Registration Rights Agreement - PEI Holdings Inc., Playboy Enterprises Inc., Bank of America Securities LLC and Lazard Freres & Co. LLC
REGISTRATION RIGHTS AGREEMENT
by and among
PEI Holdings, Inc.
Playboy Enterprises, Inc.
the Subsidiary Guarantors party hereto
and
Banc of America Securities LLC
Lazard Freres & Co. LLC
Dated as of March 11, 2003
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Registration Rights Agreement
This Registration Rights Agreement (this "Agreement") is made and entered
into as of March 11, 2003, by and among PEI Holdings, Inc., a Delaware
corporation (the "Company"), Playboy Enterprises, Inc., a Delaware corporation
and the Company's corporate parent ("Playboy"), the subsidiary guarantors listed
on the signature pages hereof (the "Subsidiary Guarantors" and together with
Playboy, the "Guarantors"), and Banc of America Securities LLC and Lazard Freres
& Co. LLC (each an "Initial Purchaser" and, collectively, the "Initial
Purchasers"), each of whom has agreed to purchase the Company's 11% Senior
Secured Notes due 2010 (the "Initial Notes") pursuant to the Purchase Agreement
(as defined below).
This Agreement is made pursuant to the Purchase Agreement, dated March 6,
2003 (the "Purchase Agreement"), by and among the Company, the Guarantors and
the Initial Purchasers (i) for the benefit of each Initial Purchaser and (ii)
for the benefit of the holders from time to time of the Notes (including each
Initial Purchaser). In order to induce the Initial Purchasers to purchase the
Initial Notes, the Company has agreed to provide the registration rights set
forth in this Agreement. The execution and delivery of this Agreement is a
condition to the obligations of the Initial Purchasers set forth in Section 5(h)
of the Purchase Agreement.
The parties hereby agree as follows:
Section 1. Definitions. As used in this Agreement, the following
capitalized terms shall have the following meanings:
Advice: As defined in Section 6(c) hereof.
Agreement: As defined in the preamble.
Broker-Dealer: Any broker or dealer registered under the Exchange Act.
Business Day: As defined in the Indenture.
Closing Date: The date of this Agreement.
Commission: The Securities and Exchange Commission.
Company: As defined in the preamble.
Consummate: A Registered Exchange Offer shall be deemed "Consummated" for
purposes of this Agreement upon the occurrence of (i) the filing and
effectiveness under the Securities Act of the Exchange Offer Registration
Statement relating to the Exchange Notes to be issued in the Exchange Offer,
(ii) the maintenance of such Registration Statement continuously effective and
the keeping of the Exchange Offer open for a period not less than the minimum
period required pursuant to Section 3(b) hereof, and (iii) the delivery by the
Company to the Registrar under the Indenture of Exchange Notes
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in the same aggregate principal amount as the aggregate principal amount of
Initial Notes that were tendered by Holders thereof pursuant to the Exchange
Offer.
Controlling person: As defined in Section 8(a) hereof.
Effectiveness Target Date: As defined in Section 5 hereof.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Exchange Date: As defined in Section 3(b) hereof.
Exchange Notes: The Company's 11% Senior Secured Exchange Notes due 2010,
constituting the same series under the Indenture as the Initial Notes, to be
issued to Holders in exchange for Initial Notes pursuant to this Agreement, with
the Exchange Notes containing terms identical in all material respects to the
Initial Notes (except that the Exchange Notes will not bear legends restricting
their transfer).
Exchange Offer: The registration by the Company under the Securities Act
of the Exchange Notes pursuant to a Registration Statement pursuant to which the
Company offers the Holders of all outstanding Transfer Restricted Securities the
opportunity to exchange all such outstanding Transfer Restricted Securities held
by such Holders for Exchange Notes in an aggregate principal amount equal to the
aggregate principal amount of the Transfer Restricted Securities tendered in
such exchange offer by such Holders.
Exchange Offer Registration Statement: The Registration Statement relating
to the Exchange Offer, including the related Prospectus.
Guarantors. As defined in the preamble hereto.
Holders: As defined in Section 2(b) hereof.
Indemnified Holder: As defined in Section 8(a) hereof.
Indenture: The Indenture, dated as of March 11, 2003, among the Company,
the Guarantors and the Trustee, pursuant to which the Notes are to be issued, as
such Indenture is amended or supplemented from time to time in accordance with
the terms thereof.
Initial Notes: As defined in the preamble hereto.
Initial Purchaser: As defined in the preamble hereto.
Interest Payment Date: As defined in the Indenture and the Notes.
Liquidated Damages: As defined in Section 5 hereof.
NASD: National Association of Securities Dealers, Inc.
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Notes: The Initial Notes and the Exchange Notes.
Person: An individual, partnership, corporation, limited liability
company, trust or unincorporated organization, or a government or agency or
political subdivision thereof.
Playboy: As defined in the preamble hereto.
Prospectus: The prospectus included in a Registration Statement, as
amended or supplemented by any prospectus supplement and by all other amendments
thereto, including post-effective amendments, and all material incorporated by
reference into such Prospectus.
Purchase Agreement: As defined in the preamble hereto.
Record Holder: With respect to any Interest Payment Date at which time any
Liquidated Damages will be paid, each Person who is a Holder of Notes on the
record date with respect to such Interest Payment Date, as determined pursuant
to the Indenture and the Notes.
Registration Default: As defined in Section 5 hereof.
Registration Statement: Any registration statement of the Company relating
to (a) an offering of Exchange Notes pursuant to an Exchange Offer or (b) the
registration for resale of Transfer Restricted Securities, in each case which is
filed pursuant to the provisions of this Agreement, including the Prospectus
included therein, all amendments and supplements thereto (including
post-effective amendments) and all exhibits and material incorporated by
reference therein.
Securities Act: The Securities Act of 1933, as amended.
Shelf Registration Statement: As defined in Section 4 hereof.
Shelf Trigger Date: As defined in Section 4 hereof.
Subsidiary Guarantors: As defined in the preamble hereto.
Transfer Restricted Securities: Each Initial Note, until the earliest to
occur of (a) the date on which such Note is exchanged in the Exchange Offer, (b)
the date on which such Note has been effectively registered under the Securities
Act and disposed of in accordance with a Shelf Registration Statement, (c) the
date on which such Note is distributed to the public pursuant to Rule 144 under
the Securities Act or is saleable pursuant to Rule 144(k) under the Securities
Act (or similar provisions then in effect), and (d) the date such Note ceases to
be outstanding, and each Exchange Note issued to a Broker-Dealer until the date
on which such Exchange Note is distributed to the public by such Broker-Dealer
pursuant to the "Plan of Distribution" contemplated by the Exchange Offer
Registration Statement (including delivery of the Prospectus contained therein);
provided, however, that the Transfer Restricted Securities with respect to which
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the Company has caused to be filed and declared effective an Exchange Offer
Registration Statement and has consummated an Exchange Offer, in each case
pursuant to and in accordance with Section 3 hereof, and which have not been
tendered by the Exchange Date by the Holder thereof shall be deemed not to be
Transfer Restricted Securities, except to the extent the Holder provides the
notice contemplated by Section 4(a)(ii) hereof.
Trust Indenture Act: The Trust Indenture Act of 1939 as amended.
Trustee: Bank One, N.A., as the trustee under the Indenture, together with
its successors and assigns.
Underwritten Registration or Underwritten Offering: A registration in
which securities of the Company are sold to an underwriter for reoffering to the
public.
Section 2. Securities Subject To This Agreement.
(a) Transfer Restricted Securities. The securities entitled to the
benefits of this Agreement are the Transfer Restricted Securities.
(b) Holders of Transfer Restricted Securities. A Person is deemed to be a
holder of Transfer Restricted Securities (each, a "Holder") whenever such Person
owns Transfer Restricted Securities.
Section 3. Registered Exchange Offer.
(a) Unless the Exchange Offer shall not be permissible under applicable
law or Commission policy (after the procedures set forth in Section 6(a) below
have been complied with), the Company and the Guarantors shall (i) cause to be
filed with the Commission on or prior to 120 days after the Closing Date, a
Registration Statement under the Securities Act relating to the Exchange Notes
and the Exchange Offer, (ii) use their reasonable best efforts to cause such
Registration Statement to become effective on or prior to 180 days after the
Closing Date, (iii) in connection with the foregoing, (A) file all pre-effective
amendments to such Registration Statement as may be necessary in order to cause
such Registration Statement to become effective, (B) if applicable, file a
post-effective amendment to such Registration Statement pursuant to Rule 430A
under the Securities Act and (C) cause all filings which to the knowledge of the
Company are reasonably necessary, if any, in connection with the registration
and qualification of the Exchange Notes to be made under the Blue Sky laws of
such jurisdictions as are necessary to permit Consummation of the Exchange
Offer, and (iv) upon the effectiveness of such Registration Statement, commence
the Exchange Offer. The Exchange Offer shall be on the appropriate form
permitting registration of the Exchange Notes to be offered in exchange for the
Transfer Restricted Securities and to permit resales of Notes held by
Broker-Dealers as contemplated by Section 3(c) below.
(b) The Company and the Guarantors shall use their reasonable best efforts
to cause the Exchange Offer Registration Statement to be effective
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continuously and shall keep the Exchange Offer open for a period of not less
than the minimum period required under applicable federal and state securities
laws to Consummate the Exchange Offer (the last date of acceptance for exchange
being referred to as the "Exchange Date"); provided, however, that in no event
shall such period be less than 30 days after the date notice of the Exchange
Offer is mailed to the Holders. The Company and the Guarantors shall cause the
Exchange Offer to comply with all applicable federal and state securities laws.
No securities other than the Notes (and guarantees thereof) shall be included in
the Exchange Offer Registration Statement. The Company and the Guarantors shall
use their reasonable best efforts to cause the Exchange Offer to be Consummated
within 30 Business Days after the Exchange Offer Registration Statement has
become effective (or longer, if required by federal securities laws).
(c) The Company and the Guarantors shall indicate in a "Plan of
Distribution" section contained in the Prospectus forming a part of the Exchange
Offer Registration Statement that any Broker-Dealer who holds Initial Notes that
are Transfer Restricted Securities and that were acquired for its own account as
a result of market-making activities or other trading activities (other than
Transfer Restricted Securities acquired directly from the Company), may exchange
such Initial Notes pursuant to the Exchange Offer; however, such Broker-Dealer
may be deemed to be an "underwriter" within the meaning of the Securities Act
and must, therefore, deliver a prospectus meeting the requirements of the
Securities Act in connection with any resales of the Exchange Notes received by
such Broker-Dealer in the Exchange Offer, which prospectus delivery requirement
may be satisfied by the delivery by such Broker-Dealer of the Prospectus
contained in the Exchange Offer Registration Statement. Such "Plan of
Distribution" section shall also contain all other information with respect to
such resales by Broker-Dealers that the Commission may require in order to
permit such resales pursuant thereto, but such "Plan of Distribution" shall not
name any such Broker-Dealer or disclose the amount of Notes held by any such
Broker-Dealer except to the extent required by the Commission as a result of a
change in policy after the date of this Agreement.
The Company and the Guarantors shall use their reasonable best efforts to
keep the Exchange Offer Registration Statement continuously effective,
supplemented and amended as required by and subject to the provisions of
Sections 6(a) and 6(c) below to the extent necessary to ensure that it is
available for resales of Notes acquired by Broker-Dealers for their own accounts
as a result of market-making activities or other trading activities, and to
ensure that it conforms with the requirements of this Agreement, the Securities
Act and the policies, rules and regulations of the Commission as announced from
time to time, for a period ending on the earlier of (i) 180 days from the date
on which the Exchange Offer Registration Statement is declared effective and
(ii) the date on which Broker-Dealers are no longer required to deliver a
prospectus in connection with market-making or other trading activities;
provided, however, that any such Broker-Dealer desiring the Company to keep the
Exchange Offer Registration Statement continuously effective shall notify the
Company in writing that such Broker-Dealer acquired Exchange Notes as a result
of market-making or other similar activities such that the Broker-Dealer would
be required to deliver a
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prospectus under the Securities Act upon a subsequent sale or other disposition
of the Exchange Notes.
The Company shall provide sufficient copies of the latest version of such
Prospectus to Broker-Dealers promptly upon request at any time during such
180-day (or shorter as provided in the foregoing sentence) period in order to
facilitate such resales.
Section 4. Shelf Registrations.
(a) Shelf Registration. If (i) the Company and the Guarantors are not
permitted to consummate the Exchange Offer because the Exchange Offer is not
permitted by applicable law or Commission policy (after the procedures set forth
in Section 6(a) below have been complied with), or (ii) any Holder notifies the
Company prior to the 20th day following Consummation of the Exchange Offer that
(A) such Holder is prohibited by applicable law or Commission policy from
participating in the Exchange Offer, (B) such Holder may not resell the Exchange
Notes acquired by it in the Exchange Offer to the public without delivering a
prospectus and that the Prospectus contained in the Exchange Offer Registration
Statement is not appropriate or available for such resales by such Holder, or
(C) such Holder is a Broker-Dealer and holds Initial Notes acquired directly
from the Company or one of its affiliates, then, upon such Holder's request, the
Company and the Guarantors shall:
(x) cause to be filed a shelf registration statement pursuant
to Rule 415 under the Securities Act, which may be an amendment to
the Exchange Offer Registration Statement (in either event, the
"Shelf Registration Statement") on or prior to the earliest to occur
of the 120th day after (1) the date on which the Company determines
that it is not permitted to file the Exchange Offer Registration
Statement as contemplated by clause (i) above or (2) the date on
which the Company receives notice from a Holder of Transfer
Restricted Securities as contemplated by clause (ii) above (such
earliest date being the "Shelf Trigger Date"), which Shelf
Registration Statement shall provide for resales of all Transfer
Restricted Securities the Holders of which shall have provided the
information required pursuant to Section 4(b) hereof; and
(y) use their reasonable best efforts to cause such Shelf
Registration Statement to be declared effective by the Commission on
or before the 180th day after the Shelf Trigger Date (such 180th day
the "Effectiveness Deadline").
If, after the Company and the Guarantors have filed an Exchange Offer
Registration Statement that satisfies the requirements of Section 3(a) hereof,
the Company and the Guarantors are required to file and make effective a Shelf
Registration Statement solely because the Exchange Offer is not permitted under
applicable federal law pursuant to clause (a)(i) above, then the filing of the
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Exchange Offer Registration Statement shall be deemed to satisfy the
requirements of clause (x) above; it being understood that in such event the
Company and the Guarantors shall remain obligated to use their reasonable best
efforts to meet the Effectiveness Deadline set forth in clause (y).
The Company and the Guarantor shall use their reasonable best efforts to
keep such Shelf Registration Statement continuously effective, supplemented and
amended as required by and subject to the provisions of Sections 6(b) and (c)
hereof to the extent necessary to ensure that it is available for resales of
Notes by the Holders of Transfer Restricted Securities entitled to the benefit
of this Section 4(a), and to ensure that it conforms with the requirements of
this Agreement, the Securities Act and the policies, rules and regulations of
the Commission as announced from time to time, for a period of at least two
years following the effective date of such Shelf Registration Statement (or such
shorter period that will terminate when all the Notes covered by such Shelf
Registration Statement have been sold pursuant to such Shelf Registration
Statement).
(b) Provision by Holders of Certain Information in Connection with the
Shelf Registration Statement. No Holder of Transfer Restricted Securities may
include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Company in writing within 20 days after receipt of a request therefor such
information as the Company may reasonably request for use in connection with any
Shelf Registration Statement or Prospectus or preliminary Prospectus included
therein, including, without limitation, the information specified in Item 507 or
508 of Regulation S-K, as applicable. No Holder of Transfer Restricted
Securities shall be entitled to liquidated damages pursuant to Section 5 hereof
because of the Company's failure to include such Holder's Transfer Restricted
Securities in Shelf Registration Statement, unless and until such Holder shall
have provided all such information. By acquiring the Initial Notes each Holder
agrees to provide the indemnity set forth in Section 8(b) hereof with respect to
the information such Holder furnishes to the Company in writing expressly for
use in any Shelf Registration Statement. The Company and the Guarantors shall
not be obligated to supplement such Shelf Registration Statement after it has
been declared effective by the Commission more than two times quarterly solely
to reflect additional Holders. Each Holder as to which any Shelf Registration
Statement is being effected agrees to furnish promptly to the Company all
information required to be disclosed in order to make the information previously
furnished to the Company by such Holder not materially misleading.
Section 5. Liquidated Damages. If (i) any of the Registration Statements
required by this Agreement is not filed with the Commission on or prior to the
date specified for such filing in this Agreement, (ii) any of such Registration
Statements has not been declared effective by the Commission on or prior to the
date specified for such effectiveness in this Agreement (the "Effectiveness
Target Date"), (iii) the Exchange Offer has not been Consummated within 30
Business Days after the Effectiveness Target Date with respect to the Exchange
Offer Registration Statement (or longer, if required by federal securities laws)
or (iv) any Registration Statement required by this Agreement is filed and
declared
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effective but shall thereafter cease to be effective or fail to be usable for
its intended purpose during the period in which it is required to be effective
pursuant to Section 3 or Section 4 without being succeeded within two business
days by a post-effective amendment to such Registration Statement that cures
such failure and that is itself promptly declared effective (each such event
referred to in clauses (i) through (iv), a "Registration Default"), then the
Company and each Guarantor (to the extent of its Note Guaranty set forth in the
Indenture) jointly and severally agrees to pay to each Holder of Transfer
Restricted Securities liquidated damages ("Liquidated Damages") in an amount
equal to $.05 per week per $1,000 in principal amount of Transfer Restricted
Securities held by such Holder for each week or portion thereof that the
Registration Default continues for the first 90-day period immediately following
the occurrence of such Registration Default. The amount of the Liquidated
Damages shall increase by an additional $.05 per week per $1,000 in principal
amount of Transfer Restricted Securities with respect to each subsequent 90-day
period until all Registration Defaults have been cured, up to a maximum amount
of Liquidated Damages for all Registration Defaults of $.25 per week per $1,000
in principal amount of Transfer Restricted Securities. Following the cure of all
Registration Defaults, Liquidated Damages shall cease to accrue; provided that,
if after any such cessation, a Registration Default occurs, Liquidated Damages
shall again accrue at the initial rate of $.05 per week per $1,000 in principal
amount of Transfer Restricted Securities pursuant to the foregoing provisions.
All accrued Liquidated Damages shall be paid to the Record Holders
entitled thereto in the manner provided for the payment of interest in the
Indenture on each Interest Payment Date, as more fully set forth in the
Indenture and the Notes. Notwithstanding the fact that any securities for which
Liquidated Damages are due cease to be Transfer Restricted Securities, all
obligations of the Company and the Guarantors to pay accrued Liquidated Damages
with respect to such securities shall survive until such time as such
obligations with respect to such securities shall have been satisfied in full.
Notwithstanding anything to the contrary in this Section 5, the Company
shall not be required to pay Liquidated Damages to a Holder of Transfer
Restricted Securities if such Holder's failure to receive Exchange Notes and/or
inability to use a Shelf Registration Statement arises from such Holder's
failure to comply with its obligations to make the representations set forth in
Section 6(a) or to provide the information required to be provided by it, if
any, pursuant to Section 4(b).
Section 6. Registration Procedures.
(a) Exchange Offer Registration Statement. In connection with the Exchange
Offer, the Company and the Guarantors shall use their reasonable best efforts to
comply with all of the relevant provisions of Section 6(c) below and shall use
their reasonable best efforts to effect such exchange. As a condition to its
participation in the Exchange Offer pursuant to the terms of this Agreement,
each Holder of Transfer Restricted Securities shall furnish, upon the request of
the Company, prior to the Consummation thereof, a written representation to the
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Company (which may be contained in the letter of transmittal contemplated by the
Exchange Offer Registration Statement) to the effect that (A) it is not an
affiliate of the Company, (B) it is not engaged in, and does not intend to
engage in, and has no arrangement or understanding with any person to
participate in, a distribution of the Exchange Notes to be issued in the
Exchange Offer, (C) it is acquiring the Exchange Notes in its ordinary course of
business, (D) it is not acting on behalf of any person who could not truthfully
make the foregoing representations and (E) such other representations as may be
reasonably necessary under applicable Commission rules, regulations or
interpretations. Each Holder tendering Initial Notes in the Exchange Offer will
be required to acknowledge and agree that any Broker-Dealer and any such Holder
using the Exchange Offer to participate in a distribution of the securities to
be acquired in the Exchange Offer (1) could not under Commission policy, as in
effect on the date of this Agreement, rely on the position of the Commission
enunciated in its no-action letters entitled Morgan Stanley and Co., Inc.
(available June 5, 1991) and Exxon Capital Holdings Corporation (available May
13, 1988), as interpreted in Shearman & Sterling (available July 2, 1993), and
similar no-action letters, and (2) must comply with the registration and
prospectus delivery requirements of the Securities Act in connection with a
secondary resale transaction and that such transaction should be covered by an
effective registration statement containing the selling security holder
information required by Item 507 or 508, as applicable, of Regulation S-K if the
resales are of Exchange Notes obtained by such Holder in exchange for Initial
Notes acquired by such Holder directly from the Company.
(b) Shelf Registration Statement. In connection with the Shelf
Registration Statement, the Company and the Guarantors shall use reasonable best
efforts to comply with all the relevant provisions of Section 6(c) below and
shall use their reasonable best efforts to effect such registration to permit
the sale of the Transfer Restricted Securities being sold in accordance with the
intended method or methods of distribution thereof (as indicated in the
information furnished to the Company pursuant to Section 4(b) hereof), and
pursuant thereto the Company will as expeditiously as possible prepare and file
with the Commission a Registration Statement relating to the registration on any
appropriate form under the Securities Act, which form shall be available for the
sale of the Transfer Restricted Securities in accordance with the intended
method or methods of distribution thereof.
(c) General Provisions. In connection with any Shelf Registration
Statement and, to the extent applicable, an Exchange Offer Registration
Statement, required by this Agreement, the Company and the Guarantors shall:
(i) use their reasonable best efforts to keep such Registration
Statement continuously effective and provide all requisite financial
statements (including, if required by the Securities Act or any regulation
thereunder, financial statements of the Company or any or all of the
Subsidiary Guarantors) for the period specified in Section 3 or 4 of this
Agreement, as applicable; upon the occurrence of any event that would
cause any such Registration Statement or the Prospectus contained therein
(A) to contain a material misstatement or omission or (B) not to be
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effective and usable during the period required by this Agreement, the
Company shall file promptly an appropriate amendment to such Registration
Statement, in the case of clause (A), correcting any such misstatement or
omission, and, in the case of either clause (A) or (B), use its reasonable
best efforts to cause such amendment to be declared effective and such
Registration Statement and the related Prospectus to become usable for
their intended purpose(s) as soon as practicable thereafter;
(ii) prepare and file with the Commission such amendments and
post-effective amendments to the Registration Statement as may be
necessary to keep the Registration Statement effective for the applicable
period set forth in Section 3 or 4 hereof, as applicable or such shorter
period as will terminate when all Transfer Restricted Securities covered
by such Registration Statement have been sold; cause the Prospectus to be
supplemented by any required Prospectus supplement, and as so supplemented
to be filed pursuant to Rule 424 under the Securities Act, and to comply
with the applicable provisions of Rules 424 and 430A under the Securities
Act in a timely manner during the applicable period; and comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such Registration Statement during the applicable
period in accordance with the intended method or methods of distribution
by the sellers thereof set forth in such Registration Statement or
supplement to the Prospectus;
(iii) with respect to a Shelf Registration Statement, advise the
underwriter(s), if any, and the selling Holders promptly and, if requested
by such Persons, confirm such advice in writing, (A) when the Prospectus
or any Prospectus supplement or post-effective amendment has been filed,
and, with respect to any Registration Statement or any post-effective
amendment thereto, when the same has become effective, (B) of any request
by the Commission for amendments to the Registration Statement or
amendments or supplements to the Prospectus or for additional information
relating thereto, (C) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement under the
Securities Act or of the suspension by any state securities commission of
the qualification of the Transfer Restricted Securities for offering or
sale in any jurisdiction, or the initiation of any proceeding for any of
the preceding purposes, (D) (1) of the existence of any fact or the
happening of any event that makes any statement of a material fact made in
the Registration Statement, the Prospectus, any amendment or supplement
thereto, or any document incorporated by reference therein untrue, or that
requires the making of any additions to or changes in the Registration
Statement or the Prospectus in order to make the statements therein not
misleading, or (2) of the Company's determination, after consultation with
counsel and evidenced by a resolution of the Board of Directors of the
Company, that the continued effectiveness and use of the Shelf
Registration Statement would require the disclosure of confidential
information or interfere with any financing, acquisition, reorganization
or
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other material transaction involving the Company and the Guarantors (it
being understood that (in the case of both clauses D(1) and D(2)) only the
existence of the fact or event must be disclosed and the nature of the
facts or events may be kept confidential for such period as required for
bona fide business reasons). If at any time the Commission shall issue any
stop order suspending the effectiveness of the Registration Statement, or
any state securities commission or other regulatory authority shall issue
an order suspending the qualification or exemption from qualification of
the Transfer Restricted Securities under state securities or Blue Sky
laws, the Company and the Guarantors shall use their reasonable best
efforts to obtain the withdrawal or lifting of such order at the earliest
possible time;
(iv) with respect to a Shelf Registration Statement, furnish without
charge to each selling Holder named in any Registration Statement, and
each of the underwriter(s), if any, before filing with the Commission,
copies of any Registration Statement or any Prospectus included therein or
any amendments or supplements to any such Registration Statement or
Prospectus (including all documents incorporated by reference after the
initial filing of such Registration Statement), which documents will be
subject to the review of such Holders and underwriter(s) in connection
with such sale, if any, for a period of at least five business days, and
the Company will not file any such Registration Statement or Prospectus or
any amendment or supplement to any such Registration Statement or
Prospectus (including all such documents incorporated by reference) to
which a Holder of Transfer Restricted Securities covered by such
Registration Statement or the underwriter(s), if any, shall reasonably
object in writing within five business days after the receipt thereof
(such objection to be deemed timely made upon confirmation of telecopy
transmission within such period). The objection of a Holder or
underwriter, if any, shall be deemed to be reasonable if such Registration
Statement, amendment, Prospectus or supplement, as applicable, as proposed
to be filed, contains a material misstatement or omission;
(v) with respect to a Shelf Registration Statement, promptly after
the filing of any document that is to be incorporated by reference into a
Registration Statement or Prospectus, provide copies of such document to
each selling Holder named in any Registration Statement, and to the
underwriter(s), if any and, make representatives of the Company and the
Guarantors available as may be reasonably necessary for discussion of such
document and other customary due diligence matters;
(vi) with respect to a Shelf Registration Statement, make available
at reasonable business hours for inspection in the offices where such
records are normally maintained by selling Holders, any managing
underwriter participating in any disposition pursuant to such Registration
Statement and any attorney or accountant retained by such selling Holders
or any of the underwriter(s), all relevant financial and other records,
pertinent corporate documents and relevant properties of the Company and
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the Guarantors as may be reasonably necessary to enable them to exercise
applicable due diligence responsibility subject to appropriate
confidentiality agreements and cause the Company's and the Guarantors'
officers, directors and employees to supply all information reasonably
requested by any such Holder, underwriter, attorney or accountant in
connection with such Registration Statement subsequent to the filing
thereof and prior to its effectiveness;
(vii) with respect to a Shelf Registration Statement, if requested
by any selling Holders or the underwriter(s), if any, promptly incorporate
in any Registration Statement or Prospectus, pursuant to a supplement or
post-effective amendment if necessary, such information as such selling
Holders and underwriter(s), if any, may reasonably request to have
included therein, including, without limitation, information relating to
the "Plan of Distribution" of the Transfer Restricted Securities,
information with respect to the principal amount of Transfer Restricted
Securities being sold to such underwriter(s), the purchase price being
paid therefor and any other terms of the offering of the Transfer
Restricted Securities to be sold in such offering; and make all required
filings of such Prospectus supplement or post-effective amendment as soon
as reasonably practicable after the Company is notified of the matters to
be incorporated in such Prospectus supplement or post-effective amendment;
(viii)if the Transfer Restricted Securities are not rated, cause the
Transfer Restricted Securities covered by the Registration Statement to be
rated with the appropriate rating agencies if so requested by the Holders
of a majority in aggregate principal amount of Notes covered thereby or
the underwriter(s), if any;
(ix) with respect to a Shelf Registration Statement, furnish to each
selling Holder and each of the underwriter(s), if any, without charge, at
least one copy, or notice of filing, of the Registration Statement, as
first filed with the Commission, and of each amendment thereto, including
financial statements and schedules, all documents incorporated by
reference therein and all exhibits (including exhibits incorporated
therein by reference);
(x) with respect to a Shelf Registration Statement, deliver to each
selling Holder and each of the underwriter(s), if any, without charge, as
many copies of the Prospectus (including each preliminary prospectus) and
any amendment or supplement thereto as such Persons reasonably may
request; the Company and the Guarantors hereby consent to the use of the
Prospectus and any amendment or supplement thereto by each of the selling
Holders and each of the underwriter(s), if any, in connection with the
offering and the sale of the Transfer Restricted Securities covered by the
Prospectus or any amendment or supplement thereto;
(xi) in the case of a Shelf Registration Statement, upon request of
Holders who collectively hold an aggregate principal amount of
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Transfer Restricted Securities in excess of 50% of the outstanding
principal amount of Transfer Restricted Securities (the "Requesting
Holders"), enter into such agreements (including an underwriting
agreement), and make such reasonable representations and warranties, and
take all such other actions in connection therewith in order to expedite
or facilitate the disposition of the Transfer Restricted Securities
pursuant to any Registration Statement contemplated by this Agreement, all
to such extent as may be requested by any Holder of Transfer Restricted
Securities or underwriter in connection with any sale or resale pursuant
to any Shelf Registration Statement contemplated by this Agreement, which
agreements must be in customary form, and whether or not an underwriting
agreement is entered into and whether or not the registration is an
Underwritten Registration, the Company and the Guarantors shall:
(A) upon request of the Requesting Holders, furnish (or in the case
of paragraphs (2) and (3), use their reasonable best efforts to furnish)
to each selling Holder and each underwriter, if any, upon the
effectiveness of the Shelf Registration Statement:
(1) a certificate, dated the date of effectiveness of the
Shelf Registration Statement, signed by an officer of the Company
and each Guarantor, confirming, as of the date thereof, the matters
set forth in paragraphs (i), (ii), (iv) and (v) of Section 5(e) of
the Purchase Agreement;
(2) an opinion, dated the date of effectiveness of the Shelf
Registration Statement, of counsel (which may be the General Counsel
of the Company) for the Company and the Guarantors, covering such
matters customarily covered in such opinions as such parties may
reasonably request, which shall be reasonably satisfactory to the
managing underwriters and Requesting Holders;,
(3) a customary comfort letter, dated as of the effectiveness
of the Shelf Registration Statement from the Company's independent
accountants, in the customary form and covering matters of the type
customarily covered in comfort letters by underwriters in connection
with primary underwritten offerings; and
(B) set forth in full or incorporate by reference in the
underwriting agreement, if any, the indemnification provisions and
procedures of Section 8 hereof with respect to all parties to be
indemnified pursuant to said Section.
If at any time the representations and warranties of the Company or any of
the Guarantors contemplated in clause (A)(1) above cease to be
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true and correct, the Company shall so advise the Initial Purchasers and the
underwriter(s), if any, and each selling Holder promptly and, if requested by
such Persons, shall confirm such advice in writing;
(xii) prior to any public offering of Transfer Restricted
Securities, cooperate with the selling Holders, the underwriter(s), if
any, and their respective counsel in connection with the registration and
qualification of the Transfer Restricted Securities under the securities
or Blue Sky laws of such jurisdictions as the selling Holders or
underwriter(s) may request and do any and all other acts or things
reasonably necessary or advisable to enable the disposition in such
jurisdictions of the Transfer Restricted Securities covered by the Shelf
Registration Statement; provided, however, that neither the Company nor
the Guarantors shall be required to register or qualify as a foreign
corporation where it is not then so qualified or to take any action that
would subject it to the service of process in suits or to taxation, other
than as to matters and transactions relating to the Registration
Statement, in any jurisdiction where it is not then so subject;
(xiii) issue, upon the request of any Holder of Initial Notes
covered by the Shelf Registration Statement, Exchange Notes, having an
aggregate principal amount equal to the aggregate principal amount of
Initial Notes surrendered to the Company by such Holder in exchange
therefor or being sold by such Holder; such Exchange Notes to be
registered in the name of such Holder or in the name of the purchaser(s)
of such Notes, as the case may be; in return, the Initial Notes held by
such Holder shall be surrendered to the Company for cancellation;
(xiv) in connection with any sale of Transfer Restricted Securities
that will result in such securities no longer being Transfer Restricted
Securities, cooperate with the selling Holders and the underwriter(s), if
any, to facilitate the timely preparation and delivery of certificates
representing Transfer Restricted Securities to be sold and not bearing any
restrictive legends; and enable such Transfer Restricted Securities to be
in such denominations and registered in such names as the Holders or the
underwriter(s), if any, may request at least two business days prior to
any sale of Transfer Restricted Securities made by such underwriter(s);
(xv) use their reasonable best efforts to cause the disposition of
the Transfer Restricted Securities covered by the Registration Statement
to be registered with or approved by such other governmental agencies or
authorities as may be necessary to enable the seller or sellers thereof or
the underwriter(s), if any, to consummate the disposition of such Transfer
Restricted Securities, subject to the proviso contained in clause (xii)
above;
(xvi) subject to clause (c)(i) above, if any fact or event
contemplated by clause (c)(iii)(D) above shall exist or have occurred,
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<PAGE>
prepare a supplement or post-effective amendment to the Registration
Statement or related Prospectus or any document incorporated therein by
reference or file any other required document so that, as thereafter
delivered to the purchasers of Transfer Restricted Securities, the
Prospectus will not contain an untrue statement of a material fact or omit
to state any material fact necessary to make the statements therein not
misleading;
(xvii) provide a CUSIP number for all Transfer Restricted Securities
not later than the effective date of the Registration Statement and
provide the Trustee under the Indenture with printed certificates for the
Transfer Restricted Securities which are in a form eligible for deposit
with the Depositary Trust Company;
(xviii) cooperate and assist in any filings required to be made with
the NASD and in the performance of any due diligence investigation by any
underwriter (including any "qualified independent underwriter") that is
required to be retained in accordance with the rules and regulations of
the NASD, and use their reasonable best efforts to cause such Registration
Statement to become effective and approved by such governmental agencies
or authorities as may be necessary to enable the Holders selling Transfer
Restricted Securities to consummate the disposition of such Transfer
Restricted Securities;
(xix) otherwise use their reasonable best efforts to comply with all
applicable rules and regulations of the Commission, and make generally
available to Playboy's security holders with regard to any applicable
Registration Statement, as soon as practicable, a consolidated earnings
statement meeting the requirements of Rule 158 (which need not be audited)
for the twelve-month period beginning, after the effective date of the
Registration Statement (as such term is defined in paragraph (c) of Rule
158 under the Act); and
(xx) cause the Indenture to be qualified under the Trust Indenture
Act not later than the effective date of the first Registration Statement
required by this Agreement, and, in connection therewith, cooperate with
the Trustee and the Holders of Notes to effect such changes to the
Indenture as may be required for such Indenture to be so qualified in
accordance with the terms of the Trust Indenture Act; and to execute and
use their reasonable best efforts to cause the Trustee to execute, all
documents that may be required to effect such changes and all other forms
and documents required to be filed with the Commission to enable such
Indenture to be so qualified in a timely manner.
Each Holder agrees by acquisition of a Transfer Restricted Security that,
upon receipt of any notice from the Company of the existence of any fact of the
kind described in Section 6(c)(iii)(C) or (D) hereof, such Holder will forthwith
discontinue disposition of Transfer Restricted Securities pursuant to the
applicable Registration Statement until such Holder's receipt of the copies of
the
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supplemented or amended Prospectus contemplated by Section 6(c)(xvi) hereof, or
until it is advised in writing (the "Advice") by the Company that the use of the
Prospectus may be resumed, and has received copies of any additional or
supplemental filings that are incorporated by reference in the Prospectus. If so
directed by the Company, each Holder will deliver to the Company (at the
Company's expense) all copies, other than permanent file copies then in such
Holder's possession, of the Prospectus covering such Transfer Restricted
Securities that was current at the time of receipt of such notice. In the event
the Company shall give any such notice, the time period regarding the
effectiveness of such Registration Statement set forth in Section 3 or 4 hereof,
as applicable, shall be extended by the number of days during the period from
and including the date of the giving of such notice to and including the date
when each selling Holder covered by such Registration Statement shall have
received the copies of the supplemented or amended Prospectus contemplated by
Section 6(c)(xvi) hereof or shall have received the Advice, it being agreed,
however, that the Company's option to suspend use of a Registration Statement
pursuant to this paragraph for more than 10 business days in any calendar year
or more than twice in any calendar year shall be treated as a Registration
Default for purposes of Section 5.
Section 7. Registration Expenses.
(a) All expenses incident to the performance of, and compliance with, this
Agreement by the Company and the Guarantors will be borne by the Company and the
Guarantors, regardless of whether a Registration Statement becomes effective,
including without limitation: (i) all registration and filing fees and expenses;
(ii) all fees and expenses of compliance with federal securities and state Blue
Sky laws; (iii) all expenses of printing (including printing certificates for
the Exchange Notes to be issued in the Exchange Offer and printing of
Prospectuses), messenger and delivery services and telephone; (iv) all fees and
disbursements of counsel for the Company and the Guarantors; (v) all application
and filing fees in connection with listing, if any, the Exchange Notes on a
national securities exchange or automated quotation system pursuant to the
requirements thereof; and (vi) all fees and disbursements of independent
certified public accountants of the Company and the Guarantors (including the
expenses of any special audit and comfort letters required by or incident to
such performance).
The Company and the Guarantors will, in any event, bear their internal
expenses (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expenses of
any annual audit and the fees and expenses of any Person, including special
experts, retained by the Company or any Guarantor.
(b) In connection with any Registration Statement required by this
Agreement (including, without limitation, the Exchange Offer Registration
Statement and the Shelf Registration Statement), the Company and the Guarantors
will reimburse the Initial Purchasers and the Holders of Transfer Restricted
Securities being tendered in the Exchange Offer and/or resold pursuant to the
"Plan of Distribution" contained in the Exchange Offer Registration Statement or
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registered pursuant to the Shelf Registration Statement, as applicable,
for the reasonable fees and disbursements of not more than one counsel for both,
who shall be Davis Polk & Wardwell or such other counsel as may be chosen by the
Holders of a majority in principal amount of the Transfer Restricted Securities
for whose benefit such Registration Statement is being prepared. Each Holder
shall pay all expenses of its counsel except as provided in this paragraph (b),
all underwriting discounts and commissions and transfer taxes, if any, relating
to the sale or disposition of such Holder's Transfer Restricted Securities
pursuant to a Shelf Registration Statement.
Section 8. Indemnification And Contribution.
(a) The Company and the Guarantors, jointly and severally, agree to
indemnify and hold harmless (i) each Holder (including any Broker-Dealer selling
Exchange Notes pursuant to the "Plan of Distribution" contained in the Exchange
Offer Registration Statement) and (ii) each person, if any, who controls (within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act) any Holder (any of the persons referred to in this clause (ii) being
hereinafter referred to as a "controlling person") and (iii) the respective
officers, directors, partners, employees, representatives and agents of any
Holder or any controlling person (any person referred to in clause (i), (ii) or
(iii) may hereinafter be referred to as an "Indemnified Holder"), to the fullest
extent lawful, from and against any and all losses, claims, damages,
liabilities, judgments, actions and expenses (including without limitation and
as incurred, reimbursement of all reasonable costs of investigating, preparing,
pursuing, settling, compromising, paying or defending any claim or action, or
any investigation or proceeding by any governmental agency or body, commenced or
threatened, including the reasonable fees and expenses of counsel to any
Indemnified Holder), joint or several, directly or indirectly caused by, related
to, based upon, arising out of or in connection with any untrue statement or
alleged untrue statement of a material fact contained in any Registration
Statement or Prospectus (or any amendment or supplement thereto), or any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages, liabilities or expenses are
caused by an untrue statement or omission or alleged untrue statement or
omission that is made in reliance upon and in conformity with information
relating to any of the Holders furnished in writing to the Company by any of the
Holders expressly for use therein; provided, however, that neither the Company
nor any Guarantor will be liable to any Initial Purchaser, Indemnified Holder
(in its capacity as Holder) or underwriter (or any person who controls such
party within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act) with respect to any untrue statement or alleged untrue
statement or omission or alleged omission of a material fact made in any
preliminary Prospectus to the extent that any such loss, liability, claim,
damage or expense resulted from the fact that such Initial Purchaser,
Indemnified Holder (in its capacity as Holder), or underwriter, as the case may
be, sold Transfer Restricted Securities to a Person to whom such Initial
Purchaser, Indemnified Holder (in its capacity as Holder) or underwriter, as the
case may be, failed to send or give, at or prior to the written confirmation of
sale of such securities, a copy of a final
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<PAGE>
Prospectus (as amended or supplemented), if the Company or any Guarantor has
previously furnished copies thereof (sufficiently in advance of the closing of
such sale to allow for distribution thereof in a timely manner) to such Initial
Purchaser, Indemnified Holder (in its capacity as Holder) or underwriter, as the
case may be, and the loss, liability, claim, damage or expense of such Initial
Purchaser, Indemnified Holder (in its capacity as Holder) or underwriter, as the
case maybe, resulted from an untrue statement or alleged untrue statement or
omission or alleged omission of a material fact contained in or omitted from
such preliminary Prospectus which was corrected in such final Prospectus. The
Company and the Guarantors shall also jointly and severally indemnify the
underwriters in any Underwritten Offering, their officers and directors and each
controlling person (within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act) of such underwriters to the same extent as
provided above with respect to the indemnification of the Holders of the Notes,
if requested by such Holders.
In case any action or proceeding (including any governmental or regulatory
investigation or proceeding) shall be brought or asserted against any of the
Indemnified Holders with respect to which indemnity may be sought against the
Company or the Guarantors, such Indemnified Holder (or the Indemnified Holder
controlled by such controlling person) shall promptly notify the Company and the
Guarantors in writing (provided, that the failure to give such notice shall not
relieve the Company or the Guarantors of their respective obligations pursuant
to this Agreement except to the extent that the Company or any Guarantor is
prejudiced as a result of such failure). The Company and the Guarantors shall be
liable for any settlement of any such action or proceeding effected with the
Company's prior written consent, which consent shall not be withheld
unreasonably, and the Company and the Guarantors agree to indemnify and hold
harmless any Indemnified Holder from and against any loss, claim, damage,
liability or expense by reason of any settlement of any action effected with the
written consent of the Company. The Company and the Guarantors shall not,
without the prior written consent of each Indemnified Holder, settle or
compromise or consent to the entry of judgment in or otherwise seek to terminate
any pending or threatened action, claim, litigation or proceeding in respect of
which indemnification or contribution may be sought hereunder (whether or not
any Indemnified Holder is a party thereto), unless such settlement, compromise,
consent or termination includes an unconditional release of each Indemnified
Holder from all liability arising out of such action, claim, litigation or
proceeding.
(b) Each Holder of Transfer Restricted Securities agrees, severally and
not jointly, to indemnify and hold harmless the Company and the Guarantors and
their respective directors and officers who sign a Registration Statement, and
any person controlling (within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act) the Company or any Guarantor, and the
respective officers, directors, partners, employees, representatives and agents
of each such person, to the same extent as the foregoing indemnity from the
Company and the Guarantors to each of the Indemnified Holders, but only with
respect to claims and actions based on information relating to such Holder
furnished in writing by such Holder expressly for use in any Registration
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Statement. In case any action or proceeding shall be brought against the Company
or any Guarantor or any of their respective directors or officers or any such
controlling person in respect of which indemnity may be sought against a Holder
of Transfer Restricted Securities, such Holder shall have the rights and duties
given the Company and any Guarantor and each of the Company or such Guarantor or
its directors or officers or such controlling person shall have the rights and
duties given to each Holder by the preceding paragraph. In no event shall the
liability of any selling Holder hereunder be greater in amount than the dollar
amount of the proceeds received by such Holder upon the sale of the Notes giving
rise to such indemnification obligation.
(c) In case any such action is brought against any indemnified party under
this Section 8 and such indemnified party seeks or intends to seek indemnity
from an indemnifying party under this Section 8, the indemnifying party will be
entitled to participate in and, to the extent that it shall elect, jointly with
all other indemnifying parties similarly notified, by written notice delivered
to the indemnified party promptly after receiving from such indemnified party
the notice required pursuant Section 8(a), to assume the defense thereof with
counsel reasonably satisfactory to such indemnified party; provided, however, if
the defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that a conflict may arise between the positions of the indemnifying party and
the indemnified party in conducting the defense of any such action or that there
may be legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party, the
indemnified party or parties shall have the right to select separate counsel to
assume such legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties. Upon receipt of notice
from the indemnifying party to such indemnified party of such indemnifying
party's election so to assume the defense of such action and approval by the
indemnified party of counsel, the indemnifying party will not be liable to such
indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed separate counsel in
accordance with the proviso to the next preceding sentence (it being understood,
however, that the indemnifying party shall not be liable for the expenses of
more than one separate counsel (together with local counsel), approved by the
indemnifying party, representing the indemnified parties who are parties to such
action) or (ii) the indemnifying party shall not have employed counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after notice of commencement of the action, in
each of which cases the fees and expenses of counsel shall, to the extent
required by subsection (a) or subsection (b), as applicable, of this Section 8,
be at the expense of the indemnifying party.
(d) If the indemnification provided for in this Section 8 is unavailable
to an indemnified party under Section 8(a) or Section 8(b) hereof (other than by
reason of exceptions provided in those Sections) in respect of any losses,
claims, damages, liabilities, judgments, or expenses referred to therein, then
(i) each applicable indemnifying party, in lieu of indemnifying such indemnified
party,
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shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages, liabilities, judgments or expenses in
such proportion as is appropriate to reflect the relative benefits received by
the Company and the Guarantors, on the one hand, and the Indemnified Holders, on
the other hand, from their sale or exchange of Transfer Restricted Securities or
(ii) if the allocation provided by clause 8(d)(i) is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause 8(d)(i) above but also the relative fault of the
Company and the Guarantors on the one hand, and of the Indemnified Holder, on
the other hand, in connection with the statements or omissions which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative fault of the Company and the
Guarantors on the one hand and of the Indemnified Holder on the other shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or any Guarantor,
on the one hand, or by the Indemnified Holder, on the other hand, 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, claims, damages, liabilities, judgments and
expenses referred to above shall be deemed to include, subject to the
limitations set forth in the second paragraph of Section 8(a), any legal or
other fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim.
The Company, the Guarantors and each Holder of Transfer Restricted
Securities agree that it would not be just and equitable if contribution
pursuant to this Section 8(d) were determined by pro rata allocation (even if
the Holders were treated as one entity for such purpose) or by any other method
of allocation which does not take account of the equitable considerations
referred to in the immediately preceding paragraph. The amount paid or payable
by an indemnified party as a result of the losses, claims, damages, liabilities,
judgments or expenses referred to in the immediately preceding paragraph shall
be deemed to include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 8, none of the Holders (and its related Indemnified
Holders) shall be required to contribute, in the aggregate, any amount in excess
of the amount by which the proceeds received by such Holder with respect to the
Initial Notes sold pursuant to the Shelf Registration Statement exceed the
amount of any damages which such Holder has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The Holders'
obligations to contribute pursuant to this Section 8(d) are several in
proportion to the respective principal amount of Initial Notes sold by each of
the Holders and not joint.
Section 9. Rule 144A. The Company and the Guarantors each hereby agrees
with each Holder, for so long as any Transfer Restricted Securities remain
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outstanding and during any period in which the Company or such Guarantor is not
subject to Section 13 or 15(d) of the Exchange Act, to make available to any
Holder or beneficial owner of Transfer Restricted Securities in connection with
any sale thereof and any prospective purchaser of such Transfer Restricted
Securities from such Holder or beneficial owner, the information required by
Rule 144A(d)(4) under the Securities Act in order to permit resales of such
Transfer Restricted Securities pursuant to Rule 144A.
Section 10. Participation In Underwritten Registrations. No Holder may
participate in any Underwritten Registration unless such Holder (a) agrees to
sell such Holder's Transfer Restricted Securities on the basis provided in any
underwriting arrangements approved by the Persons entitled hereunder to approve
such arrangements and (b) completes and executes all reasonable questionnaires,
powers of attorney, indemnities, underwriting agreements, lock-up letters and
other documents required under the terms of such underwriting arrangements.
Section 11. Selection Of Underwriters. The Holders of Transfer Restricted
Securities covered by the Shelf Registration Statement who desire to do so may
sell such Transfer Restricted Securities in an Underwritten Offering. In any
such Underwritten Offering, the investment banker or investment bankers and
manager or managers that will administer the offering will be selected by the
Holders of a majority in aggregate principal amount of the Transfer Restricted
Securities included in such offering; provided, that such investment bankers and
managers must be reasonably satisfactory to the Company.
Section 12. Miscellaneous.
(a) Remedies. The Company and the Guarantors each hereby agrees that
monetary damages would not be adequate compensation for any loss incurred by
reason of a breach by them of the provisions of this Agreement and hereby agree
to waive the defense in any action for specific performance that a remedy at law
would be adequate.
(b) No Inconsistent Agreements. The Company and the Guarantors will not,
on or after the date of this Agreement, enter into any agreement with respect to
its securities that is inconsistent with the rights granted to the Holders in
this Agreement or otherwise conflicts with the provisions hereof. The rights
granted to the Holders hereunder do not in any way conflict with and are not
inconsistent with the rights granted to holders of securities of the Company or
any Guarantor under any agreement in effect on the date hereof.
(c) Adjustments Affecting the Notes. The Company and the Guarantors will
not knowingly take any action, or permit any change to occur, with respect to
the Notes that would materially and adversely affect the ability of the Holders
to Consummate any Exchange Offer.
(d) Amendments and Waivers. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to or departures from
the provisions hereof may not be given unless the Company has
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obtained the written consent of Holders of a majority of the outstanding
principal amount of Transfer Restricted Securities. Notwithstanding the
foregoing, a waiver or consent to departure from the provisions hereof that
relates exclusively to the rights of Holders whose securities are being tendered
pursuant to the Exchange Offer and that does not affect directly or indirectly
the rights of other Holders whose securities are not being tendered pursuant to
such Exchange Offer may be given by the Holders of a majority of the outstanding
principal amount of Transfer Restricted Securities being tendered.
(e) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), facsimile, or courier
guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the records of the
Registrar under the Indenture, with a copy to the Registrar under the
Indenture;
(ii) if to an Initial Purchaser:
c/o Banc of America Securities LLC
9 West 57th Street
New York, New York
Fax No.: (212) 583-8295
Attention: High Yield Capital Markets
With a copy to:
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York
Fax No. (212) 450-3800
Attention: Richard D. Truesdell, Jr.; and
(iii) if to the Company and the Guarantors:
Playboy Enterprises, Inc.
680 North Lakeshore Drive
Chicago, Illinois
Fax No.: (312) 266-2042
Attention: Howard Shapiro, Esq.
With a copy to:
Skadden, Arps, Slate, Meagher & Flom (Illinois)
333 West Wacker Drive, Suite 2100
Chicago, Illinois 60606
Fax No.: (312) 407-0411
Attention: Rodd M. Schreiber, Esq.
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All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; when receipt
acknowledged, if sent via fax; and on the next business day, if timely delivered
to a courier guaranteeing overnight delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.
(f) Successors and Assigns. This Agreement shall inure to the benefit of,
and be binding upon, the successors and assigns of each of the parties,
including without limitation and without the need for an express assignment,
subsequent Holders of Transfer Restricted Securities; provided, however, that
this Agreement shall not inure to the benefit of or be binding upon a successor
or assign of a Holder unless and to the extent such successor or assign acquired
Transfer Restricted Securities from such Holder, provided, further, that nothing
herein shall be deemed to permit any assignment, transfer or other disposition
of Transfer Restricted Securities in violation of the terms hereof or of the
Purchase Agreement or the Indenture. If any transferee of any Holder shall
acquire Transfer Restricted Securities in any manner, whether by operation of
law or otherwise, such Transfer Restricted Securities shall be held subject to
all of the terms of this Agreement, and by taking and holding such Transfer
Restricted Securities such Person shall be conclusively deemed to have agreed to
be bound by and to perform all of the terms and provisions of this Agreement,
including the restrictions on resale set forth in this Agreement and, if
applicable, the Purchase Agreement, and such Person shall be entitled to receive
the benefits hereof.
(g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT OF LAW RULES THEREOF.
(j) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
(k) Entire Agreement. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein with respect to
the
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registration rights granted by the Company and the Guarantors with respect to
the Transfer Restricted Securities. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
PEI HOLDINGS, INC.
By: /s/ Robert Campbell
------------------------------------
Name: Robert Campbell
Title: Treasurer
PLAYBOY ENTERPRISES, INC.
By: /s/ Robert Campbell
------------------------------------
Name: Robert Campbell
Title: Senior Vice President,
Treasurer
26
<PAGE>
ADULTVISION COMMUNICATIONS, INC.
AFTER DARK VIDEO, INC.
AL ENTERTAINMENT, INC.
ALTA LOMA DISTRIBUTION, INC.
ALTA LOMA ENTERTAINMENT, INC.
IMPULSE PRODUCTIONS, INC.
INDIGO ENTERTAINMENT, INC.
ITASCA HOLDINGS, INC.
LAKE SHORE PRESS, INC.
LIFESTYLE BRANDS, LTD.
MYSTIQUE FILMS, INC.
PLAYBOY GAMING NEVADA, INC.
PLAYBOY GAMING UK, LTD.
PLAYBOY CLUB OF HOLLYWOOD, INC.
PLAYBOY CLUB OF NEW YORK, INC.
PLAYBOY CLUBS INTERNATIONAL, INC.
PLAYBOY CRUISE GAMING, INC.
PLAYBOY GAMING INTERNATIONAL, LTD.
PLAYBOY OF LYONS, INC.
PLAYBOY JAPAN, INC.
PLAYBOY MODELS, INC.
PLAYBOY PREFERRED, INC.
PLAYBOY ENTERTAINMENT GROUP, INC.
PLAYBOY ENTERPRISES INTERNATIONAL, INC.
PRECIOUS FILMS, INC.
PLAYBOY PROPERTIES, INC.
PLAYBOY OF SUSSEX, INC.
STEELTON, INC.
TELECOM INTERNATIONAL, INC.
WOMEN PRODUCTIONS, INC.
SPECIAL EDITIONS, LTD.
CPV PRODUCTIONS, INC.
CYBERSPICE, INC.
SPICE ENTERTAINMENT, INC.
SPICE DIRECT, INC.
SPICE NETWORKS, INC.
SPICE PRODUCTIONS, INC.
SPICE INTERNATIONAL, INC.
MH PICTURES, INC.
PLAYBOY SHOWS, INC.
PLANET PLAYBOY, INC.
PLANET SPICE, INC.
By: /s/ Robert Campbell
------------------------------------
Name: Robert Campbell
Title: Treasurer
27
<PAGE>
SPICE HOT ENTERTAINMENT, INC.
SPICE PLATINUM ENTERTAINMENT, INC.
By: /s/ James L. English
------------------------------------
Name: James L. English
Title: President
28
<PAGE>
PLAYBOY TV INTERNATIONAL, LLC
By: Playboy Entertainment Group, Inc., its
Sole Member
By: /s/ Robert Campbell
--------------------------------
Name: Robert Campbell
Title: Treasurer
CLARIDGE ORGANIZATION, LLC
CHELSEA COURT HOLDINGS, LLC
CANDLELIGHT MANAGEMENT, LLC
By: Playboy TV International, LLC,
its Sole Member
By: Playboy Entertainment Group,
Inc., its Sole Member
By: /s/ Robert Campbell
--------------------------
Name: Robert Campbell
Title: Treasurer
29
<PAGE>
The foregoing Registration Rights
Agreement is hereby confirmed and
accepted as of the date first above
written:
BANC OF AMERICA SECURITIES LLC
LAZARD FRERES & CO. LLC
By: Banc of America Securities LLC
By: /s/ Kelly Daniel
-------------------------------
Managing Director
30