1
EXHIBIT 10.21
EXECUTION COPY
VALASSIS COMMUNICATIONS, INC.
$100,000,000
6 5/8 % Senior Notes Due 2009
REGISTRATION RIGHTS AGREEMENT
January 12, 1999
Bear, Xxxxxxx & Co. Inc.
Xxxxxxxxxxx Xxxxxxx Securities, Inc.
c/o Bear, Xxxxxxx & Co. Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Valassis Communications, Inc., a Delaware corporation (the "Company"),
proposes to issue and sell to you (the "Initial Purchasers"), upon the terms set
forth in a purchase agreement dated of even date herewith (the "Purchase
Agreement") between the Company and the Initial Purchasers, $100,000,000 in
aggregate principal amount of its 6 5/8 % Senior Notes due 2009 (the "Notes").
The Notes will be issued pursuant to an indenture (the "Indenture") between the
Company and The Bank of New York, as trustee (the "Trustee") dated January 12,
1999, substantially in the form previously furnished to the Initial Purchasers.
As an inducement to the Initial Purchasers to purchase the Notes, the Company
agrees with the Initial Purchasers, for the benefit of the holders of the Notes
(including, without limitation, the Initial Purchasers, herein referred to as
the "Holders"), as follows:
1. Registered Exchange Offer. The Company shall prepare and, by 90 days
(or if the 90th day is not a business day, the first business day thereafter)
after the date of original issuance of the Notes (the "Issue Date"), use
reasonable efforts to file with the Securities and Exchange Commission (the
"Commission") a registration statement (the "Exchange Offer Registration
Statement") on an appropriate form under the Securities Act of 1933, as amended
(the "Securities Act"), with respect to a proposed offer (the "Registered
Exchange Offer") to the Holders of the Notes to issue and deliver to such
Holders, in exchange for the Notes, a like principal amount of debt securities
of the Company identical in all material respects to the Notes (the "Exchange
Notes"), except for the transfer restrictions relating to the Notes, that are
registered under the Securities Act. The Company shall use reasonable efforts to
cause such Exchange Offer Registration
2
Statement to become effective under the Securities Act within 150 days (or if
the 150th day is not a business day, the first business day thereafter) after
the Issue Date.
Following the declaration of the effectiveness of the Exchange Offer
Registration Statement, the Company shall promptly commence the Registered
Exchange Offer, it being the objective of such Registered Exchange Offer to
enable each Holder of the Notes electing to exchange the Notes for Exchange
Notes and (assuming that such Holder is not an affiliate of the Company within
the meaning of the Securities Act, acquires the Exchange Notes in the ordinary
course of such Holder's business and has no arrangements with any person to
participate in the distribution of the Exchange Notes) to trade such Exchange
Notes from and after their receipt without any limitations or restrictions under
the Securities Act and without material restrictions under the securities laws
of the several states of the United States. In connection with such Registered
Exchange Offer, the Company shall take such further action, including, without
limitation, appropriate filings under state securities laws, as may be necessary
to realize the foregoing objective subject to the proviso of Section 3(h).
The Company shall include within the prospectus contained in the
Exchange Offer Registration Statement a section entitled "Plan of Distribution",
reasonably acceptable to the Initial Purchasers, which shall contain a summary
statement of the positions taken or policies made by the staff of the Commission
with respect to the potential "underwriter" status of any broker-dealer that is
the beneficial owner (as defined in Rule 13d-3 under the Securities Exchange Act
of 1934, as amended (the "Exchange Act")) of Exchange Notes received by such
broker-dealer in the Registered Exchange Offer (a "Participating
Broker-Dealer"), whether such positions or policies have been publicly
disseminated by the staff of the Commission or such positions or policies
represent the prevailing views of the staff of the Commission. Such "Plan of
Distribution" section shall also allow the use of the prospectus by all persons
subject to the prospectus delivery requirements of the Securities Act, including
Participating Broker-Dealers, and include a statement describing the means by
which Participating Broker-Dealers may resell the Exchange Notes.
The Company shall use reasonable efforts to keep the Exchange Offer
Registration Statement effective and to amend and supplement the prospectus
contained therein, in order to permit such prospectus to be lawfully delivered
by all persons subject to the prospectus delivery requirements of the Securities
Act for such period of time as such persons must comply with such requirements
in order to resell the Exchange Notes; provided, however, that in the case of
where such prospectus and any amendment or supplement thereto must be delivered
by a Participating Broker-Dealer or an Initial Purchaser, such period shall be
the lesser of 180 days after the consummation of the Registered Exchange Offer
and the date on which all the Participating Broker-Dealers and Initial
Purchasers have sold all of the Exchange Notes held by them.
If, upon consummation of the Registered Exchange Offer, an Initial
Purchaser holds Notes acquired by it as part of its initial distribution, the
Company upon the request of such Initial Purchaser shall simultaneously with the
delivery of the Exchange Notes pursuant to the Registered Exchange Offer issue
and deliver to such Initial Purchaser, in
-2-
3
exchange (the "Private Exchange") for the Notes held by such Initial Purchaser,
a like principal amount of debt securities of the Company identical in all
material respects to the Notes, including the transfer restrictions (the
"Private Exchange Notes").
In connection with the Registered Exchange Offer, the Company shall:
(a) mail to each Holder a copy of the prospectus forming part of the
Exchange Offer Registration Statement, together with an appropriate
letter of transmittal and related documents;
(b) keep the Registered Exchange Offer open for not less than 30
calendar days after the date notice thereof is mailed to the Holders
(or longer if required by applicable law);
(c) utilize the services of a depositary for the Registered Exchange
Offer with an address in the Borough of Manhattan, The City of New
York;
(d) permit Holders to withdraw tendered Notes at any time prior to the
close of business, New York time, on the last business day on which the
Registered Exchange Offer shall remain open; and
(e) otherwise comply in all respects with all applicable laws.
As soon as practicable after the close of the Registered Exchange Offer
or the Private Exchange, as the case may be, the Company shall:
(i) accept for exchange all the Notes validly tendered and not
withdrawn pursuant to the Registered Exchange Offer and the
Private Exchange;
(ii) deliver to the Trustee for cancellation all the Notes so
accepted for exchange; and
(iii) cause the Trustee to authenticate and deliver promptly
to each Holder of the Notes, Exchange Notes or Private
Exchange Notes, as the case may be, equal in principal amount
to the Notes of such Holder so accepted for exchange.
The Exchange Notes and the Private Exchange Notes may be issued under
(i) the Indenture or (ii) an indenture substantially similar to the Indenture,
which in either event will provide that the Exchange Notes will not be subject
to the transfer restrictions set forth in the Indenture and that the Exchange
Notes, the Private Exchange Notes and the Notes will vote and consent together
on all matters as one class and that none of the Exchange Notes, the Private
Exchange Notes or the Notes will have the right to vote or consent as a separate
class on any matter.
-3-
4
Each Holder participating in the Registered Exchange Offer shall be
required to represent to the Company that at the time of the consummation of the
Registered Exchange Offer (i) any Exchange Notes received by such Holder will be
acquired in the ordinary course of business, (ii) such Holder will have no
arrangements or understanding with any person to participate in the distribution
of the Notes or the Exchange Notes within the meaning of the Securities Act,
(iii) such Holder is not an "affiliate", as defined in Rule 405 of the
Securities Act, of the Company, or, if it is an affiliate, such Holder will
comply with the registration and prospectus delivery requirements of the
Securities Act to the extent applicable, (iv) if such Holder is not a
broker-dealer, that it is not engaged in, and does not intend to engage in, the
distribution of the Exchange Notes, and (v) if such Holder is a broker-dealer,
that it will receive Exchange Notes for its own account in exchange for Notes
that were acquired as a result of market-making activities or other trading
activities and that it will deliver a prospectus in connection with any resale
of such Exchange Notes.
2. Shelf Registration. If, (i) because of any change in law or in
currently prevailing interpretations of the staff of the Commission, the Company
is not permitted to effect a Registered Exchange Offer, as contemplated by
Section 1 hereof, (ii) for any reason the Registered Exchange Offer is not
completed within 180 days (or if the 180th day is not a business day, the first
business day thereafter) after the Issue Date (the "Completion Deadline"), (iii)
the Initial Purchasers so request with respect to the Notes or the Private
Exchange Notes held by them following consummation of the Registered Exchange
Offer or (iv) any Holder is not eligible to participate in the Registered
Exchange Offer and so informs the Company prior to the consummation of the
Registered Exchange Offer or, in the case of any Holder that participates in the
Registered Exchange Offer or the Private Exchange, such Holder does not receive
freely tradeable Exchange Notes on the date of the exchange, the Company shall,
at its cost, take the following actions:
(a) as promptly as reasonably practicable (but in no event more than 90
calendar days after so required or requested pursuant to this Section
2) file with the Commission and thereafter shall use reasonable efforts
to cause to be declared effective a registration statement (the "Shelf
Registration Statement" and, together with the Exchange Offer
Registration Statement, a "Registration Statement") on an appropriate
form under the Securities Act relating to the offer and sale of the
Notes or, if applicable, the Private Exchange Notes by the Holders
thereof from time to time in accordance with the methods of
distribution set forth in the Shelf Registration Statement and Rule 415
under the Securities Act (hereafter, the "Shelf Registration");
provided, however, that no Holder (other than an Initial Purchaser)
shall be entitled to have the Notes held by it covered by such Shelf
Registration Statement unless such Holder agrees in writing to be bound
by all of the provisions of this Agreement applicable to such Holder.
(b) use reasonable efforts to keep the Shelf Registration Statement
continuously effective in order to permit the prospectus included
therein to be lawfully delivered by the Holders of the Notes or, if
applicable, the Private Exchange Notes until the earlier of (i) such
time as all the Notes and Private Exchange Notes covered by the Shelf
Registration Statement are sold pursuant to Rule 144 under the
Securities Act
-4-
5
without any limitations under clauses (c), (e), (f) and (h) of Rule 144
and (ii) two years from the Issue Date or such shorter period that will
terminate when all the Notes or, if applicable, the Private Exchange
Notes covered by the Shelf Registration Statement have been sold
pursuant thereto; provided, that the Company shall be deemed not to
have used reasonable efforts to keep the Shelf Registration Statement
effective during the requisite period if it voluntarily takes any
action that would result in Holders of the Notes or, if applicable, the
Private Exchange Notes covered thereby not being able to offer and sell
the Notes or, if applicable, the Private Exchange Notes during that
period, unless such action is required by applicable law.
(c) Notwithstanding any other provisions of this Agreement to the
contrary, the Company shall cause the Shelf Registration Statement and
the related prospectus and any amendment or supplement thereto, as of
the effective date of the Shelf Registration Statement, amendment or
supplement, (i) to comply in all material respects with the applicable
requirements of the Securities Act and the rules and regulations of the
Commission and (ii) not to contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
3. Registration Procedures. In connection with any Shelf Registration
contemplated by Section 2 hereof and, to the extent applicable, any Registered
Exchange Offer contemplated by Section 1 hereof, the following provisions shall
apply:
(a) The Company shall furnish to the Initial Purchasers, prior to the
filing thereof with the Commission, a copy of the Registration
Statement and each amendment thereof and each supplement, if any, to
the prospectus included therein.
(b) The Company shall give written notice to the Initial Purchasers,
the Holders of the Notes and any Participating Broker-Dealer from whom
the Company has received prior written notice that it will be a
Participating Broker-Dealer in the Registered Exchange Offer:
(i) when the Registration Statement or any amendment thereto
has been filed with the Commission and when the Registration
Statement or any posteffective amendment thereto has become
effective;
(ii) of any request by the Commission for amendments or
supplements to the Registration Statement or the prospectus
included therein or for additional information, provided that
the request and the contents of the request need only be
disclosed to the Initial Purchasers and one counsel appointed
by and on behalf of the Holders of the Notes as described in
Section 4;
-5-
6
(iii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or
the initiation of any proceedings for that purpose;
(iv) of the receipt by the Company or its legal counsel of any
notification with respect to the suspension of the
qualification of the Notes or, if applicable, the Private
Exchange Notes for sale in any jurisdiction or the initiation
or threatening of any proceeding for such purpose; and
(v) of the happening of any event that requires the Company to
make changes in the Registration Statement or the prospectus
in order to make the statements therein not misleading (which
notice shall be accompanied by an instruction to suspend the
use of the prospectus until the requisite changes have been
made).
(c) The Company shall use reasonable efforts to prevent the issuance or
obtain the withdrawal of any order suspending the effectiveness of the
Registration Statement at the earliest possible time.
(d) The Company shall furnish to each Holder of the Notes or, if
applicable, the Private Exchange Notes included within the coverage of
the Shelf Registration, without charge, at least one copy of the
Registration Statement and any post-effective amendment thereto,
including financial statements and schedules, and, if the Holder so
requests in writing, all exhibits (including those, if any,
incorporated by reference).
(e) The Company shall deliver to the Initial Purchasers and to any
other Holder who so requests, without charge, at least one copy of the
Exchange Offer Registration Statement and any post-effective amendment
thereto, including financial statements and schedules, and, if the
Initial Purchasers or any such Holder requests, all exhibits (including
those incorporated by reference).
(f) The Company shall deliver to each Holder of the Notes or, if
applicable, the Private Exchange Notes included within the coverage of
the Shelf Registration, without charge, as many copies of the
prospectus (including each preliminary prospectus) included in the
Shelf Registration Statement and any amendment or supplement thereto as
such person may reasonably request. The Company consents, subject to
the provisions of this Agreement, to the use of the prospectus or any
amendment or supplement thereto by each of the selling Holders of the
Notes or, if applicable, the Private Exchange Notes in connection with
the offering and sale of the Notes or, if applicable, the Private
Exchange Notes covered by the prospectus, or any amendment or
supplement thereto, included in the Shelf Registration Statement.
(g) The Company shall deliver to the Initial Purchasers, any
Participating Broker-Dealer and such other persons required to deliver
a prospectus following
-6-
7
the Registered Exchange Offer, without charge, as many copies of the
final prospectus included in the Exchange Offer Registration Statement
and any amendment or supplement thereto as such persons may reasonably
request. The Company consents, subject to the provisions of this
Agreement, to the use of the prospectus or any amendment or supplement
thereto by the Initial Purchasers, if necessary, any Participating
Broker-Dealer and such other persons required to deliver a prospectus
following the Registered Exchange Offer in connection with the offering
and sale of the Exchange Notes covered by the prospectus, or any
amendment or supplement thereto, included in such Exchange Offer
Registration Statement.
(h) Prior to any public offering of the Notes or, if applicable, the
Private Exchange Notes, pursuant to the Shelf Registration, the Company
shall register or qualify or cooperate with the Holders of the Notes
or, if applicable, the Private Exchange Notes, included therein and
their respective counsel in connection with the registration or
qualification of the Notes or, if applicable, the Private Exchange
Notes, for offer and sale under the securities or blue sky laws of such
jurisdictions as any Holder of the Notes or the Private Exchange Notes
reasonably requests in writing and do any and all other acts or things
necessary or advisable to enable the offer and sale in such
jurisdictions of the Notes covered by the Shelf Registration; provided
that the Company shall not be required to (i) qualify generally to do
business in any jurisdiction where it is not then so qualified or (ii)
take any action which would subject it to general service of process or
to taxation in any jurisdiction where it is not then so subject.
(i) The Company shall cooperate with the Holders of the Notes or, if
applicable, the Private Exchange Notes to facilitate the timely
preparation and delivery of certificates representing the Notes or, if
applicable, the Private Exchange Notes to be sold in the Shelf
Registration free of any restrictive legends and in such denominations
and registered in such names as the Holders may request a reasonable
period of time prior to sales of the Notes or, if applicable, the
Private Exchange Notes pursuant to the Shelf Registration.
(j) Upon the occurrence of any event contemplated by Section 3(b)(v)
above, the Company shall promptly prepare a post-effective amendment to
the Registration Statement or a supplement to the related prospectus or
file any other required document so that, as thereafter delivered to
Holders of the Notes, the Exchange Notes or, if applicable, the Private
Exchange Notes, as the case may be, the prospectus will not contain an
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading. If the Company notifies the
Initial Purchasers, the Holders of the Notes and any known
Participating Broker-Dealer in accordance with Section 3(b)(v) above to
suspend the use of the prospectus until the requisite changes to the
prospectus have been made, then the Initial Purchasers, the Holders of
the Notes and any such Participating Broker-Dealers shall suspend use
of such prospectus, and the period
-7-
8
of effectiveness of the Shelf Registration Statement provided for in
Section 2(b) above and the Exchange Offer Registration Statement
provided for in Section 1 above shall each be extended by the number of
days from and including the date of the giving of such notice to
Holders of the Notes and any known Participating Broker-Dealer shall
have received such amended or supplemented prospectus pursuant to this
Section 3(j).
(k) Not later than the effective date of the applicable Registration
Statement, the Company will provide a CUSIP number for the Notes,
Private Exchange Notes or Exchange Notes, as the case may be, and
provide the applicable trustee with certificates for the Notes, Private
Exchange Notes or Exchange Notes, as the case may be, in a form
eligible for deposit with The Depository Trust Company.
(l) The Company will comply with all rules and regulations of the
Commission to the extent and so long as they are applicable to the
Registered Exchange Offer or the Shelf Registration and will make
generally available to its securities holders (or otherwise provide in
accordance with Section 11(a) of the Securities Act) an earnings
statement satisfying the provisions of Section 11(a) of the Securities
Act, no later than 45 days after the end of a 12-month period (or 90
days, if such period is a fiscal year) beginning with the first month
of the Company's first fiscal quarter commencing after the effective
date of the Shelf Registration, which statement shall cover such
12-month period.
(m) The Company shall cause the Indenture (or an indenture
substantially identical to the Indenture in the case of a Registered
Exchange Offer) to be qualified under the Trust Indenture Act of 1939,
as amended.
(n) The Company may require each Holder of the Notes to be sold
pursuant to the Shelf Registration Statement to furnish to the Company
such information regarding the Holder and the distribution of the Notes
as the Company may from time to time reasonably require for inclusion
in the Shelf Registration Statement, and the Company may exclude from
such registration the Notes, Private Exchange Notes or Exchange Notes
of any Holder that unreasonably fails to furnish such information
within a reasonable time after receiving such request.
(o) The Company shall enter into such customary agreements (including
if requested an underwriting agreement in customary form) and take all
such other action, if any, as any Holder of the Notes shall reasonably
request in order to facilitate the disposition of the Notes pursuant to
any Shelf Registration.
(p) In the case of any Shelf Registration, the Company shall (i) make
reasonably available for inspection by the Holders of the Notes, any
underwriter participating in any disposition pursuant to the Shelf
Registration Statement and any attorney, accountant or other agent
retained by the Holders of the Notes or any such underwriter all
relevant financial and other records, pertinent corporate documents and
properties of the Company and (ii) cause the Company's officers,
-8-
9
directors and employees to supply all relevant information reasonably
requested by the Holders of the Notes or any such underwriter,
attorney, accountant or agent in connection with the Shelf Registration
Statement; provided that the foregoing inspection and information
gathering shall be coordinated on behalf of the Initial Purchasers by
the Initial Purchasers and on behalf of the other parties, by one
counsel designated by and on behalf of such other parties as described
in Section 4.
(q) In the case of the Registered Exchange Offer, the Company shall (i)
make reasonably available for inspection by the Initial Purchasers, any
known Participating Broker-Dealer and any attorney, accountant or other
agent retained by the Initial Purchasers or such Participating
Broker-Dealer all relevant financial and other records, pertinent
corporate documents and properties of the Company and (ii) cause the
Company's officers, directors and employees to supply all relevant
information reasonably requested by the Initial Purchasers, such
Participating Broker-Dealer or any such attorney, accountant or agent
in connection with the Exchange Offer Registration Statement; provided
that the foregoing inspection and information gathering shall be
coordinated on behalf of the Initial Purchasers by the Initial
Purchasers and on behalf of the other parties, by one counsel
designated by and on behalf of such other parties as described in
Section 4.
(r) In the case of any Shelf Registration, the Company, if requested by
any Holder of the Notes or, if applicable, the Private Exchange Notes,
shall use reasonable efforts to cause its counsel to deliver an opinion
relating to the Notes or, if applicable, the Private Exchange Notes in
customary form, cause its officers to execute and deliver all customary
documents and certificates requested by any underwriters of the Notes
or, if applicable, the Private Exchange Notes and cause its independent
public accountants to provide to the selling Holders of the Notes or,
if applicable, the Private Exchange Notes and any underwriter therefor
a comfort letter in customary form.
(s) In the case of the Registered Exchange Offer, if requested by the
Initial Purchasers or any known Participating Broker-Dealer, the
Company shall use reasonable efforts to cause its outside counsel and
general counsel to deliver to the Initial Purchasers or such
Participating Broker-Dealer signed opinions in the forms set forth in
Sections 8 (f) and (g) of the Purchase Agreement with such changes as
are customary in connection with the preparation of a Registration
Statement and shall use reasonable efforts to cause its independent
public accountants to deliver to the Initial Purchasers or such
Participating Broker-Dealer a comfort letter, in customary form,
meeting the requirements as to the substance thereof as set forth in
Section 8 (h) of the Purchase Agreement, with appropriate date changes.
4. Registration Expenses. The Company shall bear all expenses incurred
in connection with the performance of its obligations under Sections 1 through 3
hereof (including the reasonable fees and expenses of Xxxxxx & Xxxxxxx, counsel
to the Initial Purchasers, which fees and expenses shall not exceed $25,000,
incurred in connection with the Registered Exchange Offer) and, in the event of
a Shelf Registration, shall bear or
-9-
10
reimburse the Holders of the Notes or, if applicable, the Private Exchange
Notes for the reasonable fees and disbursements of one firm of counsel,
which fees and expenses shall not exceed $25,000, designated by the Holders of a
majority in principal amount of the Notes and, if applicable, the Private
Exchange Notes to act as counsel for the Holders of the Notes, and, if
applicable, the Private Exchange Notes in connection therewith, which counsel
shall be reasonably satisfactory to the Company.
5. Indemnification. (a) The Company agrees to indemnify and hold
harmless each Holder of the Notes or, if applicable, the Private Exchange Notes
and each person, if any, who controls such Holder within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act and each director,
officer, employee or agent of such Holder and each director, officer, employee
or agent of each such controlling person (each Holder, such controlling persons
and each such director, officer, employee and agent are referred to collectively
as the "Indemnified Parties") from and against any losses, claims, damages or
liabilities, joint or several, or any actions in respect thereof, to which each
Indemnified Party may become subject under the Securities Act, the Exchange Act
or otherwise, insofar as such losses, claims, damages, liabilities or actions
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact contained in a Registration Statement or prospectus or in any
amendment or supplement thereto, or arise out of, or are based upon, the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, and shall reimburse,
as incurred, the Indemnified Parties for any legal or other expenses reason-ably
incurred by them in connection with investigating or defending or preparing to
defend against or appearing as a third-party witness in connection with any such
loss, claim, damage, liability or action in respect thereof; provided, however,
that the Company shall not be liable in any such case to the extent that such
loss, claim, damage or liability arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged omission made in a
Registration Statement or prospectus or in any amendment or supplement thereto
or in any preliminary prospectus relating to a Shelf Registration in reliance
upon and in conformity with written information furnished to the Company by or
on behalf of such Holder specifically for inclusion therein; provided, further,
that (A) the Company shall not be obligated to indemnify or hold harmless any
Indemnified Party in respect of any loss, claim, damage, liability or action to
the extent that any such loss, claim, damage, liability or action arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in a preliminary Registration Statement or preliminary
prospectus if the applicable Holder or Initial Purchaser failed to deliver a
copy of a final prospectus or an amended or supplemented Registration Statement
or prospectus that was made available by the Company to such Indemnified Party
prior to the applicable sale to the person or persons asserting the claim which
is the basis of indemnification and such final prospectus or amended or
supplemented Registration Statement or prospectus cured such defect and (B) this
indemnity agreement will be in addition to any liability which the Company may
otherwise have to such Indemnified Party. The Company will not settle or
compromise or consent to the entry of any judgment in any pending or threatened
claim, action, suit or proceeding in
-10-
11
respect of which indemnification may be sought hereunder (whether or not such
Indemnified Party or any person who controls such Indemnified Party within
the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act is a party to such claim, action, suit or proceeding) without the
prior written consent of such Indemnified Party, which consent shall not be
unreasonably withheld, unless such settlement, compromise or consent includes an
unconditional release of such Indemnified Party and each such controlling person
from all liability arising out of such claim, action, suit or proceeding. No
Indemnified Party will settle or compromise or consent to the entry of any
judgment in any pending or threatened claim, action, suit or proceeding in
respect of which indemnification may be sought without the prior written consent
of the Company (which consent will not be unreasonably withheld). The Company
shall also indemnify underwriters, selling brokers, dealer managers and similar
securities industry professionals participating in the distribution (as
described in such Registration Statement), their officers and directors and each
person who controls such persons (within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act) to the same extent as provided
above with respect to the indemnification of the Holders of the Notes if
requested by such Holders.
(b) The Company agrees to indemnify and hold harmless each Initial
Purchaser, any Participating Broker-Dealer and each person, if any, who controls
an Initial Purchaser or a Participating Broker-Dealer within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act and each
director, officer, employee or agent of an Initial Purchaser or a Participating
Broker-Dealer and each director, officer, employee or agent of each such
controlling person (the Initial Purchasers, any Participating Broker-Dealer,
such controlling persons and each such director, officer, employee and agent of
the Initial Purchasers, such Participating Broker-Dealer or such controlling
person are referred to collectively as the "Exchange Offer Indemnified Parties")
from and against any losses, claims, damages or liabilities, joint or several,
or any actions in respect thereof, to which each Exchange Offer Indemnified
Party may become subject under the Securities Act, the Exchange Act or
otherwise, insofar as such losses, claims, damages, liabilities or actions arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Exchange Offer Registration Statement or
prospectus contained therein or in any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, and shall reimburse, as incurred, the Exchange Offer Indemnified
Parties for any legal or other expenses reasonably incurred by them in
connection with investigating or defending or preparing to defend against or
appearing as a third-party witness in connection with any such loss, claim,
damage, liability or action in respect thereof; provided, however, that the
Company shall not be liable in any such case to the extent that such loss,
claim, damage or liability arises out of or is based upon any untrue statement
or alleged untrue statement or omission or alleged omission made in any Exchange
Offer Registration Statement or prospectus contained therein or in any amendment
or supplement thereto in reliance upon and in conformity with written
information furnished to the Company by or on behalf of such Initial Purchaser
or
-11-
12
Participating Broker-Dealer specifically for inclusion therein; provided,
further, that (A) the Company shall not be obligated to indemnify or hold
harmless any Exchange Offer Indemnified Party in respect of any loss, claim,
damage, liability or action to the extent that any such loss, claim, damages,
liability or action arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in a preliminary
Registration Statement or preliminary prospectus if the applicable Initial
Purchaser or Participating Broker-Dealer failed to deliver a copy of a final
prospectus or an amended or supplemented Registration Statement or prospectus
that was made available by the Company to such Exchange Offer Indemnified Party
prior to the applicable sale to the person or persons asserting the claim which
is the basis of indemnification and such final prospectus or amended or
supplemented Registration Statement or prospectus cured such defect and (B) this
indemnity agreement will be in addition to any liability which the Company may
otherwise have to such Exchange Offer Indemnified Party. The Company will not
settle or compromise or consent to the entry of any judgment in any pending or
threatened claim, action, suit or proceeding in respect of which indemnification
may be sought hereunder (whether or not such Exchange Offer Indemnified Party or
any person who controls such Exchange Offer Indemnified Party within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act is a party
to such claim, action, suit or proceeding) without the prior written consent of
such Exchange Offer Indemnified Party, which consent shall not be unreasonably
withheld, unless such settlement, compromise or consent includes an
unconditional release of such Exchange Offer Indemnified Party and each such
controlling person from all liability arising out of such claim, action, suit or
proceeding. No Exchange Offer Indemnified Party will settle or compromise or
consent to the entry of any judgment in any pending or threatened claim, action,
suit or proceeding in respect of which indemnification may be sought without the
prior written consent of the Company (which consent will not be unreasonably
withheld).
(c) Each Holder of the Notes or, if applicable, the Private Exchange
Notes, severally and not jointly, will indemnify and hold harmless the Company,
each director, officer, employee or agent of the Company and each person, if
any, who controls the Company within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act and each director, officer, employee or
agent of such controlling person from and against any losses, claims, damages or
liabilities or any actions in respect thereof, to which the Company or any such
director, officer, employee, agent or controlling person may become subject
under the Securities Act, the Exchange Act or otherwise, insofar as such losses,
claims, damages, liabilities or actions arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in a
Registration Statement or prospectus or in any amendment or supplement thereto
or in any preliminary prospectus relating to a Shelf Registration, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact necessary to make the statements therein not misleading, but in
each case only to the extent that the untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
such Holder specifically for inclusion therein, and, subject to the limitation
set forth immediately preceding this clause, shall reimburse, as incurred, such
indemnified persons
-12-
13
for any legal or other expenses reasonably incurred by the Company or any
such director, officer, employee, agent or controlling person in connection
with the investigating or defending or preparing to defend against or appearing
as a third-party witness in connection with any loss, claim, damage, liability
or action in respect thereof. This indemnity agreement will be in addition to
any liability which such Holder may otherwise have to the Company or any such
directors, officers, employees, agents or controlling persons.
(d) Promptly after receipt by an indemnified party under this Section 5
of notice of the commencement of any action or proceeding (including a
governmental investigation), such indemnified party will, if a claim in respect
thereof is to be made against the indemnifying party under this Section 5,
notify the indemnifying party of the commencement thereof- but the omission so
to notify the indemnifying party (i) will not relieve it from any liability
under paragraph (a), (b) or (c) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights or defenses and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a), (b)
or (c) above. In case any such action is brought against any indemnified party,
and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the extent
that it may wish, jointly with any other indemnifying party similarly notified,
to assume the defense thereof, with counsel reasonably satisfactory to such
indemnified party; provided, however, that if the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be one or more
legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party, the
indemnifying party shall not have the right to direct the defense of such action
on behalf of such indemnified party or parties and such indemnified party or
parties shall have the right to select separate counsel to defend such action on
behalf of such indemnified party or parties. After notice from the indemnifying
party to such indemnified party of its election so to assume the defense thereof
and approval by such indemnified party of counsel appointed to defend such
action, which approval shall not be unreasonably withheld, the indemnifying
party will not be liable to such indemnified party under this Section 5 for any
legal or other expenses, other than reasonable costs of investigation,
subsequently incurred by such indemnified party in connection with the defense
thereof, unless (i) the indemnified party shall have employed separate counsel
in accordance with the proviso to the next preceding sentence (it being
understood, however, that in connection with such action the indemnifying party
shall not be liable for the expenses of more than one separate counsel (in
addition to local counsel) in any one action or separate but substantially
similar actions in the same jurisdiction arising out of the same general
allegation or circumstances) or (ii) the indemnifying party has authorized the
employment of counsel for the indemnified party at the expense of the
indemnifying party.
(e) In circumstances in which the indemnity agreement provided for in
the preceding paragraphs of this Section 5 is unavailable or insufficient to
hold harmless an indemnified party in respect of any losses, claims, damages or
liabilities (or actions in
-13-
14
respect thereof) (other than by reason of exceptions provided in such
Section 5), each indemnifying party, in order to provide for just and equitable
contribution, shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages or liabilities (or actions in
respect thereof), in such proportion as is appropriate to reflect (i) the
relative benefits received by the indemnifying party or parties on the one hand
and the indemnified party on the other from the offering of the Notes or (ii) if
the allocation provided by the foregoing clause (i) is not permitted by
applicable law, not only such relative benefits but also the relative fault of
the indemnifying party or parties on the one hand and the indemnified party on
the other in connection with the statements or omissions or alleged statements
or omissions that resulted in such losses, claims, damages or liabilities (or
actions in respect thereof). The relative fault of the parties 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 such Holder or such other indemnified person, as the case may be, on the
other, the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission, and any other
equitable considerations appropriate in the circumstances. The Company and each
indemnified party agrees that it would not be equitable if the amount of such
contribution were determined by pro rata or per capita allocation or by any
other method of allocation that does not take into account the equitable
considerations referred to in the first sentence of this paragraph (e).
Notwithstanding any other provision of this Section 5(e), the Holders of the
Notes or, if applicable, the Private Exchange Notes shall not be required to
contribute any amount in excess of the amount by which the net proceeds received
by such Holders from the sale of the Notes or, if applicable, the Private
Exchange Notes pursuant to a Registration Statement exceeds the amount of
damages which such Holders have otherwise been required to pay in respect of the
same or a similar claim, and 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. For purposes of this paragraph (e), each director, officer,
employee and agent of any indemnified party and each person, if any, who
controls such indemnified party within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act shall have the same rights to
contribution as such indemnified party and each director and officer of the
Company, and each person, if any, who controls the Company within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act shall have
the same rights to contribution as the Company.
(f) The agreements contained in this Section 5 shall survive the sale
of the Notes, the Exchange Notes or, if applicable, the Private Exchange Notes
pursuant to a Registration Statement and shall remain in full force and effect,
regardless of any termination or cancellation of this Agreement or any
investigation made by or on behalf of any indemnified party.
6. Additional Interest Under Certain Circumstances.
(a) Additional interest at a rate of 0.5 % per annum of the principal
amount of the Notes (the "Additional Interest") shall be assessed as follows:
-14-
15
(i) if the Exchange Offer Registration Statement is not filed
with the Commission by 90 days after the Issue Date then,
commencing from and including the earlier of such dates,
Additional Interest shall be assessed on the Notes;
(ii) if the Registered Exchange Offer is not completed and a
Shelf Registration is not declared effective by the Commission
by the Completion Deadline, then, commencing on the Completion
Deadline, Additional Interest shall be assessed on the Notes;
and
(iii) if (A) the Company has not exchanged Exchange Notes for
all the Notes validly tendered in accordance with the terms of
the Registered Exchange Offer on or prior to 30 business days
after the date on which the Exchange Offer Registration
Statement was declared effective, or (B) if applicable, the
Shelf Registration Statement has been declared effective and
it ceases to be effective prior to two years (or such later
date if such two-year period is extended pursuant to Section
30) above or such shorter period as is provided in Section
2(b)) from the Issue Date, then, Additional Interest shall be
assessed on the Notes, commencing on (x) the 31st business day
after such effective date in the case of (A) above, or (y) the
day such Shelf Registration Statement ceases to be effective
in the case of (B) above;
provided, however, that (1) upon the filing of the Exchange Offer Registration
Statement or the Completion Deadline in the case of (i) above, (2) upon
completion of the Registered Exchange Offer or the effectiveness of the Shelf
Registration Statement in the case of (ii) above, or (3) upon the exchange of
Exchange Notes for all the Notes validly tendered in accordance with the terms
of the Registered Exchange Offer, or upon the effectiveness of the Shelf
Registration Statement which has ceased to remain effective prior to two years
(or such later date if extended pursuant to Section 30) above or such shorter
period as is provided in Section 2(b)) from the date of original issuance of the
Notes in the case of (iii) above, Additional Interest on the Notes as a result
of such clause (i), (ii) or (iii) shall immediately cease to accrue.
(b) Any amount of Additional Interest due pursuant to clauses (i), (ii)
or (iii) of Section 6(a) above will be payable in cash semiannually in arrears
on each Interest Payment Date (as defined in the Notes), commencing with the
first such Interest Payment Date occurring after any such Additional Interest
commences to accrue. The amount of Additional Interest will be determined by
multiplying the Additional Interest by a fraction, the numerator of which is the
number of days such Additional Interest rate was applicable during such period,
determined on the basis of a 360-day year comprised of twelve 30-day months, and
the denominator of which is 360.
(c) If the Company effects the Registered Exchange Offer, the Company
will be entitled to close the Registered Exchange Offer provided that the
Company has accepted all the Notes theretofore validly tendered in accordance
with the terms of the Registered Exchange Offer.
-15-
16
7. Miscellaneous.
(a) Amendments and Waivers. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given, except by the Company and the written
consent of Holders of a majority in aggregate principal amount of the Notes,
determined in accordance with the terms of the Indenture.
(b) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, first-class mail,
telex, telecopy, or air courier which guarantees overnight delivery:
(1) if to a Holder of the Notes, in accordance with Section 107 of the
Indenture, with a copy to the Initial Purchasers as follows:
c/o Bear, Xxxxxxx & Co. Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxxxx
with a copy to:
Xxxxxx & Xxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxx, Esq.
(2) if to the Initial Purchasers, at the addresses specified in Section
7(b)(1);
(3) if to the Company, at its address as follows:
Valassis Communications, Inc.
00000 Xxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
with a copy to:
XxXxxxxxx, Will & Xxxxx
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxx, Esq.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; three business
days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when
-16-
17
receipt is acknowledged by recipient's telecopy operator, if telecopied; and on
the day delivered, if sent by overnight air courier guaranteeing next day
delivery. All such notices and communications to the Holders shall be deemed to
have been duly given if given as provided in Section 107 of the Indenture.
(c) Successors and Assigns. This Agreement shall be binding upon the
Company and its successors and assigns.
(d) Counterparts. This Agreement may be executed in any number of
Counterparts and by the parties hereto in separate counterparts, each of which
so executed shall be deemed to be an original and all of which taken together
shall constitute one and the same agreement.
(e) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(f) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY
PROVISIONS RELATING TO CONFLICTS OF LAWS.
(g) Severability. If 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.
-17-
18
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Initial Purchasers and the Company in accordance with its terms.
Very truly yours,
VALASSIS COMMUNICATIONS, INC,
By: /s/Xxxxx X. Xxxxxxx
-----------------------------
Name: Xxxxx X. Xxxxxxx, Esq.
Title: Secretary
Confirmed and accepted as of the
date first above written:
BEAR, XXXXXXX & CO. INC.
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Senior Managing Director
XXXXXXXXXXX XXXXXXX
SECURITIES, INC.
By:/s/ Xxxxx X. Xxxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Treasurer
-18-
