Exhibit 99.7
April __, 2003
EXCHANGE AGENT AGREEMENT
Citibank, N.A.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Agency & Trust Services
Ladies and Gentlemen:
Scholastic Corporation, a Delaware corporation (the "Company"),
proposes to make an offer (the "Exchange Offer") to exchange all of its
outstanding 5% Notes Due 2013 (the "Old Notes") for its registered 5% Notes Due
2013 (the "New Notes"). The terms and conditions of the Exchange Offer as
currently contemplated are set forth in a prospectus, dated April __, 2003 (the
"Prospectus"), proposed to be distributed to all record holders of the Old
Notes. The Old Notes and the New Notes are collectively referred to herein as
the "Notes."
The Company hereby appoints Citibank, N.A. to act as exchange agent
(the "Exchange Agent") in connection with the Exchange Offer. References
hereinafter to "you" shall refer to Citibank, N.A.
The Exchange Offer is expected to be commenced by the Company on or
about ____, 2003. The Letter of Transmittal accompanying the Prospectus (or in
the case of book-entry securities, the Automated Tender Offer Program ("ATOP")
of the Book-Entry Transfer Facility (as defined below)) is to be used by the
holders of the Old Notes to accept the Exchange Offer and contains instructions
with respect to the delivery of certificates for Old Notes tendered in
connection therewith.
The Exchange Offer shall expire at 5:00 p.m., New York City time, on
____, 2003 or on such subsequent date or time to which the Company may extend
the Exchange Offer (the "Expiration Date"). Subject to the terms and conditions
set forth in the Prospectus, the Company expressly reserves the right to extend
the Exchange Offer from time to time and may extend the Exchange Offer by giving
oral (promptly
confirmed in writing) or written notice to you before 9:00 a.m., New York City
time, on the business day following the previously scheduled Expiration Date.
The Company expressly reserves the right to amend or terminate the
Exchange Offer, and not to accept for exchange any Old Notes not theretofore
accepted for exchange, upon the occurrence of any of the conditions of the
Exchange Offer specified in the Prospectus under the caption "The Exchange
Offer -- Conditions to the Exchange Offer." The Company will give oral
(promptly confirmed in writing) or written notice of any amendment,
termination or nonacceptance to you as promptly as practicable.
In carrying out your duties as Exchange Agent, you are to act in
accordance with the following instructions:
1. You will perform such duties and only such duties as are
specifically set forth in the section of the Prospectus captioned "The Exchange
Offer" or as specifically set forth herein; PROVIDED, HOWEVER, that in no way
will your general duty to act in good faith be discharged by the foregoing.
2. You will establish a book-entry account with respect to the Old
Notes at The Depository Trust Company (the "Book-Entry Transfer Facility") for
purposes of the Exchange Offer within two business days after the date of the
Prospectus, and any financial institution that is a participant in the
Book-Entry Transfer Facility's systems may make book-entry delivery of the Old
Notes by causing the Book-Entry Transfer Facility to transfer such Old Notes
into your account in accordance with the Book-Entry Transfer Facility's
procedure for such transfer.
3. You are to examine each of the Letters of Transmittal and
certificates for Old Notes (or confirmation of book-entry transfer into your
account at the Book-Entry Transfer Facility) and any other documents delivered
or mailed to you by or for holders of the Old Notes to ascertain whether: (i)
the Letters of Transmittal and any such other documents are duly executed and
properly completed in accordance with instructions set forth therein; and (ii)
the Old Notes have otherwise been properly tendered. In each case where the
Letter of Transmittal or any other document has been improperly completed or
executed or any of the certificates for Old Notes are not in proper form for
transfer or some other irregularity in connection with the acceptance of the
Exchange Offer exists, you will endeavor to inform the presenters of the need
for fulfillment of all requirements and to take any other action as may be
reasonably necessary or advisable to cause such irregularity to be corrected.
4. With the approval of the President, Executive Vice President,
Senior Vice President or any Vice President of the Company (such approval, if
given orally, to be promptly confirmed in writing) or any other party
designated in writing, by such an officer, you are authorized to waive any
irregularities in connection with any tender of Old Notes pursuant to the
Exchange Offer.
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5. Tenders of Old Notes may be made only as set forth in the Letter
of Transmittal and in the section of the Prospectus captioned "The Exchange
Offer -- Procedures for Tendering," and Old Notes shall be considered properly
tendered to you only when tendered in accordance with the procedures set forth
therein.
Notwithstanding the provisions of this Section 5, Old Notes which
the President, Executive Vice President, Senior Vice President or any Vice
President of the Company shall approve as having been properly tendered shall
be considered to be properly tendered (such approval, if given orally, shall
be promptly confirmed in writing).
6. You shall advise the Company with respect to any Old Notes
received subsequent to the Expiration Date and accept its instructions with
respect to disposition of such Old Notes.
7. You shall accept tenders:
(a) in cases where the Old Notes are registered in two or
more names only if signed by all named holders;
(b) in cases where the signing person (as indicated on the
Letter of Transmittal) is acting in a fiduciary or a representative capacity
only when proper evidence of his or her authority so to act is submitted; and
(c) from persons other than the registered holder of Old
Notes, provided that customary transfer requirements, including payment of any
applicable transfer taxes, are fulfilled.
You shall accept partial tenders of Old Notes where so indicated and
as permitted in the Letter of Transmittal and deliver certificates for Old Notes
to the registrar for split-up and return any untendered Old Notes to the holder
(or such other person as may be designated in the Letter of Transmittal) as
promptly as practicable after expiration or termination of the Exchange Offer.
8. Upon satisfaction or waiver of all of the conditions to the
Exchange Offer, the Company will notify you (such notice, if given orally, to be
promptly confirmed in writing) of its acceptance, promptly after the Expiration
Date, of all Old Notes properly tendered and you, on behalf of the Company, will
exchange such Old Notes for New Notes and cause such Old Notes to be cancelled.
Delivery of New Notes will be made on behalf of the Company by you at the rate
of $1,000 principal amount of New Notes for each $1,000 principal amount of the
corresponding series of Old Notes tendered promptly after notice (such notice if
given orally, to be promptly confirmed in writing) of acceptance of said Old
Notes by the Company; provided, however, that in all cases, Old Notes tendered
pursuant to the Exchange Offer will be exchanged only after timely receipt by
you of certificates for such Old Notes (or confirmation of book-entry transfer
into your account at the Book-Entry Transfer
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Facility), a properly completed and duly executed Letter of Transmittal (or
manually signed facsimile thereof) with any required signature guarantees and
any other required documents. You shall issue New Notes only in denominations of
$1,000 or any integral multiple thereof.
9. Tenders pursuant to the Exchange Offer are irrevocable, except
that, subject to the terms and upon the conditions set forth in the Prospectus
and the Letter of Transmittal, Old Notes tendered pursuant to the Exchange Offer
may be withdrawn at any time prior to the Expiration Date.
10. The Company shall not be required to exchange any Old Notes
tendered if any of the conditions set forth in the Exchange Offer are not met.
Notice of any decision by the Company not to exchange any Old Notes tendered
shall be given (if given orally, to be promptly confirmed in writing) by the
Company to you.
11. If, pursuant to the Exchange Offer, the Company does not accept
for exchange all or part of the Old Notes tendered because of an invalid tender,
the occurrence of certain other events set forth in the Prospectus under the
caption "The Exchange Offer -- Conditions to the Exchange Offer" or otherwise,
you shall as soon as practicable after the expiration or termination of the
Exchange Offer return those certificates for unaccepted Old Notes (or effect
appropriate book-entry transfer), together with any related required documents
and the Letters of Transmittal relating thereto that are in your possession, to
the persons who deposited them.
12. All certificates for reissued Old Notes, unaccepted Old Notes or
for New Notes shall be forwarded by first-class mail.
13. You are not authorized to pay or offer to pay any concessions,
commissions or solicitation fees to any broker, dealer, bank or other persons or
to engage or utilize any person to solicit tenders.
14. As Exchange Agent hereunder you:
(a) shall not be liable for any action or omission to act
unless the same constitutes your own gross negligence, willful misconduct or bad
faith, and in no event shall you be liable to a securityholder, the Company or
any third party for special, indirect or consequential damages, or lost profits,
arising in connection with this Agreement;
(b) shall have no duties or obligations other than those
specifically set forth herein or as may be subsequently agreed to in writing
between you and the Company;
(c) will be regarded as making no representations and having
no responsibilities as to the validity, sufficiency, value or genuineness of any
of the
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certificates or the Old Notes represented thereby deposited with you pursuant to
the Exchange Offer, and will not be required to and will make no representation
as to the validity, value or genuineness of the Exchange Offer;
(d) shall not be obligated to take any legal action hereunder
which might in your judgment involve any expense or liability, unless you shall
have been furnished with indemnity satisfactory to you;
(e) may conclusively rely on and shall be protected in acting
in reliance upon any certificate, instrument, opinion, notice, letter, telegram
or other document or security delivered to you and believed by you to be genuine
and to have been signed or presented by the proper person or persons;
(f) may act upon any tender, statement, request, document,
agreement, certificate or other instrument whatsoever not only as to its due
execution and validity and effectiveness of its provisions, but also as to the
truth and accuracy of any information contained therein, which you shall in good
faith believe to be genuine or to have been signed or presented by the proper
person or persons;
(g) may conclusively rely on and shall be protected in acting
upon written or oral instructions from any authorized officer of the Company;
(h) may consult with counsel of your selection with respect
to any questions relating to your duties and responsibilities and the advice or
opinion of such counsel shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted to be taken by you hereunder
in good faith and in accordance with the advice or opinion of such counsel; and
(i) shall not advise any person tendering Old Notes pursuant
to the Exchange Offer as to the wisdom of making such tender or as to the market
value or decline or appreciation in market value of any Old Notes or New Notes.
15. You shall take such action as may from time to time be requested
by the Company (and such other action as you may deem appropriate) to furnish
copies of the Prospectus, Letter of Transmittal and the Notice of Guaranteed
Delivery (as defined in the Prospectus) or such other forms as may be approved
from time to time by the Company, to all persons requesting such documents and
to accept and comply with telephone requests for information relating to the
Exchange Offer, provided that such information shall relate only to the
procedures for accepting (or withdrawing from) the Exchange Offer. The Company
will furnish you with copies of such documents on your request. All other
requests for information relating to the Exchange Offer shall be directed to the
Company, Attention: Xxxxxxx Xxxxxxx, Senior Vice President, Finance and Investor
Relations, (000) 000-0000.
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16. You shall advise by facsimile transmission Xxxxxxx Xxxxxxx, the
Vice President and Treasurer of the Company (at the facsimile number
212-343-6998), and such other person or persons as the Company may request,
daily (and more frequently during the week immediately preceding the Expiration
Date if requested) up to and including the Expiration Date, as to the number of
Old Notes which have been tendered pursuant to the Exchange Offer and the items
received by you pursuant to this Agreement, separately reporting and giving
cumulative totals as to items properly received and items improperly received.
In addition, you will also inform, and cooperate in making available to, the
Company or any such other person or persons upon oral request made from time to
time prior to the Expiration Date of such other information as they may
reasonably request. Such cooperation shall include, without limitation, the
granting by you to the Company and such person as the Company may request of
access to those persons on your staff who are responsible for receiving tenders,
in order to ensure that immediately prior to the Expiration Date the Company
shall have received information in sufficient detail to enable it to decide
whether to extend the Exchange Offer. You shall prepare a final list of all
persons whose tenders were accepted, the aggregate principal amount of Old Notes
tendered, and the aggregate principal amount of Old Notes accepted and deliver
said list to the Company.
17. Letters of Transmittal and Notices of Guaranteed Delivery shall
be stamped by you as to the date and, after the expiration of the Exchange
Offer, the time, of receipt thereof and shall be preserved by you for a period
of time at least equal to the period of time you preserve other records
pertaining to the transfer of securities. You shall dispose of unused Letters of
Transmittal and other surplus materials by returning them to the Company.
18. For services rendered as Exchange Agent hereunder, you shall be
entitled to such compensation as set forth on Schedule I attached hereto. The
provisions of this section shall survive the termination of this Agreement.
19. You hereby acknowledge receipt of the Prospectus and the Letter
of Transmittal. Any inconsistency between this Agreement, on the one hand, and
the Prospectus and the Letter of Transmittal (as they may be amended from time
to time), on the other hand, shall be resolved in favor of the latter two
documents, except with respect to your duties, liabilities and indemnification
as Exchange Agent.
20. The Company covenants and agrees to fully indemnify and hold you
harmless against any and all loss, liability, cost or expense, including
attorneys' fees and expenses, incurred without gross negligence or willful
misconduct on your part, arising out of or in connection with any act, omission,
delay or refusal made by you in reliance upon any signature, endorsement,
assignment, certificate, order, request, notice, instruction or other instrument
or document believed by you to be valid, genuine and sufficient and in accepting
any tender or effecting any transfer of Old Notes believed by you in good faith
to be authorized, and in delaying or refusing in good faith to accept any
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tenders or effect any transfer of Old Notes. In each case, the Company shall be
notified by you, by letter or facsimile transmission, of the written assertion
of a claim against you or of any other action commenced against you, promptly
after you shall have received any such written assertion or shall have been
served with a summons in connection therewith. The Company shall be entitled to
participate at its own expense in the defense of any such claim or other action
and, if the Company so elects, the Company shall assume the defense of any suit
brought to enforce any such claim. In the event that the Company shall assume
the defense of any such suit, the Company shall not be liable for the fees and
expenses of any additional counsel thereafter retained by you, so long as the
Company shall retain counsel satisfactory to you to defend such suit, and so
long as you have not determined, in your reasonable judgment, that a conflict of
interest exists between you and the Company. The provisions of this section
shall survive the termination of this Agreement.
21. You shall arrange to comply with all requirements under the tax
laws of the United States, including those relating to missing Tax
Identification Numbers, and shall file any appropriate reports with the Internal
Revenue Service.
22. You shall deliver or cause to be delivered, in a timely manner to
each governmental authority to which any transfer taxes are payable in respect
of the exchange of Old Notes, the Company's check in the amount of all transfer
taxes so payable; provided, however, that you shall reimburse the Company for
amounts refunded to you in respect of your payment of any such transfer taxes,
at such time as such refund is received by you.
23. This Agreement and your appointment as Exchange Agent hereunder
shall be construed and enforced in accordance with the laws of the State of New
York applicable to agreements made and to be performed entirely within such
state, and without regard to conflicts of law principles, and shall inure to the
benefit of, and the obligations created hereby shall be binding upon, the
successors and assigns of each of the parties hereto.
24. This Agreement may be executed in two or more counterparts, each
of which shall be deemed to be an original and all of which together shall
constitute one and the same agreement.
25. In case any provision of this Agreement shall be invalid, illegal
or unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
26. This Agreement shall not be deemed or construed to be modified,
amended, rescinded, cancelled or waived, in whole or in part, except by a
written instrument signed by a duly authorized representative of the party to be
charged. This Agreement may not be modified orally.
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27. Unless otherwise provided herein, all notices, requests and other
communications to any party hereunder shall be in writing (including facsimile
or similar writing) and shall be given to such party, addressed to it, at its
address or telecopy number set forth below:
If to the Company:
Scholastic Corporation
000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx, Esq.
General Counsel
If to the Exchange Agent:
Citibank, N.A.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Agency & Trust Services
28. Unless terminated earlier by the parties hereto, this Agreement
shall terminate 90 days following the Expiration Date. Notwithstanding the
foregoing, Sections 18 and 20 shall survive the termination of this Agreement.
Upon any termination of this Agreement, you shall promptly deliver to the
Company any certificates for Notes, funds or property then held by you as
Exchange Agent under this Agreement.
29. This Agreement shall be binding and effective as of the date
hereof.
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Please acknowledge receipt of this Agreement and confirm the
arrangements herein provided by signing and returning the enclosed copy.
SCHOLASTIC CORPORATION
By:
-------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President
Accepted as of the date
first above written:
CITIBANK, N.A., as Exchange Agent
By:
-------------------------------
Name: Xxxxx Xxxx
Title: Vice President
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