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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

 

Date of Report (Date of Earliest Event Reported): May 13, 2022

 

PLBY GROUP, INC.

(Exact name of Registrant as Specified in its Charter)

 

Delaware		001-39312		37-1958714
(State or other Jurisdiction of Incorporation or Organization)		(Commission File Number)		(IRS Employer Identification No.)

 

10960 Wilshire Blvd., Suite 2200 Los Angeles, California		90024
(Address of principal executive offices)		(Zip code)

 

Registrant’s telephone number, including area code: (310) 424-1800

 

Not Applicable

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.0001 per share	PLBY	Nasdaq Global Market

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.¨

 

 

 

 

 

 

Item 1.01.

Entry into a Material Definitive Agreement.

 

Securities Purchase Agreement

 

On May 13, 2022, PLBY Group, Inc., a Delaware corporation (the “Company”), entered into a securities purchase agreement (the “Purchase Agreement”) with Drawbridge DSO Securities LLC (the “Purchaser”). Pursuant to the Purchase Agreement, the Company will issue and sell an aggregate of up to 50,000 shares of a newly created series of the Company’s preferred stock, par value $0.0001 per share, designated as “Series A Preferred Stock” (the “Series A Preferred Stock”) at a purchase price of $1,000.00 per share, resulting in total gross proceeds to the Company of up to $50.0 million. The Company has agreed to pay to the Purchaser a fee of 2.0% of the aggregate purchase price of the Series A Preferred Stock purchased by the Purchaser, and a fee of 1.0% of the aggregate purchase price of the 50,000 shares of Series A Preferred Stock. The Company expects to use the proceeds from the sale of the Series A Preferred Stock to repurchase shares of its Common Stock (as defined below) and for general corporate purposes.

 

The initial consummation of the sale of 25,000 shares of Series A Preferred Stock (the “Closing”) was completed on May 16, 2022. Any future consummation of the sale of additional shares of Series A Preferred Stock as contemplated by the Purchase Agreement is conditioned on customary closing conditions, including the accuracy of representations and warranties and the performance of all obligations contained in the Purchase Agreement (in each case subject to customary materiality qualifiers).

 

The Purchase Agreement further provides that, subject to customary exceptions, including exceptions in the case of transfers to certain permitted transferees, the Purchaser will be subject to customary transfer restrictions with respect to the Series A Preferred Stock.

 

The foregoing descriptions of the transactions contemplated by the Purchase Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Purchase Agreement attached hereto as Exhibit 10.1, which is incorporated herein by reference.

 

Certificate of Designation

 

The powers, designations, preferences and other rights of the shares of Series A Preferred Stock are set forth in the Certificate of Designation establishing the Series A Preferred Stock (the “Certificate of Designations”), filed by the Company with the Delaware Secretary of State on May 16, 2022, in connection with the Closing.

 

The Series A Preferred Stock will rank senior and in priority of payment to the Company’s common stock, par value $0.0001 per share (the “Common Stock”), with respect to distributions on liquidation, winding-up and dissolution. Each share of Series A Preferred Stock will have an initial liquidation preference of $1,000 per share (the “Liquidation Preference”).

 

Holders of shares of Series A Preferred Stock will be entitled to cumulative dividends, which will be payable quarterly in arrears in cash or, subject to certain limitations, in shares of Common Stock or any combination thereof, or by increasing the Liquidation Preference for each outstanding share of Series A Preferred Stock to the extent not so paid. Dividends will initially accrue on each share of Series A Preferred Stock at the rate of 8.0% per annum from the date of issuance until the fifth anniversary of the date of issuance, and thereafter such rate will increase quarterly by 1.0%.

 

At any time, the Company will have the right, at its option, to redeem the Series A Preferred Stock, in whole or in part. The Company will also be required to redeem the Series A Preferred Stock in full on September 30, 2027, or upon certain changes of control of the Company, subject to the terms of the Certificate of Designation.

 

The redemption price will be equal to the initial Liquidation Preference of each share of Series A Preferred Stock to be redeemed multiplied by (i) if any applicable redemption date occurs on or prior to the first anniversary of the Closing, 120%, (ii) if any applicable redemption date occurs after the first anniversary of the closing, but prior to or on the second anniversary of the closing, 125%, (iii) if any applicable redemption date occurs after the second anniversary of the closing, but prior to or on the third anniversary of the closing, 130%, (iv) if any applicable redemption date occurs after the third anniversary of the closing, but prior to or on the fourth anniversary of the closing, 145%, and (v) if any applicable redemption date occurs after the fourth anniversary of the closing, 160%, plus, in each case, a pro rata portion of the increase in the value of the shares of Common Stock repurchased with the proceeds of the offering of the Series A Preferred Stock as of the applicable redemption date, as set forth in the Certificate of Designation.

 

The redemption price will be payable in cash or, subject to certain limitations, in shares of Common Stock or any combination of cash and shares of Common Stock, at the Company’s election.

 

Holders of the Series A Preferred Stock will generally not be entitled to vote on any matter required or permitted to be voted upon by the shareholders of the Company. However, certain matters will require the approval of the holders of not less than the majority of the aggregate Liquidation Preference of the outstanding Series A Preferred Stock, voting as a separate class, including (1) the incurrence or issuance by the Company of certain indebtedness or shares of senior equity securities, (2) certain restricted payments by the Company, (3) certain consolidations, amalgamations or merger transactions involving the Company, (4) certain amendments to the organizational documents of the Company, (5) the incurrence of indebtedness or preferred equity securities by certain subsidiaries of the Company and (6) certain business activities of the Company.

 

 

 

 

The foregoing descriptions of the Certificate of Designation does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Certificate of Designation attached hereto as Exhibit 3.1, which is incorporated herein by reference.

 

Item 3.02.

Unregistered Sales of Equity Securities.

 

As described in Item 1.01 above, pursuant to the Purchase Agreement, the Company has agreed to sell to the Purchaser up to 50,000 shares of Series A Preferred Stock. The offer and sale of the shares of Series A Preferred Stock through the Purchase Agreement are being made in reliance upon an exemption from registration under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to Section 4(a)(2) thereof. Any shares of Common Stock payable as dividends on or the redemption price for the Series A Preferred Stock will be issued in reliance upon the exemption from registration in Section 3(a)(9) of the Securities Act. The information in Item 1.01 above is incorporated into this Item 3.02 by reference.

 

Item 3.03.

Material Modification to Rights of Security Holders.

 

Pursuant to the Purchase Agreement, the Company issued 25,000 shares of Series A Preferred Stock to the Purchaser in connection with the Closing. A summary of the rights, preferences and privileges of the Series A Preferred Stock is set forth in Item 1.01 above, which is incorporated herein by reference. Each share of Series A Preferred Stock issued to the Purchaser pursuant to the Purchase Agreement has the powers, designations, preferences, and other rights of the Series A Preferred Stock as are set forth in the Certificate of Designation, a copy of which is filed as Exhibit 3.1 hereto and is incorporated herein by reference.

 

Item 5.03.

Amendments to Articles of Incorporation or Bylaws.

 

The information set forth in Item 1.01 and Item 3.03 above relating to the issuance and sale of the Series A Preferred Stock and the Certificate of Designation is incorporated herein by reference. The Certificate of Designation establishes the powers, designations, preferences, and other rights of the Series A Preferred Stock and became effective upon filing with the Secretary of State of the State of Delaware on May 16, 2022.

 

Item 8.01.

Other Events.

 

On May 17, 2022, the Company issued a press release announcing that, on May 14, 2022, the Company’s board of directors authorized and approved a share repurchase program pursuant to which the Company may repurchase up to $50 million in aggregate of shares of the Company’s common stock, par value $0.0001 per share, with the authorization to expire on May 31, 2024.

 

Stock repurchases under this program will be made from time to time, on the open market, in privately negotiated transactions or by other methods, at the discretion of the management of the Company and in accordance with the limitations set forth in Rule 10b-18 promulgated under the Securities Exchange Act of 1934, as amended, and other applicable legal requirements. The timing of the repurchases will depend on market conditions and other requirements. The Company currently anticipates the share repurchase program will extend over a two-year period, or such shorter period if $50 million in aggregate of shares have been repurchased.

 

The share repurchase program does not obligate the Company to repurchase any dollar amount or number of shares, and the program may be extended, modified, suspended, or discontinued at any time.

 

A copy of the press release announcing the share repurchase program is attached hereto as Exhibit 99.1.

 

The forward-looking statements contained in this Form 8-K (including the exhibits thereto) are qualified by the information contained under the heading “Forward-Looking Statements” in the press release furnished as Exhibit 99.1 hereto.

 

The information contained in Exhibit 99.1 is furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, and such information shall not be deemed to be incorporated by reference into any of the Company’s filings under the Securities Act or the Exchange Act.

 

Item 9.01.

Financial Statements and Exhibits.

 

The following Exhibits are filed as part of this Current Report on Form 8-K.

 

Exhibit No.	Description
3.1	Certificate of Designation of the Series A Preferred Stock.

 

10.1	Purchase Agreement, dated May 13, 2022, by and among PLBY Group, Inc. and the Purchaser.*

 

99.1	Press Release dated May 17, 2022.

 

*Certain schedules and/or exhibits to this agreement have been omitted pursuant to Item 601(b)(2) of Regulation S-K. A copy of any omitted schedule and/or exhibit will be furnished to the SEC upon request. 

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

	PLBY GROUP, INC.
	By:	/s/ Chris Riley
		Name:	Chris Riley
Date: May 17, 2022		Title:	General Counsel and Secretary

 

 

 

 

Exhibit 3.1

 

CERTIFICATE OF DESIGNATION

 

OF

 

SERIES A PREFERRED STOCK

 

OF

 

PLBY GROUP, Inc.

 

 

Pursuant to Section 151 of the General Corporation Law of the State of Delaware

 

 

Pursuant to Section 151 of the General Corporation Law of the State of Delaware (the “DGCL”), PLBY Group, Inc., a corporation duly organized and validly existing under the DGCL (the “Company”), in accordance with the provisions of Section 103 thereof, does hereby submit the following:

 

WHEREAS, the Second Amended and Restated Certificate of Incorporation of the Company (as amended, restated, amended and restated, supplemented, extended, renewed or otherwise modified, in whole or in part, from time to time, the “Certificate of Incorporation”) authorizes the issuance of up to 5,000,000 shares of Preferred Stock, par value $0.0001 per share, of the Company, and expressly authorizes the Board of Directors of the Company, subject to limitations prescribed by Law, to provide, out of the unissued shares of Preferred Stock, for series of Preferred Stock, and, with respect to each such series, to establish and fix the number of shares to be included in any series of Preferred Stock and the designations, rights, preferences, powers, qualifications, restrictions and limitations of the shares of such series; and

 

WHEREAS, it is the desire of the Board of Directors to establish and fix the number of shares to be included in a new series of Preferred Stock and the designations, rights, preferences, powers, qualifications, restrictions and limitations of the shares of such new series.

 

NOW, THEREFORE, BE IT RESOLVED that the Board of Directors does hereby provide authority for the Company to issue a series of Preferred Stock to be known as the Series A Preferred Stock and does hereby in this certificate of designation (this “Certificate of Designation”) establish and fix and herein state and express the designations, rights, preferences, powers, qualifications, restrictions and limitations of the shares of Series A Preferred Stock as follows:

 

Article I

 

DEFINITIONS, CALCULATIONS AND INCORPORATION BY REFERENCE

 

Section 1.01.             Definitions. Unless stated otherwise or otherwise defined herein, capitalized terms used but not otherwise defined in this Certificate of Designation, or defined by reference to the corresponding definition in the Senior Credit Agreement, shall have the meaning, mutatis mutandis, as set forth in the Senior Credit Agreement as in effect as of the Closing Date without effect to any subsequent amendment or modification. As used in this Certificate of Designation, the following capitalized terms will have the following meanings:

 

 

“Affiliate” means, as applied to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with, that Person. For the purposes of this definition, “control” (including, with correlative meanings, the terms “controlling”, “controlled by” and “under common control with”), as applied to any Person, means the possession, directly or indirectly, of the power (i) to vote 10% or more of the Securities having ordinary voting power for the election of directors of such Person or (ii) to direct or cause the direction of the management and policies of that Person, whether through the ownership of voting securities or by contract or otherwise.

 

“Average Price” means 95% of the Average VWAP per share of Common Stock over the five consecutive Trading Day period beginning on, and including, the sixth Scheduled Trading Day prior to the applicable Redemption Notice Date or Dividend Notice Date, as the case may be. If the five Trading Day period to determine the Average Price ends on or after the relevant Redemption Date or Quarter End Date, as applicable (whether because a Scheduled Trading Day is not a Trading Day due to the occurrence of a Market Disruption Event or otherwise), then the Redemption Date or Quarter End Date, as applicable, will be postponed until the Business Day after the final Trading Day of such five Trading Day period.

 

“Average VWAP” means the average of the VWAPs for each Trading Day in the relevant period.

 

“Bankruptcy Event” means:

 

(1) an involuntary proceeding shall be commenced or an involuntary petition shall be filed in a court of competent jurisdiction seeking (i) relief in respect of the Company or any of its Subsidiaries, or of all or substantially all of the property or assets of the Company or any of its Subsidiaries, under Title 11 of the United States Code, as now constituted or hereafter amended, or any other federal, state or foreign bankruptcy, insolvency, receivership or similar law, (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Company or any of its Subsidiaries or for all or substantially all of the property or assets of the Company or any of its Subsidiaries, or (iii) the winding-up or liquidation of the Company or any of its Subsidiaries, and in the case of any proceeding described in this clause (1), such proceeding or petition shall continue in effect and undismissed or unstayed for 90 days or an order or decree approving or ordering any of the foregoing shall be entered; or

 

(2) the Company or any of its Subsidiaries shall (i) voluntarily commence any proceeding or file any petition seeking relief under Title 11 of the United States Code, as now constituted or hereafter amended, or any other federal, state or foreign bankruptcy, insolvency, receivership or similar law, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or the filing of any petition described in clause (1) above, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Company or any of its Subsidiaries or for all or substantially all of the property or assets of the Company or any of its Subsidiaries, or (iv) make a general assignment for the benefit of creditors, or (v) commence any voluntary in-court or out of- court restructuring or recapitalization transactions, and in the case of any proceeding described in this clause (2), such proceeding or petition shall continue in effect and undismissed or unstayed for 90 days or an order or decree approving or ordering any of the foregoing shall be entered.

 

“Board of Directors” means, as to any Person, the board of directors, board of managers or other governing body of such Person, or if such Person is owned or managed by a single entity, the board of directors, board of managers or other governing body of such entity, and the term “directors” means members of the Board of Directors. Whenever any provision requires any action or determination to be made by, or any approval of, a Board of Directors, such action, determination or approval shall be deemed to have been taken or made if approved by a majority of the directors on any such Board of Directors (whether or not such action or approval is taken as part of a formal board meeting or as a formal board approval). Unless the context requires otherwise, Board of Directors means the Board of Directors of the Company.

 

 

“Business Day” any day excluding Saturday, Sunday and any day which is a legal holiday under the laws of the State of New York or in Los Angeles, California or is a day on which banking institutions located in such state or city are authorized or required by law or other governmental action to close.

 

“Capital Lease” means, with respect to any Person, any lease that has been or should be accounted for as a capital lease on a balance sheet of such Person prepared in accordance with GAAP (as in effect on the date hereof).

 

“Capital Lease Obligations” of any Person means the obligations of such Person to pay rent or other amounts under any Capital Lease, which obligations are required to be classified and accounted for as Capital Leases on a balance sheet of such Person under GAAP, and the amount of such obligations at any time shall be the capitalized amount thereof at such time determined in accordance with GAAP.

 

“Cash Equivalents” means, as at any date of determination, any of the following: (i) marketable securities (a) issued or directly and unconditionally guaranteed as to interest and principal by the United States Government or (b) issued by any agency of the United States the obligations of which are backed by the full faith and credit of the United States, in each case maturing within one (1) year after such date; (ii) marketable direct obligations issued by any state of the United States or any political subdivision of any such state or any public instrumentality thereof, in each case maturing within one (1) year after such date and having, at the time of the acquisition thereof, a rating of at least A1 from S&P or at least P1 from Moody’s; (iii) commercial paper maturing no more than 180 days from the date of acquisition thereof and having, at the time of the acquisition thereof, a rating of at least A1 from S&P or at least P1 from Moody’s; (iv) certificates of deposit or bankers’ acceptances maturing within 180 days after such date and issued or accepted by any commercial bank organized under the laws of the United States or any state thereof or the District of Columbia that (a) is at least “adequately capitalized” (as defined in the regulations of its primary Federal banking regulator) and (b) has Tier 1 capital (as defined in such regulations) of not less than $1,000,000,000; (v) shares of any money market mutual fund that (a) has substantially all of its assets invested continuously in the types of investments referred to in clauses (i) and (ii) above, (b) has net assets of not less than $5,000,000,000, and (c) has the highest rating obtainable from either S&P or Moody’s; and (vi) any of the foregoing (or their reasonable equivalents) in each of the United Kingdom and Australia.

 

“Certificate of Designation” has the meaning set forth in the recitals.

 

“Certificate of Incorporation” has the meaning set forth in the recitals.

 

“Change of Control” means (i) any Person or “group” (within the meaning of Rules 13d 3 and 13d 5 under the Exchange Act but excluding any employee benefit plan of such Person and its Subsidiaries, and any Person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan), other than any combination of the Permitted Holders, shall have acquired beneficial ownership of Equity Interests of the Company representing more than 50% of the aggregate ordinary voting power represented by the issued and outstanding Equity Interests of the Company, (ii) any sale or other disposition of all or substantially all of the assets of the Company and its Subsidiaries and (iii) any event pursuant to which Company ceases to own, directly or indirectly, or to have, directly or indirectly, the power to vote or direct the voting of, Voting Stock of Playboy Enterprises, Inc. representing a majority of the voting power of the total outstanding Voting Stock of Playboy Enterprises, Inc.

 

“Closing Date” means May 16, 2022.

 

“Code” means the U.S. Internal Revenue Code of 1986, as amended from time to time.

 

“Common Stock” means the common stock, par value $0.0001 per share, of the Company.

 

 

“Compounded Liquidation Preference” means, with respect to the shares of Series A Preferred Stock at any date, the sum of (i) the Stated Value thereof, plus (ii) all accumulated and unpaid Dividends (whether declared or undeclared) as of the most recent Quarter End Date prior to such date.

 

“Debt” means, as applied to any Person, without duplication, (i) all indebtedness for borrowed money; (ii) all Capital Lease Obligations, Purchase Money Obligations and Synthetic Lease Obligations of such Person; (iii) notes payable and drafts accepted representing extensions of credit whether or not representing obligations for borrowed money (excluding trade and other current accounts payable incurred in the ordinary course of business and not more than 120 days past due or are being contested in good faith (collectively, “Trade Payables”) and customer deposits in the ordinary course of business in respect of prepayments for purchases); (iv) any obligation owed for all or any part of the deferred purchase price of property or services that would appear as a liability on a balance sheet (excluding the footnotes thereto) of the Company or any of its Subsidiaries prepared in accordance with GAAP (including any Earn-Out Indebtedness but excluding any Trade Payables); (v) all indebtedness secured by any Lien on any property or asset owned or held by that Person regardless of whether the indebtedness secured thereby shall have been assumed by that Person or is nonrecourse to the credit of that Person; (vi) the face amount of any letter of credit issued for the account of that Person or as to which that Person is otherwise liable for reimbursement of drawings; and (vii) all Hedging Obligations, valued at the Hedging Termination Value of all Hedging Obligations; provided, that, the Aircraft Indebtedness shall not constitute Debt so long as the sole obligors with respect thereto are the Aircraft SPV and the Aircraft SPV Holdco (it being agreed and understood that no Subsidiary party to the Aircraft Lease shall be deemed to be an obligor with respect to the Aircraft Indebtedness solely as a result of being a party to the Aircraft Lease). The Debt of any Person shall include the Debt of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent that terms of such Debt expressly provide that such Person is not liable therefor and such terms are effective under applicable law.

 

“Default” means any event that, if it continues uncured or unwaived, will, with the lapse of any applicable grace period or the giving of notice or both, be a Trigger Event.

 

“Dividend” means the dividends to be made by the Company in respect of the shares of Series A Preferred Stock in accordance with Section 2.01(a).

 

“Dividend Rate” means, for the period (a) from the date of issuance of any share of Series A Preferred Stock to and including the fifth anniversary of such date of issuance, 8.0% per annum and (b) following such fifth anniversary of such date of issuance, on each subsequent Quarter End Date increasing by 1.0%.

 

“Dollars” or “$” means the lawful currency of the United States of America.

 

“Equity Interests” means any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation), including partnership interests and membership interests, and any and all warrants, rights or options to purchase or other arrangements or rights to acquire any of the foregoing.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.

 

“GAAP” means generally accepted accounting principles in the United States, as in effect from time to time.

 

 

“Governmental Authority” means any federal, state, municipal, national or other government, governmental department, commission, board, bureau, court, agency or instrumentality or political subdivision thereof or any entity, officer or examiner exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to any government, any court, any securities exchange or any self-regulatory organization (including the National Association of Insurance Commissioners), in each case whether associated with a state of the United States, the United States, or a foreign entity or government (including any supra-national body exercising such powers or functions, such as the European Union or the European Central Bank).

 

“Hedging Agreement” means (i) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, currency swap transactions, cross-currency rate swap transactions, currency options, cap transactions, floor transactions, collar transactions, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options or warrants to enter into any of the foregoing), whether or not any such transaction is governed by, or otherwise subject to, any master agreement or any netting agreement, and (ii) any and all transactions or arrangements of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement (or similar documentation) published from time to time by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such agreement or documentation, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement.

 

“Hedging Obligations” means obligations under or with respect to Hedging Agreements.

 

“Hedging Termination Value” means, in respect of any one or more Hedging Agreements, after taking into account the effect of any netting agreements relating to such Hedging Agreements (to the extent, and only to the extent, such netting agreements are legally enforceable in insolvency proceedings against the applicable counterparty obligor thereunder), (i) for any date on or after the date such Hedging Agreements have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (ii) for any date prior to the date referenced in preceding clause (i), the amount(s) determined as the mark-to-market value(s) for such Hedging Agreements, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Hedging Agreements.

 

“Holder” means a holder of shares of Series A Preferred Stock.

 

“Holder Majority” means the consent of Holders who among them hold not less than the majority of the aggregate Liquidation Preference of the Series A Preferred Stock then outstanding.

 

“Intended Preferred Stock Tax Treatment” has the meaning set forth in Section 6.01(b).

 

“IRR” means, as to any Holder of Series A Preferred Stock, a specified internal rate of return that, when used as a discount rate, causes the sum of the present value of all of the inflows (i.e. redemptions, cash distributions or shares of Common Stock or Fees (as defined in the Series A Purchase Agreement) received by such Holder) accruing from all of the cash outflows (i.e., the Stated Value of such Holder’s Series A Preferred Stock) to equal the sum of the present value of such cash outflows. The IRR calculations shall use the methodology of the XIRR function of the Microsoft Excel computer program (with daily cash inflows and daily cash outflows), or its functional equivalent. If shares of Series A Preferred Stock are transferred to a new holder, for purposes of calculating the IRR of the new holder, the new holder shall be treated as receiving the cash or shares of Common Stock inflows received, and making the cash outflows made, by the prior holders.

 

 

“Laws” means, with respect to any Person, (i) the common law and any federal, state, local, foreign, multinational or international statutes, laws, treaties, judicial decisions, standards, rules and regulations, guidances, guidelines, ordinances, rules, judgments, writs, orders, decrees, codes, plans, injunctions, permits, concessions, grants, franchises, governmental agreements and governmental restrictions (including administrative or judicial precedents or authorities), in each case whether now or hereafter in effect, and (ii) the interpretation or administration thereof by, and other determinations, directives, requirements or requests of, any Governmental Authority, in each case whether or not having the force of law and that are applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

 

“Lenders” means the financial institutions from time to time party to the Senior Credit Agreement, as lenders.

 

“Leverage Ratio” means, as of any date of determination, the ratio of (x) Net Debt as of such date to (y) Consolidated EBITDA of the Company and its Subsidiaries for the Test Period ending on such date or most recently ending prior to such date, calculated in accordance with Section 1.4 of the Senior Credit Agreement, as applicable, as in effect on the Closing Date without giving effect to any subsequent modification.

 

“Lien” means any mortgage, pledge, hypothecation, assignment, encumbrance, lien (statutory or other), security interest, or other security device or security arrangement of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement, any financing or similar statement or notice filed under the UCC (as in effect from time to time in the relevant jurisdiction) or any other similar recording or notice statute, and any lease having substantially the same effect as any of the foregoing).

 

“Liquidation Event” means an involuntary proceeding shall be commenced or an involuntary petition shall be filed in a court of competent jurisdiction seeking the liquidation, dissolution or winding up of the Company or any of its Subsidiaries, and such proceeding or petition shall continue undismissed or unstayed for 90 days or an order or decree approving or ordering any of the foregoing shall be entered.

 

“Liquidation Preference” means, at any date of determination and with respect to each outstanding share of Series A Preferred Stock, the sum of (i) the Stated Value thereof, plus (ii) all accumulated and unpaid Dividends (whether declared or undeclared, and including all such dividends that have compounded pursuant to Section 2.01(a)) thereon through, but not including, such date. For the avoidance of doubt, upon any Liquidation Event or Bankruptcy Event, the Liquidation Preference shall not be less than the Redemption Price, which shall be required to be paid to Holders to the extent not prohibited by the Senior Credit Agreement as in effect on the Closing Date.

 

“Liquidity Conditions” will be satisfied with respect to the payment of any shares of Common Stock pursuant to Section 3.05(b) if (a) either (x) each such share of Common Stock would be eligible to be offered, sold or otherwise transferred by the Holder of such Series A Preferred Stock pursuant to Rule 144 under the Securities Act (or any successor rule thereto), without any requirements as to volume, manner of sale, availability of current public information (whether or not then satisfied) or notice; or (y) the offer and sale of such share of Common Stock by such Holder are registered pursuant to an effective registration statement under the Securities Act and such registration statement is reasonably expected by the Company to remain effective and usable, by such holder to sell such share of Common Stock, continuously during the period from, and including, the applicable Redemption Notice Date to, and including, the date that is six months after such Redemption Date; and (b) the offer, sale or other transfer of such share of Common Stock by such Holder would not be subject to any registration or notice requirement under any U.S. State securities or “blue sky” laws (other than those that have been fully satisfied or complied with).

 

 

“Market Disruption Event” means, with respect to any date, (a) a failure by the primary U.S. national or regional securities exchange or market on which the Common Stock is listed or admitted for trading to open for trading during its regular trading session on such date; or (b) the occurrence or existence, prior to 1:00 p.m., New York City time, on such date, for more than a one half-hour period in the aggregate during regular trading hours, of any suspension or limitation imposed on trading (by reason of movements in price exceeding limits permitted by the relevant stock exchange or otherwise) in the Common Stock or in any options contracts or futures contracts relating to the Common Stock.

 

“Minimum Redemption Premium” means, with respect to each share of Series A Preferred Stock to be redeemed, an amount equal to (a) the Stated Value of such share of Series A Preferred Stock, multiplied by (i) if any applicable Redemption Date occurs on or prior to the first anniversary of the Closing Date, 120%, (ii) if any applicable Redemption Date occurs after the first anniversary of the Closing Date, but prior to or on the second anniversary of the Closing Date, 125%, (iii) if any applicable Redemption Date occurs after the second anniversary of the Closing Date, but prior to or on the third anniversary of the Closing Date, 130%, (iv) if any applicable Redemption Date occurs after the third anniversary of the Closing Date, but prior to or on the fourth anniversary of the Closing Date, 145%, and (v) if any applicable Redemption Date occurs after the fourth anniversary of the Closing Date, 160%, minus (b) any amounts paid in cash or shares of Common Stock with respect to such share of Series A Preferred Stock.

 

“Net Debt” means, as of any date of determination, an amount equal to (x) Total Debt minus (y) the aggregate Unrestricted Cash and Cash Equivalents of the Company and its Subsidiaries.

 

“Organizational Documents” means (i) with respect to any corporation or company, its certificate, certificate of registration, constitution, memorandum or articles of incorporation, organization or association, as amended, and its by-laws, as amended, or equivalent document, (ii) with respect to any limited partnership, its certificate or declaration of limited partnership, as amended, and its partnership agreement, as amended, (iii) with respect to any general partnership, its partnership agreement, as amended, and (iv) with respect to any limited liability company, its articles of organization, as amended, and its operating agreement, as amended.

 

“Permitted Holders” means (i) RT-ICON Holdings LLC and Drawbridge Special Opportunities Fund, and (ii) any funds, limited partnerships or investment vehicles managed or advised by any of the Persons identified in clause (i), any of their respective Affiliates or direct or indirect Subsidiaries (or jointly managed by any such Person or over which any such Person exercises governance rights).

 

“Permitted Transfer” has the meaning as set forth in the Series A Securities Purchase Agreement.

 

“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

 

“Preferred Stock” as applied to the Stock of any Person, means Stock of any class or classes (however designated) which is preferred as to the payment of dividends, as to its redemption or repurchase or as to the distribution of assets upon any voluntary or involuntary liquidation, winding up or dissolution of such Person, over shares of Stock of any other class of such Person.

 

“Purchase Money Obligation” means, for any Person, the obligations of such Person in respect of Debt (including Capital Lease Obligations) incurred for the purpose of financing all or any part of the purchase price of any fixed or capital assets (including Equity Interests of any Person owning fixed or capital assets) or the cost of installation, construction or improvement of any fixed or capital assets; provided, however, that (a) such Debt is incurred within one hundred twenty (120) days after such acquisition, installation, construction or improvement of such fixed or capital assets (including Equity Interests of any Person owning the applicable fixed or capital assets) by such Person and (b) the amount of such Debt does not exceed 100% of the cost of such acquisition, installation, construction or improvement, as the case may be.

 

 

“Quarter End Date” means each of March 31, June 30, September 30 and December 31. If any Quarter End Date is not a Business Day, the Quarter End Date will be the Business Day immediately following such Quarter End Date.

 

“Redemption Date” means (a) in respect of any Voluntary Redemption, the date set by the Company as the date on which such redemption shall occur; and (b) in respect of any Mandatory Redemption, the date of redemption.

 

“Redemption Notice” has the meaning set forth in Section 3.03.

 

“Redemption Notice Date” has the meaning set forth in Section 3.03.

 

“Redemption Price” means the total price for each share of Series A Preferred Stock to be redeemed pursuant to this Certificate of Designation on any Redemption Date, which shall be an amount per share of Series A Preferred Stock equal to the greater of (1) the sum of (a) the Minimum Redemption Premium thereof on the date of such redemption plus (b) any Stock Price Premium, calculated on a pro rata basis per share of Series A Preferred Stock in proportion to all issued shares Series A Preferred Stock, whether or not previously redeemed and (2) the Liquidation Preference of such share as of such Redemption Date.

 

“Repurchased Shares” means the total number of shares of Common Stock repurchased by the Company or any of its Subsidiaries with the proceeds of the offer and sale of any shares of Series A Preferred Stock by the Company.

 

“Responsible Officer” means, as applied to any Person, any individual holding the position of chairman of the board (if an officer), chief executive officer, president, vice president (or the equivalent thereof), chief financial officer or treasurer of such Person or, with respect to any Person that is not a corporation and that does not have officers, any individual holding any such position of the general partner, the sole member, managing member or similar governing body of such Person.

 

“Restricted Payment” means (a) any payment of any dividend or any payment or distribution on account of the Company’s Equity Interests, including any dividend or distribution payable in connection with any merger, amalgamation or consolidation or (b) any purchase, redemption, defeasance or other acquisition or retirement for value of any Equity Interests of the Company, including in connection with any merger, amalgamation or consolidation.

 

“Scheduled Trading Day” means any day that is scheduled to be a Trading Day on the principal U.S. national or regional securities exchange on which the Common Stock is then listed or, if the Common Stock is not then listed on a U.S. national or regional securities exchange, on the principal other market on which the Common Stock is then traded or admitted for trading. If the Common Stock is not so listed or traded, then “Scheduled Trading Day” means a Business Day.

 

“SEC” means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.

 

 

“Securities” means any stock, shares, partnership interests, voting trust certificates, certificates of interest or participation in any profit-sharing agreement or arrangement, options, warrants, bonds, debentures, notes, or other evidences of indebtedness, secured or unsecured, convertible, subordinated or otherwise, or in general any instruments commonly known as “securities” or any certificates of interest, shares or participations in temporary or interim certificates for the purchase or acquisition of, or any right to subscribe to, purchase or acquire, any of the foregoing.

 

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder, as amended.

 

“Senior Credit Agreement” means (i) the Credit and Guaranty Agreement, dated as of May 25, 2021, by and among Playboy Enterprises, Inc., the Company, the other guarantors from time to time party thereto, the Lenders from time to time party thereto, and Acquiom Agency Services LLC, as Administrative Agent, as amended, restated, amended and restated, supplemented, extended, renewed or otherwise modified, in whole or in part, from time to time in accordance with the terms thereof and (ii) any other credit facilities, indentures or financing arrangements of the Company or its Subsidiaries that replace, increase or refinance the foregoing.

 

“Series A Preferred Stock” has the meaning set forth in Section 2.02.

 

“Series A Securities Purchase Agreement” means that certain Securities Purchase Agreement, dated as of the Closing Date, by and among the Company and the investors party thereto, as amended, restated, amended and restated, supplemented, extended, renewed or otherwise modified, in whole or in part, from time to time in accordance with the terms thereof.

 

“Stated Value” means, at any date of determination, and with respect to each outstanding share of Series A Preferred Stock, $1,000.00 (adjusted as appropriate (as determined by the Board of Directors in good faith) in the event of any stock dividend, redemption, stock split, stock distribution, recapitalization or combination with respect to the Series A Preferred Stock).

 

“Stock” of any Person means all shares of capital stock (whether denominated as common stock or preferred stock), equity interests, beneficial, partnership or membership interests, joint venture interests, participations or other ownership or profit interests in or equivalents (regardless of how designated) of or in a Person (other than an individual), whether Voting Stock or non-voting.

 

“Stock Appreciation Amount” means an amount equal to the product of (x) the Average VWAP per share of Common Stock over the five consecutive Trading Day period beginning on, and including, the sixth Scheduled Trading Day prior to the applicable Redemption Notice Date multiplied by (y) the Repurchased Shares.

 

“Stock Price Premium” means, as of any applicable Redemption Notice Date, an amount equal to (a) if any applicable Redemption Notice Date occurs on or prior to the first anniversary of the Closing Date, an amount equal to (1) the product of (i) 5% multiplied by (ii) an amount equal to (x) the Stock Appreciation Amount minus (y) the Stock Repurchase Amount (such amount pursuant to this clause (ii), the “Total Stock Appreciation Amount”), minus (2) any Fees (as defined in the Series A Purchase Agreement) received with respect to the shares of Series A Preferred Stock; and (b) if any applicable Redemption Notice Date occurs after the first anniversary of the Closing Date, the Total Stock Appreciation Amount; provided that in no event will the Stock Price Premium pursuant to this clause (b) result in an aggregate IRR (taken together with the rest of the Redemption Price and all other cash or shares of Common Stock previously or concurrently received in respect of any share of Series A Preferred Stock) greater than 18% on any share of Series A Preferred Stock (calculated using the dates of issuance of any such share of Series A Preferred Stock). Notwithstanding the foregoing, if the Stock Price Premium is less than zero, the Stock Price Premium will be deemed to equal zero.

 

 

“Stock Repurchase Amount” means an amount equal to the product of (a) the total consideration paid by the Company or any of its Subsidiaries for the Repurchased Shares, including any broker or other fees paid to any investment banks, brokers or other agents in connection with the repurchase multiplied by (b) (i) if the applicable Redemption Date occurs on or prior to the first anniversary of the Closing Date, 120%, (ii) if the applicable Redemption Date occurs after the first anniversary of the Closing Date, but prior to or on the second anniversary of the Closing Date, 125%, (iii) if the applicable Redemption Date occurs after the second anniversary of the Closing Date, but prior to or on the third anniversary of the Closing Date, 130%, (iv) if the applicable Redemption Date occurs after the third anniversary of the Closing Date, but prior to or on the fourth anniversary of the Closing Date, 145%, and (v) if the applicable Redemption Date occurs after the fourth anniversary of the Closing Date, 160%.

 

“Subsidiary” means, with respect to any Person, any corporation, partnership, joint venture, limited liability company, association or other entity, the management of which is, directly or indirectly, controlled by, or of which an aggregate of more than 50% of the outstanding Voting Stock is, at the time, owned or controlled directly or indirectly by, such Person or one or more subsidiaries of such Person. Unless the context otherwise requires, each reference to Subsidiaries herein shall be a reference to Subsidiaries of the Company.

 

“Synthetic Lease” means, as to any Person, (a) any lease (including leases that may be terminated by the lessee at any time) of any property (i) that is accounted for as an operating lease under GAAP and (ii) in respect of which the lessee retains or obtains ownership of the property so leased for U.S. federal income tax purposes, other than any such lease under which such Person is the lessor or (b)(i) a synthetic, off-balance sheet or tax retention lease, or (ii) an agreement for the use or possession of property, in each case, creating obligations that do not appear on the balance sheet of such Person but which, upon the application of any insolvency laws to such Person, would be characterized as the indebtedness of such Person (without regard to accounting treatment).

 

“Test Period” in effect at any time means the most recent period of four consecutive fiscal quarters ended on or prior to such time (taken as one accounting period).

 

“Total Debt” means, as of any date of determination, the sum of (x) aggregate principal amount of Debt of the Company and its Subsidiaries outstanding on such date (without duplication), plus (y) the aggregate liquidation preference of any Preferred Stock ranking senior to the Series A Preferred Stock of the Company and its Subsidiaries (without duplication) outstanding on such date. Notwithstanding the foregoing, Total Debt shall not include the Aircraft Indebtedness of the Aircraft SPV or Aircraft SPV Holdco.

 

“Transaction Expenses” means any fees or expenses incurred or paid by the Company in connection with the Transactions.

 

“Trading Day” means a day on which (a) there is no Market Disruption Event; and (b) trading in the Common Stock generally occurs on The Nasdaq Global Market or, if the Common Stock is not then listed on The Nasdaq Global Market, on the principal other U.S. national or regional securities exchange on which the Common Stock is then listed or, if the Common Stock is not then listed on a U.S. national or regional securities exchange, on the principal other market on which the Common Stock is then listed or admitted for trading, provided, however, that if the Common Stock is not traded on any such exchange, association or market, “Trading Day” means any Business Day.

 

 

“Transactions” means the issuance of the Series A Preferred Stock, the payment of Transaction Expenses, other related transactions and the consummation of any other transaction in connection with the foregoing.

 

“Trigger Event” has the meaning set forth in Section 8.01.

 

“Voluntary Redemption” has the meaning set forth in Section 3.07(b).

 

“Voting Stock” means, with respect to any person, any class or classes of Equity Interests pursuant to which the holders thereof have the general voting power under ordinary circumstances to elect at least a majority of the Board of Directors of such person.

 

“VWAP” per share of Common Stock on any Trading Day means the per share volume-weighted average price as displayed on Bloomberg page “PLBY <Equity> AQR” (or its equivalent successor if such page is not available) in respect of the period from the scheduled open of trading until the scheduled close of trading of the primary trading session on such Trading Day; or, if such price is not available, “VWAP” means the market value per share of Common Stock on such Trading Day as determined, using a volume-weighted average method, by a nationally recognized independent investment banking firm retained by the Company for this purpose.

 

Section 1.02.             Rules of Construction. Unless the context otherwise requires or otherwise specified herein:

 

(a)                the meanings of defined terms are equally applicable to the singular and plural forms of the defined terms;

 

(b)                the term “including” is by way of example and not limitation;

 

(c)                in the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including;” the words “to” and “until” each mean “to but excluding;” and the word “through” means “to and including”;

 

(d)                the word “incur” shall be construed to mean incur, create, issue, assume, become liable in respect of or suffer to exist (and the words “incurred” and “incurrence” shall have correlative meanings);

 

(e)                section headings herein are included for convenience of reference only;

 

(f)                 the word “or” is not exclusive;

 

(g)                the word “will” shall be interpreted to express a command;

 

(h)                provisions apply to successive events and transactions;

 

(i)                 unless the context otherwise requires, references to sections of, or rules under, the Securities Act or the Exchange Act shall be deemed to include substitute, replacement or successor sections or rules adopted by the SEC from time to time;

 

(j)                 any reference to a statute refers to the statute, any amendments or successor legislation and all rules and regulations promulgated under or implementing the statute, as in effect at the relevant time;

 

(k)                references to a Person also include its permitted assigns and successors;

 

 

(l)                 unless the context otherwise requires, any reference to an “Article,” “Section” or “clause” refers to an Article, Section or clause, as the case may be, of this Certificate of Designation;

 

(m)              the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Certificate of Designation as a whole and not any particular Article, Section, clause or other subdivision;

 

(n)                all references to $, currency, monetary values and dollars set forth herein mean U.S. dollars;

 

(o)                words used herein implying any gender shall apply to both genders;

 

(p)                the principal amount of any non-interest bearing Debt or other discount security constituting Debt at any date shall be the principal amount thereof that would be shown on a balance sheet of the Company dated such date prepared in accordance with GAAP;

 

(q)                any reference herein to a merger, transfer, consolidation, amalgamation, consolidation, assignment, sale, disposition or transfer, or similar term, shall be deemed to apply to a division of or by a limited liability company, or an allocation of assets to a series of a limited liability company (or the unwinding of such a division or allocation), as if it were a merger, transfer, consolidation, amalgamation, consolidation, assignment, sale or transfer, or similar term, as applicable, to, of or with a separate Person. Any division of a limited liability company shall constitute a separate Person hereunder (and each division of any limited liability company that is a Subsidiary, joint venture or any other like term shall also constitute such a Person or entity);

 

(r)                 a statement that a copy of an item has been delivered means a correct and accurate copy of such item has been delivered;

 

(s)                 any financial ratios required to be satisfied in order for a specific action to be permitted under this Certificate of Designation shall be calculated by dividing the appropriate numerator by the appropriate denominator, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding-up if there is no nearest number);

 

(t)                 when the payment of any obligation or the performance of any covenant, duty or obligation is stated to be due or performance required on a day which is not a Business Day, the date of such payment or performance shall extend to the immediately succeeding Business Day and such extension of time shall not be reflected in computing interest, dividends, premium or fees, as the case may be; and

 

(u)                the parties to this Certificate of Designation acknowledge and agree that (a) each party and its counsel has reviewed, or has had the opportunity to review, the terms and provisions of this Certificate of Designation, (b) any rule of construction to the effect that any ambiguities are resolved against the drafting party will not be used to interpret this Certificate of Designation and (c) the provisions of this Certificate of Designation will be construed without regard to which party was generally responsible for the preparation of this Certificate of Designation.

 

Section 1.03.             Acts of Holders.

 

(a)                Except as herein otherwise expressly provided, any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Certificate of Designation entitled to be given or taken by the requisite Holders as set forth herein may be embodied in and evidenced by one or more instruments signed by the Holders or such Holder, as applicable. Except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Company.

 

 

(b)                The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by the certificate of any notary public or other officer authorized by Law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by or on behalf of any legal entity other than an individual, such certificate or affidavit shall also constitute proof of the authority of the Person executing the same. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner that the Holders deems sufficient.

 

(c)                Any request, demand, authorization, direction, notice, consent, waiver or other action by the Holder of any share of Series A Preferred Stock shall bind every future Holder of the same share of Series A Preferred Stock and the Holder of every share of Series A Preferred Stock issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof, in respect of any action taken, suffered or omitted by the Holders or the Company in reliance thereon, whether or not notation of such action is made upon the certificate representing such share of Series A Preferred Stock, unless such consent is revoked by the Holder in accordance with Section 9.03 hereof.

 

(d)                The Company may set a record date for purposes of determining the identity of Holders entitled to give any request, demand, authorization, direction, notice, consent, waiver or take any other act, or to vote or consent to any action by vote or consent authorized or permitted to be given or taken by Holders. Unless otherwise specified, if not set by the Company prior to the first solicitation of a Holder made by any Person in respect of any such action, or in the case of any such vote, prior to such vote, any such record date shall be 10 days prior to the first solicitation of such consent.

 

(e)                Without limiting the foregoing, a Holder entitled to take any action hereunder with regard to any particular share of Series A Preferred Stock may do so with regard to all or any part of the Liquidation Preference of such share of Series A Preferred Stock or by one or more duly appointed agents, each of which may do so pursuant to such appointment with regard to all or any part of such Liquidation Preference. Any notice given or action taken by a Holder or its agents with regard to different parts of such Liquidation Preference pursuant to this paragraph shall have the same effect as if given or taken by separate Holders of each such different part.

 

Section 1.04.             Effect of Covenants. For the avoidance of doubt, the covenants set forth in Article V shall only apply at a time when the Series A Preferred Stock remains outstanding and shall cease to apply when all shares of Series A Preferred Stock are no longer outstanding.

 

Section 1.05.             Accounting Terms and Principles. Except as otherwise expressly provided herein, all accounting terms not otherwise defined herein shall have the meanings assigned to them in conformity with GAAP. If any change in GAAP results in a change in the interpretation of related provisions of this Certificate of Designation, then if the Company shall request an amendment to such provisions of this Certificate of Designation, then the Company and the Holders agree to negotiate an amendment to such provisions of this Certificate of Designation so as to equitably reflect such changes in GAAP with the desired result that the criteria for evaluating the Company’s financial condition shall be the same after such change in GAAP as if such change had not been made. Until the Company and the Holders have agreed to any amendment referred to in the prior sentence, calculations in connection with the definitions, covenants and other provisions hereof shall utilize accounting principles and policies in conformity with those used to prepare the financial statements prior to the applicable change in GAAP.

 

 

Article II

 

DIVIDENDS; DESIGNATION

 

Section 2.01.             Dividends. (a) From and after the respective dates of issuance of shares of Series A Preferred Stock, Holders of such shares of Series A Preferred Stock shall be entitled to receive in respect of each such share, if, as and when declared by the Board of Directors, from time to time, cumulative dividends accruing on a daily basis from, and including, such date of issuance, at the Dividend Rate on the Compounded Liquidation Preference of such share from time to time. Dividends will be payable in cash or, to the extent permitted by Law and applicable stock exchange rules, and to the extent (i) the Liquidity Conditions are satisfied with respect to any such shares of Common Stock and (ii) such shares of Common Stock are listed on the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or any of their respective successors) or any other nationally or internationally recognized stock exchange, in shares of Common Stock, or any combination thereof, at the Company’s election, which shares shall be valued for such purpose at the Average Price; provided that the Company will not be permitted to pay any such dividends in shares of Common Stock to the extent that any such payment would result in a Holder beneficially owning in excess of 9.9% of the then-outstanding shares of Common Stock; which limit shall be waivable or increased by any such Holder upon 61 days’ prior written notice to the Company. Dividends will be calculated on the basis of actual days elapsed over a year of 360 days consisting of twelve 30-day months. Whether or not declared, to the extent any such dividends are not paid in cash or, if applicable, shares of Common Stock, on any applicable Quarter End Date, such dividends shall compound on each Quarter End Date and shall be added to the Liquidation Preference. The Company shall give notice to Holders of any election to pay any dividends in shares of Common Stock and the portions of such payment that will be made in cash and in shares of Common Stock, if applicable, not less than five days and not more than 30 days prior to the applicable Quarter End Date for such dividend (the “Dividend Notice Date”); provided that if the Company does not provide timely notice of this election, the Company will not be permitted to pay any such dividends in shares of Common Stock.

 

(b)                All Dividends and compounded amounts on the Series A Preferred Stock are prior to and in preference over any dividend on any Common Stock or other Equity Interests of the Company and shall be declared and fully paid (including, for the avoidance of doubt, by compounding and being added to the Liquidation Preference) before any dividends are declared and paid, or any other distributions are made, on any Common Stock or other Equity Interests of the Company.

 

Section 2.02.             Designations; Ranking. A total of 50,000 shares of Preferred Stock, par value $0.0001 per share, of the Company, shall be designated as a series known as Series A Preferred Stock (the “Series A Preferred Stock”). The Series A Preferred Stock shall rank senior and in priority of payment to the Common Stock and any other existing Equity Interests of the Company in any dissolution, liquidation or winding up of the Company. Shares of Series A Preferred Stock may be issued from time to time pursuant to and in accordance with the terms and conditions of the Series A Securities Purchase Agreement. So long as any shares of Series A Preferred Stock are outstanding, no dividends or distributions on, or purchases or redemptions of, Common Stock shall be paid, declared or made, except as permitted under this Certificate of Designation.

 

Article III

 

REDEMPTION

 

Section 3.01.             Notices to Holders. If the Company elects to redeem the Series A Preferred Stock pursuant to Section 3.07 hereof or is required to redeem the Series A Preferred Stock pursuant to Section 3.08 hereof, it shall give to each Holder a notice in accordance with Section 3.03 hereof.

 

 

Section 3.02.             Selection of Series A Preferred Stock to Be Redeemed.

 

(a)                Other than in the case of a Mandatory Redemption, if less than all of the Series A Preferred Stock are to be redeemed at any time, the Series A Preferred Stock of all Holders shall be redeemed, on a pro rata basis in proportion to the aggregate Liquidation Preference of all Series A Preferred Stock held by each Holder on the date of the notice of redemption issued pursuant to Section 3.03.

 

(b)                Provisions herein that apply to shares of Series A Preferred Stock called for redemption may apply to all or less than all shares of Series A Preferred Stock called for redemption. Any redemption of Series A Preferred Stock shall constitute a reduction in the aggregate Liquidation Preference of Series A Preferred Stock.

 

Section 3.03.             Notice of Redemption. The Company shall deliver electronically, mail or cause to be mailed by first class mail, postage prepaid a notice of redemption (a “Redemption Notice”) not less than five days and not more than 30 days before the Redemption Date (the date of such notice, the “Redemption Notice Date”) to each Holder of shares of Series A Preferred Stock to be redeemed.

 

The notice shall identify the Series A Preferred Stock to be redeemed and shall state:

 

(i)                 the section of this Certificate of Designation pursuant to which the redemption shall occur;

 

(ii)              the Liquidation Preference of the Series A Preferred Stock to be redeemed;

 

(iii)            the Redemption Date;

 

(iv)             the Redemption Price, including the portion of such Redemption Price to be paid in shares of Common Stock, if any;

 

(v)               if the Company is not permitted by Law to redeem all of the Series A Preferred Stock required to be redeemed or if the Series A Preferred Stock is to be redeemed in part only (subject to applicable proration based on the aggregate Liquidation Preference of the Series A Preferred Stock), the portion of the Liquidation Preference of the Series A Preferred Stock to be redeemed and that, after the Redemption Date and upon surrender of any certificates representing such Series A Preferred Stock, a new certificate for such Series A Preferred Stock, which shall have a Liquidation Preference equal to the unredeemed portion of the original Series A Preferred Stock, will be issued in the name of the Holder upon cancellation of any certificate representing such Series A Preferred Stock prior to such Redemption Date; and

 

(vi)             if such redemption is a Voluntary Redemption, any condition to such redemption.

 

A Voluntary Redemption (and solely a Voluntary Redemption) may, at the Company’s discretion, be subject to one or more conditions precedent, and, if a Voluntary Redemption is subject to the satisfaction of one or more conditions precedent, the notice of such redemption shall describe each such condition, and if applicable, shall state that, in the Company’s discretion, the Redemption Date may be delayed until such time as any or all such conditions shall be satisfied or waived, or such redemption may not occur and such notice may be rescinded in the event that any or all such conditions shall not have been satisfied or waived by the Redemption Date as stated in such notice, or by the redemption date as so delayed. The Company may provide in such notice that payment of the Redemption Price and performance of the Company’s obligations with respect to such redemption may be performed by another Person; provided, that the Company shall remain liable to any failure by such Person to pay such Redemption Price or perform such obligations.

 

 

Section 3.04.             Effect of Notice of Redemption. The Company shall have the right to revoke and withdraw a Redemption Notice delivered to the Holders in accordance with Section 3.03 hereof prior to the Redemption Date set forth in such Redemption Notice only in the event that any or all conditions precedent relating to such Voluntary Redemption have not been satisfied or waived by such Redemption Date. The notice, if delivered in accordance with Section 10.01 hereof, shall be conclusively presumed to have been given, whether or not the Holder receives such notice. In any case, failure to deliver such notice or any defect in the notice to the Holder of any share of Series A Preferred Stock designated for redemption in whole or in part shall not affect the validity of the proceedings for the redemption of any other share of Series A Preferred Stock.

 

Section 3.05.             Deposit of Redemption Price.

 

(a)                The aggregate Redemption Price will be due and payable, and paid in cash in immediately available funds or, if applicable, as set forth in Section 3.05(b) below, shares of Common Stock, or any combination thereof, at the Company’s election, to the respective Holders on the applicable Redemption Date. Prior to 2:00 p.m., New York City time, on the Redemption Date, the Company shall deposit with each Holder money or shares of Common Stock, if applicable, sufficient to pay the Redemption Price of all Series A Preferred Stock of such Holder to be redeemed on that Redemption Date. Each such Holder shall promptly return to the Company any money or shares of Common Stock, if applicable, deposited with the Holders by the Company in excess of the amounts necessary to pay the Redemption Price of all Series A Preferred Stock of such Holder to be redeemed.

 

(b)                To the extent permitted by Law and applicable stock exchange rules, and to the extent (i) the Liquidity Conditions are satisfied with respect to any such shares of Common Stock and (ii) such shares of Common Stock are listed on the New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market (or any of their respective successors) or any other nationally or internationally recognized stock exchange, the Company may elect to pay all or any portion of the Redemption Price in shares of Common Stock, which shares shall be valued for such purpose at the Average Price; provided that the Company will not be permitted to pay any such Redemption Price in shares of Common Stock to the extent that any such payment would result in a Holder (together with any Affiliates or other Persons who are members of a “group” (within the meaning of Rules 13d 3 and 13d 5 under the Exchange Act but excluding any employee benefit plan of such Person and its Subsidiaries, and any Person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) with the Holder) beneficially owning in excess of 9.9% of the then-outstanding shares of Common Stock; which limit shall be waivable or increased by any such Holder upon 61 days’ prior written notice to the Company. Notwithstanding the foregoing, if the Company does not provide timely notice of the election to pay all or any portion of the Redemption Price in shares of Common Stock pursuant to Section 3.03, the Company will be deemed to have elected to pay the relevant Redemption Price in cash.

 

(c)                If the Company complies with the provisions of the preceding clause (a), on and after the Redemption Date, dividends shall cease to accrue on the Series A Preferred Stock or the portions of Series A Preferred Stock called for redemption.

 

Section 3.06.             Series A Preferred Stock Redeemed in Part. Upon surrender of any Series A Preferred Stock certificate that is redeemed in part, the Company shall issue a new Series A Preferred Stock certificate representing Series A Preferred Stock equal in Liquidation Preference to the unredeemed portion of the Series A Preferred Stock surrendered.

 

 

Section 3.07.             Voluntary Redemption.

 

(a)                At any time from and after the Closing Date, the Company may on one or more occasions redeem all (or a part, in accordance with Section 3.02) of the outstanding shares of Series A Preferred Stock held by the Holders on a pro rata basis, upon written notice as described under Section 3.03 hereof for an amount per share equal to the Redemption Price paid in cash or, if permitted pursuant to Section 3.05(b), shares of Common Stock, or any combination thereof, at the Company’s election, on the Redemption Date set forth in the notice required under Section 3.03.

 

(b)                Any redemption pursuant to this Section 3.07 (any such redemption, a “Voluntary Redemption”) shall be made pursuant to the provisions of Sections 3.01 through 3.06 hereof.

 

(c)                In addition to any redemption pursuant to this Section 3.07, the Company may at any time and from time to time purchase Series A Preferred Stock in privately negotiated transactions.

 

Section 3.08.             Mandatory Redemption.

 

(a)                Subject to the terms of this Section 3.08, on September 30, 2027, or upon any Change of Control, the Company shall redeem for cash or, if permitted pursuant to Section 3.05(b), shares of Common Stock, or any combination thereof, at the Company’s election, all of the then outstanding shares of Series A Preferred Stock at a price per share equal to the Redemption Price as of the applicable Redemption Date (“Mandatory Redemption”). Notwithstanding anything to the contrary, Holders shall only receive the Redemption Price upon a Mandatory Redemption in connection with a Change of Control if the Obligations under the Senior Credit Agreement have been paid in full.

 

(b)                If, upon a Mandatory Redemption, the Company does not have surplus for the redemption of all outstanding shares of Series A Preferred Stock, and the Company is not permitted to pay the Redemption Price in shares of Common Stock pursuant to Section 3.05(b), the Company shall redeem a pro rata portion of each holder’s shares of Series A Preferred Stock to the fullest extent of such surplus, based on the respective amounts which would otherwise be payable in respect of the Series A Preferred Stock to be redeemed if the Company’s surplus was sufficient to redeem all such shares, and shall redeem the remaining shares of Series A Preferred Stock as soon as practicable after the Company has surplus therefor. At any time thereafter when additional surplus is available for the redemption of the Series A Preferred Stock, such surplus will immediately be used to redeem the balance of the Series A Preferred Stock.

 

Section 3.09.             No Conversion. The Series A Preferred Stock shall not be convertible into any other securities of the Company.

 

Article IV

 

REPORTS

 

Section 4.01.             Reports.

 

(a)                So long as any shares of Series A Preferred Stock are outstanding, the Company will send to the Holders copies of all reports that the Company is required to file with the SEC pursuant to Section 13(a) or 15(d) of the Exchange Act within fifteen (15) calendar days after the date that the Company is required to file the same (after giving effect to all applicable grace periods under the Exchange Act); provided, however, that the Company need not send to the Holders any material for which the Company has received, or is seeking in good faith and has not been denied, confidential treatment by the SEC. Any report that the Company files with the SEC through the EDGAR system (or any successor thereto) will be deemed to be sent to the Holders at the time such report is so filed via the EDGAR system (or such successor).

 

 

(b)                To the extent any information is not provided within the time periods specified in Section 4.01 and such information is subsequently provided, the Company shall be deemed to have satisfied its obligations with respect thereto at such time and any Trigger Event with respect thereto shall be deemed to have been cured.

 

Article V

 

COVENANTS

 

Section 5.01.             Debt/Preferred Stock. The Company will not, and will not permit its Subsidiaries to create, incur, assume, or guarantee any Debt or issue any Preferred Stock ranking pari passu or senior to the Series A Preferred Stock unless, after giving pro forma effect to the incurrence or issuance of such Debt or Preferred Stock, as applicable, the Leverage Ratio (calculated without giving effect to the Liquidation Preference of the Series A Preferred Stock) would be equal to or less than or equal to 6.50 to 1.00 (excluding the incurrence of (i) any refinancing Debt in respect thereof existing on the Closing Date, (ii) letters of credit and (iii) Capital Leases).

 

Section 5.02.             When the Company May Merge, Etc. The Company shall not consolidate, amalgamate or merge with or into any other entity unless (A) (a) it is the continuing entity (in the case of a merger or amalgamation), or (b) if it is not the continuing entity, the successor entity formed by such consolidation or amalgamation or into which it is merged (the “Successor Entity”) is a corporation organized and existing under the laws of the United States of America or any state thereof, or the District of Columbia and, in each case, such Successor Entity expressly assumes all obligations of the Company under this Certificate of Designation and the Series A Preferred Stock or (B) the Company elects to redeem all (but not less than all) of the Series A Preferred Stock pursuant to Section 3.07.

 

Section 5.03.             Restricted Payments. The Company will not make any Restricted Payments other than (i) the repurchase or other acquisition of Common Stock of the Company or a Subsidiary made in an amount not to exceed the net proceeds of the sale of the Series A Preferred Stock or (ii) any prepayment, purchase, repurchase, redemption, defeasance, discharge, retirement or other acquisition of Common Stock of the Company held by any future, present or former employee, director, officer, manager, contractor, consultant or advisor.

 

Section 5.04.             Organizational Documents. The Company will not amend, alter or repeal any provision of the Certificate of Incorporation or the Bylaws of the Company in a manner that is adverse to the Holders or the organizational documents of any of the Subsidiaries in a manner that is materially adverse to Holders.

 

Section 5.05.             Anti-Layering. The Company will not (A) incur or issue or allow any Subsidiary of the Company that is a direct or indirect parent of Holdings (or any such Subsidiary that is the immediate parent of the Playboy Enterprises, Inc.) (each such Person, an “Intermediate Holdings”) to incur or issue any Debt or Preferred Stock or (B) fail to maintain Playboy Enterprises, Inc. as direct or indirect wholly-owned subsidiary of the Company.

 

 

Section 5.06.             Business Operations. The Company will not conduct, transact or otherwise engage in any business or operations other than (A) the direct or indirect ownership and/or acquisition of the Equity Interests of any Subsidiary, (B) the maintenance of its legal existence, including the ability to incur fees, costs and expenses relating to such maintenance, (C) participating in tax, accounting and other administrative matters as a member of the consolidated group of the Company and its Subsidiaries, (D) the performance of its obligations under and in connection with this Certificate of Designation and any documentation governing any Series A Preferred Stock issued in compliance with this Certificate of Designation and the other agreements and transactions contemplated thereby and hereby, (E) any public offering of its or any of its direct or indirect parent’s common stock or any other issuance or registration of its Equity Interests for sale or resale not prohibited by this Certificate of Designation, including the costs, fees and expenses related thereto, (F) making any Restricted Payment or dividend or distribution or other transaction similar to a Restricted Payment and not otherwise prohibited by this Certificate of Designation, or any Investment in any Restricted Subsidiary (including, for the avoidance of doubt, the acquisition thereof), (G) incurring fees, costs and expenses relating to overhead and general operating including professional fees for legal, tax and accounting issues and paying taxes, (H) providing indemnification to officers and members of the Board of Directors, (I) activities incidental to the consummation of the Transactions, (J) any action permitted pursuant to Section 6.13 of the Senior Credit Agreement as in effect on the Closing Date without giving effect to any subsequent modification and (H) activities incidental to the businesses or activities described in clauses (A) to (J) of this Section 5.06. For so long as any Series A Preferred Stock is outstanding, the Company and each Intermediate Holdings shall own, directly or indirectly, all of the outstanding Equity Interests of Playboy Enterprises, Inc.

 

Section 5.07.             Reorganization Events. In the event of (i) any reclassification, statutory exchange, merger, consolidation or other similar business combination of the Company with or into another Person, in each case, pursuant to which at least a majority of the Common Stock (but not the Series A Preferred Stock) is changed or converted into, or exchanged for, securities or other property of another Person, (ii) any reclassification, recapitalization or reorganization of the Common Stock (but not the Series A Preferred Stock) into securities of another Person or (iii) the conveyance, sale, lease, assignment, transfer or other disposition of all or substantially all of the Company’s assets or other properties (taken as a whole) (a “Reorganization Event”), each share of Series A Preferred Stock outstanding immediately prior to such Reorganization Event will, without the consent of the Holders and subject to all the other terms hereof, remain outstanding unless redeemed in accordance with this Certificate of Designation in connection with such Reorganization Event; provided, that in no event will the Company enter into or effect any such Reorganization Event if it would materially and adversely affect the rights of Holders. This provision shall similarly apply to successive Reorganization Events. To the extent that the Company is not the surviving or resulting entity in such Reorganization Event or will be dissolved in connection with such Reorganization Event, the Company shall not consummate any such transaction constituting a Reorganization Event unless proper provision shall be made in the agreements governing such Reorganization Event for the assumption of the obligations of the Company by such surviving or resulting entity in such Reorganization Event in accordance with this provision.

 

For the avoidance of doubt, any of the actions prohibited by or taken in contravention of the provisions herein, including but not limited to Article V, shall be ultra vires, null and void ab initio and of no force or effect. Further, the Company and its Subsidiaries shall not, by amendment, alteration or repeal of this Certificate of Designations (whether by merger, consolidation, operation of Law, or otherwise) or through any transaction that would trigger a Redemption, any Change of Control or any other reorganization, recapitalization, transfer of assets, amalgamation, consolidation, merger, dissolution, Disposition, issue or sale of securities, agreement or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed under this Certificate of Designations by the Company or any of its Subsidiaries.

 

 

Article VI

 

TAX

 

Section 6.01.             Tax.

 

(a)                The Company may deduct and withhold, or cause to be deducted and withheld, any amounts required to be deducted and withheld under applicable Law with respect to the Series A Preferred Stock (and may set off any such amounts required to be deducted and withheld against any dividends, distributions or other payments on the Series A Preferred Stock).

 

(b)                The Series A Preferred Stock is intended to be treated as “stock” within the meaning of section 305 of the Code and the Treasury Regulations promulgated thereunder (the “Intended Preferred Stock Tax Treatment”).

 

(c)                Each Holder of Series A Preferred Stock shall provide the Company with a properly completed IRS Form W-9 (and any applicable successor form reasonably requested by the Company) prior to acquiring its Series A Preferred Stock.

 

Article VII

 

TRANSFERS

 

Section 7.01.             Transfers.

 

(a)                A Holder of Series A Preferred Stock may transfer any share of Series A Preferred Stock to a Person pursuant to a Permitted Transfer at any time; provided, that, notwithstanding anything to the contrary in this Certificate of Designation, the transferee that has received such Series A Preferred Stock pursuant to such Permitted Transfer shall provide the Company with a properly completed IRS Form W-9 (and any applicable successor form reasonably requested by the Company) prior to completing such Permitted Transfer.

 

(b)                Upon the surrender of any certificate, if then certificated, representing Series A Preferred Stock, the Company shall, upon the request of the record holder of such certificate, promptly (but in any event within five (5) Business Days after such request) execute and deliver (at the Company’s expense) a new certificate or certificates in exchange therefor representing Series A Preferred Stock with an aggregate Stated Value of the Series A Preferred Stock represented by the surrendered certificate. Each such new certificate will be registered in such name and the shares represented thereby will have the Stated Value applicable to the shares of Series A Preferred Stock represented thereby (provided, that if such registered holder is different than such requesting holder, such registration in the name of the new registered holder will be contingent on the consummation of a Permitted Transfer). The issuance of new certificates will be made without charge to the Holders of the Series A Preferred Stock, and the Company shall pay for any cost incurred by the Company in connection with such issuance; provided that the Company shall not pay for any documentary, stamp or similar issuance or transfer tax in respect of the preparation, execution and delivery of such new certificates pursuant to this Section 7.01. All transfers and exchanges of the Series A Preferred Stock will be made promptly by direct registration on the books and records of the Company and the Company shall take all such other actions as may be required to reflect and facilitate all transfers and exchanges permitted pursuant to this Section 7.01.

 

 

(c)                Upon receipt of evidence reasonably satisfactory to the Company (it being understood that an affidavit of the registered holder will be satisfactory) of the ownership and the loss, theft, destruction or mutilation of any certificate evidencing Series A Preferred Stock, if applicable, and in the case of any such loss, theft or destruction, upon receipt of indemnity reasonably satisfactory to the Company, or, in the case of any such mutilation upon surrender of such certificate, the Company shall (at its expense) execute and deliver in lieu of such certificate a new certificate of like kind representing the Series A Preferred Stock represented by such lost, stolen, destroyed or mutilated certificate and dated the date of such lost, stolen, destroyed or mutilated certificate.

 

(d)                Unless otherwise agreed to by the Company and the applicable Holder, each certificate representing the Series A Preferred Stock, if applicable, will bear a restrictive legend substantially in the form set forth in Appendix I hereto, which is hereby incorporated in and expressly made a part of this Certificate of Designation, and will be subject to the restrictions set forth therein. In addition, each such certificate may have notations, additional legends or endorsements required by Law, stock exchange rules, and agreements to which the Company and all of the Holders of Series A Preferred Stock in their capacity as Holders are subject, if any.

 

(e)                Notwithstanding anything to the contrary herein, no transfer by any Holder of Series A Preferred Stock shall be permitted unless such transfer is made in compliance with the Series A Securities Purchase Agreement and all applicable securities laws.

 

Article VIII

 

TRIGGER EVENTS AND REMEDIES

 

Section 8.01.             Trigger Events. A “Trigger Event” wherever used herein, means any breach in any material respect by the Company of its obligations, covenants, representations, warranties or agreements (including a failure to redeem Series A Preferred Stock when required pursuant to this Certificate of Designation) in each case in this Certificate of Designation or the Series A Securities Purchase Agreement and, in the case of any such breach that is capable of being cured other than a breach pursuant to Section 5.01, Section 5.02 or Section 5.03 or breach of any payment obligations of the Company, such breach continues for 30 days following the earlier of (a) written notice to the Company by the Holders of such breach or (b) a Responsible Officer of the Company having actual knowledge of the occurrence of such breach. Promptly, and in any event three Business Days of the time any Responsible Officer of the Company has actual knowledge of the occurrence of a Trigger Event, breach or any other default hereunder, the Company shall give notice to all the Holders thereof.

 

Section 8.02.             Waiver of Past Defaults. A Holder Majority, by written notice to the Company, may on behalf of the Holders of all of the Series A Preferred Stock waive any existing Default and its consequences hereunder (except as provided in Section 9.02(b)). Upon any such waiver, such Default shall cease to exist, and unless otherwise provided in such waiver, any Trigger Event arising therefrom shall be deemed to have been cured for every purpose herein; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon.

 

Article IX

 

VOTING; AMENDMENT, SUPPLEMENT AND WAIVER

 

Section 9.01.             Voting Rights. The Holders, except as otherwise required under Law or as expressly set forth in this Certificate of Designation, shall not be entitled to vote on any matter required or permitted to be voted upon by the shareholders of the Company.

 

 

Section 9.02.             With Consent of Holders.

 

(a)                Subject to Section 9.02(b) below, no (i) amendment, modification, supplement or waiver of any of the terms of this Certificate of Designation or the preferences, powers or rights of the Holders, (ii) waiver, in whole or in part, of any Default and its consequences hereunder and (iii) waiver, in whole or in part, any existing Default or Trigger Event, shall be made or given effect without the vote or written consent (including any consents obtained in connection with a tender offer or exchange offer for, or purchase of, the Series A Preferred Stock) of the Holder Majority.

 

(b)                In addition to Section 9.02(a) above, no amendment, modification, supplement or waiver (in each case, including by merger, consolidation or otherwise) of the terms of this Certificate of Designation or the preferences, powers or rights of the Holders shall be made or given effect without the vote or written consent of (x) in the case of clauses (i) through (iii), each Holder affected thereby (as to the Series A Preferred Stock held by such affected Holder) and (y) in the case of clause (iv), all Holders, to the extent that the same shall:

 

(i)                 reduce the Liquidation Preference or Redemption Price of any such share of Series A Preferred Stock;

 

(ii)              waive a Default in the payment of the Liquidation Preference or Redemption Price of the Series A Preferred Stock;

 

(iii)            make any change to this Article IX that is materially adverse to the Holders;

 

(iv)             make any change to Section 3.02 or Section 3.07 regarding the pro rata treatment of all Holders in connection with any redemption referred to therein; or

 

(v)               make any change in voting percentages of the Holders or the definition of Holder Majority.

 

(c)                No amendment, modification, supplement or waiver (in each case, including by merger, consolidation or otherwise) to the Certificate of Incorporation or the Bylaws of the Company (as amended, restated, amended and restated, supplemented, extended, renewed or otherwise modified, in whole or in part, from time to time, the “Bylaws”) that would materially and adversely affect the Holders shall be made or effected without the vote or written consent of the Holder Majority.

 

(d)                Promptly, and in no event later than three Business Days, after an amendment, supplement or waiver under this Section 9.01 becomes effective, the Company shall give the Holders a notice briefly describing the amendment, supplement or waiver. Any failure of the Company to deliver such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such amendment, supplement or waiver.

 

Section 9.03.             Revocation and Effect of Consents. Until an amendment, modification, supplement or waiver under Section 9.01 becomes effective, a consent to it by a Holder shall represent the consent of the Holder and every subsequent Holder of a share of Series A Preferred Stock or portion of a share of Series A Preferred Stock that evidences the same share as the consenting Holder’s Series A Preferred Stock, even if notation of the consent is not made on any certificate representing a share of Series A Preferred Stock. However, unless such a consent otherwise provides in accordance with Law, any such Holder or subsequent Holder may revoke the consent as to its share of Series A Preferred Stock to the fullest extent permitted by Law. Such an amendment, modification, supplement or waiver shall bind every Holder.

 

 

Article X

 

MISCELLANEOUS

 

Section 10.01.         Notices. Any notice or other communication required or permitted to be given to any party under this Certificate of Designation will be in writing and delivered by (a) email or (b) overnight delivery via a national courier service, with respect to any Holder, at the email address or physical address on file with the Company and, with respect to the Company, to the following email address or physical address, as applicable:

 

If to the Company:

 

PLBY Group, Inc.

10960 Wilshire Boulevard, Suite 2200

Los Angeles, California 90024

Attn: Chris Riley

Email: criley@plbygroup.com

 

With a copy to:

 

Latham & Watkins LLP

1271 Avenue of the Americas 10020

New York, NY

Attention: Jason Silvera and Peter Sluka

E-mail: jason.silvera@lw.com; and

peter.sluka@lw.com

 

Notice or other communication pursuant to this Section 10.01 will be deemed given in accordance with Section 232 of the DGCL, except that any notice or communication given by email transmission on a non-Business Day or on any Business Day after 5:00 p.m., New York City time, or by overnight delivery on a non-Business Day will be deemed to have been given at 9:00 a.m., New York City time, on the next Business Day.

 

Section 10.02.         Severability. Whenever possible, each provision hereof will be interpreted in a manner as to be effective and valid under applicable Law, but if any provision hereof is held to be prohibited by, or ineffective or invalid under, applicable Law, then such provision will be prohibited, ineffective or invalid only to the extent of such prohibition, ineffectiveness or invalidity, without prohibiting, invalidating or otherwise affecting the remaining provisions hereof.

 

Section 10.03.         Governing Law. This Certificate of Designation and all claims or causes of action (whether in contract, tort or statute) that may be based upon, arise out of or relate to this Certificate of Designation, or the negotiation, adoption or performance of this Certificate of Designation (including any claim or cause of action based upon, arising out of or related to any representation or warranty made in or in connection with this Certificate of Designation or as an inducement to enter into this Certificate of Designation), shall be governed by and enforced in accordance with the Laws of the State of Delaware, including its statutes of limitations, without regard to the Laws of the State of Delaware or any other jurisdiction that would call for the application of the substantive Laws of any jurisdiction other than the State of Delaware.

 

 

Section 10.04.         Rights and Remedies of Holders.

 

(a)                The various provisions set forth under this Certificate of Designation are for the benefit of the Holders and will be enforceable by them, including by one or more actions for specific performance.

 

(b)                Except as expressly set forth herein, all remedies available under this Certificate of Designation, at law, in equity or otherwise, will be deemed cumulative and not alternative or exclusive of other remedies. The exercise by any Holder of a particular remedy will not preclude the exercise of any other remedy.

 

 

IN WITNESS WHEREOF, the Company has caused this Certificate of Designation to be signed by a duly authorized officer this 16th day of May, 2022.

 

	THE COMPANY:
	PLBY GROUP, INC.
	By:	/s/ Chris Riley
	Name: Chris Riley
	Title: General Counsel and Secretary

 

[SIGNATURE PAGE TO CERTIFICATE OF DESIGNATION]

 

 

Appendix I

 

Restrictive Legend to the Series A Preferred Stock Certificate

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT UNDER THE SECURITIES ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT.

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFERS SET FORTH IN ARTICLE VII OF THE CERTIFICATE OF DESIGNATION FILED WITH THE SECRETARY OF STATE FOR THE STATE OF DELAWARE PURSUANT TO SECTION 151 OF THE DELAWARE GENERAL CORPORATION LAW (THE “CERTIFICATE OF DESIGNATION”) AND THE SERIES A SECURITIES PURCHASE AGREEMENT BY AND AMONG PLBY GROUP, INC. (THE “COMPANY”) AND CERTAIN HOLDERS OF COMPANY’S SECURITIES PARTY THERETO. NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY BE MADE EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF THE CERTIFICATE OF DESIGNATION AND THE SERIES A SECURITIES PURCHASE AGREEMENT. A COPY OF THE CERTIFICATE OF DESIGNATION AND THE SERIES A SECURITIES PURCHASE AGREEMENT WILL BE FURNISHED WITHOUT CHARGE BY THE COMPANY TO THE HOLDER UPON REQUEST.

 

 

 

 

Exhibit 10.1

 

Execution Version

 

 

 

 

SERIES A SECURITIES PURCHASE AGREEMENT

 

BY AND BETWEEN

 

THE PURCHASERS LISTED ON SCHEDULE I HERETO

 

AND

 

PLBY Group, inc.

 

DATED AS OF May 13, 2022

 

 

 

 

 

TABLE OF CONTENTS

 

Page

 

ARTICLE I SALE AND PURCHASE OF SECURITIES		1
Section 1.1	Sale and Purchase of Securities	1
Section 1.2	Closing	2
ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE ISSUER		2
Section 2.1	Capitalization	2
Section 2.2	Private Offering; No General Solicitation	2
Section 2.3	Organization.	3
Section 2.5	Validity; Binding Nature	3
Section 2.6	Financial Statements	3
Section 2.7	Litigation	4
Section 2.8	Ownership of Property	4
Section 2.9	ERISA	4
Section 2.10	Investment Company Act	5
Section 2.11	Federal Reserve Regulations	5
Section 2.12	Taxes, Etc	5
Section 2.13	Solvency	5
Section 2.14	Environmental Laws.	5
Section 2.15	Intellectual Property	6
Section 2.16	Labor Matters	6
Section 2.17	Compliance with Laws	6
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS		8
Section 3.1	Existence, Qualification and Power; Compliance with Laws	8
Section 3.2	Authorization; No Contravention	9
Section 3.3	Governmental Authorization	9
Section 3.4	Binding Effect	9
Section 3.5	Investment Matters	9
Section 3.6	Brokerage	11
Section 3.7	Litigation	11
Section 3.8	Disclaimer	11
Section 3.9	Ownership	11
Section 3.10	Tax Status	11

 

 

ARTICLE IV CONDITIONS		12
Section 4.1	Conditions to the Several, and not Joint, Obligations of the Purchasers	12
Section 4.2	Conditions to the Obligations of the Issuer	13
ARTICLE V ADDITIONAL COVENANTS		13
Section 5.1	Further Assurances	13
Section 5.2	Transfer Restrictions	13
Section 5.3	Expenses	13
Section 5.4	Confidentiality	14
Section 5.6	Ownership	15
Section 5.7	Tax Matters.	15
ARTICLE VI MISCELLANEOUS		16
Section 6.1	Survival; Damages	16
Section 6.2	Entire Agreement; Parties in Interest	16
Section 6.3	No Recourse	16
Section 6.4	Governing Law	17
Section 6.5	Jurisdiction	17
Section 6.6	Waiver of Jury Trial	17
Section 6.7	Remedies	17
Section 6.8	Notice	18
Section 6.9	Amendments; Waivers	19
Section 6.10	Counterparts	19
Section 6.11	Assignment	19
Section 6.12	Severability	19
Section 6.13	Certain Issuer Acknowledgements	19
Section 6.14	USA PATRIOT Act	20
Section 6.15	Rights of Third Parties	20
ARTICLE VII DEFINITIONS		20
Section 7.1	Certain Definitions	20
Section 7.2	Other Terms	28
Section 7.3	Construction	28

 

 

LIST OF SCHEDULES

 

SCHEDULE I

List of Purchasers

 

LIST OF EXHIBITS

 

EXHIBIT A	Series A Certificate of Designation
EXHIBIT B	Ownership of Issuer Securities
EXHIBIT C	Solvency Certificate

 

 

SERIES A SECURITIES PURCHASE AGREEMENT

 

This SERIES A SECURITIES PURCHASE AGREEMENT (this “Agreement”), dated as of May 13, 2022, is made by and between the Purchasers named in Schedule I hereto (the “Purchasers”) and PLBY Group, Inc., a Delaware corporation (the “Issuer” and, together with the Purchasers and any Affiliated Transferee that becomes a party to this Agreement, the “Parties”).

 

PRELIMINARY STATEMENTS

 

A.            Beginning on the date of this Agreement, the Issuer may deliver a notice to the Purchasers (the “Initial Draw Notice”) requesting that the Purchasers purchase 25,000 authorized but unissued shares of non-convertible Series A Preferred Stock, par value $0.0001 per share, with an initial Stated Value of $1,000.00 per share (the “Series A Preferred Shares”), on the terms and subject to the conditions set forth in this Agreement, at a price per Preferred Share equal to the Purchase Price (as defined below) (the “Initial Purchase”). Thereafter, at any time until the expiration of the Delayed Draw Period (as defined herein), and from time to time, the Issuer may deliver a notice to the Purchasers (a “Delayed Draw Notice”) requesting that the Purchasers purchase up to 25,000 Series A Preferred Shares (the “Subsequent Commitment”) in increments of not less than 5,000 Preferred Shares or such lesser amount if less than 5,000 Preferred Shares remains of the Subsequent Commitment (each, a “Subsequent Purchase”), at a price per Preferred Share equal to the Purchase Price. The Initial Purchase shall be consummated (the “Initial Closing”) and any Subsequent Purchase shall be consummated (a “Subsequent Closing” and, together with the Initial Closing, each, a “Closing”) on a Business Day specified in the Initial Draw Notice or Delayed Draw Notice, as applicable, occurring not less than five Business Days after the date of such notice (unless, at the election of the Company such Initial Closing occurs on May 16, 2022), subject to the terms and conditions of this Agreement.

 

B.            The Purchasers agree, jointly and severally, in the respective percentages set forth in Schedule I hereto, to (x) purchase 25,000 Shares at the Initial Closing and (y) at any Subsequent Closing, purchase the Series A Preferred Shares in the respective amounts as set forth in the applicable Delayed Draw Notice, and to complete a Closing on the date specified in such Initial Draw Notice (unless, at the election of the Company such Initial Closing occurs on May 16, 2022) or Delayed Draw Notice, as applicable and the Issuer hereby agrees to issue and sell to the Purchasers, at each Closing, the Series A Preferred Shares on the terms and subject to the conditions set forth in this Agreement and in the Initial Draw Notice (unless, at the election of the Company such Initial Closing occurs on May 16, 2022) or any Delayed Draw Notice, as applicable.

 

C.            The terms of the Series A Preferred Shares are set forth in the Series A Certificate of Designation, attached here to as Exhibit A.

 

The Parties agree as follows:

 

ARTICLE I
SALE AND PURCHASE OF SECURITIES

 

Section 1.1            Sale and Purchase of Securities.

 

(a)            Sale and Purchase. Subject to all of the terms and conditions of this Agreement, and in reliance on the representations, warranties, covenants and other agreements set forth herein,

 

 

(i) at the Initial Closing, (x) the Issuer will issue and sell to the Purchasers the Series A Preferred Shares in connection with the Initial Purchase for $1,000.00 per Series A Preferred Share, representing 100.00% of the initial Stated Value of each Series A Preferred Share (the “Purchase Price”), and in aggregate, an amount equal to $25,000,000.00 and (y) each Purchaser will, severally and not jointly, purchase such number of Series A Preferred Shares and pay the portion of the Purchase Price in accordance with the respective percentages set forth in Schedule I hereto, by wire transfer in immediately available funds;

 

(ii) at each Subsequent Closing, (x) the Issuer will issue and sell to the Purchasers such amount of Series A Preferred Shares as set forth in the applicable Delayed Draw Notice, at the Purchase Price and (y) each Purchaser will, severally and not jointly, purchase such number of Series A Preferred Shares and pay the portion of the Purchase Price in accordance with the respective percentages set forth in Schedule I hereto, by wire transfer in immediately available funds.

 

(b)            Series A Preferred Shares. The Series A Preferred Shares will (i) be issued at each Closing to the Purchasers fully paid, non-assessable and free and clear of any Liens (other than restrictions on transfer set forth in the Series A Certificate of Designation or under applicable securities laws), (ii) be registered to the Purchasers in the Issuer’s stock records, in the amounts purchased by the Purchasers, and (iii) have the designations, rights, preferences, powers, restrictions and limitations set forth in the Series A Certificate of Designation, attached hereto as Exhibit A.

 

(c)            Certificates. The Board of Directors of the Issuer has determined by resolution that shares of Series A Preferred Shares will not be represented by certificates and will be uncertificated shares.

 

Section 1.2            Closing. Each Closing will take place remotely via the exchange of signatures, at such time set forth in the applicable Initial Draw Notice (unless, at the election of the Company such Initial Closing occurs on May 16, 2022) or Delayed Draw Notice.

 

ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE ISSUER

 

The Issuer represents and warrants to the Purchasers as of the date hereof and on each Subsequent Closing that:

 

Section 2.1            Capitalization.

 

(a)            As of the date of this Agreement (after giving effect to the filing and effectiveness of the Series A Certificate of Designation with the Secretary of State of the State of Delaware (the “Delaware Secretary”)), the authorized capital stock of the Issuer will consist of (i) 5,000,000 shares of Preferred Stock, par value $0.0001 per share, (ii) 50,000 Series A Preferred Shares and (iii) 150,000,000 shares of Common Stock, par value $0.0001 per share (the “Common Stock”). As of the date hereof, 45,221,175 shares of Common Stock will be issued and outstanding.

 

(b)            When issued and sold against receipt of the consideration therefor, the Series A Preferred Shares will be duly authorized, validly issued, fully paid and non-assessable and free and clear of any Liens (other than restrictions on transfer set forth in the Series A Certificate of Designation or under applicable securities laws).

 

Section 2.2            Private Offering; No General Solicitation.

 

(a)            Assuming the accuracy of the representations and warranties of the Purchasers set forth in ARTICLE III, it is not necessary in connection with the issue of the Series A Preferred Shares to the Purchasers in the manner contemplated by this Agreement, to register the Series A Preferred Shares under the Securities Act.

 

 

(b)            None of the Issuer or its Affiliates or any Person acting on any of their behalf (other than the Purchasers and their respective Affiliates, as to whom the Issuer makes no representation or warranty) directly or indirectly, has offered, sold or solicited any offer to buy, and will not, directly or indirectly, offer, sell or solicit any offer to buy, any security of a type or in a manner which would be integrated with the issue of the Series A Preferred Shares (other than any issuance of Series A Preferred Shares on any Closing Date). None of the Issuer or its Affiliates or any Person acting on any of their behalf (other than the Purchasers and their respective assignees, as to whom the Issuer makes no representation or warranty) has engaged or will engage in any form of general solicitation or general advertising (within the meaning of Rule 502(c) of Regulation D or in any matter involving a public offering within the meaning of Section 4(a)(2) of the Securities Act) in connection with the offering of the Series A Preferred Shares.

 

(c)            The Series A Preferred Shares will not, on the date they are issued, be of the same class as securities listed on a national securities exchange registered under Section 6 of the Exchange Act or quoted on a U.S. automated interdealer quotation system.

 

Section 2.3            Organization. Each Group Party is validly existing and in good standing under the laws of the jurisdiction of its organization; and each Group Party is duly qualified to do business in each jurisdiction where, because of the nature of its activities or properties, such qualification is required, except for such jurisdictions where the failure to so qualify has not had, and would not reasonably be expected to have, a Material Adverse Effect.

 

Section 2.4            Authorization; No Conflict. The Issuer is duly authorized to execute and deliver the Preferred Agreements, and the Issuer is duly authorized to perform its obligations under the Preferred Agreements. The execution, delivery and performance by the Issuer of this Agreement does not and will not (a) require any consent or approval of any Governmental Authority (other than any consent or approval which has been obtained and is in full force and effect), or (b) conflict with (i) any provision of applicable law in any material respects, (ii) the charter, by-laws or other organizational documents of any Group Party, or (iii) any agreement, indenture, instrument or other document, or any judgment, order or decree, which is binding upon any Group Party or any of their respective properties, except in the case of this clause (iii), for such conflicts that would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect.

 

Section 2.5            Validity; Binding Nature. This Agreement is the legal, valid and binding obligation of the Issuer, enforceable against the Issuer in accordance with its terms, subject to bankruptcy, insolvency and similar laws affecting the enforceability of creditors’ rights generally and to general principles of equity.

 

Section 2.6            Financial Statements.

 

(a)            The Issuer has filed or furnished, as applicable, all forms, reports, schedules and other statements required to be filed or furnished by it with the SEC under the Exchange Act since January 1, 2022 (collectively, the “Issuer Reports”).

 

(b)            As of its respective date, and, if amended, as of the date of the last such amendment, each Issuer Report complied in all material respects as to form with the applicable requirements of the Exchange Act, and any rules and regulations promulgated thereunder applicable to such Issuer Report. As of its respective date, and, if amended, as of the date of the last such amendment, and, except to the extent that information contained in any Issuer Report has been revised or superseded by a later filed Issuer Report filed and made publicly available prior to the date of this Agreement, no Issuer Report contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances in which they were made, not misleading.

 

 

(c)            Each of the consolidated statements of financial position, and the related consolidated statements of income, changes in equity and cash flows, included in the Issuer Reports filed with the SEC under the Securities Act or Exchange Act, as applicable, (A) have been prepared from, and are in accordance with, the books and records of the Issuer and its subsidiaries, (B) fairly present in all material respects the consolidated financial position of the Issuer and its subsidiaries as of the dates shown and the results of the consolidated operations, changes in equity and cash flows of the Issuer and its subsidiaries for the respective fiscal periods or as of the respective dates therein set forth, subject, in the case of any unaudited financial statements, to normal recurring year-end audit adjustments, and (C) have been prepared in accordance with GAAP consistently applied during the periods involved, except as otherwise set forth therein or in the notes thereto, and in the case of unaudited financial statements except for the absence of footnote disclosure.

 

Section 2.7            Litigation. Except as disclosed in the reports that the Company is required to file with the SEC pursuant to Section 13(a) or 15(d) of the Exchange Act, there are no Adverse Proceedings, individually or in the aggregate, that could reasonably be expected to have a Material Adverse Effect, and neither the Issuer nor any of its Subsidiaries (a) is in violation of any applicable laws (including Environmental Laws) that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect, or (b) is subject to or in default with respect to any final judgments, writs, injunctions, decrees, rules or regulations of any court or any federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

 

Section 2.8            Ownership of Property. Each Group Party has good title to each of the properties and assets material to its business, and all such properties and assets are free and clear of Liens except Permitted Liens (as defined in the Senior Credit Agreement) and except as would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

 

Section 2.9            ERISA. Except as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect:

 

(a)            the Issuer, each of its Subsidiaries and each of their respective ERISA Affiliates are in compliance with all applicable provisions and requirements of ERISA and the Internal Revenue Code and the regulations and published interpretations thereunder with respect to each Employee Benefit Plan.

 

(b)            each Employee Benefit Plan which is intended to qualify under Section 401(a) of the Internal Revenue Code has received a favorable determination letter from the Internal Revenue Service indicating that such Employee Benefit Plan is so qualified and, to the knowledge of the Issuer, nothing has occurred subsequent to the issuance of such determination letter which would cause such Employee Benefit Plan to lose its qualified status.

 

(c)            no liability under Title IV of ERISA with respect to any Pension Plan has been or is reasonably expected to be incurred by the Issuer, any of its Subsidiaries or any of their ERISA Affiliates.

 

(d)            no ERISA Event has occurred or is reasonably expected to occur.

 

 

(e)            the present value of the aggregate benefit liabilities under each Pension Plan sponsored, maintained or contributed to by the Issuer, any of its Subsidiaries or any of their ERISA Affiliates (determined as of the end of the most recent plan year on the basis of the actuarial assumptions specified for funding purposes in the most recent actuarial valuation for such Pension Plan), did not exceed the aggregate current value of the assets of such Pension Plan.

 

(f)            as of the most recent valuation date for each Multiemployer Plan for which the actuarial report is available, the Issuer, its Subsidiaries and their respective ERISA Affiliates do not have any potential liability for a complete withdrawal from such Multiemployer Plan (within the meaning of Section 4203 of ERISA), based on information available pursuant to Section 4221(e) of ERISA.

 

(g)            each Foreign Plan which is required under all applicable laws, rules, regulations and orders of any Governmental Authority to be funded satisfies in all material respects any applicable funding standard under all applicable laws, rules, regulations and orders of any Governmental Authority.

 

Section 2.10          Investment Company Act. No Group Party is an “investment company,” or an “affiliated person” of, or a “promoter” or “principal underwriter” for, an “investment company,” within the meaning of the Investment Company Act of 1940, and neither the sale of the Series A Preferred Shares, nor the application of the proceeds or repayment thereof by the Group Parties, nor the consummation of the other transactions contemplated hereby, will require any Group Party or any other Group Party to register as an “investment company” under the Investment Company Act of 1940.

 

Section 2.11          Federal Reserve Regulations. No Group Party is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying any Margin Stock.

 

Section 2.12          Taxes, Etc. All Tax returns and reports of the Issuer and its Subsidiaries required to be filed by any of them have been timely filed, and all Taxes shown on such tax returns to be due and payable, and all other taxes, assessments, fees and other governmental charges upon any of the Issuer and its Subsidiaries and upon any of their respective properties, assets, income, businesses and franchises which are due and payable have been paid when due and payable, except in each case to the extent that the failure to so file or pay would not reasonably be expected to have a Material Adverse Effect. Except for Tax assessments that would not reasonably be expected to have a Material Adverse Effect, there is no proposed Tax assessment in writing against the Issuer or any of its Subsidiaries which is not being actively contested by the Issuer or such Subsidiary in good faith and by appropriate proceedings; provided, such reserves or other appropriate provisions, if any, as shall be required in conformity with GAAP shall have been made or provided therefor.

 

Section 2.13          Solvency. Both before and after giving effect to the sale of Series A Preferred Shares, the disbursement of the proceeds of such sale, the use of the proceeds of all sales and the payment of all transaction costs in connection with the foregoing, the Issuer and its Subsidiaries, on a consolidated basis, are Solvent.

 

Section 2.14          Environmental Laws. Neither the Issuer nor any of its Subsidiaries nor any of their respective Facilities (including any facilities of any of their predecessors) or operations are subject to any outstanding written order, consent decree or settlement agreement with any Person relating to any Environmental Law, any Environmental Claim, or any Hazardous Materials Activity that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. Except as could not reasonably be expected to have a Material Adverse Effect, neither the Issuer nor any of its Subsidiaries has received any letter or request for information under Section 104 of the Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C. § 9604) or any comparable state law. There are and, to each of the Issuer’s and its Subsidiaries’ knowledge, have been, no conditions, occurrences, or Hazardous Materials Activities which could reasonably be expected to form the basis of an Environmental Claim against the Issuer or any of its Subsidiaries that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. Neither the Issuer nor any of its Subsidiaries nor, to the Issuer’s knowledge, any predecessor of the Issuer or any of its Subsidiaries has filed any notice under any Environmental Law indicating past or present treatment of Hazardous Materials at any Facility (including any facilities of any of their predecessors), and none of the Issuer’s or any of its Subsidiaries’ operations involves the generation, transportation, treatment, storage or disposal of hazardous waste, as defined under 40 C.F.R. Parts 260-270 or any state equivalent which, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. Compliance with all current or reasonably foreseeable future requirements pursuant to or under Environmental Laws could not be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect. No event or condition has occurred or is occurring with respect to the Issuer or any of its Subsidiaries relating to any Environmental Law, any Release of Hazardous Materials, or any Hazardous Materials Activity which individually or in the aggregate has had, or could reasonably be expected to have, a Material Adverse Effect.

 

 

Section 2.15          Intellectual Property. each of the Issuer and its Subsidiaries owns or licenses or otherwise has the right to use all Patents, Patent applications, Trademarks, Trademark applications, service marks, trade names, Copyrights, Copyright applications and other Intellectual Property rights (in each case as defined in the Senior Credit Agreement) that are reasonably necessary in all material respects for the operation of its business, without infringement upon or conflict with the rights of any other Person with respect thereto, and all such Intellectual Property is subsisting and, to the knowledge of such party, valid and enforceable, has not been abandoned, and is not subject to any outstanding order, judgment or decree restricting its use or adversely affecting such party’s rights thereto, except, in each case, for such failure to possess such rights, infringements, conflicts, nonsubsistence, invalidity, unenforceability, abandonment or outstanding orders, judgments or decrees, which, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect. To the knowledge of any of the Issuer or its Subsidiaries, no slogan or other advertising device, product, process, method, substance or other Intellectual Property or goods bearing or using any Intellectual Property presently contemplated to be sold by or employed by any of the Issuer or its Subsidiaries infringes any Patent, Trademark, service mark, trade name, Copyright, license or other Intellectual Property owned by any other Person in any material respect, and no claim or litigation regarding any of the foregoing is pending or, to the knowledge of the Issuer, threatened in writing, except for such infringements and conflicts which could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

 

Section 2.16          Labor Matters. Neither the Issuer nor any of its Subsidiaries is engaged in any unfair labor practice that could reasonably be expected to have a Material Adverse Effect. There is (a) no unfair labor practice complaint pending or, to the knowledge of the Issuer, threatened against the Issuer or any of its Subsidiaries before the National Labor Relations Board and no grievance or arbitration proceeding arising out of or under any collective bargaining agreement to which the Issuer or any of its Subsidiaries is a party is pending or, to the knowledge of the Issuer, threatened against the Issuer or any of its Subsidiaries, (b) no strike or work stoppage in existence or, to the knowledge of the Issuer, threatened involving the Issuer or any of its Subsidiaries, and (c) to the knowledge of the Issuer, no union representation question existing with respect to the employees of the Issuer or any of its Subsidiaries and, to the knowledge of the Issuer, no union organization activity that is taking place, except (with respect to any matter specified in clause (a), (b) or (c) above, either individually or in the aggregate) as is not reasonably likely to have a Material Adverse Effect.

 

Section 2.17          Compliance with Laws.

 

(a)            Generally. Each of the Issuer and its Subsidiaries is in compliance with all applicable statutes, regulations and orders of, and all applicable restrictions imposed by, all Governmental Authorities, in respect of the conduct of its business and the ownership of its property (including compliance with all applicable Environmental Laws with respect to any Real Estate Asset or governing its business and the requirements of any permits issued under such Environmental Laws with respect to any such Real Estate Asset or the operations of the Issuer or any of its Subsidiaries), except such non-compliance that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

 

 

(b)            Anti-Terrorism Laws, Etc. Without limiting the foregoing, no Group Party (i) is in violation in any material respect of any Anti-Terrorism Law, (ii) engages in or conspires to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law, or (iii) is a Blocked Person. No Group Party (x) conducts any business or engages in making or receiving any contribution of funds, goods or services to or for the benefit of any Blocked Person, or (y) deals in, or otherwise engages in any transaction relating to, any property or interest in property blocked pursuant to Executive Order No. 13224, any similar executive order or other Anti-Terrorism Law. No part of the proceeds of the sale of any Series A Preferred Shares will be used for any payments to any Governmental Authority or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the FCPA. The Issuer has established procedures and controls which it reasonably believes are adequate (and otherwise comply with applicable law) to ensure that the Group Parties are and will continue to be in compliance with all applicable current and future Anti-Terrorism Laws and U.S. economic sanctions laws.

 

(c)            Anti-Corruption Laws, Etc.

 

(i)            Since January 1, 2022, there has been no action taken by any Group Party or, to the knowledge of the Issuer, any officer, director, or employee, or any agent, representative, sales intermediary, or other third party of any Group Party, in each case, acting on behalf of any Group Party in violation of any applicable Anti-Corruption Law. Since January 1, 2022, none of the Group Parties has been convicted of violating any Anti-Corruption Laws or, to the knowledge of the Issuer, subjected to any investigation by a Governmental Authority for violation of any applicable Anti-Corruption Laws. There is no material suit, litigation, arbitration, claim, audit, action, proceeding or investigation pending or, to the knowledge of any Executive Officer of the Issuer, threatened against or affecting the Group Parties or any of their Subsidiaries related to any applicable Anti-Corruption Law, before or by any Governmental Authority. Since January 1, 2022, none of the Group Parties has conducted or initiated any internal investigation or made a voluntary, directed, or involuntary disclosure to any Governmental Authority with respect to any alleged act or omission arising under or relating to any noncompliance with any Anti-Corruption Law. Since January 1, 2022, none of the Group Parties has received any written notice, request or citation for any actual or potential noncompliance in any material respect with any of the foregoing.

 

(ii)           To the actual knowledge of the Group Parties after making due inquiry, none of the Group Parties has, since January 1, 2022, directly or indirectly offered, promised, given, paid or authorized the offer, promise, giving or payment of anything of value to a Governmental Official or a commercial counterparty for the purposes of: (1) influencing any act, decision or failure to act by such Governmental Official in his or her official capacity or such commercial counterparty, (2) inducing a Governmental Official to do or omit to do any act in violation of the Governmental Official’s lawful duty, or (3) inducing a Governmental Official or a commercial counterparty to use his or her influence with a government or instrumentality to affect any act or decision of such government or entity; in each case in order to obtain, retain or direct business or to otherwise secure an improper advantage in violation of any applicable law or regulation or which would cause any holder to be in violation of any law or regulation applicable to such holder.

 

 

(d)            Foreign Assets Control Regulations and Anti-Money Laundering. Each Group Party is and will remain in compliance in all material respects with all U.S. economic sanctions laws, executive orders and implementing regulations as promulgated by OFAC, and all applicable anti-money laundering and counter-terrorism financing provisions of the Bank Secrecy Act and all regulations issued pursuant to it. No Group Party (i) is a Person designated by the U.S. government on the list of the Specially Designated Nationals and Blocked Persons (the “SDN List”) with which a U.S. Person cannot deal or otherwise engage in business transactions, (ii) is a Person who is otherwise the target of U.S. economic sanctions laws such that a U.S. Person cannot deal or otherwise engage in business transactions with such Person or (iii) is controlled by (including without limitation by virtue of such Person being a director or owning voting shares or interests), or acts, directly or indirectly, for or on behalf of, any Person or entity on the SDN List or a foreign government that is the target of U.S. economic sanctions prohibitions such that the entry into, or performance under, this Agreement or any other Preferred Agreement would be prohibited under U.S. law. None of the Group Parties has been notified that its name appears or may in the future appear on a state list of Persons that engage in investment or other commercial activities in any country that is subject to U.S. economic sanctions laws.

 

Section 2.18          No Material Adverse Changes. Since December 31, 2021, there has been no change, event, occurrence, effect, fact, circumstance or condition that has had or would reasonably be expected to have a Material Adverse Effect.

 

Section 2.19         Brokerage. There are no broker fees payable by or on behalf of the Issuer or its Subsidiaries in connection with the sale of the Series A Preferred Shares.

 

ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS

 

Each Purchaser severally, and not jointly, represents and warrants to the Issuer as of the date hereof that:

 

Section 3.1            Existence, Qualification and Power; Compliance with Laws. Such Purchaser,

 

(a)            if an entity, is a Person duly organized or formed, validly existing and in good standing under the Laws of the jurisdiction of its incorporation or organization (to the extent such concept exists in such jurisdiction);

 

(b)            has all requisite power and authority and all requisite governmental licenses, authorizations, consents and approvals to (i) own or lease its assets and carry on its business as currently conducted and (ii) execute, deliver and perform its obligations under the Preferred Agreements;

 

(c)            if an entity, is duly qualified and in good standing (to the extent such concept exists in such jurisdiction) under the Laws of each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification or license; and

 

(d)            is in compliance with all applicable Laws, writs, injunctions and orders;

 

except in each case, other than with respect to clauses (a) and (b)(ii), to the extent that failure to do so would not reasonably be expected to result in a material adverse effect on such Purchaser’s ability to perform its obligations hereunder.

 

 

Section 3.2            Authorization; No Contravention.

 

(a)            If such Purchaser is an entity, the execution, delivery and performance by such Purchaser has been duly authorized by all necessary corporate, limited liability, partnership or other organizational action of such Purchaser.

 

(b)            The execution, delivery and performance by the Issuer of this Agreement will not, if such Purchaser is an entity, contravene the terms of any of its Organizational Documents.

 

Section 3.3            Governmental Authorization. No material approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority is necessary or required in connection with the execution, delivery or performance by, or enforcement against, such Purchaser of this Agreement or any other Preferred Agreement, except for,

 

(a)            the approvals, consents, exemptions, authorizations, actions, notices and filings that have been duly obtained, taken, given or made and are in full force and effect; and

 

(b)            those approvals, consents, exemptions, authorizations or other actions, notices or filings, the failure of which to obtain or make would not reasonably be expected to result in a material adverse effect on such Purchaser’s ability to perform its obligations hereunder.

 

Section 3.4            Binding Effect. This Agreement has been duly executed and delivered by such Purchaser. This Agreement constitutes a legal, valid and binding obligation of such Purchaser, enforceable against such Purchaser in accordance with its terms, except as such enforceability may be limited by Debtor Relief Laws and by general principles of equity and principles of good faith and fair dealing.

 

Section 3.5            Investment Matters.

 

(a)            Such Purchaser is, and was at the time such Purchaser was offered the Series A Preferred Shares, (i) a qualified institutional buyer (within the meaning of Rule 144A(a)(1) under the Securities Act), (ii) an institutional accredited investor (as such term is defined in Rule 501(a)(1), (2), (3), (7) or (8) of Regulation D) or (iii) a non-U.S. Person (as such term is defined in Regulation S) and will not acquire the Series A Preferred Shares for the account or benefit of any U.S. Person (as such term is defined in Regulation S).

 

(b)            Such Purchaser is acquiring the Series A Preferred Shares for its own account, for investment purposes only and not with a view to any distribution thereof that would not otherwise comply with the Securities Act.

 

(c)            Such Purchaser understands that (i) the Series A Preferred Shares have not been registered under the Securities Act and the Series A Preferred Shares are being issued by the Issuer in transactions exempt from the registration requirements of the Securities Act and (ii) all or any part of the Series A Preferred Shares may not be offered or sold except pursuant to effective registration statements under the Securities Act or pursuant to applicable exemptions from registration under the Securities Act and in compliance with applicable state Laws.

 

 

(d)           Such Purchaser understands that the exemption from registration afforded by Rule 144 promulgated under the Securities Act (“Rule 144”) (the provisions of which are known to such Purchaser) depends on the satisfaction of various conditions, which may not be satisfied, and that, if satisfied, Rule 144 may afford the basis for sales only in limited amounts. Such Purchaser understands that no public market now exists for the Series A Preferred Shares, and that the Issuer has made no assurances that a public market will ever exist for the Series A Preferred Shares.

 

(e)           Such Purchaser did not employ any broker or finder in connection with the transactions contemplated in this Agreement and no fees or commissions are payable to such Purchaser, except as otherwise expressly provided for in this Agreement.

 

(f)            No portion of the funds or assets that will be used by such Purchaser to pay its respective portion of the Purchase Price or to acquire or hold the Series A Preferred Shares, constitute or will constitute the assets of any (i) employee benefit plan subject to Title I of ERISA, (ii) plan described in and subject to Section 4975 of the IRC (each such employee benefit plan and plan described in clauses (i) and (ii) referred to herein as an “ERISA Plan”), (iii) plan, account or other arrangement subject to provisions under any other federal, state, local, non-U.S. or other laws or regulations that are similar to the fiduciary responsibility or prohibited transaction provisions of Title I of ERISA or Section 4975 of the IRC that could cause the underlying assets of the Issuer to be treated as assets of such plan, account or arrangement (a “ Similar Law Plan”) or (iv) entity whose underlying assets are deemed to include “plan assets” of any such ERISA Plan or Similar Law Plan pursuant to Section 3(42) of ERISA and any regulations that may be promulgated thereunder or otherwise.

 

(g)           Such Purchaser has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Series A Preferred Shares and has so evaluated the merits and risks of such investment. Such Purchaser understands that it must bear the economic risk of its investment in the Series A Preferred Shares indefinitely and is able to bear such risk and is able to afford a complete loss of such investment.

 

(h)           Such Purchaser acknowledges that it has reviewed all materials such Purchaser deemed necessary for the purpose of making an investment decision with respect to the Series A Preferred Shares, including information regarding the Transactions, and such Purchaser has evaluated the risks of investing in the Series A Preferred Shares and understands there are substantial risks of loss incidental to the investment and has determined that it is a suitable investment for such Purchaser. Such Purchaser has had a reasonable opportunity to ask questions of and receive answers concerning the Group Parties and all such questions have been answered to such Purchaser’s satisfaction. The determination of such Purchaser to acquire any Series A Preferred Shares pursuant to this Agreement has been made by such Purchaser independent of any such answers given or other statements made by the Group Companies and their respective Affiliates and representatives.

 

(i)            Such Purchaser has had the opportunity to consult with its own tax and other advisors with respect to the consequences to such Purchaser of the purchase, receipt or ownership of the Series A Preferred Shares, including the tax consequences under federal, state, local and other income tax laws of the United States or any other country and the possible effects of changes in such tax laws. Such Purchaser acknowledges that none of the Issuer, its Subsidiaries, Affiliates, successors, beneficiaries, heirs, and assigns and its and their past and present directors, managers, officers, employees, and agents (including, without limitation, their attorneys) makes or has made any representation or warranties to such Purchaser regarding the consequences to such Purchaser of the purchase, receipt or ownership of the Series A Preferred Shares or the consequences of the transactions contemplated by this Agreement, including the tax consequences under federal, state, local and other tax laws of the United States or any other country and the possible effects of changes in such tax laws. Such Purchaser has had an opportunity to consult with independent legal counsel regarding his, her or its rights and obligations under this Agreement and such Purchaser fully understands the terms and conditions contained herein.

 

 

(j)            The office or offices of each Purchaser in which its principal place of business is identified in the address or addresses of such Purchaser set forth on Schedule I.

 

Section 3.6            Brokerage Fees. Such Purchaser is not a party to any contract, agreement or understanding with any person (other than this Agreement) that would give rise to a valid claim against any Group Party for a brokerage fee, finder’s fee or like payment in connection with the purchase of the Series A Preferred Shares.

 

Section 3.7            Litigation. No litigation (including derivative actions), arbitration proceeding or governmental investigation or proceeding is pending or, to such Purchaser’s knowledge, threatened in writing against such Purchaser which would reasonably be expected to result in a material adverse effect on such Purchaser’s ability to perform its obligations hereunder and the other Preferred Agreements to which it is a party.

 

Section 3.8            Disclaimer. Such Purchaser has not relied, is not relying and will not at any time rely on any communication (written or oral) of the Group Parties or any of their Affiliates or any of their respective directors, managers, officers, employees, agents, legal counsel, accountants, investment bankers, finders or other advisors or representatives of any of the foregoing (the “Issuer Parties”), as investment advice or as a recommendation to acquire the Series A Preferred Shares, it being understood that information and explanations related to the terms and conditions of the Series A Preferred Shares, the Preferred Agreements or any other document or information provided in connection with any of the foregoing shall not be considered investment advice or a recommendation to acquire the Series A Preferred Shares. Such Purchaser confirms that no Issuer Party has given any guarantee or representation as to the potential success, return, effect or benefit (either legal, regulatory, tax, financial, accounting or otherwise) of an investment in the Series A Preferred Shares. In deciding to acquire the Series A Preferred Shares, such Purchaser has not relied, is not relying and will not at any time rely on the advice or recommendations of any Issuer Party and such Purchaser has made its own independent decision that the investment in the Series A Preferred Shares is suitable and appropriate for such Purchaser. Such Purchaser acknowledges that no Issuer Party has made, is making, or will make, and such Purchaser has not relied, is not relying, and will not at any time rely on, any representation or warranty whatsoever (express or implied) except as may be expressly set forth in the Preferred Agreements, and that to the extent any Issuer Party has made or purported to make any such representation or warranty they are all hereby disclaimed by the Issuer and waived by such Purchaser. Without limiting the generality of the foregoing, such Purchaser acknowledges that it, together with its advisors, has made its own investigation of the Group Parties, and has not relied, is not relying and will not at any time rely on any implied warranties or upon any representation or warranty whatsoever as to the prospects (financial or otherwise) or the viability or likelihood of success of the business of the Group Parties contained in any information (written or oral) provided by any Issuer Party, except as expressly covered by a representation and warranty contained in ARTICLE II.

 

Section 3.9            Ownership of Issuer Securities. Such Purchaser, together with any of its subsidiaries or its affiliates, is the Economic Owner of such number of share of Common Stock of the Issuer and any other securities convertible or exchangeable into shares of Common Stock of the Issuer set forth opposite its name in Exhibit B and has no agreement, arrangement or understanding with any person to acquire Economic Ownership of such person’s shares of Common Stock of the Issuer (other than pursuant to the Preferred Agreements).

 

Section 3.10          Tax Status. Such Purchaser is a United States person as defined in Section 7701 of the Internal Revenue Code.

 

 

ARTICLE IV
CONDITIONS

 

Section 4.1            Conditions to the Several, and not Joint, Obligations of the Purchasers.

 

(a)            The purchase on each Closing Date of the Series A Preferred Shares by the Purchasers shall be subject to the satisfaction or waiver by the Purchasers of the following conditions:

 

(i)            The Purchasers shall have received, and the Issuer shall have delivered, at the Initial Closing, a customary officer’s certificate certifying that the conditions specified in Section 4.1(a)(ii) have been satisfied.

 

(ii)            (x) The representations and warranties set forth in ARTICLE II shall be true and correct in all material respects (provided that any such representations or warranties that are qualified by materiality, material adverse effect or similar language shall be true and correct in all respects) as though such representations and warranties had been made on and as of the applicable Closing Date (except to the extent that such representation or warranty refers to an earlier date, then such representation or warranty shall be true and correct in all material respects as of such earlier date) and (y) the Issuer shall have performed and complied in all material respects with all agreements and obligations required by this Agreement to be performed or complied with by the Issuer on or prior to such applicable Closing Date.

 

(iii)            The Purchasers shall have received at the Initial Closing customary evidence of authority, good standing certificate (to the extent applicable) in the jurisdiction of organization of the Issuer and a solvency certificate, substantially in the form set forth in Exhibit C, from the chief financial officer, chief accounting officer or other officer of the Issuer (or, at the sole option and discretion of the Issuer, a third party opinion as to the solvency of the Issuer and its subsidiaries on a consolidated basis issued by a nationally recognized firm).

 

(iv)            The Purchasers shall have received at the Initial Closing an opinion addressed to the Purchasers from Latham & Watkins L LP, legal counsel to the Company, dated as of the Initial Closing.

 

(v)            On the date of this Agreement, the Purchasers (or their counsel) shall have received a counterpart of this Agreement (which may include a copy transmitted by facsimile or other electronic method).

 

(vi)            The Issuer shall have filed, prior to the Initial Closing, the Series A Certificate of Designation in the form of Exhibit A hereto with the Delaware Secretary.

 

(vii)            All fees and reasonable and documented out-of-pocket expenses of the Purchasers, to the extent invoiced at least three (3) Business Days prior to the date of the Initial Closing (except as otherwise reasonably agreed by the Issuer) and required to be paid in connection with the Initial Closing.

 

(viii)            The Issuer shall have paid the relevant Fees to the Purchasers of the Series A Preferred Shares in the respective percentages set forth in Schedule I hereto on the applicable Closing Date, which may, at the election of the Purchasers, be withheld from the applicable aggregate Purchase Price of the Series A Preferred Shares.

 

 

(ix)            Ben Kohn shall be the Chief Executive Officer of the Issuer as of the Initial Closing.

 

Section 4.2            Conditions to the Obligations of the Issuer.

 

(a)            The issue and sale on each Closing Date of the Series A Preferred Shares by the Issuer shall be subject to the receipt by the Issuer of a properly completed IRS Form W-9 (and any applicable successor form reasonably requested by the Issuer) from each Purchaser.

 

ARTICLE V
ADDITIONAL COVENANTS

 

Section 5.1            Further Assurances. The Parties will execute and deliver such customary documents and other customary papers and take such further actions as may be reasonably required to carry out the provisions hereof and the transactions contemplated hereby.

 

Section 5.2             Transfer Restrictions.

 

(a)            The shares of the Series A Preferred Shares may not be Transferred except pursuant to a Permitted Transfer. Any Holder wishing to complete a Permitted Transfer shall (i) notify the Issuer in writing reasonably in advance of such Transfer and (ii) provide, prior to and as a condition to such Transfer, such evidence to the Issuer as the Issuer may reasonably request to confirm that such transfer is a Permitted Transfer.

 

(b)            In the case of a Permitted Transfer, the Issuer will cooperate with such Holder (and any other applicable Holder) in connection with such Transfer and the Issuer will recognize and register on its books any such Transfer that is a Permitted Transfer. Any Transfer of Series A Preferred Shares other than in a Permitted Transfer made in compliance with the terms of this Agreement shall be null and void, ab initio, and of no effect.

 

(c)            At the request of a Holder in connection with a Permitted Transfer to “qualified institutional buyers” (within the meaning of Rule 144A of the Securities Act) or institutional accredited investor (as such term is defined in Rule 501(a)(1), (2), (3), (7) or (8) of Regulation D) without registration under the Securities Act, the Issuer will agree to, while the Series A Preferred Shares remain outstanding and constitute “restricted securities” (within the meaning of Rule 144(a)(3) under the Securities Act), during any period in which the Issuer is not subject to and in compliance with Section 13 or 15(d) of the Exchange Act and not exempt from reporting under Rule 12g3 2(b) under the Exchange Act, furnish to Holders and prospective purchasers of the Series A Preferred Shares designated by Holders (provided that they are not competitors (as determined in good faith by the Issuer) of the Issuer and its Subsidiaries), upon the request of such Holders or such prospective purchasers, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

 

(d)            Notwithstanding any other provisions of this Section 5.2, no Transfer of Series A Preferred Stock may be made unless: (i) in accordance with Rule 144 or Rule 144A; or (ii) in the opinion of counsel (who may be counsel for the Issuer ), reasonably satisfactory in form and substance to the Board of Directors and counsel for the Issuer (which opinion may be waived, in whole or in part, at the discretion of the Board of Directors), such Transfer would not require registration under applicable federal securities laws. Such opinion of counsel shall be delivered in writing to the Issuer prior to the date of the Transfer.

 

Section 5.3            Expenses. (a) The Issuer will reimburse the Holders on demand for all reasonable and documented out-of-pocket legal and tax advisory due diligence expenses, but limited in the case of legal fees and expenses, to the reasonable and documented out-of-pocket fees, charges and disbursements of one counsel for the Purchasers and if reasonably necessary, a single local counsel to the Purchasers in each relevant material jurisdiction (which may be a single local counsel acting in multiple jurisdictions), incurred in connection with the preparation, execution and delivery of this Agreement and the Series A Certificate of Designation and any related documentation and (b) all reasonable and documented out-of-pocket expenses incur red by the Holders (but limited, in the case of legal fees and expenses, to the actual reasonable and documented out-of-pocket fees, disbursements and other charges of one firm of outside counsel to all such Persons taken as a whole and, if necessary, of one local counsel in any relevant material jurisdiction to all such Persons, taken as a whole) in connection with the enforcement of their respective rights in connection with this Agreement and the Series A Certificate of Designation and any related documentation or in connection with the redemption or repayment of the Series A Preferred Stock. Except to the extent required to be paid on a Closing Date, all amounts due under this Section 5.3 shall be payable by the Company within 30 days of receipt by the Company of an invoice setting forth such expenses in reasonable detail, together with backup documentation supporting the relevant reimbursement request.

 

 

Section 5.4            Confidentiality.

 

(a)            No Holder shall use at any time any Confidential Information, except in connection with its investment in the Issuer and as set forth herein. Each Holder shall also keep the Confidential Information confidential and shall not disclose it or cause or permit its Representatives to disclose it, except (i) as required by applicable law, regulation or legal process or in response to any inquiry from, or upon the request or demand of, a Governmental Authority having jurisdiction over such Holder, and only after compliance with Section 5.4(b) and (ii) that it may disclose the Confidential Information or portions thereof to those of its Representatives who need to know such information in connection with the investment by such Holder in the Issuer; provided that such Representatives (x) are informed of the confidential and proprietary nature of the Confidential Information and (y) have agreed to maintain the confidentiality of the Confidential Information in a manner consistent with the provisions of this Section 5.4. Each Holder shall be responsible for any breach of this Section 5.4 by its Representatives. Notwithstanding anything herein to the contrary, (A) each Holder and each Representative thereof may disclose to any and all Persons, without limitation of any kind, the tax treatment, tax structure or tax strategies of, and the tax strategies relating to, the Issuer and the Transactions and all materials of any kind (including opinions and other tax analyses) that are provided to such Holder or Representative thereof relating to such tax treatment, tax structure, or tax strategies, (B) each Holder that is an investment fund may disclose Confidential Information (subject to confidentiality restrictions at least as restrictive as set forth herein) relating directly to its investment in the Issuer on a confidential basis to its and its Affiliates’ investors, limited partners so long as they are under similar confidential duties to such Holder, or prospective investors in connection with its ordinary course reporting and fundraising activities, (C) each Holder may disclose Confidential Information to other Holders or as required in any legal proceeding initiated by the Holder to enforce its rights under this Agreement, (D) each Holder may disclose Confidential Information (subject to confidentiality restrictions at least as restrictive as set forth herein)to any nationally recognized rating agency or investor of a Holder that requires access to information about a Holder’s investment portfolio in connection with ratings issued or investment decisions with respect to such Holder and (E) each Holder may disclose Confidential Information to prospective purchasers (subject to confidentiality restrictions at least as restrictive as set forth herein)in connection with a Permitted Transfer. The provisions of this Section 5.4 shall apply to all Holders for so long as such Person holds any Series A Preferred Shares.

 

(b)            If any Holder or Representative thereof becomes legally compelled (including by deposition, interrogatory, request for documents, subpoena, civil investigative demand or similar process) to disclose any of the Confidential Information, such Holder or Representative thereof shall provide the Issuer with prompt and, if possible, prior written notice of such requirement to disclose such Confidential Information, to the extent such notice is legally permissible. Upon receipt of such notice, the Issuer may seek a protective order or other appropriate remedy. If such protective order or other remedy is not obtained, such Holder and its Representatives shall disclose only that portion of the Confidential Information which is legally required to be disclosed (as determined in good faith by counsel to such Holder) and shall take all reasonable steps to preserve the confidentiality of the Confidential Information. In addition, neither such Holder or its Representatives shall oppose any action (and such Holder and its Representatives shall, if and to the extent requested by the Issuer and legally permissible to do so, cooperate with and assist the Issuer, at the Issuer’s expense and on a reasonable basis, in any reasonable action) by the Issuer to obtain an appropriate protective order or other reliable assurance that confidential treatment shall be accorded the Confidential Information.

 

 

Section 5.5            Indemnification by the Issuer. The Issuer agrees to indemnify each Purchaser and its Representatives (collectively, “Purchaser Related Parties” and with the Purchasers, each, an “Indemnitee”) from, and hold each of them harmless against, any and all actions, suits, proceedings (including any investigations, litigation or inquiries), demands, and causes of action, and, in connection therewith, and promptly upon demand, pay or reimburse each of them for all costs, losses, liabilities, damages, or expenses of any kind or nature whatsoever, including, the reasonable fees and disbursements of counsel and all other reasonable expenses incurred in connection with investigating, defending or preparing to defend any such matter that may be incurred by them or asserted against or involve any of them as a result of, arising out of, or in any way related to the breach of any of the representations, warranties or covenants of the Issuer contained herein (collectively, “Indemnified Liabilities”), provided, that the Issuer shall have no obligation to any Indemnitee hereunder with respect to (i) any Indemnified Liabilities to the extent such Indemnified Liabilities arise from the gross negligence or willful misconduct of such Indemnitee, in each case, as determined by a final, non-appealable judgment of a court of competent jurisdiction or (ii) claims brought by an Indemnitee solely against another Indemnitee and not arising out of any act or omission of the Issuer; provided also that such claim for indemnification relating to a breach of the representations or warranties is made prior to the expiration of such representations or warranties; and provided further, that no Purchaser Related Party shall be entitled to recover special, indirect, incidental, consequential (including lost profits or diminution in value) or punitive damages. Notwithstanding anything to the contrary, indirect, incidental and consequential damages shall not be deemed to include diminution in value of the Purchased Units to the extent resulting from, arising out of or in any way related to the breach of any of the representations, warranties or covenants of the Issuer contained herein, which is specifically included in damages covered by the Purchaser Related Parties’ indemnification.

 

Section 5.6            Ownership of Issuer Securities. Upon reasonable request from the Issuer, each Purchaser, together with any of its Subsidiaries or its Affiliates, shall promptly notify the Issuer in writing of its aggregate beneficial ownership of shares of Common Stock and any other securities convertible or exchangeable into shares of Common Stock (a “Beneficial Ownership Notice”), which the Issuer may rely upon for purposes of the payment of any amounts in shares of Common Stock pursuant to the terms of the Series A Certificate of Designation. To the extent any such Purchaser does not promptly (and in no event later than two Business Days after any such request) provide a Beneficial Ownership Notice, the Issuer may rely on the most recent Beneficial Ownership Notice received from such Purchaser for purposes of any such payment of shares of Common Stock (or, to the extent no prior Beneficial Ownership Notice has been provided, the information set forth in Exhibit B).

 

Section 5.7             Tax Matters.

 

(a)            The Parties shall cooperate in good faith to agree on the proper treatment of the Series A Preferred Shares and any payments (or deemed payments) with respect thereto for U.S. federal income Tax purposes and shall file all Tax returns consistent with such agreed treatment. Unless otherwise required by a final determination by the Internal Revenue Service or a change in applicable law after the date hereof, each of the Parties shall not take, and the Issuer shall cause any paying agent or other agent of the Issuer not to take, any position on any Tax return or other Tax filing or proceeding that is inconsistent with such agreed treatment.

 

 

ARTICLE VI
MISCELLANEOUS

 

Section 6.1            Survival; Damages.

 

(a)            All representations and warranties made by the Issuer and the Purchasers contained in this Agreement, or made by or on behalf of them, respectively, pursuant to this Agreement, and all covenants of the Issuer and the Purchasers in this Agreement, shall survive the execution and delivery of this Agreement and shall continue in full force and effect until such time when either (i) the Series A Preferred Shares are no longer outstanding or (ii) the Purchasers no longer hold any Series A Preferred Shares. Notwithstanding the foregoing, any claims asserted in good faith with reasonable specificity (to the extent known at such time) and in writing by notice from the non-breaching party to the breaching party prior to the expiration date of the applicable survival period shall not thereafter be barred by the expiration of such survival period and such claims shall survive until finally resolved. All covenants made herein to be performed at or prior to any Closing shall terminate upon such Closing and all other covenants shall survive such Closing according to their respective terms. The aggregate amount of all damages for which the Issuer shall be liable for any breach of this Agreement shall not exceed the aggregate price paid for the Preferred Shares.

 

(b)            To the fullest extent permitted by applicable Law, no Party shall assert, and each hereby waive, any claim against any other Party, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of this Agreement, any other Preferred Agreement or any agreement or instrument contemplated hereby or thereby or the transactions contemplated hereby or thereby.

 

Section 6.2            Entire Agreement; Parties in Interest. The Preferred Agreements constitute the entire agreement, and supersede all other prior agreements and understandings, both written and oral, between the Parties with respect to the subject matter hereof. This Agreement will be binding upon and inure solely to the benefit of each Party and their respective successors, legal representatives and permitted assigns, and nothing in this Agreement, express or implied, is intended to or will confer upon any other Person any rights, benefits or remedies of any nature whatsoever under or by reason of this Agreement except for the provisions of Section 6.3, which will be enforceable by the beneficiaries contemplated thereby.

 

Section 6.3            No Recourse. Notwithstanding anything to the contrary in this Agreement, this Agreement may only be enforced by a Party against, and any proceedings that may be based upon, arise out of or relate to this Agreement, or the negotiation, execution or performance of this Agreement, may only be made by such Party against, another Party or, if applicable, such other Party’s Affiliated Transferees that become party to this Agreement, and no current, former or future Affiliates of a Party or any Affiliated Transferee (except for any Affiliated Transferees in their capacity as such), or any of the foregoing Persons’ respective Representatives (collectively, the “Related Parties”) will have any liability for any liabilities of such Party for any claim (whether in tort, contract or otherwise) based on, in respect of, or by reason of, the purchase of the Series A Preferred Shares hereunder or in respect of any oral representations made or alleged to be made in connection herewith or therewith. In no event will a Party or any of its Affiliates or Representatives, and each Party agrees not to and to cause its Affiliates and Representatives not to, seek to enforce this Agreement against, make any claims for breach of this Agreement against, or seek to recover losses or other damages in connection therewith from, any Related Party.

 

 

Section 6.4            Governing Law. This Agreement and all questions relating to the interpretation or enforcement of this Agreement will be governed by and construed in accordance with the Laws of the State of Delaware.

 

Section 6.5            Jurisdiction. EACH PARTY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION OF THE DELAWARE COURT OF CHANCERY IN NEW CASTLE COUNTY, OR IN THE EVENT (BUT ONLY IN THE EVENT) THAT SUCH COURT DOES NOT HAVE SUBJECT MATTER JURISDICTION OVER SUCH ACTION, THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER PREFERRED AGREEMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH DELAWARE STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN THIS Section 6.5. EACH PARTY HERETO AGREES THAT THE HOLDERS OF THE SERIES A PREFERRED SHARES RETAIN THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

 

Section 6.6            Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER PREFERRED AGREEMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER PREFERRED AGREEMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS Section 6.6.

 

Section 6.7            Remedies.

 

(a)            Each Party hereby acknowledges and agrees that the subject matter of this Agreement and the Series A Certificate of Designation is unique, that the other Parties would be damaged irreparably in the event any of the provisions of this Agreement and/or the Series A Certificate of Designation are not performed in accordance with their specific terms or otherwise are breached, and that remedies at law would not be adequate to compensate such other Parties not in default or in breach. Accordingly, each Party agrees that the other Parties will be entitled to an injunction or injunctions to prevent breaches of the provisions of this Agreement and/or the Series A Certificate of Designation and to enforce specifically the terms and provisions of hereof and thereof in addition to any other remedy to which they may be entitled, at law or in equity. The Parties waive any defense that a remedy at law is adequate and waive any requirement to prove special damages, post bond or provide similar security in connection with actions instituted for injunctive relief or specific performance of this Agreement.

 

 

(b)            All remedies available under this Agreement, at law or otherwise, will be deemed cumulative and not alternative or exclusive of other remedies. The exercise by any Party of a particular remedy will not preclude the exercise of any other remedy.

 

Section 6.8            Notice.

 

(a)            Except as otherwise provided in this Agreement, any notice or other communication required or permitted to be delivered to any Party under this Agreement will be in writing and delivered by (i) email or (ii) registered mail via a national courier service to the following email address or physical address, as applicable:

 

If to the Issuer:

 

PLBY Group, Inc.

10960 Wilshire Boulevard, Suite 2200

Los Angeles, California 90024

Attn: Chris Riley

Email: criley@plbygroup.com

 

With a copy to:

 

Latham & Watkins, LLP

1271 Avenue of Americas

New York, NY 10020

Attention: Jason Silvera and Peter Sluka

E-mail:    jason.silvera@lw.com; and 
peter.sluka@lw.com

 

If to the Purchasers:

 

Drawbridge DSO Securities LLC

c/o Fortress Investment Group LLC

1345 Avenue of the Americas, 46th Floor

New York, NY, 10105

 

with a copy (which will not constitute notice) to:

 

Kirkland & Ellis LLP

2049 Century Park East, Suite 3700

Los Angeles, CA 90067

Facsimile:		(310) 552-5900
Attention:		Tim Cruickshank Thomas Dobleman H. Thomas Felix

 

 

(b)            Notice or other communication pursuant to Section 6.8(a) will be deemed given or received when delivered, except that any notice or communication received by email transmission on a non-Business Day or on any Business Day after 5:00 p.m., New York City time, or overnight delivery on a non-Business Day will be deemed to have been given and received at 9:00 a.m., New York City time, on the next Business Day. Any Party may specify a different address, by written notice to the other Parties. The change of address will be effective upon the other Parties’ receipt of the notice of the change of address.

 

Section 6.9            Amendments; Waivers. Any provision of this Agreement may be amended or waived if, and only if, such amendment or waiver is in writing and signed, in the case of an amendment, a Holder Majority and the Issuer, or in the case of a waiver, by the Party against whom the waiver is to be effective. No knowledge, investigation or inquiry, or failure or delay by the Issuer or any Purchaser in exercising any right hereunder will operate as a waiver thereof nor will any single or partial exercise thereof preclude any other or further exercise of any other right hereunder. No waiver of any right or remedy hereunder will be deemed to be a continuing waiver in the future or a waiver of any rights or remedies arising thereafter.

 

Section 6.10          Counterparts. This Agreement may be executed in two or more counterparts, each of which constitutes an original, and all of which taken together constitute one instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes. For the avoidance of doubt, the foregoing also applies to any amendment, extension or renewal of this Agreement.

 

Section 6.11          Assignment. This Agreement will be binding upon and will inure to the benefit of the Parties and their respective permitted assigns and successors. Neither this Agreement nor any of the rights, interests or obligations hereunder may be assigned by any of the Parties without the prior written consent of the other Parties, except that each Purchaser may, without the consent of the Issuer, assign all or a portion of their rights, interests and obligations hereunder to one or more Persons who are an Affiliated Transferee; provided, that such Affiliated Transferee enters into a joinder to this Agreement and that any such assignment to an Affiliated Transferee will not relieve any Purchaser of any of its funding obligations hereunder on any applicable Closing Date. In the event of an assignment to an Affiliated Transferee, such Affiliated Transferee shall become a party to this Agreement by execution of a joinder hereto in form and substance reasonably acceptable to the Issuer. Any assignment or transfer in violation of this Section 6.11 shall be null and void.

 

Section 6.12          Severability. In the event that any provision of this Agreement, or the application thereof becomes or is declared by a court of competent jurisdiction to be illegal, void, invalid or unenforceable, the remainder of this Agreement will continue in full force and effect and the application of such provision to other Persons or circumstances will be interpreted so as reasonably to effect the intent of the Parties; provided, however, that in no event shall this Agreement be enforced without giving effect to Section 6.3. The Parties further agree to replace such illegal, void, invalid or unenforceable provision of this Agreement with a legal, valid and enforceable provision that achieves, to the extent possible, the economic, business and other purposes of such illegal, void, invalid or unenforceable provision.

 

Section 6.13          Certain Issuer Acknowledgements. The Issuer acknowledges on its behalf and on behalf of its Subsidiaries that:

 

(a)            Certain of the Purchasers and their respective Affiliates may be full service securities or investment firms engaged, either directly or through their respective Affiliates, in various activities, including securities trading, commodities trading, investment management, investment banking, financial advisory, financing and brokerage activities and financial planning and benefits counseling for both companies and individuals. In the ordinary course of such activities, such Purchaser and its Affiliates may actively engage in commodities trading or trade the debt and equity securities (or related derivative securities) and financial instruments (including bank loans and other obligations) of the Issuer and other Subsidiaries of the Issuer for their own account and for the accounts of their customers and may at any time hold long and short positions in such securities and financial instruments. Each Purchaser or its Affiliates may also co-invest with, make direct investments in, and invest or co-invest client monies in or with funds or other investment vehicles managed by other parties, and such funds or other investment vehicles may trade or make investments in securities of the Issuer or other Subsidiaries of the Issuer or engage in commodities trading with any thereof.

 

 

(b)            The Purchasers and their respective Affiliates are involved in a broad range of transactions and may have economic interests that conflict with those of the Issuer and its Subsidiaries. Each Purchaser is and will act under this Agreement as an independent contractor. Nothing in this Agreement or otherwise will be deemed to create an advisory, fiduciary or agency relationship or fiduciary or other implied duty of the Purchasers to the Issuer, any of its Subsidiaries or any Affiliate or equity holder thereof. The transactions contemplated by this Agreement are arm’s-length commercial transactions between the Purchasers, on the one hand, and the Issuer on the other hand. In connection with the Transactions and with the process leading to the Transactions each Purchaser is acting solely as a principal and not as agent or fiduciary of the Issuer or any of its Subsidiaries or member of management, equity holders or creditors thereof or any other Person. The Purchasers have not assumed an advisory or fiduciary responsibility or any other obligation in favor of the Issuer or any of its Subsidiaries with respect to the Transactions or the process leading thereto (irrespective of whether any of the Purchasers or any of their respective Affiliates has advised or is currently advising the Issuer or any of its Affiliates or equity holders on other matters), except for the obligations expressly set forth in this Agreement or other applicable Preferred Agreement. Each of the Purchasers and the Issuer has consulted its own legal, tax, accounting, regulatory and financial advisors to the extent it has deemed appropriate. The Issuer is responsible for making its own independent judgment with respect to the Transactions and the process leading thereto.

 

Section 6.14          USA PATRIOT Act. The Purchasers hereby notify the Issuer that, pursuant to the requirements of the USA PATRIOT Act, the Purchasers may be required to obtain, verify and record information that identifies the Issuer, including its name, address and other information that will allow the Purchasers to identify, the Issuer in accordance with the USA PATRIOT Act.

 

Section 6.15         Rights of Third Parties. Except as expressly stated in this Agreement, including Related Parties, who are express third party beneficiaries of the provisions of Section 6.3, this Agreement does not confer any rights on any person other than the Parties.

 

ARTICLE VII
DEFINITIONS

 

Section 7.1            Certain Definitions. The following words and phrases have the meanings specified in this Section 7.1:

 

“Adverse Proceeding” means any action, suit, proceeding, hearing (in each case, whether administrative, judicial or otherwise), governmental investigation or arbitration (whether or not purportedly on behalf of the Issuer or any of its Subsidiaries) at law or in equity, or before or by any Governmental Authority, domestic or foreign (including any Environmental Claims), whether pending or, to the knowledge of the Issuer or any of its Subsidiaries, threatened against or affecting the Issuer or any of its Subsidiaries or any property of the Issuer or any of its Subsidiaries.

 

 

“Affiliate” means, with respect to respect to a specified person, another person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the person specified. “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlled” has the meaning correlative thereto. For the avoidance of doubt, none of the Holders shall be deemed to be an Affiliate of the Issuer or any of its Subsidiaries.

 

“Affiliated Transferee” means, as to a Purchaser, a Person that is (a) a wholly-owned Affiliate of such Purchaser, including another Purchaser, or (b) any investment funds, entities or accounts managed or controlled by such Purchaser or a wholly-owned Affiliate of such Purchaser.

 

“Anti-Corruption Laws” means Laws relating to anti-bribery or anti-corruption (governmental or commercial) which apply to the Issuer and its Subsidiaries, including Laws that prohibit the corrupt payment, offer, promise, or authorization of the payment or transfer of anything of value (including gifts or entertainment), directly or indirectly, to any foreign government official, foreign government employee or commercial entity to obtain a business advantage, including the FCPA, the U.K. Bribery Act of 2010, and all national and international Laws enacted to implement the OECD Convention on Combating Bribery of Foreign Officials in International Business Transactions.

 

“Anti-Terrorism Laws” means Laws applicable to the Issuer and its Subsidiaries relating to terrorism or money laundering, including Executive Order No. 13224, the PATRIOT Act, the Laws comprising or implementing the Bank Secrecy Act, and the Laws administered by OFAC.

 

“Benefit Plan” means any Plan (other than a Multiemployer Plan) subject to the provisions of Section 412 of the IRC or Section 302 of ERISA and in respect of which a the Issuer or any ERISA Affiliate is, or within the immediately preceding five(5) years was an “employer” as defined in Section 3(5) of ERISA.

 

“Blocked Person” means a Person designated by the U.S. government on the OFAC Lists.

 

“Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the Laws of, or are in fact closed in, New York, New York.

 

“Closing Date” means the date of any Closing.

 

“Commitment Fee” means a cash fee equal to 1.00% of $50,000,000.00, due and payable at the Initial Closing.

 

“Confidential Information” means oral and written information concerning the Issuer or any of its Subsidiaries or Affiliates or their respective businesses or operations furnished to any Holder or its Representatives by or on behalf of the Issuer or any of its Subsidiaries, Affiliates or Representatives (irrespective of the form of communication and whether such information is so furnished before, on or after the date hereof) or any other Person known, after reasonable investigation, to be prohibited from disclosing such information by a legal, contractual or fiduciary obligation; provided, that the term “Confidential Information” does not include any information which (i) at the time of disclosure is or thereafter becomes generally available to the public (other than as a result of a disclosure directly or indirectly by such Holder or its Representatives in violation of Section 5.4); (ii) is or becomes available to such Holder on a non-confidential basis from a source other than the Issuer or any of its respective Subsidiaries, Affiliates or Representatives, provided that such source was not known by such Holder, after reasonable investigation, to be prohibited from disclosing such information to such Holder by a legal, contractual or fiduciary obligation; or (iii) with respect to any Holder that is not an individual, the identity of the Issuer or any of its Subsidiaries or Affiliates or the amount invested by such Person the Issuer or any of its Subsidiaries or Affiliates.

 

 

“Contractual Obligation” means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.

 

“Debtor Relief Laws” means the Bankruptcy Code, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the United States, Australia, England and Wales or any other applicable jurisdictions from time to time in effect.

 

“Delayed Draw Period” means the date that is six months after the date of the Initial Closing.

 

“Draw Fee” means a cash fee equal to 2.00% of the aggregate Purchase Price of the number of Series A Preferred Shares to be purchased at any Closing, due and payable at such Closing.

 

“Employee Benefit Plan” means any “employee benefit plan” as defined in Section 3(3) of ERISA which is or was, within the preceding six years, sponsored, maintained or contributed to by, or required to be contributed by, the Issuer or any of its Subsidiaries or, solely with respect to any such plan that is subject to Title IV of ERISA, Section 302 of ERISA or Section 412 of the Internal Revenue Code, any of their respective ERISA Affiliates.

 

“Environmental Claim” means any investigation, notice, notice of violation, claim, action, suit, proceeding, demand, abatement order or other order or directive (conditional or otherwise), by any Governmental Authority or any other Person, arising (i) pursuant to or in connection with any actual or alleged violation of any Environmental Law; (ii) in connection with any Hazardous Material or any actual or alleged Hazardous Materials Activity; or (iii) in connection with any actual or alleged damage, injury, threat or harm to health, safety, natural resources or the environment.

 

“Environmental Laws” means any and all current or future foreign or domestic, federal or state (or any subdivision of either of them), statutes, ordinances, orders, rules, regulations, judgments, Governmental Authorizations, or any other requirements of Governmental Authorities relating to (i) environmental matters, including those relating to any Hazardous Materials Activity; (ii) the generation, use, storage, transportation or disposal of Hazardous Materials; or (iii) occupational safety and health, industrial hygiene, land use or the protection of human, plant or animal health or welfare, in any manner applicable to the Issuer or any of its Subsidiaries.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and any successor thereto.

 

“ERISA Affiliate” means, as applied to any Person, (i) any corporation which is a member of a controlled group of corporations within the meaning of Section 414(b) of the Internal Revenue Code of which that Person is a member; (ii) any trade or business (whether or not incorporated) which is a member of a group of trades or businesses under common control within the meaning of Section 414(c) of the Internal Revenue Code of which that Person is a member; and (iii) for purposes relating to Section 412 of the Internal Revenue Code only, any member of an affiliated service group within the meaning of Section 414(m) or (o) of the Internal Revenue Code of which that Person, any corporation described in clause (i) above or any trade or business described in clause (ii) above is a member. Any former ERISA Affiliate of the Issuer or any of its Subsidiaries shall continue to be considered an ERISA Affiliate of the Issuer or any such Subsidiary within the meaning of this definition with respect to the period such entity was an ERISA Affiliate of the Issuer or such Subsidiary and with respect to liabilities arising after such period for which the Issuer or such Subsidiary could be liable under the Internal Revenue Code or ERISA.

 

 

“ERISA Event” means (i) a “reportable event” within the meaning of Section 4043(c) of ERISA and the regulations issued thereunder with respect to any Pension Plan (excluding those for which the provision for thirty (30) day notice to the PBGC has been waived by regulation); (ii) the failure by the Issuer, any of its Subsidiaries or any of their respective ERISA Affiliates to meet the minimum funding standard of Section 412 of the Internal Revenue Code with respect to any Pension Plan (whether or not waived in accordance with Section 412(c) of the Internal Revenue Code), to make by its due date a required installment under Section 430(j) of the Internal Revenue Code with respect to any Pension Plan or to make any required contribution to a Multiemployer Plan; (iii) the filing by the administrator of any Pension Plan pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate such plan in a distress termination described in Section 4041(c) of ERISA; (iv) the withdrawal by the Issuer, any of its Subsidiaries or any of their respective ERISA Affiliates from any Pension Plan with two or more contributing sponsors or the termination of any such Pension Plan resulting in liability to the Issuer, any of its Subsidiaries or any of their respective ERISA Affiliates pursuant to Section 4063 or Section 4064 of ERISA; (v) the institution by the PBGC of proceedings to terminate any Pension Plan, or the occurrence of any event or condition which constitutes grounds under ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan; (vi) the imposition of liability on the Issuer, any of its Subsidiaries or any of their respective ERISA Affiliates pursuant to Section 4062(e) or Section 4069 of ERISA or by reason of the application of Section 4212(c) of ERISA; (vii) the withdrawal of the Issuer, any of its Subsidiaries or any of their respective ERISA Affiliates in a complete or partial withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from any Multiemployer Plan if there is any potential withdrawal liability therefor, a determination that a Multiemployer Plan is in “endangered status” or “critical status” (as defined in Section 305(b) of ERISA), or the receipt by the Issuer, any of its Subsidiaries or any of their respective ERISA Affiliates of notice from any Multiemployer Plan that it is in insolvency pursuant to Section 4245 of ERISA, or that it intends to terminate or has terminated under Section 4041A or Section 4042 of ERISA; (viii) the occurrence of an act or omission which could reasonably be expected to give rise to the imposition on the Issuer, any of its Subsidiaries or any of their respective ERISA Affiliates of fines, penalties, taxes or related charges under Chapter 43 of the Internal Revenue Code or under Section 409, Section 502(c), (i) or (l), or Section 4071 of ERISA in respect of any Employee Benefit Plan; (ix) receipt from the Internal Revenue Service of notice of the failure of any Pension Plan (or any other Employee Benefit Plan intended to be qualified under Section 401(a) of the Internal Revenue Code) to qualify under Section 401(a) of the Internal Revenue Code, or the failure of any trust forming part of any Pension Plan to qualify for exemption from taxation under Section 501(a) of the Internal Revenue Code; (x) the imposition of a Lien upon the assets of the Issuer, any of its Subsidiaries or any of their respective ERISA Affiliates pursuant to Section 430(k) of the Internal Revenue Code or Section 303(k) of ERISA with respect to any Pension Plan or a violation of Section 436 of the Internal Revenue Code; or (xi) the occurrence of any Foreign Plan Event.

 

“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.

 

“Executive Officer” means, as to any Person, any individual holding the position of chief executive officer, chief financial officer, chief operating officer, chief compliance officer, chief legal officer of such Person or any other executive officer of such Person having substantially the same authority and responsibility as any of the foregoing.

 

“Facility” means any real property (including all buildings, fixtures or other improvements located thereon) now, hereafter or heretofore owned, leased, operated or used by any Group Party.

 

“FCPA” means the U.S. Foreign Corrupt Practices Act (15 U.S.C. §§78dd-1 et seq.).

 

 

“Fees” means, as applicable, each Draw Fee and the Commitment Fee.

 

“Foreign Plan” means any employee benefit plan, program, policy, arrangement or agreement maintained or contributed to by, or required to be maintained or contributed to by, the Issuer or any of its Subsidiaries primarily for the benefit of their respective employees residing outside the United States.

 

“Foreign Plan Event” means, with respect to any Foreign Plan, (a) the existence of unfunded liabilities in excess of the amount permitted under any applicable law, (b) the failure by the Issuer or its Subsidiaries to make the required contributions or payments, under any applicable law, on or before the due date for such contributions or payments, (c) the receipt by the Issuer or its Subsidiaries of a notice from a Governmental Authority relating to the intention to terminate any such Foreign Plan or to appoint a trustee or similar official to administer any such Foreign Plan, or alleging the insolvency of any such Foreign Plan, (d) the incurrence of any liability by the Issuer or any of its Subsidiaries under applicable law due to the complete or partial termination of such Foreign Plan or the complete or partial withdrawal of any participating employer therein, or (e) the occurrence of any transaction that is prohibited under any applicable law and that could reasonably be expected to result in the incurrence of any liability by the Issuer or any of its Subsidiaries, or the imposition on the Issuer or any of its Subsidiaries of any fine, excise tax or penalty resulting from any noncompliance with any applicable law.

 

“GAAP” has the meaning set forth in the Series A Certificate of Designation.

 

“Governmental Authority” means any federal, state, municipal, national or other government, governmental department, commission, board, bureau, court, agency or instrumentality or political subdivision thereof or any entity, officer or examiner exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to any government, any court, any securities exchange or any self-regulatory organization (including the National Association of Insurance Commissioners), in each case whether associated with a state of the United States, the United States, or a foreign entity or government (including any supra-national body exercising such powers or functions, such as the European Union or the European Central Bank).

 

“Governmental Authorization” means any permit, license, authorization, plan, directive, consent order or consent decree of or from any Governmental Authority.

 

“Governmental Official” includes, but is not limited to, any employee, agent, or instrumentality of any government, including departments or agencies of a government and businesses that are wholly or partially government-owned, and any employees of such businesses, as well as departments or agencies of public international organizations. This term includes, but is not limited to, all employees, agents, and instrumentalities of state-owned or state-controlled entities or businesses, including hospitals, laboratories, universities, and other research institutions. The term Governmental Official also applies to individuals who are members of political parties or hold positions in political parties.

 

“Group Parties” means the Issuer and each of its Subsidiaries, each being a “Group Party.”

 

“Hazardous Materials” means any chemical, material or substance, exposure to which is prohibited, limited or regulated by any Governmental Authority or which may or could pose a hazard to the health and safety of the owners, occupants or any Persons in the vicinity of any Facility or to the indoor or outdoor environment.

 

“Hazardous Materials Activity” means any past, current, proposed or threatened activity, event or occurrence involving any Hazardous Materials, including the use, manufacture, possession, storage, holding, presence, existence, location, Release, threatened Release, discharge, placement, generation, transportation, processing, construction, treatment, abatement, removal, remediation, disposal, disposition or handling of any Hazardous Materials, and any corrective action or response action with respect to any of the foregoing.

 

 

“Holder” has the meaning given in the Series A Certificate of Designation.

 

“Holder Majority” has the meaning given in the Series A Certificate of Designation.

 

“Internal Revenue Code” means the Internal Revenue Code of 1986, as amended to the date hereof and from time to time hereafter, and any successor statute.

 

“Law” means collectively, all international, supranational, foreign, federal, state and local laws (including common law), statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities and executive orders, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority.

 

“Legal Requirements” means, as to any Person, the Organizational Documents of such Person, and any treaty, law (including the common law), statute, ordinance, code, rule, regulation, guidelines, license, permit requirement, order or determination of an arbitrator or a court or other Governmental Authority, and the interpretation or administration thereof, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject, in each case whether or not having the force of law.

 

“Lien” means any mortgage, pledge, hypothecation, assignment, encumbrance, lien (statutory or other), security interest, or other security device or security arrangement of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement, any financing or similar statement or notice filed under the UCC (as in effect from time to time in the relevant jurisdiction) or any other similar recording or notice statute, and any lease having substantially the same effect as any of the foregoing).

 

“Margin Stock” shall have the meaning assigned to such term in Regulation U of the Board.

 

“Material Adverse Effect” means a material adverse effect on and/or material adverse developments with respect to (i) the business, operations, properties, assets or condition (financial or otherwise) of the Issuer and its Subsidiaries taken as a whole; or (ii) the ability of the Issuer to fully and timely perform its obligations under the Preferred Documents.

 

“Multiemployer Plan” means any Employee Benefit Plan which is a “multiemployer plan” as defined in Section 3(37) of ERISA.

 

“OFAC Lists” means, collectively, the SDN List and/or any other list of terrorists or other restricted Persons maintained pursuant to any of the rules and regulations of OFAC or pursuant to any other applicable executive orders of the United States.

 

“Organizational Documents” means (i) with respect to any corporation or company, its certificate, certificate of registration, constitution, memorandum or articles of incorporation, organization or association, as amended, and its by-laws, as amended, or equivalent document, (ii) with respect to any limited partnership, its certificate or declaration of limited partnership, as amended, and its partnership agreement, as amended, (iii) with respect to any general partnership, its partnership agreement, as amended, and (iv) with respect to any limited liability company, its articles of organization, as amended, and its operating agreement, as amended.

 

 

“PBGC” means the Pension Benefit Guaranty Corporation or any successor thereto.

 

“Pension Plan” means any Employee Benefit Plan, other than a Multiemployer Plan, which is subject to Section 412 of the Internal Revenue Code or Section 302 of ERISA.

 

“Permitted Liens” has the meaning set forth under the Senior Credit Agreement.

 

“Permitted Transfer” of Series A Preferred Shares means:

 

(i)             a Transfer of Series A Preferred Shares by a Holder to the Issuer or any of its Subsidiaries; or

 

(ii)            a Transfer of Series A Preferred Shares by a Holder to (a) its Affiliates (including accounts or funds managed or advised by such Holder or its Affiliates), (b) other persons with the consent of the Issuer (such consent not to be unreasonably withheld) or (c) for so long as a Default pursuant to the Series A Certificate of Designation or Credit Agreement has occurred and is continuing, to other persons without the consent of the Issuer, provided that, in each case, such transfer is made in compliance with all applicable securities laws.

 

Notwithstanding the foregoing, a transfer shall not be treated as a Permitted Transfer unless the applicable transferee satisfies its obligation to deliver a Form W-9 to the Issuer.

 

“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

 

“Preferred Agreements” means this Agreement and the Series A Certificate of Designation.

 

“Real Estate Asset” means, at any time of determination, any interest (fee, leasehold or otherwise) then owned by any Group Party in any real property.

 

“Release” means any release, spill, emission, leaking, pumping, pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping, leaching or migration of any Hazardous Material into the indoor or outdoor environment (including the abandonment or disposal of any barrels, containers or other closed receptacles containing any Hazardous Material), including the movement of any Hazardous Material through the air, soil, surface water or groundwater.

 

“Representatives” means, with respect to any Person, such Person’s officers, directors, partners, limited partners, investors, lenders, rating agencies, managed accounts, employees, investment bankers, attorneys, accountants and other advisors, agents and representatives.

 

“Responsible Officer” of any Person means any executive officer, president, Financial Officer of such Person and any other officer or similar official thereof with significant responsibility for the administration of the obligations of such Person in respect of this Agreement.

 

“SEC” means the U.S. Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.

 

“Senior Credit Agreement” shall have the meaning given in the Series A Certificate of Designation.

 

 

“Series A Certificate of Designation” means that certain Certificate of Designation of Series A Preferred Shares of the Issuer.

 

“Solvent” means that as of the date of determination, (i) the sum of the debt (including contingent liabilities) of the Issuer and its Subsidiaries, taken as a whole, does not exceed the present fair saleable value (on a going concern basis) of the assets of the Issuer and its Subsidiaries, taken as a whole; (ii) the capital of the Issuer and its Subsidiaries, taken as a whole, is not unreasonably small in relation to the business of the Issuer and its Subsidiaries, taken as a whole, contemplated as of the date of this Agreement; and (iii) the Issuer and its Subsidiaries, taken as a whole, do not intend to incur, or believe that they will incur, debts including current obligations beyond their ability to pay such debt as they mature in the ordinary course of business. For the purposes hereof, the amount of any contingent liability at any time shall be computed as the amount that, in light of all of the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability (irrespective of whether such contingent liabilities meet the criteria for accrual under Statement of Financial Accounting Standard No. 5).

 

“Stated Value” shall have the meaning given in the Series A Certificate of Designation.

 

“Subsidiary” means, with respect to any Person, any corporation, partnership, joint venture, limited liability company, association or other entity, the management of which is, directly or indirectly, controlled by, or of which an aggregate of more than 50% of the outstanding Voting Stock is, at the time, owned or controlled directly or indirectly by, such Person or one or more subsidiaries of such Person. Unless the context otherwise requires, each reference to Subsidiaries herein shall be a reference to Subsidiaries of the Issuer.

 

“Tax” means any present or future tax, goods and services tax, levy, impost, duty, assessment, charge, fee, deduction or withholding (including backup withholding) (together with interest, penalties and other additions thereto) imposed by any Governmental Authority having the power to tax.

 

“Transaction” means the issuance of the Series A Preferred Shares, the consummation of the other transactions contemplated by the Preferred Agreements and payment of fees and expenses in connection therewith.

 

“Transfer” means any sale, pledge, assignment, encumbrance or other transfer or disposition of any Series A Preferred Shares to any Person, whether directly, indirectly, voluntarily, involuntarily, by operation of law, pursuant to judicial process or otherwise. Notwithstanding the foregoing, a bona fide direct or indirect transfer of an interest in an investment partnership or other investment fund that was not established just to hold Series A Preferred Shares shall not be deemed a Transfer hereunder. The words “Transferred”, “Transferor” and “Transferee” shall have correlative meanings.

 

“U.S.” means the United States of America.

 

“USA PATRIOT Act” means The Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Title III of Public Law No. 107-56 (signed into law October 26, 2001)), as amended or modified from time to time.

 

“Voting Stock” means, with respect to any person, any class or classes of Equity Interests pursuant to which the holders thereof have the general voting power under ordinary circumstances to elect at least a majority of the Board of Directors of such person.

 

 

Section 7.2            Other Terms. The following term shall have the meanings specified in the indicated Section of this Agreement.

 

“Agreement”	Preamble
“Closing”	Section 1.2
“Common Stock”	Section 2.1
“Delaware Secretary”	Section 2.1
“Delayed Draw Notice”	Preliminary Statements
“ERISA Plan”	Section 3.5(f)
“Initial Closing”	Preliminary Statements
“Initial Draw Notice”	Preliminary Statements
“Initial Purchase”	Preliminary Statements
“Issuer”	Preamble
“Issuer Parties”	Section 3.8
“Parties”	Preamble
“Purchase Price”	Section 1.1(a)
“Purchasers”	Preamble
“Related Parties”	Section 6.3
“Rule 144”	Section 3.5(d)
“Series A Preferred Shares”	Preliminary Statements
“Similar Law Plan”	Section 3.5(f)
“Subsequent Closing”	Preliminary Statements
“Subsequent Commitment”	Preliminary Statements
“Subsequent Purchase”	Preliminary Statements

 

Section 7.3            Construction. Unless the context otherwise requires or otherwise specified herein:

 

(a)            the meanings of defined terms are equally applicable to the singular and plural forms of the defined terms;

 

(b)            the term “including” is by way of example and not limitation;

 

(c)            in the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including;” the words “to” and “until” each mean “to but excluding;” and the word “through” means “to and including”;

 

(d)            the word “incur” shall be construed to mean incur, create, issue, assume, become liable in respect of or suffer to exist (and the words “incurred” and “incurrence” shall have correlative meanings);

 

(e)            section headings herein are included for convenience of reference only.

 

(f)            the word “or” is not exclusive;

 

(g)            the word “will” shall be interpreted to express a command;

 

(h)            provisions apply to successive events and transactions;

 

 

(i)             unless the context otherwise requires, references to sections of, or rules under, the Securities Act or the Exchange Act shall be deemed to include substitute, replacement or successor sections or rules adopted by the SEC from time to time;

 

(j)            any reference to a statute refers to the statute, any amendments or successor legislation and all rules and regulations promulgated under or implementing the statute, as in effect at the relevant time;

 

(k)            references to a Person also include its permitted assigns and successors;

 

(l)            unless the context otherwise requires, any reference to an “Article,” “Section”, “clause”, “Exhibit” or “Schedule” in this Agreement refers to an Article, Section, clause, Exhibit or Schedule, as the case may be, of this Agreement;

 

(m)            the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not any particular Article, Section, clause or other subdivision;

 

(n)            all references to $, currency, monetary values and dollars set forth herein mean U.S. dollars;

 

(o)            words used herein implying any gender shall apply to both genders;

 

(p)            a statement that a copy of an item has been delivered means a correct and accurate copy of such item has been delivered;

 

(q)            when the payment of any obligation or the performance of any covenant, duty or obligation is stated to be due or performance required on a day which is not a Business Day, the date of such payment or performance shall extend to the immediately succeeding Business Day and such extension of time shall be reflected in computing interest, dividends, premium or fees, as the case may be; and

 

(r)            the Parties acknowledge and agree that (a) each Party and its counsel has reviewed, or has had the opportunity to review, the terms and provisions of this Agreement, (b) any rule of construction to the effect that any ambiguities are resolved against the drafting Party will not be used to interpret this Agreement and (c) the provisions of this Agreement will be construed without regard to which Party was generally responsible for the preparation of this Agreement.

 

[Remainder of page intentionally left blank]

 

 

IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby, has duly executed this Series A Securities Purchase Agreement as of the date and year first written above.

 

IssueR:	PLBY GROUP, INC.
	By:	/s/ Bernhard L. Kohn III
	Name: Bernhard L. Kohn III
	Title: Chief Executive Officer

 

 

Signature Page to Series A Securities Purchase Agreement

 

 

PURCHASERS:	For and on behalf of:
	DRAWBRIDGE DSO SECURITIES LLC
	By:	/s/ Radhika Hulyalkar
	Name: Radhika Hulyalkar
	Title: Deputy Chief Financial Officer

 

 

Signature Page to Series A Securities Purchase Agreement

 

 

Schedule I

 

LIST OF PURCHASERS

 

Name	Purchase Percentage
Drawbridge DSO Securities LLC	100%

 

 

Exhibit A

 

SERIES A CERTIFICATE OF DESIGNATION

 

[See Attached.]

 

 

Exhibit B

 

OWNERSHIP OF ISSUER SECURITIES

 

Name	Shares of Common Stock beneficially owned
Drawbridge DSO Securities LLC	1,817,620

 

 

Exhibit C

 

SOLVENCY CERTIFICATE

 

 

 

Exhibit 99.1

 

 

PLBY Group Announces Common Stock Repurchase Program

 

LOS ANGELES, May 17, 2022 (GLOBE NEWSWIRE) – PLBY Group, Inc. (NASDAQ: PLBY) (“PLBY Group” or the “Company”), a leading pleasure and leisure lifestyle company and owner of Playboy, one of the most recognizable and iconic brands in the world, today announced its Board of Directors has authorized a $50 million common stock repurchase program after having secured financing through a private placement of preferred stock. Additional details are to be provided in a Current Report on Form 8-K the Company will file with the Securities and Exchange Commission.

 

“This repurchase program reflects our confidence in our reimagined Playboy brand, transformed business model, and progress against our long-term growth objectives,” said PLBY Group Chief Executive Officer Ben Kohn. “We believe this is a great opportunity to create long-term, sustainable value for our shareholders.”

 

The share repurchase program does not obligate the Company to repurchase any dollar amount or number of shares, and the program may be extended, modified, suspended, or discontinued at any time.

 

About PLBY Group, Inc.

 

PLBY Group, Inc. (“PLBY Group” or the “Company”) is a global pleasure and leisure company connecting consumers with products, content, and experiences that help them lead more fulfilling lives. Our flagship consumer brand, Playboy, is one of the most recognizable brands in the world, driving billions of dollars annually in global consumer spending with products and content available in approximately 180 countries. Our mission — to create a culture where all people can pursue pleasure — builds upon almost seven decades of creating groundbreaking media and hospitality experiences and fighting for cultural progress rooted in the core values of equality, freedom of expression and the idea that pleasure is a fundamental human right. Learn more at http://www.plbygroup.com.

 

Forward-Looking Statements

 

This press release includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. The Company’s actual results may differ from their expectations, estimates, and projections and, consequently, you should not rely on these forward-looking statements as predictions of future events. Words such as “expect,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,” “believes,” “predicts,” “potential,” “continue,” and similar expressions (or the negative versions of such words or expressions) are intended to identify such forward-looking statements. These forward-looking statements include, without limitation, the Company’s expectations with respect to future performance, growth plans and anticipated financial impacts of its acquisitions and corporate transactions.

 

 

These forward-looking statements involve significant risks and uncertainties that could cause the actual results to differ materially from those discussed in the forward-looking statements. Factors that may cause such differences include, but are not limited to: (1) the impact of the COVID-19 pandemic on the Company’s business and acquisitions; (2) the inability to maintain the listing of the Company’s shares of common stock on Nasdaq; (3) the risk that the Company’s business combination, acquisitions or any proposed transactions disrupt the Company’s current plans and/or operations, including the risk that the Company does not complete any such proposed transactions or achieve the expected benefits from them; (4) the ability to recognize the anticipated benefits of the business combination, acquisitions, commercial collaborations, commercialization of digital assets and proposed transactions, which may be affected by, among other things, competition, the ability of the Company to grow and manage growth profitably, and retain its key employees; (5) costs related to being a public company, acquisitions, commercial collaborations and proposed transactions; (6) changes in applicable laws or regulations; (7) the possibility that the Company may be adversely affected by global hostilities, supply chain disruptions, inflation, foreign currency exchange rates or other economic, business, and/or competitive factors; (8) risks relating to the uncertainty of the projected financial information of the Company; (9) risks related to the organic and inorganic growth of the Company’s business, and the timing of expected business milestones; and (10) other risks and uncertainties indicated from time to time in the Company’s annual report on Form 10-K, including those under “Risk Factors” therein, and in the Company’s other filings with the Securities and Exchange Commission. The Company cautions that the foregoing list of factors is not exclusive, and readers should not place undue reliance upon any forward-looking statements, which speak only as of the date which they were made. The Company does not undertake any obligation to update or revise any forward-looking statements to reflect any change in its expectations or any change in events, conditions, or circumstances on which any such statement is based.

 

Contact:

Investors: investors@plbygroup.com

Media: press@plbygroup.com