EXHIBIT 99.4
CONFORMED COPY
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REGISTRATION RIGHTS AGREEMENT
Dated as of September 26, 1997
by and among
K-III Communications Corporation
and
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Salomon Brothers Inc
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This Registration Rights Agreement (this "Agreement") is made and
entered into as of September 26, 1997, by and between K-III Communications
Corporation, a Delaware corporation (the "Company") and Xxxxxx Xxxxxxx & Co.
Incorporated, Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated and Salomon
Brothers Inc (collectively, the "Placement Agents"), who have purchased
1,250,000 shares of the Company's $9.20 Series E Exchangeable Preferred Stock
Redeemable 2009 (the "Series E Preferred Stock") pursuant to the Placement
Agreement (as defined below).
This Agreement is made pursuant to the Placement Agreement, dated
September 22, 1997 (the "Placement Agreement"), by and between the Company and
the Placement Agents. In order to induce the Placement Agents to purchase the
Series E Preferred Stock, the Company has agreed to provide the registration
rights set forth in this Agreement. The execution and delivery of this
Agreement is a condition to the obligations of the Placement Agents set forth in
Section 4 of the Placement Agreement.
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have
the following meanings:
144A Offer: The transactions in which the Placement Agents propose
to sell the Series E Preferred Stock to certain "qualified institutional buyers"
(as such term is defined in Rule 144A under the Act) and "institutional
accredited investors" (as such term is defined in Regulation D under the Act)
and in "offshore transactions" (as such term is defined in Regulation S under
the Act) pursuant to the Offering Memorandum.
Act: The Securities Act of 1933, as amended.
Advice: As defined in Section 6(b) hereof.
Applicable Effectiveness Percent: As defined in Section 5 hereof.
Business Day: Each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in The Borough of Manhattan,
The City of New York, New York are authorized or obligated by law or executive
order to close.
Class E Subordinated Debentures: The 9.20% Class E Subordinated
Debentures due 2009 of the Company issuable in exchange for the Series E
Preferred Stock.
Class F Subordinated Debentures: The 9.20% Class F Subordinated
Debentures due 2009 of the Company issuable in exchange for the Series F
Preferred Stock or, in connection with a Registered Exchange Offer for the Class
E Subordinated Debentures and containing terms identical to the Class E
Subordinated Debentures (except that if issued in connection with a Registered
Exchange Offer, interest thereon shall accrue from the Exchange Offer
Consummation Date and except that such securities shall bear no legend and shall
be free from restrictions on transfer).
Closing Date: The date on which the Series E Preferred Stock is first
sold by the Placement Agents pursuant to the 144A Offer.
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Commission: The Securities and Exchange Commission.
Consummate: A Registered Exchange Offer shall be deemed "Consummated"
for purposes of this Agreement upon the occurrence of (i) the filing and
effectiveness under the Act of a Registration Statement relating to the Series F
Preferred Stock or Class F Subordinated Debentures, as applicable, to be issued
in the Registered Exchange Offer, (ii) the maintenance of such Registration
Statement continuously effective for a period of not less than the minimum
period required under applicable federal and state securities laws (provided
that in no event shall such Registered Exchange Offer remain open and the
Registration Statement relating thereto remain continuously effective, in each
case, for less than 20 business days), and (iii) the delivery by the Company to
(A) the transfer agent for the Series F Preferred Stock of the same number of
shares of Series F Preferred Stock as the number of shares of Series E Preferred
Stock tendered by holders thereof pursuant to the Registered Exchange Offer, or
(B) the registrar under the Subordinated Debenture Indenture of Class F
Subordinated Debentures in the same aggregate principal amount as the aggregate
principal amount of Class E Subordinated Debentures tendered by Holders thereof
pursuant to the Registered Exchange Offer.
Dividend Payment Date: As defined in the Certificate of Designations
relating to the Series E Preferred Stock.
Effectiveness Target Date: As defined in Section 5 hereof.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Exchange Offer Consummation Date: The date on which the Registered
Exchange Offer is Consummated.
Exchange Offer Effective Date: The date on which the Registration
Statement relating to the Registered Exchange Offer becomes effective.
Exchange Offer Registration Statement: As defined in Section 3
hereof.
Holder: As defined in Section 2(b) hereof.
Indemnified Party: As defined in Section 8 hereof.
Interest Payment Date: As defined in the Subordinated Debenture
Indenture, for the Subordinated Debentures.
NASD: National Association of Securities Dealers, Inc.
Offering Memorandum: The offering memorandum, dated September 22,
1997 and all amendments and supplements thereto, relating to the Preferred Stock
prepared by the Company pursuant to the Placement Agreement.
Payment Date: Each Dividend Payment Date and each Interest Payment
Date.
Person: An individual, partnership, joint venture, corporation,
trust, estate or unincorporated organization, or a government or agency or
political subdivision thereof.
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Placement Agents: Xxxxxx Xxxxxxx & Co. Incorporated, Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated and Salomon Brothers Inc.
Placement Agreement: The Placement Agreement, dated September 22,
1997, by and among the Company and the Placement Agents pursuant to which the
Placement Agents purchased 1,250,000 shares of the Company's Series E Preferred
Stock.
Preferred Stock: The Series E Preferred Stock and the Series F
Preferred Stock.
Prospectus: The prospectus included in a Registration Statement, as
amended or supplemented by any prospectus supplement and by all other amendments
thereto, including post-effective amendments, and all material, if any,
incorporated by reference into such Prospectus.
Record Holder: (i) With respect to any Payment Date occurring prior
to the date on which the Series E Preferred Stock is exchanged for Class E
Subordinated Debentures, each Person who was a Holder of Series E Preferred
Stock on the record date with respect to the Dividend Payment Date on which such
Payment Date shall occur, or, if no record date was set with respect to such
Dividend Payment Date, the date 15 days prior to such Dividend Payment Date; and
(ii) with respect to any Payment Date occurring after the date on which the
Series E Preferred Stock is exchanged for Class E Subordinated Debentures, each
Person who was a Holder of Class E Subordinated Debentures on the record date
with respect to the Interest Payment Date on which such Payment Date shall
occur.
Registered Exchange Offer: The registration by the Company under the
Act of the Series F Preferred Stock or, if the Series E Preferred Stock has been
exchanged for Class E Subordinated Debentures, Class F Subordinated Debentures
pursuant to a Registration Statement pursuant to which the Company offers the
holders of all outstanding Transfer Restricted Securities the opportunity to
exchange all such outstanding Transfer Restricted Securities held by such Holder
for Series F Preferred Stock or Class F Subordinated Debentures, as applicable,
in an aggregate number of shares or principal amount, as applicable, equal to
the aggregate number of shares or principal amount, as applicable, of the
Transfer Restricted Securities tendered in such exchange offer by such Holders.
Registration Statement: Any registration statement of the Company
relating to (a) an offering of Series F Preferred Stock or, if the Series E
Preferred Stock has been exchanged for Class E Subordinated Debentures, Class F
Subordinated Debentures, pursuant to a Registered Exchange Offer or (b) the
registration for resale of Transfer Restricted Securities pursuant to the Shelf
Registration Statement, which is filed pursuant to the provisions of this
Agreement, including the Prospectus included therein, all amendments and
supplements thereto (including post-effective amendments) and all exhibits and
material incorporated by reference therein.
Series E Preferred Stock: The $9.20 Series E Exchangeable Preferred
Stock Redeemable 2009, par value $.01 per share, of the Company with a
liquidation preference of $100 per share.
Series F Preferred Stock: The $9.20 Series F Exchangeable Preferred
Stock Redeemable 2009, par value $.01 per share, of the Company, issuable in
connection with the Registered Exchange Offer and containing terms identical to
the Series E Preferred Stock (except that dividends thereon will accrue from the
Exchange Offer Consummation Date and except that such securities shall bear no
legend and shall be free from restrictions on transfer).
Shelf Registration Statement: As defined in Section 4 hereof.
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Subordinated Debentures: The Class E Subordinated Debentures and the
Class F Subordinated Debentures.
Subordinated Debenture Indenture: The Indenture between the Company
and the trustee referred to therein pursuant to which the Subordinated
Debentures are issued.
Subordinated Debenture Trustee: The trustee referred to in the
Subordinated Debenture Indenture.
TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb)
as in effect on the date of the Indenture.
Transfer Restricted Securities: Each share of Series E Preferred
Stock and, if the Company has elected to exchange such Series E Preferred Stock,
each Class E Subordinated Debenture issued in exchange therefor, until the
earlier to occur of (a) the Exchange Offer Consummation Date, (b) the date on
which such Preferred Stock or Subordinated Debentures, as applicable, have been
effectively registered under the Act and disposed of in accordance with a
Registration Statement and (c) the date on which such Preferred Stock or
Subordinated Debentures, as applicable, are distributed to the public pursuant
to Rule 144 under the Act.
Underwriter(s): The underwriter(s) participating in any Underwritten
Offering referred to in Section 6(b)(xii) and party to the underwriting
agreement referred to in such section.
Underwritten Registration or Underwritten Offering: A registration in
which securities of the Company are sold to an Underwriter for reoffering to the
public.
SECTION 2. SECURITIES SUBJECT TO THIS AGREEMENT
(a) Transfer Restricted Securities. The securities entitled to the
benefits of this Agreement are the Transfer Restricted Securities.
(b) Holders of Transfer Restricted Securities. A Person is deemed to
be a holder of Transfer Restricted Securities (each, a "Holder") whenever such
Person is the registered owner of Transfer Restricted Securities.
SECTION 3. REGISTERED EXCHANGE OFFER
(a) If, in the reasonable opinion of the Company after consultation
with counsel, (i) the Registered Exchange Offer shall then be permissible under
applicable law and (ii) a Registration Statement (the "Exchange Offer
Registration Statement") with respect to the Series F Preferred Stock or Class F
Subordinated Debentures, as applicable, can be filed after the initial sale of
Series E Preferred Stock pursuant hereto, the Company shall (a) cause to be
filed with the Commission after the Closing Date a Registration Statement under
the Act relating to the Series F Preferred Stock or Class F Subordinated
Debentures, as applicable, (b) use its reasonable best efforts to cause such
Exchange Offer Registration Statement to become effective at the earliest
possible time thereafter, (c) in connection with the foregoing, (1) file all
pre-effective amendments to such Exchange Offer Registration Statement as may be
necessary in order to cause such Exchange Offer Registration Statement to become
effective, (2) if applicable, a post-effective amendment to such Exchange Offer
Registration Statement pursuant to Rule 430A under
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the Act, and (3) use its reasonable best efforts to cause all necessary filings
in connection with the registration and qualification of the Series F Preferred
Stock or Class F Subordinated Debentures, as applicable, to be registered under
the Blue Sky laws of such jurisdictions as are necessary to permit Consummation
of the Registered Exchange Offer, and (d) upon the effectiveness of such
Exchange Offer Registration Statement, commence the Registered Exchange Offer.
The Registered Exchange Offer shall be on the appropriate form permitting
registration of the Series F Preferred Stock or Class F Subordinated Debentures,
as applicable, to be offered in exchange for the Transfer Restricted Securities.
(b) The Company shall cause the Exchange Offer Registration Statement
to be continuously effective for a period of not less than the minimum period
required under applicable federal and state securities laws to Consummate the
Registered Exchange Offer; provided, however, that in no event shall such period
be less than 20 Business Days. The Company shall cause the Registered Exchange
Offer to comply with all applicable federal and state securities laws. No
securities other than the Series F Preferred Stock or Class F Subordinated
Debentures, as applicable, shall be included in the Registration Statement
relating to the Registered Exchange Offer. The Company shall use its reasonable
best efforts to cause the Registered Exchange Offer to be Consummated on the
earliest practicable date after the Exchange Offer Effective Date.
SECTION 4. SHELF REGISTRATION
(a) Shelf Registration. If the Company is not required to file a
Registration Statement with respect to the Registered Exchange Offer pursuant to
Section 3(a) hereof, then pursuant to Rule 415 under the Act, the Company shall
file a "shelf" registration statement (the "Shelf Registration Statement")
relating to all then outstanding Transfer Restricted Securities, the holders of
which shall have provided the information required pursuant to Section 6(a)(i)
and (ii) hereof within the time specified in such section, and shall use its
reasonable best efforts to cause such Shelf Registration Statement to become
effective as promptly as practicable thereafter. Subject to the proviso
contained in Section 6(b)(x), the Company shall use its reasonable best efforts
to keep such Shelf Registration Statement continuously effective and to prevent
the happening of any event described in Section 6(b)(iv)(D) hereof for a period
of two years following the date on which such Shelf Registration Statement
becomes effective under the Act (as may be extended pursuant to Section 6
hereof) or shorter period terminating when all Transfer Restricted Securities
either (i) have been sold pursuant to the Shelf Registration Statement or (ii)
have ceased to be Transfer Restricted Securities pursuant to clause (c) of the
definition of Transfer Restricted Securities.
Subject to the proviso contained in Section 6(b)(x), upon the
occurrence of any event that would cause the Shelf Registration Statement (i) to
contain a material misstatement or omission or (ii) not to be effective and
usable for resale of Transfer Restricted Securities during the period that such
Shelf Registration Statement is required to be effective and usable, the Company
shall promptly file an amendment to the Shelf Registration Statement, in the
case of clause (i), correcting any such misstatement or omission, and in the
case of clauses (i) and (ii), use its reasonable best efforts to cause such
amendment to be declared effective and such Shelf Registration Statement to
become usable as soon as practicable thereafter.
(b) Restrictions on Sale of certain Securities by Others. The
Company agrees to use reasonable best efforts to cause each holder of its
privately placed debt securities (if the Holders effect an Underwritten Offer
with respect to the Subordinated Debentures) or preferred stock (if the Holders
effect an Underwritten Offer with respect to the Preferred Stock), and its
securities convertible into or
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exchangeable or exercisable for any such debt security or preferred stock, as
applicable, purchased from the Company at any time on or after the date of this
Agreement to agree not to effect any public sale or distribution of any such
securities during the 10 day period prior to and during the 60-day period
beginning on the closing date of each Underwritten Offer made pursuant to the
Shelf Registration Statement, including a sale pursuant to Rule 144 under the
Act (except as part of such Underwritten Registration).
SECTION 5. LIQUIDATED DAMAGES
If written notice that the applicable Registration Statement has been
declared effective shall not have been given on or before 180 days following the
Closing Date (the "Effectiveness Target Date"), then, commencing on the first
Payment Date following the 181st day after the Closing Date and on each Payment
Date thereafter until the applicable Registration Statement has been declared
effective, the Company shall pay to each Record Holder an amount, as liquidated
damages, equal to the product of (i) the aggregate liquidation preference of
all shares of Preferred Stock (or, if the Preferred Stock has been exchanged for
Subordinated Debentures, the aggregate principal amount of all such Subordinated
Debentures) constituting Transfer Restricted Securities and (ii) the "Applicable
Effectiveness Percent," which shall accrue from and after the 181st day after
the Closing Date. For purposes hereof, the "Applicable Effectiveness Percent"
shall be one-half of one percent (0.50%) per annum for each of the days
immediately succeeding the 181st day following the Closing Date until the
applicable Registration Statement has been declared effective.
SECTION 6. REGISTRATION PROCEDURES
(a) In connection with the Registered Exchange Offer (if required to
be made pursuant to Section 3(a) hereof):
(i) As a condition to its participation in the Registered
Exchange Offer pursuant to the terms of this Agreement, each Holder of
Transfer Restricted Securities shall be required to furnish, upon the
request of the Company, within 15 Business Days thereafter, such
information regarding such Holder and such Holder's intentions in
connection with the Series F Preferred Stock or Class F Subordinated
Debentures, as applicable, to be received in the Registered Exchange Offer
as the Company may from time to time reasonably request in writing. Each
such Holder shall be required to furnish to the Company all information
required to be disclosed in order to make the information previously
furnished to the Company by such Holder not materially misleading.
(ii) As a condition to its participation in the Registered
Exchange Offer pursuant to the terms of this Agreement, each Holder of
Transfer Restricted Securities shall be required to furnish, upon the
request of the Company, prior to the Consummation thereof a written
representation to the Company that it is not engaged in, and does not
intend to engage in, a distribution of the Series F Preferred Stock or
Class F Subordinated Debentures, as applicable, to be received in the
Registered Exchange Offer and that it is acquiring the Series F Preferred
Stock or Class F Subordinated Debentures, as applicable, in its ordinary
course of business and shall otherwise cooperate in the Company's
preparations for the Registered Exchange Offer. Each Holder shall
acknowledge that any such Holder using the Registered Exchange Offer to
participate in a distribution of the securities to be acquired in the
Registered Exchange Offer (x) could not
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rely on the position of the Commission enunciated in Exxon Capital Holdings
Corporation (available April 13, 1989) or similar no-action letters, (y)
must comply with registration and prospectus delivery requirements of the
Act in connection with a secondary resale transaction and (z) that such a
secondary resale transaction should be covered by an effective registration
statement containing the selling security holder information required by
Item 507 of Regulation S-K.
(iii) If the Registered Exchange Offer relates to the
Subordinated Debentures, the Company shall cause the Subordinated Debenture
Indenture to be qualified under the TIA not later than the effective date
of the first Registration Statement relating to the Registered Exchange
Offer; and, in connection therewith, will cooperate with the Subordinated
Debenture Trustee and the holders of the Class E Subordinated Debentures to
effect such changes to the Subordinated Debenture Indenture as may be
required for such Indenture to be so qualified in accordance with the terms
of the TIA; and will execute, and use its reasonable best efforts to cause
such Subordinated Debenture Trustee to execute, all documents as may be
required to effect such changes and all other forms and documents required
to be filed with the Commission to enable such Indenture to be so qualified
in a timely manner.
(b) In connection with the Shelf Registration Statement, the Company
will use its reasonable best efforts to effect such registration, to permit the
sale of the Transfer Restricted Securities being sold in accordance with the
intended method or methods of distribution thereof and, pursuant thereto, the
Company will as expeditiously as possible:
(i) prepare and file with the Commission, as soon as
practicable, a Registration Statement relating to the registration on any
appropriate form under the Act, cooperate and assist in any filings
required to be made with the NASD and use its reasonable best efforts to
cause such Shelf Registration Statement to become effective and approved by
such governmental agencies or authorities as may be necessary to enable the
selling Holders to consummate the disposition of such Transfer Restricted
Securities; provided that before filing a Shelf Registration Statement or
any Prospectus, or any amendments or supplements thereto, including
documents incorporated by reference after the initial filing of the Shelf
Registration Statement, the Company will furnish to the Holders and the
underwriter(s), if any, copies of all such documents proposed to be filed
prior to the filing thereof and shall make the Company's representative
available for discussion of such documents.
(ii) prepare and file with the Commission such amendments and
post-effective amendments to the Shelf Registration Statement as may be
necessary to keep the Shelf Registration Statement effective for the
applicable period set forth in Section 3 hereof, or such shorter period
which will terminate when all Transfer Restricted Securities covered by
such Shelf Registration Statement have been sold; cause the Prospectus to
be supplemented by any required Prospectus supplement, and as so
supplemented to be filed pursuant to Rule 424 under the Act, and to comply
fully with the applicable provisions of Rules 424 and 430A under the Act in
a timely manner; and comply with the provisions of the Act with respect to
the disposition of all securities covered by such Shelf Registration
Statement during the applicable period in accordance with the intended
method or methods of distribution by the sellers thereof set forth in such
Shelf Registration Statement or supplement to the Prospectus.
(iii) if requested by the Holders of Transfer Restricted
Securities being sold in an Underwritten Offering conducted pursuant to an
Underwriting Agreement referred to in
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Section 6(b)(xii) or the Underwriter(s) thereof, promptly incorporate in a
Prospectus supplement or post-effective amendment such information as such
Underwriter(s) and the Holders of Transfer Restricted Securities being sold
agree should be included therein relating to the plan of distribution of
the Transfer Restricted Securities, including, without limitation,
information with respect to the number of shares of Preferred Stock and
principal amount of Subordinated Debentures being sold to such
Underwriter(s), the purchase price being paid therefor and with respect to
any other terms of the offering of the Transfer Restricted Securities to be
sold in such offering; and make all required filings of such Prospectus
supplement or post-effective amendment as soon as practicable after the
Company is notified of the matters to be incorporated in such Prospectus
supplement or post-effective amendment.
(iv) advise the Underwriter(s), if any, and selling Holders
promptly and, if requested by such Persons, to confirm such advice in
writing, (A) when the Shelf Registration Statement or any post-effective
amendment thereto, has become effective, (B) of any request by the
Commission for amendments to the Registration Statement or amendments or
supplements to the Prospectus or for additional information relating
thereto, (C) if at any time the representations and warranties of the
Company contemplated by paragraph (xii)(A) below cease to be true and
correct, (D) of the existence of any fact and the happening of any event
that makes any statement of a material fact made in the Registration
Statement, the Prospectus, any amendment or supplement thereto, or any
document incorporated by reference therein untrue, or that requires the
making of any additions to or changes in the Registration Statement or the
Prospectus in order to make the statements therein not misleading and (E)
of the receipt by the Company of any stop order from the Commission
suspending the effectiveness of the Registration Statement, and any order
issued by any state securities commission or other regulatory authority
suspending the qualification or exemption from qualification of such
Transfer Restricted Securities under state securities or Blue Sky laws. If
at any time the Company shall receive any such stop order suspending the
effectiveness of the Registration Statement, or any such order from a state
securities commission or other regulatory authority, the Company shall use
its reasonable best efforts to obtain the withdrawal or lifting of such
order at the earliest possible time.
(v) promptly prior to the filing of any document that is to be
incorporated by reference into the Shelf Registration Statement or the
Prospectus (after initial filing of the Shelf Registration Statement),
provide copies of such document to the selling Holders and to the managing
Underwriter(s), if any, and make the Company's representative(s) available
for discussion of such document.
(vi) furnish to each selling Holder and each of the
Underwriter(s), if any, without charge, at least one signed copy of the
Registration Statement, as first filed with the Commission, and of each
amendment thereto, including all documents incorporated by reference
therein and all exhibits (including exhibits incorporated therein by
reference).
(vii) deliver to each selling Holder and each of the
Underwriter(s), if any, without charge, as many copies of the Prospectus
(including each preliminary prospectus) and any amendment or supplement
thereto as such Persons may reasonably request; the Company consents to the
use of the Prospectus and any amendment or supplement thereto by each of
the selling Holders and each of the Underwriter(s), if any, in connection
with the offering and the sale of the Transfer Restricted Securities
covered by the Prospectus or any amendment or supplement thereto.
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(viii) prior to any public offering of Transfer Restricted
Securities, cooperate with the selling Holders, the Underwriter(s), if any,
and their respective counsel in connection with the registration and
qualification of the Transfer Restricted Securities under the securities or
Blue Sky laws of such jurisdictions as the selling Holders or
Underwriter(s) may request and do any and all other acts or things
necessary or advisable to enable the disposition in such jurisdictions of
the Transfer Restricted Securities covered by the Shelf Registration
Statement; provided, however, that the Company shall not be required to
register or qualify as a foreign corporation where it is not then so
qualified or to take any action that would subject it to the service of
process in suits or to taxation, other than as to matters and transactions
relating to the Shelf Registration Statement, in any jurisdiction where it
is not now so subject.
(ix) cooperate with the selling Holders and the Underwriter(s),
if any, to facilitate the timely preparation and delivery of certificates
representing Transfer Restricted Securities to be sold and not bearing any
restrictive legends; and enable such Transfer Restricted Securities to be
in such denominations and registered in such names as the Holders or the
Underwriter(s), if any, may request at least two Business Days prior to any
sale of Transfer Restricted Securities made by such Underwriter(s);
(x) if any fact or event contemplated by Section 6(b)(iv)(D)
above shall exist or have occurred, prepare a supplement or post-effective
amendment to the Registration Statement or related Prospectus or any
document incorporated therein by reference or file any other required
document so that, as thereafter delivered to the purchasers of Transfer
Restricted Securities, the Prospectus, as amended or supplemented, will not
contain an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein not misleading;
provided, however, that the Company shall not be required to comply with
this Section 6(b)(x) if, and only for so long as: (i) the Company shall be
engaged in a transaction; (ii) (A) such transaction is required to be
disclosed in the Registration Statement, the related Prospectus, or any
amendment or supplement thereto, or the failure by the Company to disclose
such transaction in the Registration Statement or related Prospectus, or
any amendment or supplement thereto, as then amended or supplemented, would
cause such Registration Statement, Prospectus or amendment or supplement
thereto, to contain an untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements therein not
misleading, in the light of the circumstances under which they were made;
(B) information regarding the existence of such transaction has not then
been publicly disclosed by or on behalf of the Company; and (C) the Company
determines, in its reasonable judgment, that disclosure of such transaction
would have a material adverse effect (1) on the business, condition
(financial or other), results of operations or properties of the Company
and its subsidiaries, taken as a whole, or (2) on the consummation of such
transaction and (iii) the Company notifies the Holders promptly after
making the determination set forth in clause (ii).
(xi) provide a CUSIP number for all Transfer Restricted
Securities not later than the effective date of Exchange Offer Registration
Statement or the Shelf Registration Statement;
(xii) enter into such customary agreements (including an
underwriting agreement in form reasonably satisfactory to the Company) and
take all such other actions in connection therewith as may be requested by
the Holders of a majority of the outstanding shares (or principal amount,
as the case may be) of the Transfer Restricted Securities or the managing
Underwriter(s) in order to expedite or facilitate the disposition of the
Transfer Restricted Securities
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pursuant to the Shelf Registration and, in connection with any such
underwriting agreement entered into by the Company, (A) make such
representations and warranties to the Holders and the Underwriter(s), in
form, substance and scope as are customarily made by issuers to
Underwriters in primary underwritten offerings and covering matters
including, but not limited to, those set forth in the Placement Agreement;
(B) obtain opinions of counsel to the Company and updates thereof (which
counsel and opinions (in form, scope and substance) shall be reasonably
satisfactory to the Underwriter(s) and the Holders of the Transfer
Restricted Securities being sold) addressed to each selling Holder and the
Underwriter(s) covering the matters customarily covered in opinions
requested in underwritten offerings and such other matters as may be
reasonably requested by such Holders and Underwriters; (C) obtain "cold
comfort" letters and updates thereof from the Company's independent
certified public accountants addressed to the Underwriters and use its
reasonable best efforts to obtain such "cold comfort" letters addressed to
the Holders of Transfer Restricted Securities, such letters to be in
customary form and covering matters of the type customarily covered in
"cold comfort" letters by Underwriters in connection with primary
underwritten offerings; (D) set forth in full or incorporate by reference
in the underwriting agreement the indemnification provisions and procedures
of Section 8 hereof with respect to all parties to be indemnified pursuant
to said Section; and (E) deliver such documents and certificates as may be
reasonably requested by the Holders of the Transfer Restricted Securities
being sold or the underwriter(s) of such Underwritten Offering to evidence
compliance with clause (A) above and with any customary conditions
contained in the underwriting agreement or other agreement entered into by
the Company pursuant to this clause (xii). The above shall be done at each
closing under such underwriting or similar agreement, as and to the extent
required thereunder. Notwithstanding the foregoing, in no event shall any
Holder be entitled to participate in an Underwritten Registration unless
Holders of Preferred Stock the aggregate liquidation preference of which
equals or exceeds $25 million (or, if the Preferred Stock has been
exchanged for Subordinated Debentures, the principal amount of which equals
or exceeds $25 million) shall first notify the Company of their intent to
retain an Underwriter for such purpose pursuant to Section 11 hereof.
(xiii) make available at reasonable times for inspection by
the Holders of the Transfer Restricted Securities, any Underwriter
participating in an Underwritten Offering pursuant to such Shelf
Registration Statement and any attorney or accountant retained by such
selling Holders or any of the Underwriters (collectively, the
"Inspectors"), all financial and other records, pertinent corporate
documents and properties of the Company as shall be requested by any such
Inspector in connection with such Shelf Registration Statement subsequent
to the filing thereof and prior to its effectiveness; provided, however,
that any Records which the Company determines, in good faith, to be
confidential and which it notifies the Inspectors in writing are
confidential shall not be disclosed to any Inspector unless (i) such
Inspector signs a confidentiality agreement reasonably satisfactory to the
Company or (ii) the release of such Records is ordered pursuant to a
subpoena or other court order or is otherwise required by law. Each Holder
agrees that it will, promptly after learning that disclosure of such
Records is sought by a court having jurisdiction, give notice to the
Company and allow the Company to undertake appropriate action to prevent
disclosure of such Records (it being understood, however, that, in no
event, shall any Holder be required to violate any such subpoena, court
order or applicable law as a result of the Company's actions to prevent
such disclosure).
(xiv) 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 as soon as practicable a
consolidated earnings statement (which need not be audited) for the
twelve-month
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period (A) commencing at the end of any fiscal quarter in which Transfer
Restricted Securities are sold to the Underwriters in a firm or best
efforts Underwritten Offering or (B) if not sold to the Underwriters in
such an offering, beginning with the first month of the Company's first
fiscal quarter commencing after the effective date of the Shelf
Registration Statement.
(xv) cause the Subordinated Debenture Indenture to be qualified
under the TIA, and, in connection therewith, cooperate with the
Subordinated Debenture Trustee and the Holders to effect such changes to
such Indenture as may be required for such Indentures to be so qualified in
accordance with the terms of the TIA; and execute and use its reasonable
best efforts to cause such Subordinated Debenture Trustee to execute, all
documents as may be required to effect such changes and all other forms and
documents required to be filed with the Commission to enable such Indenture
to be so qualified in a timely manner.
Each Holder as to which any Shelf Registration Statement is being
effected shall furnish promptly to the Company all information required to be
disclosed in order to make the information previously furnished to the Company
by such Holder not materially misleading.
Upon receipt of any notice from the Company of the existence of any
fact of the kind described in Section 6(b)(iv)(D) hereof, each Holder will
forthwith discontinue disposition of Transfer Restricted Securities until such
Holder's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 6(b)(x) hereof, or until it is advised in writing (the
"Advice") by the Company that the use of the Prospectus may be resumed, and has
received copies of any additional or supplemental filings which are incorporated
by reference in the Prospectus. If so directed by the Company, each Holder will
deliver to the Company (at the Company's expense) all copies, other than
permanent file copies then in such Holder's possession, of the Prospectus
covering such Transfer Restricted Securities current at the time of receipt of
such notice. In the event the Company shall give any such notice, the time
period regarding the effectiveness of the Registration Statement set forth in
Section 4(a) hereof shall be extended by the number of days during the period
from and including the date of the giving of such Advice to and including the
date when each selling Holder covered by such Registration Statement shall have
received the copies of the supplemented or amended Prospectus contemplated by
Section 6(b)(x) hereof.
SECTION 7. REGISTRATION EXPENSES
(a) All expenses incident to the Company's performance of or
compliance with this Agreement will be borne by the Company, regardless of
whether a Registration Statement becomes effective, including without limitation
all: (i) registration and filing fees and expenses (including filings made with
the NASD (including, if applicable, the fees and expenses of any "qualified
independent underwriter" and its counsel, as may be required by the rules and
regulations of the NASD)); (ii) fees and expenses of compliance with federal
securities and state Blue Sky or securities laws; (iii) expenses of printing
(including printing certificates for the Preferred Stock, Subordinated
Debentures and Prospectuses), messenger and delivery services and telephone;
(iv) reasonable fees and disbursements of counsel for the Company and the
Holders of the Transfer Restricted Securities; (v) all application and filing
fees in connection with listing the Preferred Stock and the Subordinated
Debentures on a national securities exchange or automated quotation system
pursuant to the requirements hereof; and (vi) reasonable fees and disbursements
of independent certified public accountants of the Company (including the
expenses of any special audit and "cold comfort" letters required by or incident
to such performance).
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The Company will, in any event, bear its internal expenses (including,
without limitation, all salaries and expense of its officers and employees
performing legal or accounting duties), the expenses of any annual audit, rating
agency fees and the fees and expenses of any Person, including special experts,
retained by the Company.
(b) In connection with the Shelf Registration Statement, the Company
will reimburse the Holders of Transfer Restricted Securities being tendered or
registered for the reasonable fees and disbursements of Xxxxxx & Xxxxxxx, as
counsel to such Holders. Notwithstanding the provisions of this Section 7, each
Holder shall pay all registration expenses to the extent required by applicable
law.
SECTION 8. INDEMNIFICATION
(a) The Company agrees to indemnify and hold harmless each Holder of
Transfer Restricted Securities and each person, if any, who controls such Holder
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act, or is under common control with or is controlled by such
Holder from and against any and all losses, claims, damages and liabilities
(including, without limitation, any legal or other expenses reasonably incurred
by any Holder of Transfer Restricted Securities or any such controlling person
or person who is under common control with, or is controlled by such Holder, in
connection with defending or investigating any such action or claim) caused by
any untrue statement or alleged untrue statement of a material fact contained in
either Memorandum (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto), or caused by any omission or
alleged omission to state therein a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, except (i) insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon information relating to any Holder of
Transfer Restricted Securities furnished to the Company in writing by such
Holder expressly for use therein and (ii) that the foregoing indemnity with
respect to any untrue statement contained in or omission from a Memorandum shall
not inure to the benefit of any Holder of Transfer Restricted Securities (or any
person controlling, under common control with, or controlled by, such Holder)
from whom the person asserting any such loss, claim, damage or liability
purchased any of the Securities which are the subject thereof if such person was
not sent or given a copy of the Memorandum (or the Memorandum as amended or
supplemented) at or prior to the written confirmation of the sale of such
Securities to such person and the untrue statement contained in or omission from
such Memorandum was contained in the Memorandum (or the Memorandum as amended or
supplemented).
(b) Each Holder of Transfer Restricted Securities agrees, severally
and not jointly, to indemnify and hold harmless each of the Company, its
directors, its 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 to the same extent as the foregoing indemnity from the Company to
such Holder, but only with reference to information relating to such Holder
furnished to the Company in writing by such Holder expressly for use in either
Memorandum or any amendments or supplements thereto.
(c) In case any proceeding (including without limitation any
governmental investigation) shall be instituted involving any person in respect
of which indemnity may be sought pursuant to either paragraph (a) or (b) above,
such person (the "Indemnified Party") shall promptly notify the person against
whom such indemnity may be sought (the "Indemnifying Party") in writing and the
Indemnifying Party, upon request of the Indemnified Party, shall retain counsel
reasonably satisfactory to the Indemnified Party to represent the Indemnified
Party and any others the Indemnifying Party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any
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such proceeding, any Indemnified Party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Party unless (i) the Indemnifying Party and the Indemnified
Party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the Indemnifying Party and the Indemnified Party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the Indemnifying Party
shall not, in respect of the legal expenses of any Indemnified Party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such indemnified parties and that all such fees
and expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by Xxxxxx Xxxxxxx & Co. Incorporated, in the case of
parties indemnified pursuant to paragraph (a) above and by the Company in the
case of parties indemnified pursuant to paragraph (b) above. The Indemnifying
Party shall not be liable for any settlement of any proceeding effected without
its written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the Indemnifying Party agrees to indemnify the
Indemnified Party from and against any loss or liability by reason of such
settlement or judgment. Notwithstanding the immediately preceding sentence, if
at any time an Indemnified Party shall have requested an Indemnifying Party to
reimburse the Indemnified Party for fees and expenses of counsel as contemplated
by the second and third sentences of this paragraph, the Indemnifying Party
agrees that it shall be liable for any settlement of any proceeding effected
without its written consent if (i) such settlement is entered into more than 60
days after receipt by such Indemnifying Party of the aforesaid request and (ii)
such Indemnifying Party shall not have reimbursed the Indemnified Party in
accordance with such request prior to the date of such settlement. No
Indemnifying Party shall, without the prior written consent of the Indemnified
Party, effect any settlement of any pending or threatened proceeding in respect
of which any Indemnified Party is or could have been a party and indemnity could
have been sought hereunder by such Indemnified Party, unless such settlement
includes an unconditional release of such Indemnified Party from all liability
on claims that are the subject matter of such proceeding.
(d) To the extent the indemnification provided for in paragraph (a)
or (b) of this Section 8 is unavailable to an Indemnified Party or insufficient
in respect of any losses, claims, damages or liabilities referred to therein,
then each Indemnifying Party under such paragraph, in lieu of indemnifying such
Indemnified Party thereunder, shall contribute to the amount paid or payable by
such Indemnified Party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company, on the one hand, and the Holders of Transfer
Restricted Securities on the other hand, from their sale of the Transfer
Restricted Securities or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company, on the one hand, and of the Holders of Transfer
Restricted Securities, on the other hand, in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative fault of the
Company and the Holders of Transfer Restricted Securities 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 or by
the Holders of Transfer Restricted Securities and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
(e) The Company and the Holders of Transfer Restricted Securities
agree that it would not be just or equitable if contribution pursuant to this
Section 8 were determined by pro rata allocation or by any other method of
allocation that does not take account of the equitable considerations referred
13
to in paragraph (d) above. The amount paid or payable by an Indemnified Party
as a result of the losses, claims, damages and liabilities referred to in
paragraph (d) above shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such Indemnified
Party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 8, no Holder of Transfer
Restricted Securities shall be required to contribute any amount in excess of
the amount by which the total price at which the Securities resold by it in the
initial placement of such Securities were offered to investors exceeds the
amount of any damages that such Holder has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
remedies provided for in this Section 8 are not exclusive and shall not limit
any rights or remedies which may otherwise be available to any Indemnified Party
at law or in equity.
(f) The indemnity and contribution provisions contained in this
Section 8 and the representations and warranties of the Company contained in
this Agreement shall remain operative and in full force and effect regardless of
(i) any termination of this Agreement, (ii) any investigation made by or on
behalf of any Holder of Transfer Restricted Securities or any person controlling
any Holder of Transfer Restricted Securities or by or on behalf of the Company,
its officers or directors or any person controlling the Company and (iii)
acceptance of and payment for any of the Securities. The remedies provided for
in this Section 8 are not exclusive and shall not limit any rights or remedies
that may otherwise be available to any Indemnified Party at law or equity.
SECTION 9. RULE 144A
The Company hereby agrees with each Holder, for so long as any of the
Series E Preferred Stock or Class E Subordinated Debentures remain outstanding
and during any period in which the Company is not subject to Section 13 or 15(d)
of the Exchange Act, to make available to any Placement Agent or beneficial
owner of such Transfer Restricted Securities in connection with any sale thereof
and any prospective purchaser of such Transfer Restricted Securities from such
Placement Agent or beneficial owner, the information required by Rule 144A(d)(4)
under the Act.
SECTION 10. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS
No Holder may participate in any Underwritten Registration hereunder
unless such Holder (a) agrees to sell such Holder's Transfer Restricted
Securities on the basis provided in any underwriting arrangements approved by
the Persons entitled hereunder to approve such arrangements and (b) completes
and executes the related underwriting agreement and all questionnaires, powers
of attorney, indemnities, and other documents required under the terms of such
underwriting arrangements.
SECTION 11. SELECTION OF UNDERWRITERS
Subject to Section 6(b)(xii) hereof, the Holders of Transfer
Restricted Securities covered by the Shelf Registration Statement who desire to
do so may sell such Transfer Restricted Securities in an Underwritten Offering.
The Underwriter(s) that will administer said offerings will be selected by the
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Holders of a majority of the outstanding shares or the aggregate principal
amount, as applicable, of the Transfer Restricted Securities included in such
Underwritten Offering.
SECTION 12. MISCELLANEOUS
(a) Remedies. Each Holder, in addition to being entitled to exercise
all rights provided herein, in the Subordinated Debenture Indenture, in the
Placement Agreement and granted by law, including recovery of damages, will be
entitled to specific performance of its rights under this Agreement. The
Company agrees that monetary damages would not be adequate compensation for any
loss incurred by reason of a breach by it of the provisions of this Agreement
and hereby agrees to waive the defense in any action for specific performance
that a remedy at law would be adequate.
(b) No Inconsistent Agreements. The Company will not on or after the
date of this Agreement enter into any agreement with respect to its securities
that is inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof. The rights granted to the
Holders hereunder do not in any way conflict with and are not inconsistent with
the rights granted to the holders of the Company's securities under any
agreements of the Company in effect on the date hereof.
(c) Amendments and Waivers. The provisions of this Agreement may not
be amended, modified or supplemented, and waivers or consents to or departures
from the provisions hereof may not be given unless the Company has obtained the
written consent of Holders of a majority of, in the case of Preferred Stock, the
outstanding shares and, in the case of Subordinated Debentures, the then
outstanding aggregate principal amount, in each case, that are Transfer
Restricted Securities.
(d) 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 a Holder, at the address set forth on the records of
the transfer agent for the Preferred Stock or the Registrar for the
Subordinated Debentures, as applicable, with a copy to the transfer agent
or the Registrar; and
(ii) if to the Company, to K-III Communications Corporation, 000
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Attention: Xxxxxxx Xxxxx, with a
copy to Xxxxxxx Xxxxxxx & Xxxxxxxx at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx, 00000, Attention: Xxxx X. Xxxxxxxx.
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
answered back, if telexed; when receipt acknowledged, if telecopied; and on the
next Business Day, if timely delivered to an air courier guaranteeing overnight
delivery.
From and after the date on which the Preferred Stock is exchanged for
Subordinated Debentures, copies of all such notices, demands or other
communications shall be concurrently delivered by the Person giving the same to
the trustee under the Subordinated Debenture Indenture at the address specified
therein.
15
(e) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including without limitation and without the need for an express
assignment hereof, subsequent Holders of Transfer Restricted Securities;
provided, however, that this Agreement shall not inure to the benefit of or be
binding upon a successor or assign of a Holder unless and to the extent such
successor or assign acquired Transfer Restricted Securities from such Holder.
(f) 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.
(g) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(h) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT OF LAW RULES THEREOF.
(i) 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.
(j) Entire Agreement. This Agreement together with the other
Operative Documents (as defined in the Placement Agreement) is intended by the
parties as a final expression of their agreement and intended 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 by the Company with
respect to the Transfer Restricted Securities. This Agreement supersedes all
prior agreements and understandings between the parties with respect to such
subject matter.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
K-III Communications Corporation
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice Chairman
CONFIRMED AND ACCEPTED,
as of the date first written above
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Salomon Brothers Inc
By: XXXXXX XXXXXXX & CO. INCORPORATED
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Principal
