporated by reference in any Memorandum complied or will
comply when so filed in all material respects with the Exchange Act and the
applicable rules and regulations of the Commission thereunder, (ii) the
Preliminary Memorandum did not, as of its date, and the Final Memorandum, as
amended or supplemented, does not, as of its date, and will not, at the time
of purchase or at any additional time of purchase, contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading and (iii) the Final Memorandum will not contain
any material statement relating to the Company that has not been disclosed to
the Initial Purchasers or counsel for the Initial Purchasers prior to the date
of the Final Memorandum; provided, however, that any representations and
warranties set forth in this paragraph do not apply to statements or omissions
in any Memorandum based upon information relating to any Initial Purchaser
furnished to the Company in writing by or on behalf of such Initial Purchaser
expressly for use therein;
(b) As of December 31, 2004, the Company had an authorized and
outstanding capitalization as set forth under the column heading entitled
"Actual" in the section of the Final Memorandum entitled "Capitalization" and,
as adjusted to give effect to the transactions described in such section,
including the offering of the Firm Notes and the application of the net
proceeds therefrom as described in the "Use of proceeds" section of the Final
Memorandum, the Company would, as of December 31, 2004, have had an authorized
and outstanding capitalization as set forth under the column heading entitled
"As adjusted" in the section of the Final Memorandum entitled
"Capitalization"; all of the issued and outstanding shares of all classes of
capital stock of the Company have been duly authorized and validly issued and
are fully paid and non-assessable, have been issued in compliance with all
federal and state securities laws and were not issued in violation of any
statutory or contractual preemptive rights, resale rights, rights of first
refusal or similar rights;
(c) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the State of Delaware and has
the corporate power and authority to own, lease and operate its properties and
to conduct its business as described in the Memorandum;
(d) The Company is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction where the ownership
or leasing of its properties or the conduct of its business requires such
qualification, except where the failure to be so qualified and in good
standing would not, individually or in the aggregate, have a material adverse
effect on the business, financial condition, results of operations or business
prospects of the Company and the Subsidiaries (as hereinafter defined) taken
as a whole (a "Material Adverse Effect"); and the Company is in compliance in
all respects with the laws, orders, rules, regulations and directives issued
or administered by such jurisdictions, except where the failure to be in
compliance would not have a Material Adverse Effect;
(e) The subsidiaries of the Company, other than those subsidiaries of
the Company listed in Exhibit 21 to the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 2004 (the "Subsidiaries"), would not,
individually or in the aggregate, be a "significant subsidiary" of the Company
as defined by Rule 1-02 of Regulation S-X; each Subsidiary has been duly
incorporated or formed, is validly existing as a corporation or limited
liability company in good standing under the laws of the jurisdiction of its
incorporation or formation and has the corporate or limited liability company
power and authority to own, lease and operate its properties and to conduct
its business as described in the Memorandum; each Subsidiary is duly qualified
to do business as a foreign corporation or limited liability company and is in
good standing in each jurisdiction where the ownership or leasing of its
properties or the conduct of its business requires such qualification, except
where the failure to be so qualified and in good standing would not,
individually or in the aggregate, have a Material Adverse Effect; each of the
Subsidiaries is in compliance in all respects with the laws, orders, rules,
regulations and directives issued or administered by such jurisdictions,
except where the failure to be in compliance would not have a Material Adverse
Effect; all of the issued and outstanding shares of capital stock of the
Subsidiaries have been duly authorized and validly issued, are fully paid and
non-assessable and, except for the capital stock of Xxxxxxx.xxx, Inc., a
corporation organized under the laws of Delaware ("Xxxxxxx.xxx"), and its
subsidiaries, are owned directly or indirectly by the Company, free and clear
of all material liens, encumbrances, equities or claims, other than those
securing obligations under (i) the Indenture, dated as of March 11, 2003, as
amended (the "Holdings Indenture"), between PEI Holdings, Inc., a corporation
organized under the laws of Delaware ("PEI Holdings"), the Guarantors party
thereto and X.X. Xxxxxx Trust Company, National Association (as successor to
Bank One, N.A.), as trustee, and (ii) the Credit Agreement, dated as of March
11, 2003 (the "Credit Agreement"), among PEI Holdings, each lender from time
to time party thereto and Bank of America, N.A., as Agent (as defined
therein);
(f) Neither the Company nor any of the Subsidiaries is in breach or
violation of, or in default under (nor has any event occurred which with
notice, lapse of time, or both would result in any breach or violation of,
constitute a default under or give the holder of any indebtedness (or person
acting on such holder's behalf) the right to require the repurchase,
redemption or repayment of all or part of such indebtedness under) its
respective charter or by-laws or any indenture, mortgage, deed of trust, bank
loan or credit agreement or other evidence of indebtedness, or any license,
lease, contract or other agreement or instrument to which the Company or any
of the Subsidiaries is a party or by which any of them or their respective
properties may be bound or affected, or under any federal, state, local or
foreign law, regulation or rule or any decree, judgment or order applicable to
the Company or any of the Subsidiaries, except as would not have a Material
Adverse Effect, and the execution, delivery and performance by the Company of
this Agreement, the Registration Rights Agreement, the Indenture and the Notes
and consummation of the transactions contemplated hereby and thereby,
including the issuance of the Notes and the issuance of the Shares upon
conversion of the Notes, will not conflict with, result in any breach or
violation of or constitute a default under (nor constitute any event which
with notice, lapse of time or both would result in any breach or violation of
or constitute a default under), the charter or by-laws of the Company or any
of the Subsidiaries or any material federal, state, local or foreign law,
regulation or rule or any material decree, judgment or order applicable to the
Company or any of the Subsidiaries or, except as would not have a Material
Adverse Effect, any indenture, mortgage, deed of trust, bank loan or credit
agreement or other evidence of indebtedness, or any license, lease, contract
or other agreement or instrument to which the Company or any of the
Subsidiaries is a party or by which any of them or their respective properties
may be bound or affected;
(g) The Indenture has been duly authorized by the Company and when
duly executed and delivered by the Company and duly authorized, executed and
delivered by the Trustee will (assuming the Indenture is a valid and binding
obligation of the Trustee) be a valid and binding agreement of the Company,
enforceable in accordance with its terms, except as the enforceability thereof
may be limited by bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer or similar laws affecting creditors' rights generally and
general principles of equity;
(h) The Registration Rights Agreement has been duly authorized by the
Company and when executed and delivered by the Company and duly authorized,
executed and delivered by the Initial Purchasers will (assuming the
Registration Rights Agreement is a valid and binding obligation of the Initial
Purchasers) be a valid and binding agreement of the Company, enforceable in
accordance with its terms, except as the enforceability thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or
similar laws affecting creditors' rights generally and general principles of
equity and except as rights to indemnification and contribution may be limited
under applicable law;
(i) The Notes have been duly authorized by the Company and when
executed and delivered by the Company and duly authenticated by the Trustee in
accordance with the terms of the Indenture and delivered to and paid for by
the Initial Purchasers in accordance with the terms hereof will (assuming the
Indenture is a valid and binding obligation of the Trustee) constitute valid
and binding obligations of the Company, enforceable in accordance with their
terms, except as the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer or similar laws
affecting creditors' rights generally and general principles of equity, and
will be entitled to the benefits of the Indenture; the Shares initially
issuable upon conversion of the Notes have been duly authorized and reserved
for issuance upon conversion of the Notes and are sufficient in number to meet
the current conversion requirements, and upon conversion of the Notes in
accordance with their terms and the terms of the Indenture will be issued free
of statutory and contractual preemptive rights, and such Shares, when so
issued upon such conversion in accordance with the terms of the Notes and the
terms of the Indenture, will be validly issued, fully paid and non-assessable;
(j) This Agreement has been duly authorized, executed and delivered
by the Company;
(k) The terms of the Notes, the Registration Rights Agreement, the
Indenture and the capital stock of the Company, including the Shares, conform
in all material respects to the description thereof contained or incorporated
by reference in the Final Memorandum;
(l) No approval, authorization, consent or order of or filing with
any federal, state, local or foreign governmental or regulatory commission,
board, body, authority or agency or the New York Stock Exchange or the Pacific
Exchange, or approval of stockholders of the Company, is required in
connection with the issuance and sale by the Company of the Notes or the
issuance by the Company of Shares upon conversion of the Notes or the
consummation of the transactions contemplated hereby other than (i) as may be
required under the securities or blue sky laws of the various jurisdictions in
which the Notes and the Shares are being offered by the Initial Purchasers and
(ii) as may be required by federal and state securities laws with respect to
the Company's obligations under the Registration Rights Agreement and (iii)
pursuant to the listing requirements of the Shares on the New York Stock
Exchange and the Pacific Exchange in connection therewith;
(m) The Company has obtained for the benefit of the Initial
Purchasers the agreement (a "Lock-Up Agreement"), in the form set forth as
Exhibit B-1 hereto, of each of its executive officers and directors named in
Exhibit B-2 hereto;
(n) Ernst & Young LLP, whose reports on the consolidated financial
statements of the Company are included or incorporated by reference in the
Memorandum, are independent public accountants with respect to the Company as
required by the Securities Act and the applicable published rules and
regulations thereunder;
(o) Each of the Company and the Subsidiaries has all necessary
licenses, authorizations, consents and approvals (collectively, "Consents")
and has made all necessary filings required under any federal, state, local or
foreign law, regulation or rule and has obtained all necessary Consents from
other persons, in order to conduct its respective business as currently
conducted, except where the failure to have or to have obtained such Consents
or to have made such filings would not have a Material Adverse Effect; and
neither the Company nor any of the Subsidiaries has received notice of any
proceedings relating to revocation or modification of any such Consent, except
where such revocation or modification would not, individually or in the
aggregate, have a Material Adverse Effect;
(p) Except as described in the Memorandum, there are no actions,
suits, claims, investigations or proceedings pending or, to the knowledge of
the Company, threatened to which the Company or any of the Subsidiaries is or
would be a party or to which any of their respective properties is or would be
subject at law or in equity, or before or by any federal, state, local or
foreign governmental or regulatory commission, board, body, authority or
agency, except any such action suit, claim, investigation or proceeding which
would not result in a judgment, decree or order either (A) having,
individually or in the aggregate, a Material Adverse Effect or (B) preventing
the consummation of the transactions contemplated hereby and by the Indenture,
the Registration Rights Agreement and the Notes;
(q) All tax returns required to be filed by the Company and each of
the Subsidiaries have been filed, except to the extent that failure to file
such tax returns would not have a Material Adverse Effect, and all taxes and
other assessments of a similar nature (whether imposed directly or through
withholding) including any interest, additions to tax or penalties applicable
thereto (other than those being contested in good faith and for which adequate
reserves have been provided) due or claimed to be due from such entities have
been paid, except to the extent that the failure to pay such taxes,
assessments, interest, additions to tax and penalties would not have a
Material Adverse Effect;
(r) The Company and each of the Subsidiaries maintains insurance
covering its properties, operations, personnel and businesses as the Company
deems adequate; such insurance insures against such losses and risks to an
extent which is adequate in accordance with customary industry practice to
protect the Company and the Subsidiaries and their respective businesses; all
such insurance is fully in force on the date hereof and will be fully in force
at the time of purchase and any additional time of purchase, except where the
failure to maintain such insurance would not have a Material Adverse Effect;
(s) Neither the Company nor any of the Subsidiaries has sustained
since the date of the last audited financial statements included or
incorporated by reference in the Memorandum any loss or interference with its
respective business from fire, explosion, flood or other calamity, whether or
not covered by insurance, except as would not have a Material Adverse Effect;
(t) Except for matters which would not, individually or in the
aggregate, have a Material Adverse Effect, (i) there is (A) no unfair labor
practice complaint pending or, to the Company's knowledge, threatened against
the Company or any of the Subsidiaries before the National Labor Relations
Board, and no grievance or arbitration proceeding arising out of or under
collective bargaining agreements is pending or, to the Company's knowledge,
threatened, (B) no strike, labor dispute, slowdown or stoppage pending or, to
the Company's knowledge, threatened against the Company or any of the
Subsidiaries and (C) no union representation dispute currently existing
concerning the employees of the Company or any of the Subsidiaries and (ii) to
the Company's knowledge, (A) no union organizing activities are currently
taking place concerning the employees of the Company or any of the
Subsidiaries and (B) there has been no violation of any federal, state, local
or foreign law relating to discrimination in the hiring, promotion or pay of
employees, any applicable wage or hour laws or any provision of the Employee
Retirement Income Security Act of 1974 or the rules and regulations
promulgated thereunder concerning the employees of the Company or any of the
Subsidiaries;
(u) Each of the Company and the Subsidiaries owns, or has obtained
valid and enforceable licenses for, or other rights to use, the inventions,
patent applications, patents, trademarks (both registered and unregistered),
tradenames, copyrights, trade secrets and other proprietary information
described or incorporated by reference in the Memorandum as being owned or
licensed by them or that are necessary for the conduct of their respective
businesses as currently conducted, except where the failure to own, license or
have such rights would not, individually or in the aggregate, have a Material
Adverse Effect (collectively, "Intellectual Property"); except as would not
have a Material Adverse Effect, (i) there are no third parties who have or, to
the Company's knowledge, will be able to establish rights to any Intellectual
Property, except for the ownership rights of the owners of the Intellectual
Property which is licensed to the Company, (ii) to the Company's knowledge,
there is no infringement by third parties of any Intellectual Property which
is licensed to the Company, (iii) there is no pending or threatened action,
suit, proceeding or claim by others challenging the Company's rights in or to
any Intellectual Property, and the Company is unaware of any facts which could
form a reasonable basis for any such claim, (iv) there is no pending or
threatened action, suit, proceeding or claim by others challenging the
validity or scope of any Intellectual Property, and the Company is unaware of
any facts which could form a reasonable basis for any such claim, and (vi)
there is no patent or patent application that contains claims that interfere
with the issued or pending claims of any of the Intellectual Property; and
neither the Company nor any of the Subsidiaries has received any written
notice of infringement of or conflict with asserted intellectual property
rights of any third party which, if the subject of an unfavorable decision,
ruling or finding, would have a Material Adverse Effect;
(v) The audited financial statements included or incorporated by
reference in the Memorandum, together with the related notes and schedules,
present fairly in all material respects the consolidated financial position of
the Company as of the dates indicated and the consolidated results of
operations and cash flows of the Company for the periods specified and, except
as may be expressly stated in such related notes, have been prepared in
compliance in all material respects with the requirements of the Exchange Act
and in compliance with the requirements of generally accepted accounting
principles applied on a consistent basis during the periods involved; except
as disclosed in the Offering Memorandum, any pro forma financial statement or
data included or incorporated by reference in the Memorandum complies with the
requirements of Regulation S-X under the Securities Act, including without
limitation Article 11 thereof, and the assumptions used in the preparation of
such pro forma financial statements or data included or incorporated by
reference in the Memorandum are reasonable, the pro forma adjustments used
therein are appropriate to give effect to the transactions or circumstances
described therein and the pro forma adjustments have been properly applied to
the historical amounts in the compilation of those statements and data; and
the other financial data set forth or incorporated by reference in the
Memorandum present fairly, in all material respects, the data shown therein
and, except as disclosed in the Memorandum, have been prepared on a basis
consistent with that of the financial statements that are included or
incorporated by reference in the Memorandum or the books and records of the
Company; and the Company does not have any material liabilities or
obligations, direct or contingent (including any off-balance sheet
obligations), not disclosed in the Memorandum;
(w) Subsequent to the respective dates as of which information is
given in the Memorandum, and except as may be otherwise stated or incorporated
by reference in the Memorandum, there has not been (A) any material adverse
change, or any development involving a prospective material adverse change, in
the business, financial condition or results of operations of the Company and
the Subsidiaries, taken as a whole, (B) any transaction which is material to
the Company and the Subsidiaries, taken as a whole, (C) any obligation, direct
or contingent (including any off-balance sheet obligations), incurred by the
Company or any of the Subsidiaries, which is material to the Company and the
Subsidiaries, taken as a whole, (D) any material change in the capital stock
or outstanding indebtedness of the Company or the Subsidiaries or (E) any
dividend or distribution of any kind declared, paid or made on the capital
stock of the Company;
(x) The Company and the Subsidiaries and their properties, assets and
operations are in compliance with, and hold all permits, authorizations and
approvals required under, Environmental Laws (as defined below), except to the
extent that failure to so comply or to hold such permits, authorizations or
approvals would not, individually or in the aggregate, have a Material Adverse
Effect; except as would not, individually or in the aggregate, have a Material
Adverse Effect, the Company and each of the Subsidiaries (i) has not received
any notice or claim, (ii) is not a party to any pending or, to the Company's
knowledge, threatened action, suit or proceeding, (iii) is not bound by any
judgment, decree or order or (iv) has not entered into any agreement, in each
case relating to any alleged violation of any Environmental Law or any actual
or alleged release or threatened release or cleanup at any location of any
Hazardous Materials (as defined below) (as used herein, "Environmental Law"
means any federal, state, local or foreign law, statute, ordinance, rule,
regulation, order, decree, judgment, injunction, permit, license,
authorization or other binding requirement, or common law, relating to health,
safety or the protection, cleanup or restoration of the environment or natural
resources, including those relating to the distribution, processing,
generation, treatment, storage, disposal, transportation, other handling or
release or threatened release of Hazardous Materials, and "Hazardous
Materials" means any material (including, without limitation, pollutants,
contaminants, hazardous or toxic substances or wastes) that is regulated by or
may give rise to liability under any Environmental Law);
(y) When the Notes are issued pursuant to this Agreement, the Notes
will not be of the same class (within the meaning of Rule 144A) as securities
that are listed on a national securities exchange registered pursuant to
Section 6 of the Exchange Act or quoted in a U.S. automated inter-dealer
quotation system;
(z) Neither the Company nor any Affiliate (as defined in Rule 501(b)
of Regulation D under the Securities Act) (i) sold, offered for sale,
solicited offers to buy or otherwise negotiated in respect of, any security
(as defined in the Securities Act) which is or would be integrated with the
sale of the Notes in a manner that would require the registration under the
Securities Act of the Notes or (ii) offered, solicited offers to buy or sold
the Notes by any form of general solicitation or general advertising (as such
terms are used in Regulation D under the Securities Act) or in any manner
involving a public offering within the meaning of Section 4(2) of the
Securities Act;
(aa) Subject to compliance by the Initial Purchasers with their
agreements set forth in Section 4 hereof, their other covenants and agreements
herein, assuming the accuracy of the representations and warranties of the
Initial Purchasers hereunder and subject to the obligations of the Initial
Purchasers and the Company pursuant to the Registration Rights Agreement, it
is not necessary, in connection with the offer, sale and delivery of the Notes
to the Initial Purchasers pursuant to this Agreement, to register the Notes or
the Shares deliverable upon conversion of the Notes under the Securities Act
or to qualify the Indenture under the Trust Indenture Act of 1939, as amended;
(bb) The Company is not and, solely after giving effect to the
offering and sale of the Notes and the application of the proceeds thereof as
described in the Final Memorandum, will not be subject to registration and
regulation as an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended;
(cc) The Company and each of the Subsidiaries has good title to all
property (real and personal) described or incorporated by reference in the
Memorandum as being owned by each of them, free and clear of all liens,
claims, security interests or other encumbrances, except for those securing
obligations under the Holdings Indenture or the Credit Agreement and such as
are described in the Memorandum or would not have a Material Adverse Effect;
all the property described in the Memorandum as being held under lease by the
Company or a Subsidiary is held thereby under valid, subsisting and
enforceable leases, with such exceptions as would not have a Material Adverse
Effect;
(dd) Except for the Registration Rights Agreement and as disclosed in
the Memorandum, there are no contracts, agreements or understandings between
the Company and any person granting such person the right to require the
Company to register any securities with the SEC;
(ee) The Company and each of the Subsidiaries maintains a system of
internal accounting controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with management's general or
specific authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets; (iii) access
to assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate action
is taken with respect to any differences;
(ff) The Company has established and maintains disclosure controls
and procedures (as such term is defined in Rule 13a-15 and 15d-15 under the
Exchange Act); such disclosure controls and procedures are designed to ensure
that material information relating to the Company, including its consolidated
subsidiaries, is made known to the Company's Chief Executive Officer and its
Chief Financial Officer by others within those entities, and such disclosure
controls and procedures are effective to perform the functions for which they
were established; and since the date of the most recent evaluation of such
disclosure controls and procedures, there have been no significant changes in
internal controls or in other factors that could significantly affect internal
controls, including any corrective actions with regard to significant
deficiencies and material weaknesses;
(gg) Any statistical and market related data included or incorporated
by reference in the Memorandum are based on or derived from sources that the
Company believes to be reliable and accurate;
(hh) Except as contemplated by the Memorandum, neither the Company
nor any of the Subsidiaries nor any of their respective directors, officers,
affiliates or controlling persons has taken, directly or indirectly, any
action designed, or which has constituted or might reasonably be expected to
cause or result in, under the Exchange Act or otherwise, the stabilization or
manipulation of the price of any security of the Company to facilitate the
sale or resale of the Notes or the Shares issued upon conversion thereof; and
(ii) There is and has been no failure on the part of the Company and
the Subsidiaries or, to the Company's knowledge, any of the officers and
directors of the Company or any of the Subsidiaries, in their capacities as
such, to comply in all material respects with the provisions of the
Xxxxxxxx-Xxxxx Act of 2002 and the rules and regulations in connection
therewith, including without limitation Section 402 related to loans and
Sections 302 and 906 related to certifications.
In addition, any certificate signed by any officer of the Company and
delivered to the Initial Purchasers or counsel for the Initial Purchasers in
connection with the offering of the Notes shall be deemed to be a
representation and warranty by the Company as to matters covered thereby to
each Initial Purchaser.
4. Representations and Warranties of the Initial Purchasers. The
Initial Purchasers propose to offer the Notes for sale upon the terms and
conditions set forth in this Agreement and the Final Memorandum, and each
Initial Purchaser hereby represents and warrants to and agrees with the
Company that:
(a) It will offer and sell the Notes only to persons that it
reasonably believes are "qualified institutional buyers" ("QIBs") within the
meaning of Rule 144A in transactions meeting the requirements of Rule 144A in
purchasing such Notes and are deemed to have represented and agreed as
provided in the Final Memorandum under the caption "Transfer restrictions";
(b) It is a QIB within the meaning of Rule 144A; and
(c) It has not solicited and will not solicit, directly or
indirectly, offers in the United States for, and has not offered or sold and
will not offer or sell, the Notes by any form of general solicitation or
general advertising (as such terms are used in Regulation D under the
Securities Act) or in any manner involving a public offering within the
meaning of Section 4(2) of the Securities Act.
5. Certain Covenants of the Company: The Company hereby agrees that:
(a) The Company will prepare the Final Memorandum in a form approved
by the Initial Purchasers (which approval shall not be unreasonably withheld)
and will make no amendment or supplement to the Final Memorandum to which the
Initial Purchasers reasonably object promptly after having been furnished such
proposed amendment or supplement;
(b) The Company will take such action as the Initial Purchasers may
reasonably request to qualify the Notes and the Shares for offering and sale
under the securities laws of such jurisdictions as the Initial Purchasers may
reasonably request in writing and will comply with such laws so as to permit
the continuance of sales and dealing therein in such jurisdictions for as long
as may be reasonably necessary to complete the distribution of the Notes;
provided, that in connection therewith the Company shall not be required to
qualify as a foreign corporation, to file a general consent to service of
process or subject itself to any tax in any such jurisdiction where it is not
now so qualified or subject;
(c) The Company will furnish the Initial Purchasers with as many
copies of the Final Memorandum, any documents incorporated by reference
therein (but not the exhibits thereto, except for any such exhibit that has
been specifically incorporated by reference in the Final Memorandum) and any
amendment or supplement thereto as the Initial Purchasers may from time to
time reasonably request, and if, at any time prior to the completion of the
resale of the Notes by the Initial Purchasers, any event shall have occurred
as a result of which the Final Memorandum as then amended or supplemented
would include an 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 when such Final Memorandum is
delivered, not misleading, or if for any other reason it shall be necessary or
desirable during such same period to amend or supplement the Final Memorandum,
the Company will notify the Initial Purchasers and upon the request of the
Initial Purchasers will prepare and furnish without charge to the Initial
Purchasers and to any dealer in securities as many copies as the Initial
Purchasers may from time to time reasonably request of an amended Final
Memorandum or a supplement to the Final Memorandum which will correct such
statement or omission or effect such compliance;
(d) During the period beginning from the date hereof and continuing
until the date 90 days after the date of the Final Memorandum, the Company
will not, without the prior written consent of UBS, issue, offer, sell,
contract to sell, hypothecate, pledge, grant or sell any option, right or
warrant to purchase, or otherwise dispose of, or contract to dispose of, any
Shares, any securities substantially similar to the Notes or the Common Stock,
including the Company's Class A common stock, par value U.S.$0.01 per share,
any securities that are convertible into or exchangeable for shares of Common
Stock and debt securities or any securities that are convertible into or
exchangeable for the Notes or such other debt securities (other than (i) the
issuance of the Notes; (ii) the issuance of Shares upon conversion of the
Notes; (iii) the issuance of shares of Common Stock upon conversion or
exercise of convertible or exercisable or exchangeable securities outstanding
as of the date of this Agreement or (iv) the issuance of shares of Common
Stock or options pursuant to employee stock option or employee stock purchase
plans existing on, or upon exercise of warrants outstanding as of, the date of
this Agreement), or enter into any swap or other agreement that transfers, in
whole or in part, any of the economic consequences of ownership of the Common
Stock or Notes irrespective of whether any transaction mentioned above is to
be settled by delivery of the Common Stock, the Notes or other securities, in
cash or otherwise;
(e) At any time when the Company is not subject to Section 13 or
15(d) of the Exchange Act and so long as any of the Notes (or Shares issued
upon conversion thereof) are "restricted securities" within the meaning of
Rule 144(a)(3) under the Securities Act, for the benefit of holders from time
to time of the Notes, the Company will furnish at its expense, upon request,
to holders and beneficial owners of Notes and prospective purchasers of Notes
information satisfying the requirements of subsection (d)(4)(i) of Rule 144A;
(f) The Company will use its commercially reasonable efforts to cause
the Notes to be eligible for trading in PORTAL;
(g) For a period commencing on, and ending on the third anniversary
of, the time of purchase, the Company will furnish to the Initial Purchasers
(i) copies of all reports or other communications (financial or other), in
each case to the extent they are publicly available, furnished to stockholders
of the Company during such period, and will deliver to the Initial Purchasers
as soon as they are available, and to the extent they are publicly available,
copies of any reports and financial statements furnished to or filed by the
Company during such period with the Commission or any securities exchange on
which the Notes or any class of securities of the Company is listed; and (ii)
such additional information concerning the business and financial condition of
the Company as the Initial Purchasers may from time to time reasonably
request, to the extent such information is publicly available (such financial
information to be on a consolidated basis to the extent the accounts of the
Company and the Subsidiaries are consolidated in reports furnished to its
stockholders generally or to the Commission); provided, that the filing by the
company in the Commission's XXXXX system of any item described in this
subsection (g) shall be deemed to satisfy the Company's obligation to furnish
or deliver such item to the Initial Purchasers pursuant to this subsection
(g).
(h) The Company will use the net proceeds received by it from the
sale of the Notes pursuant to this Agreement in the manner specified in the
Final Memorandum under the caption "Use of proceeds";
(i) The Company will reserve and keep available at all times free of
preemptive rights, Shares for the purpose of enabling the Company to satisfy
any obligations to issue Shares upon conversion of the Notes;
(j) The Company will use its reasonable best efforts to list, as
promptly as practicable but in no event later than the time that the
registration statement is declared effective in accordance with the
Registration Rights Agreement, and subject to notice of issuance, the Shares
on the New York Stock Exchange;
(k) Whether or not the transactions contemplated in this Agreement
are consummated or this Agreement is terminated, the Company will pay or cause
to be paid all expenses incident to the performance of its obligations under
this Agreement, including, without limitation, (i) the fees, disbursements and
expenses of the Company's counsel and the Company's accountants in connection
with the issuance and sale of the Notes and all other fees and expenses in
connection with the preparation of each Memorandum and all amendments and
supplements thereto, including all printing costs associated therewith, and
the furnishing of copies thereof to the Initial Purchasers and to dealers
(including costs of mailing and shipment), (ii) all costs related to the
preparation, issuance, execution, authentication and delivery of the Notes and
the Shares, (iii) all costs related to the transfer and delivery of the Notes
to the Initial Purchasers, including any transfer or other taxes payable
thereon, (iv) all expenses in connection with the qualification of the Notes
and the Shares for offering and sale under state laws and the cost of printing
and furnishing of copies of any blue sky or legal investment memorandum to the
Initial Purchasers and to dealers (including filing fees and the reasonable
and documented fees and disbursements of counsel for the Initial Purchasers in
connection with such qualification and in connection with such blue sky or
legal investment memorandum), (v) the costs and charges of the Trustee and any
transfer agent, registrar or depositary, (vi) the fees and expenses, if any,
incurred in connection with the admission of the Notes for trading in PORTAL
or any appropriate market system, (vii) the costs and expenses of the Company
relating to investor presentations on any "road show" undertaken in connection
with the marketing of the offering of the Notes, including, without
limitation, expenses associated with the production of road show slides and
graphics, fees and expenses of any consultants engaged in connection with the
road show presentations with the prior approval of the Company, travel and
lodging expenses of the representatives and officers of the Company and any
such consultants, and the cost of any aircraft chartered in connection with
the road show, and (viii) all other cost and expenses incident to the
performance of the Company's obligations hereunder for which provision is not
otherwise made in this Section 5(k); it being understood however, that, except
as provided in this Section 5(k) or in Section 6 and Section 9, the Initial
Purchasers will pay all of their costs and expenses, including fees and
disbursements of their counsel, transfer taxes payable on resale of any of the
Notes or the Shares by them and any advertising expenses connected with any
offers they may make;
(l) Neither the Company nor any Affiliate will sell, offer for sale
or solicit offers to buy or otherwise negotiate in respect of any security (as
defined in the Securities Act) which could be integrated with the sale of the
Notes in a manner which would require the registration under the Securities
Act of the offer and sale of the Notes pursuant to this Agreement;
(m) The Company will not solicit any offer to buy or offer or sell
the Notes or the Shares by means of any form of general solicitation or
general advertising (as those terms are used in Regulation D under the
Securities Act) or in any manner involving a public offering within the
meaning of Section 4(2) of the Securities Act;
(n) During the period of two years immediately after the time of
purchase or the additional time of purchase, if later, the Company will not,
and will not permit any of its Affiliates, to resell any of the Notes or the
Shares which constitute "restricted securities" under Rule 144 under the
Securities Act that have been reacquired by any of them except pursuant to an
effective registration statement under the Securities Act; and
(o) Neither the Company nor any Affiliate will take any action
prohibited by Regulation M under the Exchange Act in connection with the
distribution of the Notes contemplated hereby.
6. Reimbursement of Initial Purchasers' Expenses: If the Firm Notes
are not delivered for any reason other than the default by one or more of the
Initial Purchasers in their obligations hereunder, the Company will reimburse
the Initial Purchasers for all of their out-of-pocket expenses (including the
reasonable fees and disbursements of their counsel) reasonably incurred by the
Initial Purchasers in connection with this Agreement or the offering
contemplated hereunder.
7. Conditions of Initial Purchasers' Obligations: The several
obligations of the Initial Purchasers hereunder are subject to the accuracy in
all material respects of the representations and warranties on the part of the
Company on the date hereof and at the time of purchase. The several
obligations of the Initial Purchasers at the additional time of purchase are
subject to the accuracy in all material respects of the representations and
warranties on the part of the Company on the date hereof, at the time of
purchase (unless previously waived) and at the additional time of purchase, as
the case may be. Additionally, the several obligations of the Initial
Purchasers hereunder are subject to performance by the Company of its
obligations hereunder and to the following conditions:
(a) The Company shall furnish to UBS at the time of purchase and at
the additional time of purchase, as the case may be, (i) an opinion of
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, special counsel for the Company,
addressed to the Initial Purchasers and dated the date of the time of purchase
or the date of the additional time of purchase, as the case may be, in the
form as set forth in Exhibit A-1 hereto and (ii) an opinion of Xxxxxx Xxxxxxx,
Executive Vice President, Law and Administration, General Counsel and
Secretary of the Company, addressed to the Initial Purchasers and dated the
date of the time of purchase or the date of the additional time of purchase,
as the case may be, in the form as set forth in Exhibit A-2 hereto;
(b) UBS shall have received on the date of this Agreement, at the
time of purchase and the additional time of purchase, as the case may be, from
Ernst & Young LLP a customary comfort letter dated as of the date of this
Agreement, the date of the time of purchase and the date of the additional
time of purchase, as the case may be, and addressed to the Initial Purchasers,
in form and substance satisfactory to counsel for the Initial Purchasers;
(c) UBS shall have received at the time of purchase and at the
additional time of purchase, as the case may be, the opinion of Xxxxxx &
Xxxxxxx LLP, counsel for the Initial Purchasers, dated the date of the time of
purchase or the date of the additional time of purchase, as the case may be,
in form and substance reasonably satisfactory to UBS;
(d) No amendment or supplement to the Final Memorandum, or any
document which upon filing with the Commission would be incorporated by
reference in the Final Memorandum, shall at any time have been made or filed
to which UBS has reasonably objected in writing;
(e) At the time of purchase or the additional time of purchase, as
the case may be, the Final Memorandum shall not contain an untrue statement of
a material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading;
(f) Between the time of execution of this Agreement and the time of
purchase or the additional time of purchase, as the case may be, no material
adverse change or any development involving a prospective material adverse
change in the business, properties, management, financial condition or results
of operations of the Company and the Subsidiaries, taken as a whole shall have
occurred;
(g) The Company will, at the time of purchase and, if applicable, at
the additional time of purchase, deliver to you a certificate of its Chief
Executive Officer and its Chief Financial Officer in the form attached as
Exhibit C hereto;
(h) You shall have received copies, duly executed by the Company and
the other parties thereto (other than the Initial Purchasers, in the case of
the Registration Rights Agreement), of the Registration Rights Agreement and
the Indenture;
(i) Each executive officer and director of the Company named in
Exhibit B-2 shall have entered into a Lock-Up Agreement in the form attached
as Exhibit B-1 hereto on or prior to the date hereof, and each such Lock-Up
Agreement shall have been delivered to you and shall be in full force and
effect at the time of purchase and the additional time of purchase, as the
case may be;
(j) The Company shall have furnished to you such other documents and
certificates as to the accuracy and completeness of any statement in the Final
Memorandum as of the time of purchase and the additional time of purchase, as
the case may be, as you may reasonably request;
(k) The Notes shall have been designated for trading on PORTAL,
subject only to notice of issuance at or prior to the time of purchase; and
(l) Between the time of execution of this Agreement and the time of
purchase or additional time of purchase, as the case may be, there shall not
have occurred any downgrading, nor shall any notice have been given of (i) any
intended or potential downgrading or (ii) any review or possible change that
does not indicate an improvement in the rating accorded any securities of or
guaranteed by the Company or any Subsidiary of the Company by any "nationally
recognized statistical rating organization", as that term is defined in Rule
436(g)(2) promulgated under the Securities Act.
8. Termination: The several obligations of the Initial Purchasers
hereunder shall be subject to termination in the absolute discretion of UBS or
any group of Initial Purchasers (which may include UBS) that has agreed to
purchase in the aggregate a majority of the Notes, if, (x) since the time of
execution of this Agreement or the earlier respective dates as of which
information is given in the Final Memorandum, there has been any material
adverse change or any development involving a prospective material adverse
change in the business, properties, management, financial condition or results
of operations of the Company and the Subsidiaries taken as a whole, which
would, in UBS' judgment or in the judgment of such group of Initial
Purchasers, make it impracticable or inadvisable to proceed with the offering
or the delivery of the Notes on the terms and in the manner contemplated in
the Final Memorandum; (y) at any time since the time of execution of this
Agreement and prior to the time of purchase or, with respect to the purchase
of any Additional Notes, the additional time of purchase, as the case may be,
there shall have occurred: (i) a suspension or material limitation in trading
in securities generally on the New York Stock Exchange, the American Stock
Exchange or the NASDAQ; (ii) a suspension or material limitation in trading in
the Company's securities on the New York Stock Exchange; (iii) a general
moratorium on commercial banking activities declared by either federal or New
York State authorities or a material disruption in commercial banking or
securities settlement or clearance services in the United States; (iv) an
outbreak or escalation of hostilities or acts of terrorism involving the
United States or a declaration by the United States of a national emergency or
war; or (v) any other calamity or crisis or any change in financial, political
or economic conditions in the United States or elsewhere, if the effect of any
such event specified in clause (iv) or (v) in UBS' judgment or in the judgment
of such group of Initial Purchasers makes it impracticable or inadvisable to
proceed with the offering or the delivery of the Notes on the terms and in the
manner contemplated in the Final Memorandum; or (z) between the time of
execution of this Agreement and the time of purchase or, with respect to the
purchase of any Additional Notes, the additional time of purchase, as the case
may be, there shall have occurred any downgrading, or any notice or
announcement shall have been given or made of (i) any intended or potential
downgrading or (ii) any watch, review or possible change that does not
indicate an affirmation or improvement in the rating accorded any securities
of or guaranteed by the Company or any Subsidiary by any "nationally
recognized statistical rating organization," as that term is defined in Rule
436(g)(2) under the Securities Act.
If you elect to terminate this Agreement as provided in this Section
8, the Company shall be notified as provided for herein.
If the sale to the Initial Purchasers of the Notes, as contemplated
by this Agreement, is not carried out by the Initial Purchasers for any reason
permitted under this Agreement or if such sale is not carried out because the
Company shall be unable to comply and does not comply with any of the terms of
this Agreement, the Company shall not be under any obligation or liability
under this Agreement (except to the extent provided in Sections 5(k), 6 and 9
hereof), and the Initial Purchasers shall be under no obligation or liability
to the Company under this Agreement (except to the extent provided in Section
9 hereof) or to one another hereunder.
9. Indemnity by the Company and the Initial Purchasers:
(a) The Company agrees to indemnify, defend and hold harmless each
Initial Purchaser, its directors and officers, and any person who controls any
Initial Purchaser within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act (each, an "Initial Purchaser Indemnified
Party"), and the successors and assigns of all the foregoing persons, from and
against any loss, damage, expense, liability or claim (including the
reasonable cost of investigation) which, jointly or severally, any such
Initial Purchaser Indemnified Party or any such person may incur under the
Securities Act, the Exchange Act, the common law 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 Memorandum, as amended or supplemented, if applicable, or arises out of or
is based upon any omission or alleged omission to state a material fact
necessary to make the statements made therein, in the light of the
circumstances under which they 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 Initial Purchaser to
the Company expressly for use therein; provided, however, that the foregoing
indemnity with respect to any Preliminary Memorandum shall not inure to the
benefit of any Initial Purchaser (or to the benefit of any person controlling
such Initial Purchaser) from whom the person asserting any such loss, damage,
expense, liability or claim purchased Notes if such untrue statement or
omission or alleged untrue statement or omission made in such Preliminary
Memorandum is eliminated or remedied in the Final Memorandum (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) and a copy of the Final Memorandum (as so amended or supplemented)
shall not have been furnished to such person at or prior to the written
confirmation of the sale of such Notes to such person, if the Company shall
have provided the Initial Purchasers copies of such Final Memorandum in
sufficient quantities and on a timely basis to permit such Final Memorandum to
be furnished at or prior to such written confirmation;
(b) Each Initial Purchaser severally agrees to indemnify, defend and
hold harmless the Company, its directors and officers 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 any
untrue statement or alleged untrue statement of a material fact contained in
information furnished in writing by or on behalf of such Initial Purchaser to
the Company expressly for use in any Memorandum 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 therein, in the light of the circumstances under
which they were made, not misleading, in connection with such information.
(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 (b) of this Section 9, 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 such Indemnifying Party shall assume the
defense of such Proceeding, including the employment of counsel reasonably
satisfactory to such Indemnified Party and payment of all reasonable fees and
expenses of such counsel; provided, however, that the omission to so 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 results in actual material prejudice to 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 written advice of counsel that
there may be 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 such Indemnified Party, but such
Indemnifying Party may employ counsel and participate in the defense thereof,
provided that 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 Proceeding). An
Indemnifying Party shall not be liable for any settlement of any such
Proceeding effected without its written consent, 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. Notwithstanding the foregoing
sentence, if at any time an Indemnified Party shall have requested an
Indemnifying Party to reimburse such Indemnified Party for fees and expenses
of counsel as contemplated by the second sentence of this paragraph, then such
Indemnifying Party agrees that it shall be liable for any settlement of any
Proceeding effected without its written consent if (i) such settlement is
entered into more than 60 business days after receipt by such Indemnifying
Party of the aforesaid request, (ii) such Indemnifying Party shall not have
reimbursed such Indemnified Party in accordance with such request prior to the
date of such settlement (other than the portion of such fees and expenses that
the Indemnifying Person is contesting in good faith) and (iii) such
Indemnified Party shall have given such Indemnifying Party at least 30 days'
prior notice of its intention to settle. An Indemnifying Party shall not,
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, culpability or a failure to act, by or on behalf of such
Indemnified Party.
(d) If the indemnification provided for in this Section 9 is
unavailable to an Indemnified Party under subsections (a) and (b) of this
Section 9 in respect of any losses, damages, expenses, liabilities or claims
referred to therein, 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 or claims (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and the
Initial Purchasers on the other hand from the offering of the Notes 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 Initial Purchasers on the other in
connection with the statements or omissions which resulted in such losses,
damages, expenses, liabilities or claims, as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and the Initial Purchasers on the other shall be deemed to be in the
same proportion as the total proceeds from the offering (net of Initial
Purchasers' discounts and commissions but before deducting expenses) received
by the Company bear to the discounts and commissions received by the Initial
Purchasers. The relative fault of the Company on the one hand and of the
Initial Purchasers on the other 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 Initial Purchasers 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 and claims 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 Initial Purchasers agree that it would not be
just and equitable if contribution pursuant to this Section 9 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 9, no Initial Purchaser
shall be required to contribute any amount in excess of the amount by which
the total price at which the Notes resold by it in the initial placement of
such Notes were offered to investors exceeds the amount of any damages which
such Initial Purchaser 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 Initial Purchasers'
respective obligations to contribute pursuant to this Section 9 are several in
proportion to the respective principal amount of Notes they have purchased
hereunder, and not joint. The remedies provided for in this Section 9 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 agreements contained in this
Section 9 and the covenants, warranties and representations of the Company and
the Initial Purchasers contained in this Agreement shall remain in full force
and effect (regardless of any investigation made by or on behalf of any
Initial Purchaser, its directors or officers or any person who controls such
Initial Purchaser within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, or by or on behalf of the Company, its
directors and officers or any person who controls the Company within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act), and shall survive any termination of this Agreement or the issuance and
delivery of the Notes. The Company and the Initial Purchasers agree promptly
to notify the other of the commencement of any litigation or proceeding
against it and, in the case of the Company, against any of the Company's
officers and directors, in connection with the issuance and sale of the Notes,
or in connection with any Memorandum.
10. Effectiveness; Increase in Initial Purchasers' Commitments: This
Agreement shall become effective upon the execution and delivery hereof by the
parties hereto.
Subject to Sections 7 and 8, if, at the time of purchase, or the
additional time of purchase, as the case may be, any Initial Purchaser shall
default in its obligation to take up and pay for the Notes to be purchased by
it at such time hereunder (otherwise than for a reason sufficient to justify
the termination of this Agreement under the provisions of Section 8 hereof)
and if the aggregate principal amount of Notes which all Initial Purchasers so
defaulting shall have agreed but failed to take up and pay for at such time
does not exceed 10% of the total aggregate principal amount of Notes to be
purchased at such time, the non-defaulting Initial Purchasers shall take up
and pay for (in addition to the aggregate number of Notes they are obligated
to purchase at such time pursuant to Section 1 hereof) the aggregate principal
amount of Notes agreed to be purchased by all such defaulting Initial
Purchasers at such time, as hereinafter provided. Such Notes shall be taken up
and paid for by such non-defaulting Initial Purchaser or Initial Purchasers in
such amount or amounts as you may designate with the consent of each Initial
Purchaser so designated or, in the event no such designation is made, such
Notes shall be taken up and paid for by all non-defaulting Initial Purchasers
pro rata in proportion to the aggregate principal amount of Firm Notes set
opposite the names of such non-defaulting Initial Purchasers in Schedule A.
Without relieving any defaulting Initial Purchaser from its
obligations hereunder, the Company agrees with the non-defaulting Initial
Purchasers that it will not sell any Firm Notes hereunder unless all of the
Firm Notes are purchased by the Initial Purchasers (or by substituted Initial
Purchasers selected by you with the approval of the Company or selected by the
Company with your approval).
If a new Initial Purchaser or Initial Purchasers are substituted by
the Initial Purchasers or by the Company for a defaulting Initial Purchaser or
Initial Purchasers in accordance with the foregoing provision, the Company or
you shall have the right to postpone the time of purchase for a period not
exceeding five business days in order that any necessary changes in the Final
Memorandum and other documents may be effected.
The term "Initial Purchaser" as used in this Agreement shall refer to
and include any Initial Purchaser substituted under this Section 10 with like
effect as if such substituted Initial Purchaser had originally been named in
Schedule A.
If, at the time of purchase, the aggregate principal amount of Firm
Notes which the defaulting Initial Purchaser or Initial Purchasers agreed to
purchase exceeds 10% of the total principal amount of Firm Notes which all
Initial Purchasers agreed to purchase hereunder, and if neither the
non-defaulting Initial Purchasers nor the Company shall make arrangements
within the five business day period stated above for the purchase of all the
Firm Notes which the defaulting Initial Purchaser or Initial Purchasers agreed
to purchase hereunder, this Agreement shall be terminated without further act
or deed and without any liability on the part of the Company to any
non-defaulting Initial Purchaser (and, assuming that the Company is not
otherwise in default under this Agreement, to any defaulting Initial
Purchaser) and without any liability on the part of any non-defaulting Initial
Purchaser to the Company. If, at the additional time of purchase, the
aggregate principal amount of Additional Notes which the defaulting Initial
Purchaser or Initial Purchasers agreed to purchase exceeds 10% of the total
principal amount of Additional Notes which all Initial Purchasers agreed to
purchase hereunder, the non-defaulting Initial Purchasers shall have the
option to (a) terminate their obligation hereunder to purchase the Additional
Notes or (b) purchase not less than the principal amount of Additional Notes
that such non-defaulting Initial Purchasers would have been obligated to
purchase in the absence of such default. Nothing in this paragraph, and no
action taken hereunder, shall relieve any defaulting Initial Purchaser from
liability in respect of any default of such Initial Purchaser under this
Agreement.
11. Information Furnished by the Initial Purchasers: The statements
set forth in the fourteenth paragraph under the caption "Plan of distribution"
in the Final Memorandum constitute the only information furnished by or on
behalf of the Initial Purchasers.
12. Notices: Except as otherwise herein provided, all statements,
requests, notices and agreements shall be in writing or by facsimile and, if
to the Initial Purchasers, shall be sufficient in all respects if delivered or
sent to c/o UBS Securities LLC, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Syndicate Department, facsimile no. (000) 000-0000, with a copy to
(for informational purposes only): Attention: Legal Department, facsimile no.
(000) 000-0000 and, if to the Company, shall be sufficient in all respects if
delivered or sent to the Company at the offices of the Company at 000 Xxxxx
Xxxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000, Attention: General Counsel,
facsimile no. (000) 000-0000.
13. Governing Law and Construction: 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. The section headings in this
Agreement have been inserted as a matter of convenience of reference and are
not a part of this Agreement.
14. Parties at Interest: The Agreement herein set forth has been and
is made solely for the benefit of the Initial Purchasers and the Company and
the controlling persons, directors and officers referred to in Section 9
hereof, and their respective successors, assigns, executors and
administrators. No other person, partnership, association or corporation
(including a purchaser, as such purchaser, from the Initial Purchasers) shall
acquire or have any right under or by virtue of this Agreement.
15. Counterparts: This Agreement may be signed by the parties in
counterparts which together shall constitute one and the same agreement among
the parties. Delivery of an executed counterpart by facsimile shall be
effective as delivery of a manually executed counterpart thereof.
16. Submission to Jurisdiction: Except as set forth below, no
Proceeding 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.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
If the foregoing correctly sets forth the understanding between the
Company and the Initial Purchasers, please so indicate in the space provided
below for the purpose, whereupon this letter and your acceptance shall
constitute a binding agreement between the Company and the Initial Purchasers.
Very truly yours,
PLAYBOY ENTERPRISES, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Senior Vice President,
Treasurer and Strategic
Planning and Assistant
Secretary
Accepted and agreed to as of the date
first above written on behalf of
itself and the other Initial Purchasers
named in Schedule A hereto:
UBS SECURITIES LLC
By: /s/ Xxxxx Xxxxx
----------------------------
Name: Xxxxx Xxxxx
Title: Managing Director
By: /s/ Xxxxx Xxxxxxx
---------------------------
Name: Xxxxx Xxxxxxx
Title: Director
SCHEDULE A
Principal Amount of
Initial Purchasers Firm Notes
------------------ -------------------
UBS SECURITIES LLC U.S.$ 80,000,000
BANC OF AMERICA SECURITIES LLC 10,000,000
BEAR, XXXXXXX & CO. INC. 10,000,000
Total U.S.$ 100,000,000
==============
EXHIBIT A-1
[Form of Opinion of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP]
1. The Company is validly existing and in good standing under the
laws of the State of Delaware.
2. The Company has an authorized capitalization as set forth in the
Memorandum.
3. The Company has the corporate power and corporate authority to
execute and deliver each of the Purchase Agreement, the Notes, the Indenture
and the Registration Rights Agreement and to consummate the transactions
contemplated thereby.
4. The Purchase Agreement has been duly authorized, executed and
delivered by the Company.
5. The Indenture has been duly authorized, executed and delivered by
the Company and constitutes a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms.
6. The Registration Rights Agreement has been duly authorized,
executed and delivered by the Company and constitutes a valid and binding
agreement of the Company, enforceable against the Company in accordance with
its terms.
7. The Notes have been duly authorized and executed by the Company
and, when issued and delivered by the Company against payment therefor in
accordance with the terms of the Purchase Agreement and the Indenture, the
Notes will constitute valid and binding obligations of the Company entitled to
the benefits of the Indenture and enforceable against the Company in
accordance with their terms.
8. The Shares initially issuable upon conversion of the Notes have
been duly authorized by all necessary corporate action and, when issued upon
conversion of the Notes in accordance with the terms of the Indenture, will be
validly issued, fully paid and nonassessable and free and clear of any
preemptive rights or any similar rights arising under the DGCL, the
Certificate of Incorporation or the Bylaws. The resolutions of the Board of
Directors of the Company approving the issuance of the Notes have reserved the
Shares initially issuable upon conversion of the Notes for issuance.
9. The authorized capital stock of the Company conforms in all
material respects as to legal matters to the description thereof contained in
the Memorandum under the caption "Description of capital stock."
10. The execution and delivery by the Company of each of the Purchase
Agreement, the Notes, the Indenture and the Registration Rights Agreement and
the performance by the Company of its obligations under each of the Purchase
Agreement, the Notes, the Indenture and the Registration Rights Agreement,
each in accordance with its terms, do not conflict with the Certificate of
Incorporation or Bylaws.
11. Except as would not have a material adverse effect on the Company
and the Subsidiaries, taken as a whole, the execution and delivery by the
Company of each of the Purchase Agreement, the Notes, the Indenture and the
Registration Rights Agreement and the performance by the Company of its
obligations under each of the Purchase Agreement, the Notes, the Indenture and
the Registration Rights Agreement, each in accordance with its terms, will not
violate or conflict with, or result in any contravention of, any applicable
law.
12. Except as would not have a material adverse effect on the Company
and the Subsidiaries, taken as a whole, no governmental approval, which has
not been obtained or taken and is not in full force and effect, is required to
authorize, or is required for, the execution or delivery of each of the
Purchase Agreement, the Notes, the Indenture and the Registration Rights
Agreement by the Company or the consummation by the Company of the
transactions contemplated thereby.
13. The Notes, the Registration Rights Agreement and the Indenture
conform, in all material respects, as to legal matters to the description
thereof contained in the Offering Memorandum under the heading "Description of
notes."
14. The Company is not and, solely upon application of the proceeds
as described under the caption "Use of proceeds" in the Memorandum will not
be, an "investment company," as such term is defined in the Investment Company
Act of 1940, as amended.
15. Assuming (i) the accuracy of the representations and warranties
of the Company set forth in Section 3 of the Purchase Agreement and of the
Initial Purchasers in Section 4 of the Purchase Agreement, (ii) the due
performance by the Company of the covenants and agreements set forth in the
Purchase Agreement and the due performance by the Initial Purchasers of the
covenants and agreements set forth in Section 4 of the Purchase Agreement,
(iii) compliance by the Company and the Initial Purchasers with the offering
and transfer procedures and restrictions described in the Memorandum and the
Purchase Agreement, (iv) the accuracy of the representations and warranties
made in accordance with the Purchase Agreement and the Memorandum by
purchasers to whom the Initial Purchasers initially resell the Notes and (v)
that purchasers to whom the Initial Purchasers initially resell the Notes
receive a copy of the Memorandum prior to confirmation of such sale, the
offer, sale and delivery of the Notes to the Initial Purchasers in the manner
contemplated by the Purchase Agreement and the Memorandum and the initial
resale of the Notes by the Initial Purchasers in the manner contemplated in
the Memorandum and the Purchase Agreement, do not require registration under
the Securities Act, and, prior to the effectiveness of the Initial Shelf
Registration Statement (as defined in the Registration Rights Agreement), the
Indenture does not require qualification under the Trust Indenture Act of
1939, as amended, it being understood that we do not express any opinion as to
any subsequent reoffer or resale of any Note.
16. The statements in the Memorandum under the heading "Certain US
federal tax considerations," insofar as such statements constitute a summary
of the U.S. federal income tax laws referred to therein, summarize accurately
in all material respects the U.S. federal income tax laws referred to therein
17. Based upon our participation in conferences with officers and
other representatives of the Company, counsel for the Company, representatives
of the independent public accountants of the Company and representatives of
the Initial Purchasers at which the contents of the Memorandum and related
matters were discussed, although we are not passing upon and do not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Memorandum (except to the extent stated in paragraphs 9 and
13 above), no facts have come to our attention that have caused us to believe
that the Memorandum, as of its date and as of the date hereof, contained or
contains an untrue statement of a material fact or omitted or omits to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading (except that in each
case we do not express any view as to the financial statements, schedules and
other financial data included or incorporated by reference therein or excluded
therefrom).
EXHIBIT A-2
[Form of Opinion of Xxxxxx Xxxxxxx, Esq.]
1. The Company and each Subsidiary set forth on Schedule I hereto has
been duly incorporated or formed, as applicable, and is validly existing as a
corporation or limited liability company, as applicable, and is in good
standing under the laws of the State of Delaware (with such exceptions as
would not have a material adverse effect on the Company and the Subsidiaries,
taken as a whole), with the corporate power and corporate authority to own its
properties and conduct its business as described in the Memorandum.
2. Based solely upon a review of the Schedule II Certificates, each
Subsidiary set forth on Schedule II hereto is validly existing as a
corporation or limited liability company, as applicable, and is in good
standing under the laws of its jurisdiction of incorporation or formation, as
applicable (with such exceptions as would not have a material adverse effect
on the Company and the Subsidiaries, taken as a whole).
3. To my knowledge, the Company and each Subsidiary is duly qualified
to do business as a foreign corporation and is in good standing in each
jurisdiction in which it conducts business and in which failure to so qualify
or be in good standing would reasonably be expected to have a material adverse
effect on the Company and the Subsidiaries, taken as a whole.
4. All of the shares of capital stock of the Company issued and
outstanding immediately prior to the date hereof have been duly authorized and
are validly issued and are fully paid and non-assessable, and free and clear
of any preemptive rights or any similar rights arising under the General
Corporation Law of the State of Delaware or under the certificate of
incorporation or bylaws of the Company.
5. All of the issued shares of capital stock of each Subsidiary have
been duly authorized and validly issued and are fully paid and non-assessable
and, except for the capital stock of Xxxxxxx.xxx, Inc. and its subsidiaries
(on account of the ownership of Xxxxxxx.xxx, Inc. Series A Preferred Stock by
third parties) and except as set forth in the Memorandum, are owned directly
or indirectly by the Company and, to my knowledge, free and clear of any lien,
charge, mortgage, pledge, security interest, claim or encumbrance.
6. Other than as set forth in the Memorandum, there are no suits or
proceedings pending or, to my knowledge, threatened against the Company or any
of the Subsidiaries or any property of the Company or any of the Subsidiaries
before any court, arbitrator or by or before any administrative agency or
governmental authority, except as would not reasonably be expected to have a
material adverse effect on the Company and the Subsidiaries, taken as a whole,
or prevent the Company from performing its obligations under the Transaction
Documents.
7. Neither the Company nor any of the Subsidiaries is in violation of
its respective charter or by-laws or similar organizational documents or, to
my knowledge, any law, administrative regulation or administrative or court
decree or judgment applicable to the Company or any of the Subsidiaries. To my
knowledge, neither the Company nor any of the Subsidiaries is in default under
any agreement to which it is a party, except, in each case, as would not
reasonably be expected to have a material adverse effect on the Company and
the Subsidiaries, taken as a whole, or materially to impair the Company's
ability to perform its obligations under each of the Purchase Agreement, the
Notes, the Indenture and the Registration Rights Agreement.
8. The execution and delivery by the Company of each of the Purchase
Agreement, the Notes, the Indenture and the Registration Rights Agreement and
the consummation by the Company of the transactions contemplated thereby will
not conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of
the Company or the Subsidiaries pursuant to, any indenture, note, mortgage,
deed of trust, loan or credit agreement or other agreement or instrument
identified on Schedule III hereto.
9. The documents filed under the Exchange Act and incorporated by
reference in the Memorandum (except that in each case I do not express any
opinion as to the financial statements, schedules and other financial
information included or incorporated by reference therein or excluded
therefrom) when they became effective or were filed with the Commission, as
the case may be, complied as to form in all material respects with the
Securities Act or the Exchange Act, as applicable, and the rules and
regulations thereunder.
10. The statements appearing in the Company's Annual Report on Form
10-K for the year ended December 31, 2004 under the headings "Business--Legal
Proceedings," insofar as such statements constitute summaries of legal
matters, documents or proceedings referred to therein, are accounts and fairly
summarize the matters referred to therein.
11. In addition, I have participated in conferences with officers and
other representatives of the Company, special counsel for the Company,
representatives of the independent accountants of the Company and with the
Initial Purchasers and counsel for the Initial Purchasers at which the
contents of the Offering Memorandum and related matters were discussed. I have
reviewed the documents incorporated by reference in the Memorandum and
discussed the business and affairs of the Company with officers and other
representatives of the Company. Although I am not passing upon, and do not
assume any responsibility for, the accuracy, completeness or fairness of the
statements contained in the Memorandum and have made no independent check or
verification thereof, on the basis of the foregoing, no facts have come to my
attention that have led me to believe that the Memorandum, as of its date and
as of the date hereof, contained or contains an untrue statement of a material
fact or omitted or omits to state a material fact necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading, except that I express no opinion or belief with respect
to the financial statements, schedules and other financial data derived
therefrom included or incorporated by reference therein or excluded therefrom.
EXHIBIT B-1
[Form of Lock-Up Agreement]
___, 2005
UBS Securities LLC
Banc of America Securities LLC
Bear, Xxxxxxx & Co. Inc.
c/o UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
This letter is being delivered to you in connection with the
consummation of the transactions contemplated by the proposed Purchase
Agreement (the "Purchase Agreement") between Playboy Enterprises, Inc., a
corporation organized under the laws of Delaware (the "Company"), and you, as
the Initial Purchasers named therein, relating to an offering without
registration under the Securities Act of 1933, as amended (the "Act"), in
reliance on Rule 144A and Regulation D under the Act, of Convertible Senior
Subordinated Notes due 2025 (the "Notes") of the Company.
I agree that I will not, for a period commencing on the date hereof
and ending 90 days after the date of the Final Memorandum (as defined in the
Purchase Agreement), without the prior written consent of UBS Securities LLC,
offer to sell, sell, contract to sell, hypothecate, pledge, sell or grant any
option, right or warrant to purchase, or otherwise dispose of, or contract to
dispose of, any shares of Class A or Class B common stock of the Company, par
value U.S.$0.01 per share (the "Common Stock"), any securities substantially
similar to the Notes or the Common Stock or any securities that are
convertible into or exchangeable for the Notes or shares of Common Stock, or
enter into any swap or other agreement that transfers, in whole or in part,
any of the economic consequences of the ownership of Common Stock or Notes
irrespective of whether any transaction mentioned above is to be settled by
delivery of Common Stock, Notes or other securities, in cash or otherwise. The
foregoing notwithstanding, the undersigned may (a) make gifts or transfers of
shares of Common Stock to, or for the benefit of, (i) family members,
charitable institutions, and trusts, limited partnerships or other entities
created for estate planning purposes, the principal beneficiaries of which are
family members or charitable institutions, or (ii) corporations, partnerships,
limited liability companies or other entities to the extent such entities are
wholly owned by the undersigned and/or any of the persons or entities
described in the immediately preceding clause (i), in each case subject to the
condition that any such family member or charitable institution or other donee
or transferee shall execute an agreement with the Initial Purchasers stating
that such donee or transferee is receiving and holding the Common Stock
subject to the provisions of this agreement and (b) transfer shares of Common
Stock by will or intestate succession, subject to the condition that the
transferee shall execute an agreement with the Initial Purchasers stating that
such transferee is receiving and holding the Common Stock subject to the
provisions of this agreement.
If (a) the Company notifies you in writing prior to the time of
purchase that it does not intend to proceed with the offering of the Notes or
(b) for any reason the Purchase Agreement shall be terminated prior to the
time of purchase (as defined in the Purchase Agreement), the agreement set
forth above shall be terminated.
Very truly yours,
--------------------------
Name:
Title:
EXHIBIT B-2
List of Parties to Execute Lock-Up Agreements
Name Position(s)
1. Xxxxxx X. Xxxxxxxxxxx Director
2. Xxxxx X. Xxxxxxxx Director
3. Xxxxxx X. Xxxxxxx Director
4. Xxxxx X. Xxxxxxxxx Senior Executive Vice President and
President, Playboy Entertainment Group
5. Xxxxx X. Xxxxxx Executive Vice President,
Finance and Operations and Chief
Financial officer
6. Xxxxxxxx Xxxxxx Chairman of the Board and Chief
Executive Officer
7. Xxxx X. Xxxxxx Editor-in-Chief
8. Xxxxxx Xxxx Director
9. Xxxxxx X. Xxxxxxxx Senior Vice President, Corporate
Communications and Investor Relations
10. Xxxxxxx X. Pillar Director
11. Xxx Xxxxxxxxx Director
12. Xxxxxxx X. Xxxxxxxxxx Executive Vice President
13. Xxxxxx Xxxxxxx Executive Vice President, Law and
Administration, General Counsel
and Secretary
14. Xxxx Xxxxxxx Executive Vice President and
President, Global Licensing
EXHIBIT C
Officer's Certificate
1. I have reviewed the Final Memorandum.
2. The representations and warranties of the Company as set forth in
the Purchase Agreement are true and correct as of the time of purchase and, if
applicable, the additional time of purchase.
3. The Company has performed all of its obligations under the
Purchase Agreement as are to be performed at or before the time of purchase
and at or before the additional time of purchase, as the case may be.
4. The conditions set forth in paragraphs (d) and (e) of Section 7 of
the Purchase Agreement have been met.
5. The financial statements and other financial information included
in the Final Memorandum present fairly in all material respects the financial
condition, results of operations, and cash flows of the Company as of, and
for, the periods presented in the Final Memorandum.
