EXHIBIT 4.02
REGISTRATION RIGHTS AGREEMENT
This Agreement, dated May 15, 2001, is entered into by and
among New Mountain Partners, L.P. and DB Capital Investors, L.P. (the
"Purchasers") and Xxxxxxx Education, Inc., a Maryland corporation (the
"Company").
Reference is made to the Preferred Stock Purchase Agreement
dated as of November 28, 2000 (the "Purchase Agreement"), by and between the
Company and the Purchasers pursuant to which, among other things, the Company
will issue and sell to the Purchasers upon the terms set forth therein 5,769,231
shares of Series A Convertible Preferred Stock, par value $0.01 per share, of
the Company (the "Series A Preferred Stock"). The Company agrees with the
Purchasers for the benefit of the Covered Holders (as defined herein) from time
to time of the Registrable Securities (as defined herein) as follows:
1. DEFINITIONS. (a) As used in this Agreement and except as otherwise defined
herein, the following defined terms shall have the following meanings:
"Affiliate" of any specified Person means any other Person
which, directly or indirectly, is in control of, is controlled by, or is under
common control with such specified Person. For purposes of this definition,
control of a Person means the power, direct or indirect, to direct or cause the
direction of the management and policies of such Person whether by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Applicable Securities" means in relation to a Registration
Statement the Registrable Securities identified in the related Demand Notice or
Piggy-back Notice.
"Commission" means the United States Securities and Exchange
Commission.
"Common Stock" means the Company's common stock, par value
$0.01 per share.
"Covered Holder" means each of (i) the Purchasers and any of
their respective Affiliates that acquires Registrable Securities from any
Purchaser or any of their respective Affiliates and (ii) any other Person who
acquires (consistent with the terms of the Purchase Agreement and the Articles
Supplementary relating to the Series A Preferred Stock) Registrable Securities
for an aggregate purchase price of at least $10 million (or which have a
Liquidation Amount of at least $10 million) and who shall have been designated
as a Covered Holder by any Purchaser in a written notice to the Company,
provided that the rights of any Person designated as a Covered Holder referred
to in clause (ii) shall be limited if and to the extent provided in such notice;
and provided further, that each Purchaser shall not be entitled (x) to designate
more than 5 Covered Holders or (y) to designate any Covered Holder to the extent
the Registrable Securities would continue to be Registrable Securities for a
period longer than would be the case in the hands of such Purchaser or any of
its Affiliates (so that the period for which such Registrable Securities shall
continue to be Registrable Securities in the hands of such designee shall be
limited to the period in which they would have been Registrable Securities in
the hands of such Purchaser or any of its Affiliates).
"Demand Notice" means a notice given by Covered Holders
pursuant to Section 2(a).
"Effective Time" means the date on which the Commission
declares a Registration Statement effective or on which a Registration Statement
otherwise becomes effective.
"Effectiveness Period" means as to a Registration Statement
the period during which such Registration Statement is effective.
"Electing Holder" means, with respect to a Registration, any
Covered Holder that has delivered a completed and signed Notice and
Questionnaire to the Company in accordance with the provisions hereof.
"Exchange Act" means the United States Securities Exchange Act
of 1934, as amended.
"Liquidation Amount" has the meaning assigned to such term in
the Articles Supplementary classifying and designating the Series A Preferred
Stock.
"NASD Rules" means the Rules of the National Association of
Securities Dealers, Inc., as amended from time to time.
"Notice and Questionnaire" means a Notice of Registration
Statement and Selling Stockholder Questionnaire substantially in the form of
Exhibit A hereto.
"Person" means an individual, partnership, corporation, trust,
limited liability company or unincorporated organization, or other entity or
organization, including a government or agency or political subdivision thereof.
"Piggy-back Notice" means a Notice given by a Covered Holder
pursuant to Section 3(a) hereof.
"Prospectus" means the prospectus (including, without
limitation, any preliminary prospectus, any final prospectus and any prospectus
that discloses information previously omitted from a prospectus filed as part of
an effective Registration Statement in reliance upon Rule 430A under the Act)
included in a Registration Statement, as amended or supplemented by any
prospectus supplement with respect to the terms of the offering of any portion
of the Applicable Securities covered by a Registration Statement and by all
other amendments and supplements to such prospectus, including all material
incorporated by reference in such prospectus and all documents filed after the
date of such prospectus by the Company under the Exchange Act and incorporated
by reference therein.
"Registrable Securities" means the Series A Preferred Stock
and the Common Stock and other securities, if any, issuable upon conversion of
the Series A Preferred Stock, as well as any Common Stock that may be sold and
purchased if any, pursuant to the Support
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and Option Agreement (as defined in the Purchase Agreement) upon exercise of the
option described therein and any securities issued in respect of the rights of
the holders under Article Second of the Articles of Amendment (as defined in the
Purchase Agreement), in each case, until any such security is effectively
registered under the Securities Act and disposed of in accordance with the
Registration Statement covering it, or is distributed to the public by the
holder thereof pursuant to Rule 144, or with respect to any Covered Holder
owning less than $10 million in fair market value of the Registrable Securities,
all the Registrable Securities held by that Covered Holder are eligible for sale
pursuant to Rule 144 without holding period or volume limitations.
"Registration" means a registration under the Securities Act
effected pursuant to Section 2 or Section 3 hereof.
"Registration Expenses" means all expenses incident to the
Company's performance of or compliance with any Registration of Registrable
Securities pursuant to this Agreement, including, without limitation, (a) all
registration, filing and National Association of Securities Dealers, Inc. fees,
(b) all fees and expenses of complying with securities or blue sky laws, (c) all
word processing, duplicating and printing expenses, messenger and delivery
expenses, (d) the fees and disbursements of counsel for the Company and of its
independent public accountants, including the expenses of any special audits or
"comfort" letters required by or incident to such performance and compliance,
(e) premiums and other costs of policies of insurance obtained by the Company
against liabilities arising out of the public offering of Registrable Securities
being registered and (f) any fees and disbursements of underwriters customarily
paid by issuers, but excluding (i) any fees and disbursements of underwriters
customarily paid by sellers of securities who are not the issuers of such
securities and (ii) all underwriting discounts and commissions and transfer
taxes, if any, relating to Registrable Securities.
"Registration Statement" means a registration statement filed
under the Securities Act by the Company pursuant to the provisions of Section 2
or Section 3 hereof, including the Prospectus contained therein, any amendments
and supplements to such registration statement, including post-effective
amendments, and all exhibits and all material incorporated by reference in such
registration statement.
"Rule 144" means Rule 144 promulgated by the Commission under
the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission.
"Rules and Regulations" means the published rules and
regulations of the Commission promulgated under the Securities Act or the
Exchange Act, as in effect at any relevant time.
"S-3 Eligible" means that the Company meets the registrant
requirements and transaction requirements for the use of Form S-3 of the
Commission, as set forth in the General Instructions to such Form.
"Securities Act" means the United States Securities Act of
1933, as amended.
"Underwriter" means any underwriter of Applicable Securities
designated by Covered Holders pursuant to Section 2(e) hereof.
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(b) The words "include," "includes" and "including," when used in this
Agreement, shall be deemed to be followed by the words "without limitation."
2. DEMAND REGISTRATION. (a) The Covered Holders shall have the right, on not
more than two occasions in the aggregate, occurring no more frequently than once
during any six month period, to require the Company (subject to the next
sentence) to use its reasonable best efforts to register for offer and sale
under the Securities Act all or a portion of the Registrable Securities then
outstanding; provided, however, that, without limiting the foregoing, if the
Company is S-3 Eligible during any calendar year, then the Covered Holders shall
also have the right, on not more than two occasions in the aggregate during such
calendar year, to require the Company to register for offer and sale pursuant to
a Registration Statement on Form S-3 (which shall be a "shelf" Registration
Statement pursuant to Rule 415 under the Securities Act, or a successor
provision) if so requested by a majority of the Covered Holders (which majority
shall be calculated based on the number of Registrable Securities held by all
Covered Holders) all or a portion of the Registrable Securities then
outstanding. As promptly as practicable after the Company receives a notice from
the Covered Holders (a "Demand Notice") demanding that the Company register for
offer and sale under the Securities Act Registrable Securities having as to each
Registration an expected aggregate offering price of at least $10,000,000,
subject to Section 2(b), the Company shall (i) file with the Commission a
Registration Statement relating to the offer and sale of the Applicable
Securities on Form S-3, or if Form S-3 is not available, on such other form as
the Company may reasonably deem appropriate and, thereafter, (ii) use all
reasonable efforts to cause such Registration Statement to be declared effective
under the Securities Act as promptly as practicable after the date of filing of
such Registration Statement; provided, however, that no Covered Holder shall be
entitled to be named as a selling stockholder in the Registration Statement or
to use the Prospectus forming a part thereof for resales of Registrable
Securities unless such Covered Holder is an Electing Holder. Subject to Section
2(b), the Company shall use all reasonable efforts to keep each Registration
Statement continuously effective in order to permit the Prospectus forming a
part thereof to be usable by Covered Holders for resales of Registrable
Securities for an Effectiveness Period ending on the earlier of (i) 90 days from
the Effective Time of such Registration Statement (two years in the case of a
shelf registration pursuant to Rule 415 or any successor rule thereto on Form
S-3) and (ii) such time as all of such securities have been disposed of by the
selling stockholders.
(b) If the Company determines in good faith based upon the advice of
counsel that the use of such Registration would result in a disclosure of
information that would materially and adversely affect any proposed or pending
material acquisition, merger, business combination or other material transaction
involving the Company and that such disclosure is not in the best interests of
the Company and its stockholders, the Company shall have the right (i) to
postpone (or, if necessary or advisable, withdraw) the filing, or delay the
effectiveness, of a Registration Statement, (ii) to fail to keep such
Registration Statement continuously effective and (iii) not to amend or
supplement the Registration Statement or included Prospectus after the
effectiveness of the Registration Statement; provided that no one such
postponement shall exceed 90 days in any six month period and all such
postponements shall not exceed 120 days in the aggregate in any 12 month period.
The Company shall advise the Purchasers of any such determination as promptly as
practicable.
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(c) The Company may include in any registration requested pursuant to
Section 2(a) hereof other securities for sale for its own account or for the
account of another Person, provided that such inclusion shall not affect the
number of Applicable Securities that can be sold in the related offering. In
connection with an underwritten offering, if the managing underwriter or
underwriters advise the Company in writing that in its or their opinion the
number of Applicable Securities requested by Covered Holders to be registered
exceeds the number which can be sold in such offering, the Company shall include
in such Registration the number of Applicable Securities that, in the opinion of
such managing underwriter or underwriters, can be sold as follows: (i) first,
the Applicable Securities requested to be registered, pro rata among the Covered
Holders that have requested their Applicable Securities to be registered and
(ii) second, any other securities requested to be included in such Registration.
(d) The Covered Holders requesting any Registration pursuant to
Section 2(a) hereof shall have the right to withdraw such request, without such
Registration being deemed to have been effected (and, therefore, requested) for
purposes of Section 2(a), (i) prior to the time the Registration Statement in
respect of such Registration has been declared effective, (ii) upon the issuance
by a governmental agency or the Commission of a stop order, injunction or other
order which interferes with such Registration, (iii) upon the Company availing
itself of Section 2(b) hereof, or (iv) if such Covered Holders are prevented
pursuant to Section 2(c) hereof from selling all of the Applicable Securities
they requested to be registered. Notwithstanding the foregoing, the Registration
requested by such Covered Holders shall be deemed to have been effected (and,
therefore, requested) for purposes of Section 2(a) hereof if the Covered Holders
withdraw any Registration request pursuant to Section 2(a) hereof (i) after the
Commission filing fee is paid in full with respect to all Applicable Securities
requested to be registered or (ii) as a result of the provisions of Section 2(c)
hereof in circumstances where at least 75% of the Applicable Securities
requested to be included in such Registration by the Covered Holders demanding
such Registration have been included, and in each case, (x) the Company has not
availed itself of Section 2(b) or Section 7(j) with respect to such Registration
request or (y) the Company has availed itself of Section 2(b) or Section 7(j)
hereof and the withdrawal request is not made within 10 days after the
termination of the suspension period occasioned by the Company's exercise of its
rights under Section 2(b) or Section 7(j) hereof. If the Covered Holders
withdraw a request pursuant to Section 2(a) but the Company nevertheless
determines to complete, within 30 days after such withdrawal, the Registration
so requested as to securities other than the Applicable Securities, such Covered
Holders shall be entitled to participate in such Registration pursuant to
Section 3 hereof, but in such case the Intended Offering Notice (as defined in
Section 3) shall be required to be given to the Covered Holders at least 10
business days prior to the anticipated filing date of the registration statement
and such Covered Holders shall be required to give the Piggy-back Notice no
later than 5 business days after the Company's delivery of such Intended
Offering Notice.
(e) In the event that any Registration pursuant to this Section 2
shall involve, in whole or in part, an underwritten offering, one co-lead
managing underwriter shall be selected by the Company and shall be reasonably
acceptable to the Covered Holders participating therein, and the other co-lead
managing underwriter shall be selected by the Covered Holders participating
therein and shall be reasonably acceptable to the Company.
3. PIGGY-BACK REGISTRATION. (a) If at any time the Company intends to file on
its behalf or on behalf of any of its stockholders (including Covered Holders
with respect to Registrable Secu-
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rities) a registration statement in connection with a public offering of any
securities of the Company on a form and in a manner that would permit the
registration for offer and sale under the Securities Act of Registrable
Securities of the same class held by such Covered Holder, other than a
registration statement on Form S-8 or Form S-4 or any successor form or other
forms promulgated for similar purposes, then the Company shall give written
notice (an "Intended Offering Notice") of such intention to each Covered Holder
at least 30 business days prior to the anticipated filing date of such
registration statement. Such Intended Offering Notice shall offer to include in
such registration statement for offer to the public such number or amount of
Registrable Securities as each such Covered Holder may request, subject to the
conditions set forth herein, and shall specify, to the extent then known, the
number and class of securities proposed to be registered, the proposed date of
filing of such registration statement, any proposed means of distribution of
such securities, any proposed managing underwriter or underwriters of such
securities and (if available or as soon as available) a good faith estimate
(which may be a range) by the Company of the proposed maximum offering price of
such securities, as such price is proposed to appear on the facing page of such
registration statement. Any Covered Holder desiring to have Registrable
Securities included in such registration statement and offered to the public
shall so advise the Company in writing (the written notice of any such Covered
Holder being a "Piggy-back Notice") not later than 10 business days after the
Company's delivery to the Covered Holders of the Intended Offering Notice,
setting forth the number of Registrable Securities such Covered Holder desires
to have included in the registration statement and offered to the public. Upon
the request of the Company, such Covered Holders shall enter into such
underwriting, custody and other agreements as shall be customary in connection
with registered secondary offerings or necessary or appropriate in connection
with the offering. No Covered Holder shall be entitled to be named as a selling
stockholder in the Registration Statement or to use the Prospectus forming a
part thereof for sales of Registrable Securities unless such Covered Holder is
an Electing Holder.
(b) No Covered Holder shall be entitled to be named as a selling
stockholder in the Registration Statement as of the Effective Time, and no
Covered Holder shall be entitled to use the Prospectus forming a part thereof
for sales of Registrable Securities at any time, unless such Covered Holder has
returned a completed and signed Notice and Questionnaire to the Company at least
two business days before the anticipated filing date specified in the Intended
Offering Notice.
(c) In connection with an underwritten offering, if the managing
underwriter or underwriters advise the Company in writing that in its or their
opinion the number of securities proposed to be registered exceeds the number
that can be sold in such offering, the Company shall include in such
Registration the number of securities that, in the opinion of such managing
underwriter or underwriters, can be sold as follows: (i) first, the securities
that the Company proposes to sell on its behalf or, if the offering is a demand
registration the securities proposed to be sold for the stockholder or
stockholders initiating such demand registration, as the case may be, (ii)
second, the Applicable Securities requested to be included in such Registration,
pro rata among the Electing Holders who are Covered Holders which have requested
their Applicable Securities to be included therein, and (iii) third, other
securities requested to be included in such Registration.
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(d) The rights of the Covered Holders pursuant to Section 2 hereof and
this Section 3 are cumulative, and the exercise of rights under one such Section
shall not exclude the subsequent exercise of rights under the other such
Section. Notwithstanding anything herein to the contrary, the Company may
abandon and/or withdraw any registration (other than pursuant to Section 2
hereof) as to which any right under this Section 3 may exist at any time and for
any reason without liability hereunder. In such event, the Company shall so
notify each Covered Holder that has delivered a Piggy-back Notice to participate
therein.
4. REGISTRATION PROCEDURES. In connection with a Registration Statement, the
following provisions shall apply:
(a) The Company shall furnish to each Electing Holder, prior to the
Effective Time, a copy of the Registration Statement initially filed with the
Commission, and shall furnish to such Electing Holders copies of each amendment
thereto and each amendment or supplement, if any, to the Prospectus included
therein.
(b) In respect of a Registration Statement under Section 2 (and not
Section 3), the Company shall use reasonable efforts to promptly take such
action as may be reasonably necessary so that (i) each of the Registration
Statement and any amendment thereto and the Prospectus forming part thereof and
any amendment or supplement thereto (and each report or other document
incorporated therein by reference in each case), when it becomes effective,
complies in all material respects with the Securities Act and the Exchange Act
and the respective rules and regulations thereunder, (ii) each of the
Registration Statement and any amendment thereto does not, when it becomes
effective, contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading and (iii) each of the Prospectus forming part of the
Registration Statement, and any amendment or supplement to such Prospectus, does
not at any time during the period during which the Company is required to keep a
Registration Statement continuously effective under Section 2(a) include an
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
Notwithstanding the forgoing provisions of this Section 4(b), the
Company shall notify each Electing Holder at any time after effectiveness of a
Registration Statement (when a Prospectus relating thereto is required to be
delivered under the Securities Act) of the happening of any event or other
circumstance as the result of which (i) the Prospectus included in such
Registration Statement, as then in effect, would include an untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading in light of the
circumstances then existing, or (ii) the continued effectiveness of such
Registration Statement or a subsequent Registration Statement, and the use of
such Prospectus, would otherwise have a material and adverse effect on any
proposed or pending material acquisition, merger, business combination or other
material transaction involving the Company, and, upon receipt of such notice and
until the Company makes available to each Electing Holder a supplemented or
amended Prospectus, each Electing Holder shall not offer or sell any Registrable
Securities pursuant to such Registration Statement and shall (at the Company's
expense) return all copies of such Prospectus to the Company if requested to do
so by it. As promptly as practicable following any such occurrence, the Company
shall prepare and furnish to each Electing Holder a reasonable number of copies
of a supplement or an amendment
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to such Prospectus as may be necessary so that, as thereafter delivered to
subsequent purchasers of the Registrable Securities, such Prospectus shall meet
the requirements of the Securities Act and relevant state securities laws;
provided that the Company's obligations under and actions pursuant to this
paragraph shall be subject to the provisions, including time limits, of Section
2(b).
(c) The Company shall, promptly upon learning thereof, advise each
Electing Holder, and shall confirm such advice in writing if so requested by any
such Electing Holder:
(i) when the Registration Statement and any amendment
thereto has been filed with the Commission and when the Registration
Statement or any post-effective amendment thereto has become
effective;
(ii) of any request by the Commission for amendments or
supplements to the Registration Statement or the Prospectus included
therein or for additional information;
(iii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for such purpose;
(iv) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the securities
included in the Registration Statement for sale in any jurisdiction or
the initiation of any proceeding for such purpose; and
(v) of the happening of any event or the existence of any
state of facts that requires the making of any changes in the
Registration Statement or the Prospectus included therein so that, as
of such date, such Registration Statement and Prospectus do not
contain an untrue statement of a material fact and do not omit to
state a material fact required to be stated therein or necessary to
make the statements therein (in the case of the Prospectus, in light
of the circumstances under which they were made) not misleading (which
advice shall be accompanied by an instruction to such Electing Holders
to suspend the use of the Prospectus until the requisite changes have
been made).
(d) The Company shall use reasonable efforts to prevent the issuance,
and if issued to obtain the withdrawal, of any order suspending the
effectiveness of the Registration Statement at the earliest possible time.
(e) The Company shall furnish to each Electing Holder, without charge,
at least one copy of the Registration Statement and all post-effective
amendments thereto, including financial statements and schedules, and, if such
holder so requests in writing, all reports, other documents and exhibits that
are filed with or incorporated by reference in the Registration Statement.
(f) The Company shall, during the period during which the Company is
required to keep a Registration Statement continuously effective under Section
2(a) or elects to keep effective under Section 3(a), deliver to each Electing
Holder, without charge, as many copies of the Prospectus (including each
preliminary Prospectus) included in the Registration Statement and any amendment
or supplement thereto as such Electing Holder may reasonably request; and the
Company consents (except during the continuance of any event described in
Section 2(b)
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or Section 4(c)(v) hereof) to the use of the Prospectus, with any amendment or
supplement thereto, by each of the Electing Holders in connection with the
offering and sale of the Applicable Securities covered by the Prospectus and any
amendment or supplement thereto during such period.
(g) Prior to any offering of Applicable Securities pursuant to the
Registration Statement, the Company shall use all reasonable efforts to (i)
register or qualify or cooperate with the Electing Holders and their respective
counsel in connection with the registration or qualification of such Applicable
Securities for offer and sale under the securities or "blue sky" laws of such
jurisdictions within the United States as any Electing Holder may reasonably
request, (ii) keep such registrations or qualifications in effect and comply
with such laws so as to permit the continuance of offers and sales in such
jurisdictions for the period during which the Company is required to keep a
Registration Statement continuously effective under Section 2(a) and (iii) take
any and all other actions reasonably requested by an Electing Holder which are
necessary or advisable to enable the disposition in such jurisdictions of such
Applicable Securities; provided, however, that in no event shall the Company be
obligated to (i) qualify as a foreign corporation or as a dealer in securities
in any jurisdiction where it would not otherwise be required to so qualify but
for this Agreement or (ii) file any general consent to service of process or
subject itself to tax in any jurisdiction where it is not so subject.
(h) The Company shall cooperate with the Electing Holders to
facilitate the timely preparation and delivery of certificates representing
Applicable Securities to be sold pursuant to the Registration Statement, which
certificates shall comply with the requirements of any United States securities
exchange or automated quotation system upon which any Applicable Securities are
listed or quoted (provided that nothing herein shall require the Company to list
any Registrable Securities on any securities exchange or automated quotation
system on which they are not currently listed), and which certificates shall be
free of any restrictive legends and in such permitted denominations and
registered in such names as Electing Holders may request in connection with the
sale of Applicable Securities pursuant to the Registration Statement.
(i) Not later than the Effective Time of the Registration Statement,
the Company shall use reasonable efforts to provide any required CUSIP number
for any Applicable Securities.
(j) The Company shall, in the event of an underwriting of Applicable
Securities, enter into indemnification provisions and procedures substantially
identical to those set forth in Section 6 hereof with respect to all parties to
be indemnified pursuant to Section 6 hereof, provided that the applicable
Electing Holders do the same.
(k) The Company shall use reasonable efforts to:
(i) cooperate with the Electing Holders and their advisors
in their efforts to conduct appropriate due diligence as is customary
for a company of the size and character of the Company and make such
reasonable representations and warranties in the applicable
underwriting agreement to the Underwriters, in form, substance and
scope as are customarily made by the Company to underwriters in
underwritten offerings of equity and/or convertible securities, as
applicable;
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(ii) in connection with any underwritten offering, obtain
opinions of counsel to the Company (which counsel and opinions (in
form, scope and substance) shall be reasonably satisfactory to the
Underwriters) addressed to the Underwriters, covering such matters
that the Company customarily covers in opinions requested in secondary
underwritten offerings of equity and/or convertible securities, as
applicable, to the extent reasonably required by the applicable
underwriting agreement;
(iii) in connection with any underwritten offering, obtain
"cold comfort" letters and updates thereof from the independent public
accountants of the Company (and, if necessary, from the independent
public accountants of any Subsidiary (as defined in the Purchase
Agreement) of the Company or of any business acquired by the Company
for which financial statements and financial data are, or are required
to be, included in the Registration Statement), addressed to each
Electing Holder participating in such underwritten offering (if such
Electing Holder has provided such letter, representations or
documentation, if any, required for such cold comfort letter to be so
addressed) and the Underwriters, in customary form and covering
matters of the type customarily covered in "cold comfort" letters in
connection with underwritten offerings of Company securities; and
(iv) in connection with any underwritten offering, deliver
such documents and certificates as may be reasonably requested by any
Electing Holders participating in such underwritten offering and the
Underwriters, if any, including, without limitation, certificates to
evidence compliance with any conditions contained in the underwriting
agreement or other agreements entered into by the Company.
(l) In respect of a Registration Statement under Section 2 (and not
Section 3), the Company shall use reasonable efforts to take all other steps
reasonably necessary to effect the timely registration, offering and sale of the
Applicable Securities covered by the Registration Statements contemplated
hereby.
5. REGISTRATION EXPENSES. The Company shall bear the Registration Expenses in
connection with the performance of its obligations under Sections 2, 3 and 4
hereof.
6. INDEMNIFICATION AND CONTRIBUTION. (a) Upon the Registration of Applicable
Securities pursuant to Section 2 or 3 hereof, the Company shall indemnify and
hold harmless each Electing Holder and each Underwriter, selling agent or other
securities professional, if any, which facilitates the disposition of Applicable
Securities, and each of their respective officers, directors, employees and
agents and each person who controls such Electing Holder, Underwriter, selling
agent or other securities professional within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act (each such person being
sometimes referred to as an "Indemnified Person") against any losses, claims,
damages or liabilities, joint or several, to which such Indemnified Person may
become subject under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement of a material
fact contained in any Registration Statement under which such Applicable
Securities are to be registered under the Securities Act, or any Prospectus
contained therein or furnished by the Company to any Indemnified Person, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged
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omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and the Company hereby
agrees to reimburse such Indemnified Person for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such action or claim as such expenses are incurred; provided, however, that the
Company shall not be liable to any such Indemnified Person in any such case to
the extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in such Registration Statement or Prospectus, or amendment
or supplement, in reliance upon and in conformity with written information
furnished to the Company by such Indemnified Person expressly for use therein.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of the Company or any of the prospective
sellers, or any of their respective Affiliates, directors, officers, employees,
agents or controlling Persons and shall survive the transfer of securities by
any Electing Holder.
(b) Each Electing Holder agrees, as a consequence of the inclusion of
any of such Holder's Applicable Securities in such Registration Statement, and
each Underwriter, selling agent or other securities professional, if any, which
facilitates the disposition of Applicable Securities shall agree, as a
consequence of facilitating such disposition of Applicable Securities, severally
and not jointly, to indemnify and hold harmless the Company, its directors and
officers and each person, if any, who controls the Company within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act,
against any losses, claims, damages or liabilities to which the Company or such
other persons may become subject, under the Securities Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in such Registration Statement or Prospectus, or
any amendment or supplement, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by such Holder,
Underwriter, selling agent or other securities professional expressly for use
therein. Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of the Company, the underwriters or any of
the prospective sellers, or any of their respective Affiliates, directors,
officers or controlling Persons and shall survive the transfer of securities by
any Electing Holder. In no event shall the liability of any Electing Holder
hereunder be greater in amount than the dollar amount of the proceeds received
by that Electing Holder upon the sale of the Registrable Securities giving rise
to the indemnification obligation.
(c) Promptly after receipt by any Person entitled to indemnity (an
"Indemnitee") under Section 6(a) or (b) hereof of notice of the commencement of
any action or claim, such Indemnitee shall, if a claim in respect thereof is to
be made against an indemnifying party under this Section 6 (an "Indemnitor"),
notify such Indemnitor in writing of the commencement thereof, but the omission
so to notify the Indemnitor shall not relieve it from any liability which it may
have to any Indemnitee except to the extent of any actual prejudice. In case any
such action shall be brought against any Indemnitee and the Indemnitee shall
notify an Indemnitor of the commencement thereof, such Indemnitor shall be
entitled to participate therein and, jointly with any other Indemnitor similarly
notified, to assume the defense thereof, with counsel satisfactory
-11-
to such Indemnitee, and, after notice from the Indemnitor to such Indemnitee of
its election so to assume the defense thereof, such Indemnitor shall not be
liable to such Indemnitee under this Section 6 for any legal expenses of other
counsel or any other expenses, in each case subsequently incurred by such
Indemnitee, in connection with the defense thereof. No Indemnitor shall, without
the prior written consent of the Indemnitee, effect the settlement or compromise
of, or consent to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification or contribution
may be sought hereunder (whether or not the Indemnitee is an actual or potential
party to such action or claim) unless such settlement, compromise or judgment
(i) includes an unconditional release of the Indemnitee from all liability
arising out of such action or claim and (ii) does not include a statement as to,
or an admission of, fault, culpability or a failure to act, by or on behalf of
any Indemnitee.
(d) If the indemnification provided for in this Section 6 is
unavailable to or insufficient to hold harmless an Indemnitee under Section 6(a)
or (b) hereof in respect of any losses, claims, damages or liabilities (or
actions in respect thereof) referred to therein, then each Indemnitor, in lieu
of indemnifying the Indemnitee, shall contribute to the amount paid or payable
by such Indemnitee as a result of such losses, claims, damages or liabilities
(or actions in respect thereof) in such proportion as is appropriate to reflect
the relative fault of the Indemnitor and the Indemnitee in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative fault of such Indemnitor and Indemnitee
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact relates to information supplied by such Indemnitor or by
such Indemnitee, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 6(d) were determined solely by pro rata allocation
(even if the Electing Holders or any Underwriters, selling agents or other
securities professionals or all of them were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in this Section 6(d). The amount paid or
payable by an Indemnitee as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to above shall be deemed to
include any legal or other fees or expenses reasonably incurred by such
Indemnitee in connection with investigating or defending any such action or
claim. No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The obligations
of the Electing Holders and any Underwriters, selling agents or other securities
professionals in this Section 6(d) to contribute shall be several in proportion
to the percentage of principal amount of Applicable Securities registered or
underwritten, as the case may be, by them and not joint and shall be subject to
the limitations set forth in the last sentence of Section 6(b).
(e) The obligations of the Company under this Section 6 shall be in
addition to any liability which the Company may otherwise have to any Indemnitee
and the obligations of any Indemnified Person under this Section 6 shall be in
addition to any liability which such Indemnified Person may otherwise have to
the Company. The remedies provided in this Section 6 are not exclusive and shall
not limit any rights or remedies that may otherwise be available to an
Indemnitee at law or in equity.
-12-
7. MISCELLANEOUS. (a) This Agreement, including this Section 7(a), may be
amended, and waivers or consents to departures from the provisions hereof may be
given, only by a written instrument duly executed, (x) in the case of an
amendment, by the Company and (i) the Covered Holders representing a majority of
Registrable Securities at the time outstanding (who shall be deemed to be acting
for themselves and as agents for each Covered Holder), and (ii) any Covered
Holder on whom such amendment would have an adverse effect materially
disproportionate to the Covered Holders in general, or (y) in the case of a
waiver or consent, by the party against whom the waiver or consent, as the case
may be, is to be effective. Each Holder of Registrable Securities outstanding at
the time of any such amendment, waiver or consent or thereafter shall be bound
by any amendment, waiver or consent effected pursuant to this Section 7(a),
whether or not any notice, writing or marking indicating such amendment, waiver
or consent appears on the Registrable Securities or is delivered to such holder.
Further if at any time a Covered Holder no longer holds Registrable Securities,
the consent of such Covered Holder shall no longer be required to amend this
agreement or to waive or consent to departures from the provisions hereof.
-13-
(b) All notices, requests and other communications to any party
hereunder shall be in writing (including facsimile transmission) and shall be
given as follows:
if to the Company, to:
Xxxxxxx Education, Inc.
0000 00xx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Chief Financial Officer
Telecopy: (000) 000-0000
with a copy to:
Xxxxx & Xxxxxxx L.L.P.
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxx, Xx.
Telecopy: (000) 000-0000
if to Purchasers or any Covered Holder, to:
New Mountain Partners, L.P.
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxx
Telecopy: (000) 000-0000
and
DB Capital Investors, L.P.
c/o DB Capital Partners, Inc.
Xxx Xxxxxx Xxxxx
Xxxxxxx Xxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx
Telecopy: (000) 000-0000
with copies to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Telecopy: (000) 000-0000
-14-
White & Case LLP
1155 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxx
Telecopy: (000) 000-0000
(c) The parties to this Agreement intend that all Covered Holders of
Registrable Securities shall be entitled to receive the benefits of and shall be
bound by the terms and provisions of this Agreement by reason of electing to
have Applicable Securities included in a Registration Statement. Except as
provided herein respecting Covered Holders, the terms and provisions of this
Agreement shall not be assignable or transferable and there shall be no
third-party beneficiaries hereto. All the terms and provisions of this Agreement
shall be binding upon, shall inure to the benefit of and shall be enforceable by
the respective legal successors and permitted assigns of the parties hereto and
any Covered Holder.
(d) This Agreement may be executed in any number of counterparts and
by the parties hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
(e) The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof.
(f) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF MARYLAND, WITHOUT GIVING EFFECT TO ANY PROVISIONS
RELATING TO CONFLICTS OF LAWS.
(g) The provisions of this Agreement shall be deemed severable and the
invalidity or unenforceability of any provision shall not affect the validity or
enforceability of the other provisions hereof. If any provision of this
Agreement, or the application thereof to any Person or entity or any
circumstance, is invalid or unenforceable, (i) a suitable and equitable
provision shall be substituted therefor in order to carry out, so far as may be
valid and enforceable, such provision and (ii) the remainder of this Agreement
and the application of such provision to other Persons, entities or
circumstances shall not be affected by such invalidity or unenforceability, nor
shall such invalidity or unenforceability affect the validity or enforceability
of such provision, or the application thereof, in any other jurisdiction.
(h) The respective indemnities, agreements, representations,
warranties and other provisions set forth in this Agreement or made pursuant
hereto shall remain in full force and effect, regardless of any investigation
(or any statement as to the results thereof) made by or on behalf of any
Electing Holder, any director, officer or partner of such Electing Holder, any
agent or Underwriter, any director, officer or partner of such agent or
Underwriter, or any controlling person of any of the foregoing, and shall
survive the transfer and registration of the Applicable Securities of such
Holder.
-15-
(i) Each Covered Holder and Electing Holder shall cooperate with
respect to any Registration effected under this Agreement and shall provide such
information, documents, and instruments as may be reasonably requested in
connection therewith.
(j) Each Covered and Electing Holder agrees, if so requested by the
managing underwriter in any underwritten offering of the Company's securities
(based on the negative impact that the inclusion of such Covered and Electing
Holder's Registrable Securities would have on the pricing of such offering), not
to effect any public sale or public distribution of Registrable Securities
during the 30 days prior to and the 60 days after any registration statement for
any underwritten offering of the Company's securities (either for its own
account or for the benefit of the holders of any securities of the Company) has
become effective (or such period of time shorter than 90 days that is sufficient
and appropriate, in the opinion of the managing underwriter, in order to
complete the sale and distribution of securities included in such registration).
(k) The obligations of the Company hereunder shall terminate upon the
earlier of (i) 10 years from the date hereof and (ii) the date upon which there
ceases to be any Registrable Securities outstanding.
(l) The Company shall have no liability to any Covered Holder for any
actions taken or omitted on the basis of actions of the Purchasers as agents for
the Covered Holders.
(m) The Company shall use reasonable efforts to timely file all
reports required to be filed with respect to the Company under Section 13 or
Section 15(d) of the Exchange Act for so long as the Company has obligations
hereunder.
-16-
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective authorized officers as of the day
and year first above written.
NEW MOUNTAIN PARTNERS, L.P.
By: New Mountain Investments, L.P., its
general partner
By: New Mountain GP, LLC, its
general partner
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Member
DB CAPITAL INVESTORS, L.P.
By: DB Capital Partners, L.P., its
general partner
By: DB Capital Partners, Inc., its
general partner
By: /s/ Xxxxxx Xxxxxxxxx
-------------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Director
XXXXXXX EDUCATION, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: President and Chief Executive
Officer
-17-
Exhibit A
Xxxxxxx Education, Inc.
Notice of Registration Statement
and
Selling Stockholder Questionnaire
(Date)
Reference is hereby made to the Registration Rights Agreement
(the "Registration Rights Agreement") between Xxxxxxx Education, Inc. (the
"Company") and the Purchasers named therein. Pursuant to the Registration Rights
Agreement, the Company [has filed] with the United States Securities and
Exchange Commission (the "Commission") a registration statement on Form _______
(the "Registration Statement") for the registration and resale under the
Securities Act of 1933, as amended (the "Securities Act"), of the Company's
[Title of Securities] (the "Securities"). All capitalized terms not otherwise
defined herein shall have the meanings ascribed thereto in the Registration
Rights Agreement.
Each Holder of Registrable Securities is entitled to have the
Registrable Securities owned by it included in the Registration Statement. In
order to have Registrable Securities included in the Registration Statement,
this Notice of Registration Statement and Selling Stockholder Questionnaire
("Notice and Questionnaire") must be completed, executed and delivered to the
Company's counsel at the address set forth herein for receipt ON OR BEFORE
[DEADLINE FOR RESPONSE]. Holders of Registrable Securities who do not complete,
execute and return this Notice and Questionnaire by such date (i) will not be
named as selling stockholders in the Registration Statement and (ii) may not use
the Prospectus forming a part thereof for resales of Registrable Securities.
Certain legal consequences arise from being named as a selling
stockholder in the Registration Statement and related Prospectus. Accordingly,
Holders of Registrable Securities are advised to consult their own securities
law counsel regarding the consequences of being named or not being named as a
selling stockholder in the Registration Statement and related Prospectus.
ELECTION
The undersigned Holder (the "Selling Stockholder") of
Registrable Securities hereby elects to include in the Registration Statement
the Registrable Securities beneficially owned by it and listed below in Item
(3). The undersigned, by signing and returning this Notice and Questionnaire,
agrees to be bound with respect to such Registrable Securities by the terms and
conditions of this Notice and Questionnaire and the Registration Rights
Agreement, including, without limitation, Section 6 of the Registration Rights
Agreement, as if the undersigned Selling Stockholder were an original party
thereto.
Upon any sale of Registrable Securities pursuant to the
Registration Statement, the Selling Stockholder will be required to deliver to
the Company the Notice of Transfer set forth in Appendix A to the Prospectus.
The Selling Stockholder hereby provides the following
information to the Company and represents and warrants that such information is
accurate and complete:
A-2
QUESTIONNAIRE
(1) (a) Full Legal Name of Selling Stockholder:
(b) Full Legal Name of Registered Holder (if not the same as in (a)
above) of Registrable Securities Listed in (3) below:
(2) Address for Notices to Selling Stockholder:
Telephone:
Fax:
Contact Person:
(3) Except as set forth below in this Item (3), the undersigned does not
beneficially own any Securities or Common Stock.
(a) Principal amount or number of Registrable Securities (as defined
in the Registration Rights Agreement) beneficially owned:___
(b) Principal amount or number of Registrable Securities which the
undersigned wishes to be included in the Registration
Statement:___
(4) Beneficial Ownership of Other Securities of the Company:
Except as set forth below in this Item (4), the undersigned Selling
Stockholder is not the beneficial or registered owner of any shares of Common
Stock or any other securities of the Company, other than the Securities and
shares of Common Stock listed above in Item (3).
State any exceptions here:
(5) Relationships with the Company:
Except as set forth below, neither the Selling Stockholder nor any of
its affiliates, officers, directors or principal equity holders (5% or more) has
held any position or office or has had any other material relationship with the
Company (or its predecessors or affiliates) during the past three years.
A-3
State any exceptions here:
(6) Plan of Distribution:
Except as set forth below, the undersigned Selling Stockholder intends
to distribute the Registrable Securities listed above in Item (3) only as
follows (if at all): Such Registrable Securities may be sold from time to time
directly by the undersigned Selling Stockholder or, alternatively, through
underwriters, broker-dealers or agents. Such Registrable Securities may be sold
in one or more transactions at fixed prices, at prevailing market prices at the
time of sale, at varying prices determined at the time of sale, or at negotiated
prices. Such sales may be effected in transactions (which may involve crosses or
block transactions) (i) on any national securities exchange or quotation service
on which the Registered Securities may be listed or quoted at the time of sale,
(ii) in the over-the-counter market, (iii) in transactions otherwise than on
such exchanges or services or in the over-the-counter market, or (iv) through
the writing of options. In connection with sales of the Registrable Securities
or otherwise, the Selling Stockholder may enter into hedging transactions with
broker-dealers, which may in turn engage in short sales of the Registrable
Securities in the course of hedging the positions they assume. The Selling
Stockholder may also sell Registrable Securities short and deliver Registrable
Securities to close out such short positions, or loan or pledge Registrable
Securities to broker-dealers that in turn may sell such securities.
State any exceptions here:
By signing below, the Selling Stockholder acknowledges that it
understands its obligation to comply, and agrees that it will comply, with the
provisions of the Exchange Act and the rules and regulations thereunder,
particularly Regulation M.
In the event that the Selling Stockholder transfers all or any portion
of the Registrable Securities listed in Item (3) above after the date on which
such information is provided to the Company, the Selling Stockholder agrees to
notify the transferee(s) at the time of the transfer of its rights and
obligations under this Notice and Questionnaire and the Registration Rights
Agreement.
By signing below, the Selling Stockholder consents to the disclosure of
the information contained herein in its answers to Items (1) through (6) above
and the inclusion of such information in the Registration Statement and related
Prospectus. The Selling Stockholder understands that such information will be
relied upon by the Company in connection with the preparation of the
Registration Statement and related Prospectus.
A-4
In accordance with the Selling Stockholder's obligation under Section 4
of the Registration Rights Agreement to provide such information as may be
required by law for inclusion in the Registration Statement, the Selling
Stockholder agrees to promptly notify the Company of any inaccuracies or changes
in the information provided herein which may occur subsequent to the date hereof
at any time while the Registration Statement remains in effect. All notices
hereunder and pursuant to the Registration Rights Agreement shall be made in
writing by hand-delivery, first-class mail, or air courier guaranteeing
overnight delivery as follows:
(i) To the Company:
Xxxxxxx Education, Inc.
0000 00xx Xxxxxx, X.X.
Xxxxxxxxxx, XX 00000
Attn: Chief Financial Officer
Telecopy: (000) 000-0000
(ii) With a copy to:
Xxxxx & Xxxxxxx L.L.P.
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxx, Xx.
Telecopy: (000) 000-0000
Once this Notice and Questionnaire is executed by the Selling
Stockholder and received by the Company's counsel, the terms of this Notice and
Questionnaire, and the representations and warranties contained herein, shall be
binding on, shall inure to the benefit of and shall be enforceable by the
respective successors, heirs, personal representatives, and assigns of the
Company and the Selling Stockholder (with respect to the Registrable Securities
beneficially owned by such Selling Stockholder and listed in Item (3) above).
This Agreement shall be governed in all respects by the laws of the State of
Maryland.
A-5
IN WITNESS WHEREOF, the undersigned, by authority duly given,
has caused this Notice and Questionnaire to be executed and delivered either in
person or by its duly authorized agent.
Dated:
------------------------
Selling Stockholder
By:
Name:
Title:
PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE FOR RECEIPT ON
OR BEFORE [DEADLINE FOR RESPONSE] TO THE COMPANY'S COUNSEL AT:
Xxxxx & Xxxxxxx L.L.P.
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxx, Xx.
Telecopy: (000) 000-0000
A-6
