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Exhibit 10.1
REGISTRATION RIGHTS AGREEMENT
Dated as of March 27, 1998
by and among
The Learning Company, Inc.
and
Mindscape Holding Company
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This Registration Rights Agreement (this "Agreement") is made and entered
into as of March 27, 1998 by and among The Learning Company, Inc., a Delaware
corporation (the "Company"), and Mindscape Holding Company (the "Holder").
This Agreement is made pursuant to the Stock Purchase Agreement, dated
March 27, 1998 (the "Purchase Agreement"), by and among the Company and the
Holder.
The parties hereby agree as follows:
1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have the
following meanings:
Act: The Securities Act of 1933, as amended.
Business Day: Each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which banking institutions
in New York, New York or Boston, Massachusetts are
authorized or obligated by law or executive order to
close.
Common Stock: Common Stock, $.01 par value per share, of the Company.
Commission: The Securities and Exchange Commission.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Person: Any individual or entity.
Questionnaire: Means a Selling Securityholder Questionnaire, in the
form attached, containing the information specified in
Item 507 or 508 of Regulation S-K, as applicable, of the
Act and such other information with respect to a Holder
and the intended distribution of the Shares as may be
required in connection with the Registration Statement.
Prospectus: The prospectus included in the Registration Statement at
the time such Registration Statement is declared
effective, as amended or supplemented by any prospectus
supplement and by all other amendments thereto,
including post-effective amendments, all material
incorporated by reference
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into such Prospectus and any information previously
omitted in reliance upon Rule 430A of the Act.
Special Counsel: Special counsel to the Holder.
Shares: The shares of Common Stock issued to the Holder pursuant
to the Purchase Agreement.
2. REGISTRATION
(a) REGISTRATION. No later than 30 days after the date hereof, the Company
shall file with the Commission a registration statement on Form S-3 (the
"Registration Statement") covering the resale of the Shares, and shall use its
reasonable best efforts to cause such Registration Statement to become effective
as soon as possible thereafter. Any sale of Shares pursuant to the Registration
Statement shall be made only pursuant to an underwritten offering (an
"Underwritten Offering"), and, if necessary, the Company shall file such
amendments to the Registration Statement, and such supplements to the
Prospectus, as may be necessary to reflect the terms of the Underwritten
Offering. The Company may elect to include shares of Common Stock for its own
account in the Underwritten Offering, PROVIDED, that if the managing underwriter
determines that the number of shares to be included therein should be limited,
the shares to be offered for the account of the Company shall be excluded before
any Shares are excluded. The Company shall have the right to select the managing
underwriter(s) for the Underwritten Offering, subject to the approval of the
Holder, which approval will not be unreasonably withheld.
The Company shall use its reasonable best efforts to keep the Registration
Statement continuously effective, supplemented and amended as required by and
subject to the provisions of Section 3 hereof to the extent necessary to ensure
that it is available for sales of Shares by the Holder, and to ensure that it
conforms with the requirements of this Agreement, the Act and the policies,
rules and regulations of the Commission as announced from time to time, for a
period of one year following the date on which such Registration Statement first
became effective under the Act, or such shorter period as will terminate when
all Shares covered by such Registration Statement have been sold pursuant
thereto.
Notwithstanding the foregoing provisions, the Shares covered by the
Registration Statement may be sold by the Holder pursuant to one or more block
trades effected through a broker-dealer selected by the Company and approved by
the Holder (which approval shall not be unreasonably withheld), provided no such
block trade shall be made on terms that are not approved by the Company and
provided further that the Holder shall not be required to seek any such block
trades.
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(b) PROVISION BY THE HOLDER OF CERTAIN INFORMATION IN CONNECTION WITH THE
REGISTRATION STATEMENT. The Holder may not include any of its Shares in the
Registration Statement pursuant to this Agreement unless and until the Holder
furnishes to the Company a Questionnaire within 25 days after the Closing. The
Holder agrees to furnish in a reasonable period of time such additional
information as may be reasonably requested in writing by the Company in
connection with the Registration Statement.
3. REGISTRATION PROCEDURES
In connection with the Registration Statement and Underwritten Offering,
the Company shall:
(i) upon the occurrence of any event that would cause the
Registration Statement or any Prospectus contained therein (A) to contain a
material misstatement or omission or (B) not to be effective and usable for
resale of Shares during the period required by this Agreement, the Company shall
file promptly an appropriate amendment to such Registration Statement curing
such defect, and, if Commission review is required, use its reasonable best
efforts to cause such amendment to be declared effective as soon as practicable;
(ii) advise the Holder or its Special Counsel and underwriters
promptly and, if requested by such Persons, confirm such advice in writing, (A)
when the Prospectus or any Prospectus supplement relating to the Holder or
post-effective amendment has been filed, and, with respect to the Registration
Statement or any post-effective amendment thereto, when the same has become
effective, (B) of any request by the Commission for amendments to the
Registration Statement or amendments or supplements relating to the Holder to
the Prospectus or for additional information relating thereto, (C) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement under the Act or of the suspension by any state
securities commission of the qualification of the Shares for offering or sale in
any jurisdiction, or the initiation of any proceeding for any of the preceding
purposes, (D) of the existence of any fact or the happening of any event that
makes any statement of a material fact made in the Registration Statement, the
Prospectus, any amendment or supplement thereto or any document incorporated by
reference therein untrue, or that requires the making of any additions to or
changes in the Registration Statement in order to make the statements therein
not misleading; or that requires the making of any additions to or changes in
the Prospectus in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(iii) if at any time the Commission shall issue any stop order
suspending the effectiveness of the Registration Statement, or any state
securities commission or other regulatory authority shall issue an order
suspending the
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qualification or exemption from qualification of the Shares under state
securities or Blue Sky laws, the Company shall use its reasonable best efforts
to obtain the withdrawal or lifting of such order at the earliest possible time;
(iv) make available at reasonable times for inspection by a
representative of the Holder, and any attorney or accountant retained by the
Holder, or underwriters, all relevant financial and other records and pertinent
corporate documents of the Company and cause the Company's officers, directors
and employees to supply all information reasonably requested by any the Holder,
underwriters, attorney or accountant in connection with such Registration
Statement or any post-effective amendment thereto subsequent to the filing
thereof and prior to its effectiveness, in each case as is customary for similar
due diligence investigations; provided, however, that any information that is
designated in writing by the Company, in good faith, as confidential at the time
of delivery of such information shall be kept confidential by the Holder,
attorney, accountant or agent, unless such disclosure is made in connection with
a court proceeding or required by law, or such information becomes available to
the public generally or through a third party without an accompanying obligation
of confidentiality; and provided further that the foregoing inspection and
information gathering shall, to the greatest extent possible, be coordinated on
behalf of the Holder by one Special Counsel designated by and on behalf of the
Holder;
(v) if requested by the Holder, promptly include in any Registration
Statement or Prospectus, pursuant to a supplement or post-effective amendment if
necessary, such information as the Holder, may reasonably request to have
included therein, including, without limitation, information relating to the
"Plan of Distribution" of the Shares; and make all required filings of such
Prospectus supplement or post-effective amendment as soon as practicable after
the Company is notified of the matters to be included in such Prospectus
supplement or post-effective amendment, provided that the Company shall not be
required to take any actions under this clause that are not, in the opinion of
its counsel, in compliance with applicable law;
(vi) furnish to the Holder, without charge, at least one copy of the
Registration Statement, as first filed with the Commission, and of each
amendment thereto, and upon reasonable request of such selling Holder or
underwriter, all documents incorporated by reference therein and all exhibits
(including exhibits incorporated therein by reference);
(vii) deliver to the Holder, without charge, as many copies of the
Prospectus (including each preliminary prospectus) and any amendment or
supplement thereto as such Persons reasonably may request; the Company hereby
consents to the use (in accordance with law) of the Prospectus and any amendment
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or supplement thereto by the Holder in connection with the offering and the
sale of the Shares covered by the Prospectus or any amendment or supplement
thereto;
(viii) enter into such agreements (including underwriting agreements)
and make such representations and warranties and take all such other actions in
connection therewith, in each case as is customary in underwritten public
offerings, in order to expedite or facilitate the disposition of the Shares
pursuant to the Underwritten Offering contemplated by this Agreement;
(ix) cooperate with the Holder, underwriters and their respective
counsel in connection with the registration and qualification of the Shares
under the securities or Blue Sky laws of such jurisdictions as such Persons may
request and do any and all other acts or things necessary or advisable to enable
the disposition in such jurisdictions of the Shares covered by the Registration
Statement; provided, however, that the Company shall not be required to register
or qualify as a foreign corporation where it is not now so qualified or to take
any action that would subject it to the service of process in suits or to
taxation in any jurisdiction where it is not now so subject;
(x) list all Shares covered by such Registration Statement on any
securities exchange on which the Common Stock is then listed;
(xi) otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the Commission, and make generally available
to its security holders with regard to the Registration Statement, as soon as
practicable, a consolidated earnings statement meeting the requirements of Rule
158 (which need not be audited) covering a twelve-month period beginning after
the effective date of the Registration Statement (as such term is defined in
paragraph (c) of Rule 158 under the Act); and
(xii) take all such action as may reasonably be necessary to effect
the sale of the Shares pursuant to the Underwritten Offering.
4. REGISTRATION EXPENSES
All expenses incident to the Company's performance of or compliance with
this Agreement will be borne by the Company, regardless of whether the
Registration Statement required by this Agreement becomes effective, including
without limitation: (i) all registration and filing fees and expenses; (ii) all
fees and expenses of compliance with federal securities and state Blue Sky or
securities laws; (iii) all expenses of printing (including printing certificates
for the Common Stock and printing of Prospectuses); (iv) all fees and
disbursements of counsel for the Company and a single counsel for the Holder;
(v) all application and filing fees in connection with listing the Common Stock
on a national securities exchange pursuant to the
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requirements hereof; and (vi) all fees and disbursements of independent
certified public accountants of the Company (including the expenses of any
special audit and comfort letters required by or incident to such performance);
PROVIDED, that the Holder shall be responsible for underwriting discounts and
commissions in connection with the sale of the Shares (subject to the "gross-up"
provisions of Section 1.2 of the Purchase Agreement).
5. INDEMNIFICATION
(a) The Company agrees to indemnify and hold harmless the Holder, its
directors, its officers and each Person, if any, who controls the Holder (within
the meaning of Section 15 of the Act and Section 20 of the Exchange Act)(each
such person being sometimes referred to herein as an "Indemnified Holder"), from
and against any and all losses, claims, damages, liabilities, judgments,
(including without limitation, any reasonable legal or other expenses incurred
in connection with investigating or defending any matter, including any action
that could give rise to any such losses, claims, damages, liabilities or
judgments) caused by any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement, preliminary Prospectus or
Prospectus (or any amendment or supplement thereto) or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages, liabilities or judgments are caused by an untrue
statement or omission or alleged untrue statement or omission that is based upon
information relating to any of the Holder furnished in writing to the Company by
any of the Holder, provided, however, that the indemnification contained in this
paragraph (a) with respect to the preliminary Prospectus shall not inure to the
benefit of any Indemnified Holder (or to the benefit of any person controlling
such Indemnified Holder) on account of any such loss, claim, damage, judgment,
liability or expense arising from the sale of the Shares by such Indemnified
Holder to any person if the untrue statement or alleged untrue statement or
omission or alleged omission of a material fact contained in the preliminary
Prospectus was corrected in the Prospectus and, due to the wrongful actions or
wrongful inaction of the Indemnified Holder, the Indemnified Holder did not send
or give in a timely manner, a copy of the Prospectus to such person (as then
amended or supplemented) if the Company has previously furnished sufficient
copies thereof to the Indemnified Holder on a timely basis.
(b) The Holder agrees, severally and not jointly, to indemnify and
hold harmless the Company and its directors and officers, and each person, if
any, who controls (within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act) the Company, to the same extent as the foregoing indemnity
from the Company to the Indemnified Holder, but only with reference to
information relating to such Indemnified Holder furnished in writing to the
Company by such Indemnified Holder expressly for use in the Registration
Statement (or any amendment thereto) or
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Prospectus (or any supplement thereto). In no event shall any Indemnified Holder
be liable or responsible for any amount in excess of the amount by which the
total amount received by such Indemnified Holder with respect to its sale of
Shares pursuant to the Registration Statement exceeds (i) the amount paid by
such Indemnified Holder for such Shares and (ii) the amount of any damages that
such Indemnified Holder has otherwise been required to pay to the Company
pursuant to this Section 5(b) by reason of such untrue or alleged untrue
statement or omission or alleged omission.
(c) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 5(a) or 5(b) (the
"indemnified party"), the indemnified party shall promptly notify the person
against whom such indemnity may be sought (the "indemnifying person") in writing
and the indemnifying party shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the indemnified party and
the payment of all reasonable fees and expenses of such counsel, as incurred
(except that in the case of any action in respect of which indemnity may be
sought pursuant to both Sections 5(a) and 5(b), an Indemnified Holder shall not
be required to assume the defense of such action pursuant to this Section 5(c),
but may employ separate counsel and participate in the defense thereof, but the
fees and expenses of such counsel, except as provided below, shall be at the
expense of the Indemnified Holder). Any indemnified party shall have the right
to employ separate counsel in any such action and participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
the indemnified party unless (i) the employment of such counsel shall have been
specifically authorized in writing by the indemnifying party, (ii) the
indemnifying party shall have failed to assume the defense of such action or
employ counsel reasonably satisfactory to the indemnified party or (iii) the
named parties to any such action (including any impleaded parties) include both
the indemnified party and the indemnifying party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them (in which case the indemnifying party shall not
have the right to assume the defense of such action on behalf of the indemnified
party). In any such case, the indemnifying party shall not, in connection with
any one action or separate but substantially similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances,
be liable for the reasonable fees and expenses of more than one separate firm of
attorneys (in addition to any local counsel) for all indemnified parties and all
such fees and expenses shall be reimbursed as they are incurred. Such firm shall
be designated in writing by a majority of the Indemnified Holder, in the case of
the parties indemnified pursuant to Section 5(a), and by the Company, in the
case of parties indemnified pursuant to Section 5(b). The indemnifying party
shall indemnify and hold harmless the indemnified party from and against any and
all losses, claims, damages, liabilities and judgments by reason of any
settlement of any action (i) effected with its written consent or (ii) effected
without its written consent if the settlement is entered into
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more than twenty business days after the indemnifying party shall have received
a request from the indemnified party for reimbursement for the reasonable fees
and expenses of counsel (in any case where such fees and expenses are at the
expense of the indemnifying party) and, prior to the date of such settlement,
the indemnifying party shall have failed to comply with such reimbursement
request. No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement or compromise of, or consent to the
entry of judgment with respect to, any pending or threatened action in respect
of which the indemnified party is or could have been a party and indemnity or
contribution may be or could have been sought hereunder by the indemnified
party, unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability on claims that
are or could have been the subject matter of such action 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 the indemnified party.
(d) To the extent that the indemnification provided for in this
Section 5 is unavailable to an indemnified party in respect of any losses,
claims, damages, liabilities or judgments referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or judgments (i) in such proportion
as is appropriate to reflect the relative benefits received by the Company, on
the one hand, and the Holder, on the other hand, from their sale of Shares or
(ii) if the allocation provided by clause 5(d)(i) is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause 5(d)(i) above but also the relative fault of the
Company on the one hand, and of the Indemnified Holder, on the other hand, in
connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or judgments, as well as any other relevant
equitable considerations. The relative fault of the Company, on the one hand,
and of the Indemnified Holder, on the other hand, shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company, on the one hand, or by the
Indemnified Holder, on the other hand, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The amount paid or payable by a party as a result of the
losses, claims, damages, liabilities and judgments referred to above shall be
deemed to include, subject to the limitations set forth in the second paragraph
of Section 5(a), any legal or other fees or expenses reasonably incurred by such
party in connection with investigating or defending any action or claim.
The Company and the Holder, agree that it would not be just and equitable
if contribution pursuant to this Section 5(d) were determined by pro rata
allocation (even if the Holder was treated as one entity for such purpose) or by
any other method of allocation which does not take account of the equitable
considerations
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referred to in the immediately preceding paragraph. The amount paid or payable
by an indemnified party as a result of the losses, claims, damages, liabilities
or judgments referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any matter, including any action that could have
given rise to such losses, claims, damages, liabilities or judgments.
Notwithstanding the provisions of this Section 5, no Holder or its related
Indemnified Holder shall be required to contribute, in the aggregate, any amount
in excess of the amount by which the total received by the Holder with respect
to the sale of its Shares pursuant to the Registration Statement exceeds the sum
of (A) the amount paid by the Holder for such Shares plus (B) the amount of any
damages which the Holder has otherwise been required to pay to the Company
pursuant to this Section 5 by reason of such untrue or alleged untrue statement
or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation.
6. MISCELLANEOUS
(a) AMENDMENTS AND WAIVERS. The provisions of this Agreement may not
be amended, modified or supplemented, and waivers or consents to the provisions
hereof may not be given unless the Company has obtained the written consent of
the Holder.
(b) NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier, or air
courier guaranteeing overnight delivery:
(i) if to the Holder:
Mindscape Holding Company
c/x Xxxxxxx Inc.
00 Xxxxxxxxxxx Xxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Chief Financial Officer
Telecopier No: (000) 000-0000
With a copy to:
O'Melveny & Xxxxx LLP
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1999 Avenue of the Stars, Xxxxx 000
Xxx Xxxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx, Esq.
(ii) if to the Company:
The Learning Company, Inc.
Xxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Attention: General Counsel
With a copy to:
Xxxx and Xxxx LLP
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Attention: Xxxx X. Xxxxxx, Esq.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when receipt
acknowledged, if telecopied; and on the next business day, if timely delivered
to an air courier guaranteeing overnight delivery.
(c) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(d) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(e) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO THE
CONFLICT OF LAW RULES THEREOF.
(f) SEVERABILITY. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
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(g) ENTIRE AGREEMENT. This Agreement is intended by the parties as a final
expression of their agreement and intended (together with the Purchase
Agreement) to be a complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject matter contained
herein. There are no restrictions, promises, warranties or undertakings, other
than those set forth or referred to herein with respect to the registration
rights granted with respect to the Shares. This Agreement (together with the
Purchase Agreement) supersedes all prior agreements and understandings between
the parties with respect to such subject matter. For the avoidance of doubt, the
parties acknowledge that the payment obligations in the Purchase Agreement are
to be read in conjunction with, and in no way limited by, this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
THE LEARNING COMPANY, INC.
By: /s/ R. Xxxxx Xxxxxx
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Name: R. Xxxxx Xxxxxx
Title: Executive Vice President and
Chief Financial Officer
HOLDER:
MINDSCAPE HOLDING COMPANY
By: /s/ Xxxxx Xxxx
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Name: Xxxxx Xxxx
Title: President
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