EXECUTOIN COPY
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WRC MEDIA INC.
WEEKLY READER CORPORATION
JLC LEARNING CORPORATION
THE NOTE GUARANTORS NAMED
HEREIN
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$152,000,000
12 3/4% SENIOR SUBORDINATED NOTES DUE 2009
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REGISTRATION RIGHTS AGREEMENT
DATED AS OF NOVEMBER 17, 1999
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XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
BANC OF AMERICA SECURITIES LLC
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This Registration Rights Agreement (this "AGREEMENT") is made and
entered into as of November 17, 1999, by and among WRC Media Inc., a Delaware
corporation (the "COMPANY"), Weekly Reader Corporation, a Delaware corporation
("WEEKLY READER"), JLC Learning Corporation, a Delaware corporation ("JLC
LEARNING" and, together with the Company and Weekly Reader, each an "ISSUER"
and, collectively, the "ISSUERS"), the Note Guarantors listed on the signature
pages hereto (each a "NOTE GUARANTOR" and, collectively, the "NOTE GUARANTORS")
and Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation and Banc of America
Securities LLC (each an "INITIAL PURCHASER" and, collectively, the "INITIAL
PURCHASERS"), each of whom has agreed to purchase the Company's 12 3/4% Senior
Subordinated Notes due 2009 (the "SENIOR SUBORDINATED NOTES"), pursuant to the
Purchase Agreement (as defined below).
This Agreement is made pursuant to the Purchase Agreement, dated
November 10, 1999, (the "PURCHASE AGREEMENT"), by and among the Issuers, the
Note Guarantors and the Initial Purchasers. In order to induce the Initial
Purchasers to purchase the Senior Subordinated Notes, the Issuers have agreed to
provide the registration rights relating to the Senior Subordinated Notes set
forth in this Agreement. The execution and delivery of this Agreement is a
condition to the obligations of the Initial Purchasers set forth in Section 3 of
the Purchase Agreement. Capitalized terms used herein and not otherwise defined
shall have the meaning assigned to them in the Indenture, dated the Closing
Date, among the Issuers, the Note Guarantors and The Bankers Trust Company, as
Trustee, relating to the Senior Subordinated Notes and the New Senior
Subordinated Notes, as such indenture is amended or supplemented from time to
time (the "INDENTURE").
The parties hereby agree as follows:
SECTION 1 DEFINITIONS
As used in this Agreement, the following capitalized terms shall have
the following meanings:
ACT: The Securities Act of 1933, as amended.
AFFILIATE: As defined in Rule 144 of the Act.
APPLICABLE PERIOD: As defined in Section 3(c) hereof.
BROKER-DEALER: Any broker or dealer registered under the Exchange Act.
BUSINESS DAY: Any day other than a Saturday, Sunday or day on which
commercial banks in the City of New York are authorized or required by law,
regulation or executive order to remain closed.
CERTIFICATED SECURITIES: Definitive Notes, as defined in the Indenture.
CLOSING DATE: The date hereof.
COMMISSION: The Securities and Exchange Commission.
CONSUMMATE: An Exchange Offer shall be deemed "Consummated" for
purposes of this Agreement upon the occurrence of (a) the filing and
effectiveness under the Act of the Exchange Offer Registration Statement
relating to the New Senior Subordinated Notes to be issued in the Exchange
Offer, (b) the maintenance of such Exchange Offer Registration Statement
continuously effective and the keeping of the Exchange Offer open for a period
not less than the period required pursuant to Section 3(b) hereof and (c) the
delivery by the Issuers to the Registrar under the Indenture of New Senior
Subordinated Notes in the same aggregate principal amount as the aggregate
principal amount of Senior Subordinated Notes tendered by Holders thereof
pursuant to the Exchange Offer.
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CONSUMMATION DEADLINE: As defined in Section 3(b) hereof.
EXCHANGE ACT: The Securities Exchange Act of 1934, as amended.
EXCHANGE OFFER: The exchange and issuance by the Issuers of a principal
amount of New Senior Subordinated Notes (which shall be registered pursuant to
the Exchange Offer Registration Statement) equal to the outstanding principal
amount of Senior Subordinated Notes that are tendered by such Holders in
connection with such exchange and issuance.
EXCHANGE OFFER EFFECTIVENESS TARGET DATE: As defined in Section 3(a)
hereof.
EXCHANGE OFFER FILING DEADLINE: As defined in Section 3(a) hereof.
EXCHANGE OFFER REGISTRATION PERIOD: As defined in Section 3(b) hereof.
EXCHANGE OFFER REGISTRATION STATEMENT: The Registration Statement
relating to the Exchange Offer, including the related Prospectus.
EXEMPT RESALES: The transactions in which the Initial Purchasers
propose to sell the Senior Subordinated Notes to certain "qualified
institutional buyers," as such term is defined in Rule 144A under the Act.
HOLDERS: As defined in Section 2 hereof.
NEW SENIOR SUBORDINATED NOTES: The Issuers; new 12 3/4% Senior
Subordinated Notes due 2009 to be issued pursuant to the Indenture: (i) in the
Exchange Offer or (ii) as contemplated by Section 4 hereof.
NOTES: The Senior Subordinated Notes and the New Senior Subordinated
Notes.
PERSON: An individual, partnership, limited liability company,
corporation, trust, unincorporated organization, or a government or agency or
political subdivision thereof.
PROSPECTUS: The prospectus included in a Registration Statement at the
time such Registration Statement is declared effective, as amended or
supplemented by any prospectus supplement and by all other amendments thereto,
including post-effective amendments, and all material incorporated by reference
into such Prospectus.
RECOMMENCEMENT DATE: As defined in Section 6(d) hereof.
REGISTRATION DEFAULT: As defined in Section 5 hereof.
REGISTRATION STATEMENT: Any registration statement of the Issuers and
the Note Guarantors relating to (a) an offering of New Senior Subordinated Notes
pursuant to an Exchange Offer or (b) the registration for resale of Transfer
Restricted Securities pursuant to the Shelf Registration Statement, in each
case, (i) that is filed pursuant to the provisions of this Agreement and (ii)
including the Prospectus included therein, all amendments and supplements
thereto (including post-effective amendments) and all exhibits and material
incorporated by reference therein.
RULE 144: Rule 144 promulgated under the Act.
SHELF REGISTRATION EFFECTIVENESS TARGET DATE: As defined in Section
4(a) hereof.
SHELF REGISTRATION FILING DEADLINE: As defined in Section 4(b) hereof.
SHELF REGISTRATION PERIOD: As defined in Section 4(a) hereof.
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SHELF REGISTRATION STATEMENT: As defined in Section 4 hereof.
SUSPENSION NOTICE: As defined in Section 6(d) hereof.
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 (A) Senior Subordinated Note,
until the earliest to occur of (i) the date on which such Senior Subordinated
Note is exchanged in the Exchange Offer for a New Senior Subordinated Note which
is entitled to be resold to the public by the Holder thereof (other than a
Broker-Dealer) without complying with the prospectus delivery requirements of
the Act, (ii) the date on which such Senior Subordinated Note has been disposed
of in accordance with a Shelf Registration Statement (and the purchasers thereof
have been issued New Senior Subordinated Notes), or (iii) the date on which such
Senior Subordinated Note is distributed to the public pursuant to Rule 144 under
the Act and each (B) New Senior Subordinated Note held by a Broker-Dealer until
the date on which such New Senior Subordinated Note is disposed of by a
Broker-Dealer pursuant to the "Plan of Distribution" contemplated by the
Exchange Offer Registration Statement (including the delivery of the Prospectus
contained therein).
SECTION 2 HOLDERS
A Person is deemed to be a holder of Transfer Restricted Securities
(each, a "HOLDER") whenever such Person owns Transfer Restricted Securities.
SECTION 3 REGISTERED EXCHANGE OFFER
(a) Unless the Exchange Offer shall not be permitted by applicable law
or rules, regulations or policies of the Commission, the Issuers and the Note
Guarantors shall (i) cause the Exchange Offer Registration Statement to be filed
with the Commission no later than 90 days after the Closing Date (such 90th day
being the "EXCHANGE OFFER FILING DEADLINE"), (ii) use their respective best
efforts to cause such Exchange Offer Registration Statement to become effective
as promptly as possible, but in no event later than 210 days after the Closing
Date such 210 day being the "EXCHANGE OFFER EFFECTIVENESS TARGET DATE"), (iii)
in connection with the foregoing, (A) file all pre-effective amendments to such
Exchange Offer Registration Statement as may be necessary in order to cause it
to become effective, (B) file, if applicable, a post-effective amendment to such
Exchange Offer Registration Statement pursuant to Rule 430A under the Act and
(C) cause all necessary filings, if any, in connection with the registration and
qualification of the New Senior Subordinated Notes to be made under the Blue Sky
laws of such jurisdictions as are necessary to permit Consummation of the
Exchange Offer; PROVIDED, HOWEVER, that neither any Issuer nor any Note
Guarantor shall be required to register or qualify as a foreign corporation
where it is not now so qualified or to take any action that would subject it to
the service of process in suits or to taxation in any jurisdiction where it is
not now so subject, and (iv) upon the effectiveness of such Exchange Offer
Registration Statement, use their respective best efforts to commence and
Consummate the Exchange Offer. The Exchange Offer Registration Statement shall
be on the appropriate form permitting (i) registration of the New Senior
Subordinated Notes to be offered in exchange for the Senior Subordinated Notes
that are Transfer Restricted Securities and (ii) resales of New Senior
Subordinated Notes by Broker-Dealers that tendered into the Exchange Offer
Senior Subordinated Notes that such Broker-Dealer acquired for its own account
as a result of market making activities or other trading activities (other than
Senior Subordinated Notes acquired directly from any Issuer or any Affiliate
thereof) as contemplated by Section 3(c) below.
(b) The Issuers and the Note Guarantors shall use their respective best
efforts to cause the Exchange Offer Registration Statement to be effective
continuously, and shall keep the Exchange Offer open for a period of not less
than the minimum period required under applicable federal and state securities
laws to Consummate the Exchange Offer (the "EXCHANGE OFFER
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REGISTRATION PERIOD"); PROVIDED, HOWEVER, that in no event shall such period be
less than 20 Business Days. The Issuers and the Note Guarantors shall cause the
Exchange Offer to comply with all applicable federal and state securities laws.
No securities other than the New Senior Subordinated Notes and the Preferred
Stock of the Company issued in connection with the Transactions (as defined in
the Offering Memorandum) or any preferred stock of Weekly Reader or JLC Learning
issued in exchange therefor, shall be included in the Exchange Offer
Registration Statement. The Issuers and the Note Guarantors shall use their
respective best efforts to cause the Exchange Offer to be Consummated on or
prior to 30 Business Days, or longer if required by the Federal securities laws,
after the Exchange Offer Registration Statement has become effective (such 30th
Business Day, or such later date if required by the Federal Securities laws,
being the "CONSUMMATION DEADLINE").
(c) The Issuers shall include a "Plan of Distribution" section in the
Prospectus contained in the Exchange Offer Registration Statement and indicate
therein that any Broker-Dealer who holds Transfer Restricted Securities that
were acquired for the account of such Broker-Dealer as a result of market-making
activities or other trading activities (other than Senior Subordinated Notes
acquired directly from any Issuer or any Affiliate of such Issuer), may exchange
such Transfer Restricted Securities pursuant to the Exchange Offer; however,
such Broker-Dealer may be deemed to be an "underwriter" within the meaning of
the Act and must, therefore, deliver a prospectus meeting the requirements of
the Act in connection with its initial sale of any New Senior Subordinated Notes
received by such Broker-Dealer in the Exchange Offer, and the Issuers and the
Note Guarantors shall permit the use of the Prospectus contained in the Exchange
Offer Registration Statement by such Broker-Dealer to satisfy such prospectus
delivery requirement. Such "Plan of Distribution" section shall also contain all
other information with respect to such sales by such Broker-Dealers that the
Commission may require in order to permit such sales pursuant thereto, but such
"Plan of Distribution" shall not name any such Broker-Dealer or disclose the
amount of Transfer Restricted Securities held by any such Broker-Dealer, except
to the extent required by the Commission as a result of a change in policy,
rules or regulations after the date of this Agreement. See the Xxxxxxx &
Sterling no-action letter (available July 2, 1993).
To the extent necessary to ensure that the prospectus contained in the
Exchange Offer Registration Statement is available for sales of New Senior
Subordinated Notes by Broker-Dealers, the Issuers and the Note Guarantors agree
to use their respective best efforts to keep the Exchange Offer Registration
Statement continuously effective, supplemented, amended and current as required
by and subject to the provisions of Section 6(a) and (c) hereof and in
conformity with the requirements of this Agreement, the Act and the policies,
rules and regulations of the Commission as announced from time to time, for a
period of one year from the Consummation Deadline or such shorter period as will
terminate when all Transfer Restricted Securities covered by such Registration
Statement have been sold pursuant thereto (the "Applicable Period"). The Issuers
and the Note Guarantors shall provide sufficient copies of the latest version of
such Prospectus to such Broker-Dealers, as promptly as practicable upon request
and in no event later than two Business Days after Such request, at any time
during such period.
SECTION 4 SHELF REGISTRATION
(a) SHELF REGISTRATION. If (i) the Exchange Offer is not permitted by
applicable law or rules, regulations or policies of the Commission or (ii) if
any Holder of Transfer Restricted Securities shall notify the Issuers within 20
Business Days following the Consummation of the Exchange Offer that (A) such
Holder was prohibited by law or Commission rules, regulations or policies from
participating, in the Exchange Offer or (B) such Holder may not resell the New
Senior Subordinated Notes acquired by it in the Exchange Offer to the public
without delivering a prospectus and the Prospectus contained in the Exchange
Offer Registration Statement is not appropriate or available for such resales by
such Holder or (C) such Holder is a Broker-Dealer and holds Senior Subordinated
Notes acquired directly from the Company or any of its Affiliates, then the
Issuers and the Note Guarantors shall:
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(x) use their respective best efforts to cause to be filed, on or prior
to 45 days after the earlier of (i) the date on which the Issuers determine that
the Exchange Offer Registration Statement cannot be filed as a result of clause
(a)(i) above and (ii) the date on which the Issuers receive the notice specified
in clause (a)(ii) above (such earlier date, the "SHELF REGISTRATION FILING
DEADLINE"), a shelf registration statement pursuant to Rule 415 under the Act
(which may be an amendment to the Exchange Offer Registration Statement (the
"SHELF REGISTRATION STATEMENT")), relating to all Transfer Restricted
Securities, and
(y) use their respective best efforts to cause such Shelf Registration
Statement to become effective on or prior to 90 days after the Filing Deadline
(such 90th day the "SHELF REGISTRATION EFFECTIVENESS TARGET DATE").
If, after the Issuers have filed an Exchange Offer Registration
Statement that satisfies the requirements of Section 3(a) above, the Issuers are
required to file and make effective a Shelf Registration Statement solely
because the Exchange Offer is not permitted under applicable federal law or
rules, regulations or policies of the Commission (i.e., clause (a)(i) above),
then the filing of the Exchange Offer Registration Statement shall be deemed to
satisfy the requirements of clause (x) above; PROVIDED that, in such event, the
Issuers shall be obligated to use their respective best efforts to cause such
Shelf Registration Statement to become effective by the later of (i) the Shelf
Registration Effectiveness Target Date and (ii) the 90th day after publication
of the change in the applicable Federal law or rules, regulations or policies of
the Commission.
To the extent necessary to ensure that the Shelf Registration Statement
is available for sales of Transfer Restricted Securities by the Holders thereof
entitled to the benefit of this Section 4(a) and the other securities required
to be registered therein pursuant to Section 6(b)(ii) hereof, the Issuers and
the Note Guarantors shall use their respective best efforts to keep any Shelf
Registration Statement required by this Section 4(a) continuously effective,
supplemented, amended and current as required by and subject to the provisions
of Sections 4(c) and 6(b) and (c) hereof and in conformity with the requirements
of this Agreement, the Act and the policies, rules and regulations of the
Commission as announced from time to time, for a period ending on the earlier
of: (i) two years (as extended pursuant to Section 6(c)(i)) following the
Closing Date, or such shorter period as will terminate when all Transfer
Restricted Securities covered by such Shelf Registration Statement have been
sold pursuant thereto and (ii) the date on which the Senior Subordinated Notes
become eligible for resale without volume restrictions pursuant to Rule 144
under the Act (the "Shelf Registration Period").
(b) PROVISION BY HOLDERS OF CERTAIN INFORMATION IN CONNECTION WITH THE
SHELF REGISTRATION STATEMENT. No Holder of Transfer Restricted Securities may
include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Issuers in writing, within 20 days after receipt of a request therefor, the
information specified in Item 507 or 508 of Regulation S-K, as applicable, of
the Act for use in connection with any Shelf Registration Statement or
Prospectus or preliminary Prospectus included therein. Each selling Holder
agrees to promptly furnish additional information required to be disclosed in
order to make the information previously furnished to the Issuers by such Holder
not materially misleading.
(c) Notwithstanding the provisions of Section 4(a) (but subject to the
provisions of Section 5(b)), the Issuers may for valid business reasons,
including without limitation, a potential acquisition, divestiture of assets or
other material corporate transaction, issue a notice that the Shelf Registration
Statement is no longer effective or the Prospectus included therein is no longer
usable for offers and sales of Transfer Restricted Securities and may issue any
notice suspending use of the Shelf Registration Statement required under
applicable securities laws to be issued. The provisions of this Section 4(c)
shall also be applicable to the Exchange Offer Registration Statement during the
Applicable Period; PROVIDED that the Applicable Period shall be extended for the
number of days (which shall not exceed 90 in any twelve-month period) that the
use of the Exchange Offer Registration Statement is suspended.
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SECTION 5 LIQUIDATED DAMAGES
(a) If (i) any Registration Statement required by this Agreement is not
filed with the Commission on or prior to the Exchange Offer Filing Deadline or
the Shelf Registration Filing Deadline, as applicable, (ii) any such
Registration Statement has not been declared effective by the Commission on or
prior to the Exchange Offer Effectiveness Target Date or the Shelf Registration
Effectiveness Target Date, as applicable, (iii) the Exchange Offer has not been
Consummated on or prior to the Consummation Deadline or (iv) any Registration
Statement required by this Agreement is filed and declared effective but shall
thereafter cease to be effective or fail to be usable for its intended purpose
at any time the Issuers and the Note Guarantors are required to maintain the
effectiveness thereof without being succeeded by an effective post-effective
amendment to such Registration Statement that cures such failure within 45 days
(each such event referred to in clauses (i) through (iv), a "REGISTRATION
DEFAULT"), then the Issuers and the Note Guarantors hereby jointly and severally
agree to pay to each Holder of Transfer Restricted Securities (but not in
respect of any Transfer Restricted Securities for any period after such
securities cease to be Transfer Restricted Securities pursuant to clause A(iii)
of the definition thereof) affected thereby liquidated damages in an amount
equal to $.05 per week per $1,000 in principal amount of Transfer Restricted
Securities held by such Holder for each week or portion thereof that the
Registration Default continues for the first 90-day period immediately following
the occurrence of such Registration Default. The amount of the liquidated
damages shall increase by an additional $.05 per week per $1,000 in principal
amount of Transfer Restricted Securities with respect to each subsequent 90-day
period until all Registration Defaults have been cured, up to a maximum amount
of liquidated damages of $.50 per week per $1,000 in principal amount of
Transfer Restricted Securities; PROVIDED that the Issuers and the Note
Guarantors shall in no event be required to pay liquidated damages for more than
one Registration Default at any given time. Notwithstanding anything to the
contrary set forth herein, (1) upon filing of the Exchange Offer Registration
Statement (and/or, if applicable, the Shelf Registration Statement), in the case
of (i) above, (2) upon the effectiveness of the Exchange Offer Registration
Statement (and/or, if applicable, the Shelf Registration Statement), in the case
of (ii) above, (3) upon Consummation of the Exchange Offer, in the case of (iii)
above, or (4) upon the filing of a post-effective amendment to the Registration
Statement or an additional Registration Statement that causes the Exchange Offer
Registration Statement (and/or, if applicable, the Shelf Registration Statement)
to again be declared effective or made usable in the case of (iv) above, the
liquidated damages payable with respect to the Transfer Restricted Securities as
a result of such clause (i), (ii), (iii) or (iv), as applicable, shall cease.
(b) Notwithstanding the foregoing provisions of Section 5(a), the
Issuers may for valid business reasons, including without limitation, a
potential acquisition, divestiture of assets or other material corporate
transaction, issue a notice that the Registration Statement is no longer
effective or the Prospectus included therein is no longer usable for offers and
sales of Transfer Restricted Subsidiaries and may issue any notice suspending
use of the Registration Statement required under applicable securities laws to
be issued and, in the event that the aggregate number of days in any consecutive
twelve-month period for which all such notices are issued and effective exceeds
30 days in the aggregate, then the Issuers will be jointly and severally
obligated to pay liquidated damages to each Holder of Transfer Restricted
Securities covered by the Registration Statement in an amount equal to $0.05 per
week per $1,000 in principal amount of Transfer Restricted Securities covered by
the Registration Statement and held by such Holder. Upon the Issuers declaring
that the Registration Statement is useable after the period of time described in
the preceding sentence, accrual of liquidated damages shall cease; PROVIDED,
HOWEVER, that if after any such cessation of the accrual of liquidated damages
the Registration Statement again ceases to be useable beyond the period
permitted above, liquidated damages will again accrue pursuant to the foregoing
provisions.
(c) Notwithstanding anything to the contrary set forth herein, the
Issuers and the Note Guarantors shall not be required to pay liquidated damages
to a Holder of Transfer Restricted Securities if such Holder failed to comply
with its obligations to make the representations set forth
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in Section 6(a)(i) or failed to provide the information required to be provided
by it, if any, pursuant to Section 4(b).
All accrued liquidated damages shall be paid to the Holders entitled
thereto, in the manner provided for the payment of interest in the Indenture, on
each Interest Payment Date, as more fully set forth in the Indenture and the
Notes. Notwithstanding the fact that any securities for which liquidated damages
are due cease to be Transfer Restricted Securities, all obligations of the
Issuers and the Note Guarantors to pay liquidated damages with respect to such
securities shall survive until such time as such obligations with respect to
such securities shall have been satisfied in full.
SECTION 6 REGISTRATION PROCEDURES
(a) EXCHANGE OFFER REGISTRATION STATEMENT. In connection with the
Exchange Offer, (i) the Issuers and the Note Guarantors shall (x) comply with
all applicable provisions of Section 6(c) below and (y) use their respective
best efforts to effect such exchange and to permit the resale of New Senior
Subordinated Notes by Broker-Dealers that tendered in the Exchange Offer Senior
Subordinated Notes that such Broker-Dealer acquired for its own account as a
result of its market making activities or other trading activities (other than
Senior Subordinated Notes acquired directly from any Issuer or any Affiliate
thereof) being sold in accordance with the intended method or methods of
distribution thereof, and (ii) the Issuers, the Note Guarantors and the Holders,
as applicable, shall comply with all of the following provisions:
(i) As a condition to its participation in the Exchange Offer,
each Holder of Transfer Restricted Securities (including, without
limitation, any Holder who is a Broker Dealer, except as provided in
the next sentence) shall furnish, upon the request of the Issuers,
prior to the Consummation of the Exchange Offer, a written
representation to the Issuers and the Note Guarantors (which may be
contained in the letter of transmittal contemplated by the Exchange
Offer Registration Statement) to the effect that at the time of the
consummation of the Exchange Offer (A) it is not an Affiliate of any
Issuer, (B) it is not engaged in, and does not intend to engage in, and
has no arrangement or understanding with any person to participate in,
a distribution of the Senior Subordinated Notes or the New Senior
Subordinated Notes to be issued in the Exchange Offer, within the
meaning of the Act, (C) it is acquiring the New Senior Subordinated
Notes in its ordinary course of business and (D) if such Holder is a
Broker-Dealer, that it will deliver a Prospectus in connection with any
resale of any New Subordinated Notes. As a condition to its
participation in the Exchange Offer each Holder Using the Exchange
Offer to participate in a distribution of the New Senior Subordinated
Notes shall acknowledge and agree that, if the resales are of New
Senior Subordinated Notes obtained by such Xxxxxx in exchange for
Senior Subordinated Notes acquired directly from any Issuer or any
Affiliate thereof, it (1) could not, Under Commission policy as in
effect on the date of this Agreement, rely on the position of the
Commission enunciated in XXXXXX XXXXXXX AND CO., INC. (available June
5, 1991) and EXXON CAPITAL HOLDINGS CORPORATION (available May 13,
1988), as interpreted in the Commission's letter to XXXXXXX & STERLING
dated July 2, 1993, and similar no-action letters, and (2) must comply
with the registration and prospectus delivery requirements of the Act
in connection with a secondary resale transaction and that such a
secondary resale transaction must be covered by an effective
registration statement containing the selling security holder
information required by Item 507 or 508, as applicable, of Regulation
S-K.
(ii) Prior to effectiveness of the Exchange Offer Registration
Statement, the Issuers and the Note Guarantors shall provide a
supplemental letter to the Commission (A) stating that the Issuers and
the Note Guarantors are registering the Exchange Offer in reliance on
the position of the Commission enunciated in EXXON CAPITAL HOLDINGS
CORPORATION (available May 13, 1988), XXXXXX XXXXXXX AND CO., INC.
(available June 5, 1991) as interpreted in the Commission's letter to
XXXXXXX & STERLING dated July 2, 1993 and (B) including, a
representation that neither any Issuer nor any Note Guarantor has
entered into any arrangement or understanding with any Person to
distribute the New
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Senior Subordinated Notes to be received in the Exchange Offer and
that, to the best of each Issuer's and each Note Guarantor's
information and belief, each Holder participating in the Exchange Offer
is acquiring the New Senior Subordinated Notes in its ordinary course
of business and has no arrangement or understanding with any Person to
participate in the distribution of the New Senior Subordinated Notes
received in the Exchange Offer.
(b) Shelf Registration Statement.
In connection with the Shelf Registration Statement, the
Issuers and the Note Guarantors shall:
(i) comply with all the provisions of Section 6(c) below and
use their respective 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 (as
indicated in the information furnished to the Issuers pursuant to
Section 4(b) hereof), and pursuant thereto the Issuers and the Note
Guarantors will prepare and file with the Commission a Registration
Statement relating to the registration on any appropriate form under
the Act, which form shall be available for the sale of the Transfer
Restricted Securities in accordance with the intended method or methods
of distribution thereof within the time periods and otherwise in
accordance with the provisions hereof, and
(ii) issue, upon the request of any Holder or purchaser of
Senior Subordinated Notes covered by any Shelf Registration Statement
contemplated by this Agreement, New Senior Subordinated Notes having,
an aggregate principal amount equal to the aggregate principal amount
of Senior Subordinated Notes sold pursuant to the Shelf Registration
Statement and surrendered to the Issuers for cancelation; the Issuers
shall register New Senior Subordinated Notes on the Shelf Registration
Statement for this purpose and issue the New Senior Subordinated Notes
to the purchaser(s) of securities subject to the Shelf Registration
Statement in the names as such purchaser(s) shall designate.
(c) GENERAL PROVISIONS. In connection with any Registration Statement
and any related Prospectus required by this Agreement, the Issuers and the Note
Guarantors shall:
(i) use their respective best efforts to keep such
Registration Statement continuously effective and provide all requisite
financial statements for the period specified in Section 3 or 4 of this
Agreement, as applicable. Upon the occurrence of any event that would
cause any such Registration Statement or the Prospectus contained
therein (A) to contain an untrue statement of material fact or omit to
state any material fact necessary to make the statements therein (in
the case of the Prospectus only, in light of the circumstances under
which they were made), not misleading or (B) not to be effective and
usable for resale of Transfer Restricted Securities during the period
required by this Agreement, the Issuers and the Note Guarantors, to the
extent required after the end of the applicable periods referred to in
Section 5(b), shall file promptly an appropriate amendment to such
Registration Statement curing such defect, and, if Commission review is
required, use their respective best efforts to cause such amendment to
be declared effective as soon as practicable;
(ii) prepare and file with the Commission such amendments and
post- effective amendments to the applicable Registration Statement as
may be necessary to keep such Registration Statement effective for the
applicable period set forth in Section 3 or 4 hereof, as the case may
be; 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 Rules 424, 430A and 462, as
applicable, 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 Registration Statement during the applicable period in
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accordance with the intended method or methods of distribution by the
sellers thereof set forth in such Registration Statement or supplement
to the Prospectus;
(iii) advise each selling Holder promptly (if requested by
such Holder, in the case of clause (A) and (B)) (A) when the Prospectus
or any Prospectus supplement or post-effective amendment has been
filed, and, with respect to any applicable Registration Statement or
any post-effective amendment thereto, when the same has become
effective, (B) of any request by the Commission for amendments to the
Registration Statement or amendments or supplements to the Prospectus
or for additional information relating thereto, (C) of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement under the Act or of the suspension by any state
securities commission of the qualification of the Transfer Restricted
Securities for offering or sale in any jurisdiction, or the initiation
of any proceeding for any of the preceding purposes, (D) of the
existence of any fact or the happening of any event that makes any
statement of a material fact made in the Registration Statement, the
Prospectus, any amendment or supplement thereto or any document
incorporated by reference therein untrue, or that requires the making
of any additions to or changes in the Registration Statement in order
to make the statements therein not misleading, or that requires the
making of any additions to or changes in the Prospectus in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading. If at any time the Commission
shall issue any stop order suspending the effectiveness of the
Registration Statement, or any state securities commission or other
regulatory authority shall issue an order suspending the qualification
or exemption from qualification of the Transfer Restricted Securities
under state securities or Blue Sky laws, the Issuers and the Note
Guarantors shall use their respective best efforts to obtain the
withdrawal or lifting of such order at the earliest possible time;
(iv) subject to Section 6(c)(i), if any fact or event
contemplated by Section 6(c)(iii)(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 will not contain an untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(v) furnish to each Initial Purchaser in connection with such
exchange or sale, if any, before filing with the Commission, copies of
any Registration Statement or any Prospectus included therein or any
amendments or supplements to any such Registration Statement or
Prospectus (including all documents incorporated by reference after the
initial filing of such Registration Statement), and use their
respective best efforts to reflect in each such document, when so filed
with the Commission, such comments as any Initial Purchaser may
reasonably propose;
(vi) promptly prior to the filing of any document that is to
be incorporated by reference into a Registration Statement or
Prospectus, provide copies of such document to each Initial Purchaser
in connection with such exchange or sale, if any;
(vii) in the case of a Shelf Registration Statement, make
available, at reasonable times, for inspection by a representative of,
and counsel for, Holders of at least 25% in aggregate principal amount
of Notes being sold and any Underwriter participating in any such
disposition of Notes pursuant to such Shelf Registration Statement, all
relevant financial and other records and pertinent corporate documents
of the Issuers and the Note Guarantors and use its best efforts to
cause the Issuers' and the Note Guarantors' officers, directors and
employees to supply all relevant information reasonably requested by
any such representatives in connection with such Registration Statement
or any post-effective amendment thereto subsequent to the filing
thereof and prior to its effectiveness;
11
(viii) if requested by any selling, Holders in connection with
such exchange or sale, if any, promptly include in any Registration
Statement or Prospectus, pursuant to a supplement or post-effective
amendment if necessary, such information as such selling Holders may
reasonably request to have included therein, including, without
limitation, information relating to the "Plan of Distribution" of the
Transfer Restricted Securities, and make all required filings of such
Prospectus supplement or post-effective amendment as soon as
practicable after the Issuers are notified of the matters to be
included in such Prospectus supplement or post-effective amendment;
(ix) furnish to each Holder of Transfer Restricted Securities
included within the coverage of any Shelf Registration Statement,
without charge, at least one conformed copy of such Shelf Registration
Statement and any post-effective amendment thereto, including financial
statements and, if any such Holder so requests in writing, all exhibits
thereto (including those, if any, incorporated by reference);
(x) during the Shelf Registration Period, promptly deliver to
each Holder of Transfer Restricted Securities included within the
coverage of any Shelf Registration Statement, without charge, as many
copies of the Prospectus (including each preliminary Prospectus)
included in such Shelf Registration Statement and any amendment or
supplement thereof as such Holder may reasonably request; and the
Issuers consent to the use of such Prospectus or any amendment or
supplement thereto by each of the selling Holders of Transfer
Restricted Securities in connection with the offer and sale of the
Transfer Restricted Securities covered by such Prospectus or any
amendment or supplement thereto;
(xi) furnish to each Initial Purchaser and each Holder that is
a Broker-Dealer electing to exchange Senior Subordinated Notes,
acquired for its own account as a result of market-making activities or
other trading activities, for New Senior Subordinated Notes (an
"EXCHANGING DEALER"), and to any other Holder who so requests, without
charge, at least one conformed copy of the Exchange Offer Registration
Statement and any post-effective amendment thereto, including financial
statements and schedules and, if any Initial Purchaser or Exchanging
Dealer or any such Holder so requests in writing, all exhibits thereto
(including those, if any, incorporated by reference);
(xii) during the Exchange Offer Registration Period or the
Shelf Registration Period, as applicable, promptly deliver to each
Initial Purchaser, each Exchanging Dealer and such other persons that
are required to deliver a Prospectus following the Exchange Offer,
without charge, as many copies of the final Prospectus included in the
Exchange Offer Registration Statement or the Shelf Registration
Statement and any amendment or Supplement thereto as such Initial
Purchaser, Exchanging Dealer or other persons may reasonably request;
and the Issuers and the Note Guarantors consent to the use of Such
Prospectus or any amendment or supplement thereto by any such Initial
Purchaser, Exchanging Dealer or other persons, as applicable, as
aforesaid;
(xiii) upon the request by Holders of a majority in aggregate
principal amount of the Notes (the "Majority Holders"), make such
customary representations and warranties and take all such other
actions in connection therewith in order to expedite or facilitate the
disposition of the Transfer Restricted Securities pursuant to any
applicable Registration Statement contemplated by this Agreement as may
be reasonably requested by such Holders in connection with any sale or
resale pursuant to any applicable Registration Statement. In such
connection, the Issuers and the Note Guarantors shall, upon request of
the Majority Holders, furnish to each selling Holder, upon Consummation
of the Exchange Offer or upon the effectiveness of the Shelf
Registration Statement, as the case may be, a certificate, dated such
date, signed on behalf of each Issuer and each Note Guarantor by (x)
the President or any Vice President and (y) a principal financial or
accounting officer of such Issuer and such Note Guarantor, confirming,
as of the date thereof, the matters set forth in Sections 6(kk) (as to
the Registration Statement) and 9(a)
12
(as to the representations and warranties contained herein) of the
Purchase Agreement and such other similar matters as such Holders may
reasonably request;
(xiv) prior to any public offering of Transfer Restricted
Securities, cooperate with the selling Holders and their 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 Majority Holders 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 applicable Registration Statement; PROVIDED, HOWEVER, that neither
any Issuer nor any Note Guarantor shall be required to register or
qualify as a foreign corporation where it is not now so qualified or to
take any action that would subject it to the service of process in
suits or to taxation in any jurisdiction where it is not now so
subject;
(xv) in connection with any sale of Transfer Restricted
Securities that will result in such securities no longer being Transfer
Restricted Sectilities, cooperate with the selling Holders to
facilitate the timely preparation and delivery of certificates
representing Transfer Restricted Securities to be sold and not bearing
any restrictive legends; and to register such Transfer Restricted
Securities in such denominations and such names as the selling Holders
may request in writing at least three Business Days prior to such sale
of Transfer Restricted Securities;
(xvi) use their respective best efforts to cause the
disposition of the Transfer Restricted Securities covered by the
Registration Statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to enable the
seller or sellers thereof to consummate the disposition of such
Transfer Restricted Securities, subject to the proviso contained in
clause (xiv) above;
(xvii) provide a CUSIP number for all Transfer Restricted
Securities not later than the effective date of a Registration
Statement covering such Transfer Restricted Securities and provide the
Trustee under the Indenture with printed certificates for the Transfer
Restricted Securities which are in a form eligible for deposit with The
Depository Trust Company;
(xviii) otherwise use their respective best efforts to comply
with all applicable rules and regulations of the Commission, and make
generally available to their security holders with regard to any
applicable Registration Statement, as soon as practicable after the
effective date of such Registration Statement, a consolidated earnings
statement meeting the requirements of Rule 158 (which need not be
audited) covering a twelve-month period beginning after the effective
date of the Registration Statement (as such term is defined in
paragraph (c) of Rule 158 under the Act);
(xix) cause the Indenture to be qualified under the TIA not
later than the effective date of the first Registration Statement
required by this Agreement and, in connection therewith, cooperate with
the Trustee and the Holders to effect such changes to the Indenture as
may be required for such Indenture to be so qualified in accordance
with the terms of the TIA; and execute and use their respective best
efforts to cause the Trustee to execute all documents that 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; and
(xx) provide promptly to each Holder, upon written request,
each document filed by an Issuer with the Commission pursuant to the
requirements of Section 13 or Section 15(d) of the Exchange Act during
any period of time when the Issuers are required to maintain the
effectiveness of a Registration Statement.
13
(d) RESTRICTIONS ON HOLDERS. Each Holder agrees by acquisition of a
Transfer Restricted Security that, upon receipt of the notice referred to in
Section 6(c)(iii)(B) and Section 6(c)(iii)(C) or any notice from the Issuers of
the existence of any fact of the kind described in Section 4(c) or 5(b) or
Section 6(c)(iii)(D) hereof (in each case, a "SUSPENSION NOTICE"), such Holder
will forthwith discontinue disposition of Transfer Restricted Securities
pursuant to the applicable Registration Statement until (i) such Holder has
received copies of the supplemented or amended Prospectus contemplated by
Section 6(c)(iv) hereof, or (ii) such Holder is advised in writing by the
Issuers that the use of the Prospectus may be resumed, and has received copies
of any additional or supplemental filings that are incorporated by reference in
the Prospectus and that are required to be delivered hereunder (in each case,
the "RECOMMENCEMENT DATE"). Each Holder receiving a Suspension Notice hereby
agrees that it will either (i) destroy any Prospectuses, other than permanent
file copies, then in such Holder's possession which have been replaced by the
Issuers with more recently dated Prospectuses or (ii) deliver to the Issuers (at
the Issuers' expense) all copies, other than permanent file copies, then in such
Xxxxxx's possession of the Prospectus covering such Transfer Restricted
Securities that was current at the time of receipt of the Suspension Notice. The
time period regarding the effectiveness of such Registration Statement set forth
in Section 3 or 4 hereof, as applicable, shall be extended by a number of days
equal to the number of days in the period from and including the date of
delivery of the Suspension Notice to the date of delivery of the Recommencement
Date.
SECTION 7 REGISTRATION EXPENSES
(a) All expenses incident to the Issuers' and the Note Guarantors'
performance of or compliance with this Agreement will be borne by the Issuers,
regardless of whether a Registration Statement becomes effective, including
without limitation: (i) all registration and filing fees and expenses; (ii) all
fees and expenses of compliance with federal securities and state Blue Sky or
securities laws; (iii) all expenses of printing (including printing certificates
for the New Senior Subordinated Notes to be issued in the Exchange Offer and
printing of Prospectuses), messenger and delivery services and telephone; (iv)
all fees and disbursements of counsel for the Issuers, the Note Guarantors and,
subject to the limitations set forth in Section 7(b), the Holders of Transfer
Restricted Securities; (v) all application and filing fees in connection with
listing the New Senior Subordinated Notes on a national securities exchange or
automated quotation system pursuant to the requirements hereof, and (vi) all
fees and disbursements of independent certified public accountants of the
Issuers and the Note Guarantors (including the expenses of any special audit and
comfort letters required by or incident to such performance).
The Issuers will, in any event, bear their and the Note Guarantors'
internal expenses (including, without limitation, all salaries and expenses of
its officers and employees performing legal or accounting duties), the expenses
of any annual audit and the fees and expenses of any Person, including special
experts, retained by the Issuers or the Note Guarantors.
(b) In connection with any Registration Statement required by this
Agreement (including, without limitation, the Exchange Offer Registration
Statement and the Shelf Registration Statement), the Issuers and the Note
Guarantors will reimburse the Initial Purchasers and the Holders of Transfer
Restricted Securities who are tendering Senior Subordinated Notes in the
Exchange Offer and/or selling or reselling Senior Subordinated Notes or New
Senior Subordinated Notes pursuant to the "Plan of Distribution" contained in
the Exchange Offer Registration Statement or the Shelf Registration Statement,
as applicable, for the reasonable fees and disbursements of not more than one
counsel, who shall be Xxxxxx & Xxxxxxx, unless another firm shall be chosen by
the Holders of a majority in principal amount of the Transfer Restricted
Securities for whose benefit such Registration Statement is being prepared. Such
Holders shall be responsible for any and all other out-of-pocket expenses of the
Holders incurred in connection with the registration of the Notes.
SECTION 8 INDEMNIFICATION
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(a) The Issuers and the Note Guarantors agree, jointly and severally,
to indemnify and hold harmless each Holder, its directors, officers, employees,
representatives and agents and each Person, if any, who controls such Holder
(within the meaning of Section 15 of the Act or Section 20 of the Exchange Act),
from and against any and all losses, claims, damages, liabilities, judgments
(including without limitation, any legal or other expenses incurred in
connection with investigating, or defending any matter, including any action
that could give rise to any such losses, claims, damages, liabilities or
judgments) caused by any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement, preliminary prospectus or
Prospectus (or any amendment or supplement thereto) provided by the Issuers to
any Holder or any prospective purchaser of New Senior Subordinated Notes, or
caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein in
light of the circumstances under which they were made, not misleading, except
insofar as such losses, claims, damages, liabilities or judgments are caused by
an untrue statement or omission or alleged untrue statement or omission that is
based upon information relating to any of the Holders furnished in writing to
the Issuers by any of the Holders; provided that, the indemnity agreement
contained in this Section 8(a) shall not inure to the benefit of any Holder from
whom the person asserting any such loss, claim, damage, liability or action
received Notes if the final Prospectus (as then amended or supplemented) was not
sent or given to such person, if required by law so to have been delivered, at
or prior to the written confirmation of the sale of such Notes to such person
and if the final Prospectus (as amended or Supplemented) would have corrected
any such untrue statement of a material fact contained in and each omission or
alleged omission of a material fact from the related preliminary Prospectus
giving rise to such losses, claims, damages, liabilities or actions unless such
failure is the result of noncompliance by the Issuers with Sections 6(c)(ix),
(x), (xi) or (xii).
(b) Each Holder of Transfer Restricted Securities agrees, severally and
not jointly, to indemnify and hold harmless the Issuers and the Note Guarantors
and their respective directors, officers, employees, representatives and agents
and each person, if any, who controls (within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act) any Issuer or any Note Guarantor, to the
same extent as the foregoing indemnity from the Issuers and the Note Guarantors
set forth in section (a) above, but only with reference to information relating
to such Holder furnished in writing to the Company by such Holder expressly for
use in any Registration Statement. In no event shall any Holder, its directors,
officers or any Person who controls such Holder be liable or responsible for any
amount in excess of the amount by which the total amount received by such Holder
with respect to its sale of Transfer Restricted Securities pursuant to a
Registration Statement exceeds (i) the amount paid by such Holder for such
Transfer Restricted Securities and (ii) the amount of any damages that such
Holder, its directors, officers or any Person who controls such Holder has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission.
(c) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 8(a) or 8(b) (the
"INDEMNIFIED PARTY"), the indemnified party shall promptly notify the person
against whom such indemnity may be sought (the "INDEMNIFYING PERSON") in writing
and the indemnifying party shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the indemnified party and
the payment of all fees and expenses of such counsel, as incurred (except that
in the case of any action in respect of which indemnity may be sought pursuant
to both Sections 8(a) and 8(b), a Holder shall not be required to assume the
defense of such action pursuant to this Section 8(c), but may employ separate
counsel and participate in the defense thereof, but the fees and expenses of
such counsel, except as provided below, shall be at the expense of the Holder).
Any indemnified party shall have the right to employ separate counsel in any
such action and participate in the defense thereof, but the fees and expenses of
such counsel shall be at the expense of the indemnified party unless (i) the
employment of such counsel shall have been specifically authorized in writing by
the indemnifying party, (ii) the indemnifying party shall have failed to assume
the defense of such action or employ counsel reasonably satisfactory to the
indemnified party or (iii) the named parties to any such action (including any
impleaded parties) include both the indemnified party and the indemnifying
party, and the indemnified party shall have been
15
advised by such counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the
indemnifying party (in which case the indemnifying party shall not have the
right to assume the defense of such action on behalf of the indemnified party).
In any such case, the indemnifying party shall not, in connection with any one
action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of attorneys (in
addition to any local counsel) for all indemnified parties and all such fees and
expenses shall be reimbursed as they are incurred. Such firm shall be designated
in writing by a majority of the Holders, in the case of the parties indemnified
pursuant to Section 8(a), and by the Issuers and the Note Guarantors, in the
case of parties indemnified pursuant to Section 8(b). No indemnifying party
shall be liable for any settlement of any such action effected without its
written consent, but if settled with its written consent, which consent will not
unreasonably be withheld, the indemnifying party shall indemnify and hold
harmless the indemnified party from and against any and all losses, claims,
damages, liabilities and judgments by reason of any settlement of any action
effected with its written consent. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement or
compromise of, or consent to the entry of judgment with respect to, any pending
or threatened action in respect of which the indemnified party is or could have
been a party and indemnity or contribution may be or could have been sought
hereunder by the indemnified party, unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability on claims that are or could have been the subject matter of such
action and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of the indemnified party.
(d) To the extent that the indemnification provided for in this Section
8 is unavailable to an indemnified party in respect of any losses, claims,
damages, liabilities or judgments referred to therein, then each indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages, liabilities or judgments (i) in such proportion as is
appropriate to reflect the relative benefits received by the Issuers and the
Note Guarantors, on the one hand, and the Holders, on the other hand, from their
sale of Transfer Restricted Securities or (ii) if the allocation provided by
clause 8(d)(i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
8(d)(i) above but also the relative fault of the Issuers and the Note
Guarantors, on the one hand, and of the Holder, on the other hand, in connection
with the statements or omissions which resulted in such losses, claims, damages,
liabilities or judgments, as well as any other relevant equitable
considerations. The relative fault of the Issuers and the Note Guarantors, on
the one hand, and of the Holder, on the other hand, shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by such Issuer or such Note Guarantor, on the
one hand, or by the Holder, on the other hand, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The amount paid or payable by a party as a result of the
losses, claims, damages, liabilities and judgments referred to above shall be
deemed to include, subject to the limitations set forth in the second paragraph
of Section 8(a), any legal or other fees or expenses reasonably incurred by such
party in connection with investigating or defending any action or claim.
The Issuers, the Note Guarantors and each Holder agree that it would
not be just and equitable if contribution pursuant to this Section 8(d) were
determined by pro rata allocation (even if the Holders were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities or judgments referred to in
the immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any matter,
including any action that could have given rise to such losses, claims, damages,
liabilities or judgments. Notwithstanding the provisions of this Section 8, no
Holder, its
16
directors, its officers or any Person, if any, who controls such Holder shall be
required to contribute, in the aggregate, any amount in excess of the amount by
which the total received by such Holder with respect to the sale of Transfer
Restricted Securities pursuant to a Registration Statement exceeds (i) the
amount paid by such Holder for such Transfer Restricted Securities plus (ii) the
amount of any damages which 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 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Holders'
obligations to contribute pursuant to this Section 8(c) are several in
proportion to the respective principal amount of Transfer Restricted Securities
held by each Holder hereunder and not joint.
SECTION 9 RULE 144A AND RULE 144
Each Issuer and each Note Guarantor agrees with each Holder, for so
long as any Transfer Restricted Securities remain outstanding and during any
period in which such Issuer or such Note Guarantor (i) is not subject to Section
13 or 15(d) of the Exchange Act, to make available, upon request of any Holder,
to such Holder or beneficial owner of Transfer Restricted Securities in
connection with any sale thereof and any prospective purchaser of such Transfer
Restricted Securities designated by such Holder or beneficial owner, the
information required by Rule 144A(d)(4) Under the Act in order to permit resales
of such Transfer Restricted Securities pursuant to Rule 144A, and (ii) is
subject to Section 13 or 15 (d) of the Exchange Act, to make all filings
required thereby in a timely manner in order to permit resales of such Transfer
Restricted Securities pursuant to Rule 144.
SECTION 10 UNDERWRITTEN REGISTRATIONS
If any of the Transfer Restricted Securities covered by any Shelf
Registration Statement are to be sold in an Underwritten offering, the
investment banker or investment bankers and manager or managers that will
administer the offering will be selected by the Holders of a majority in
aggregate principal amount of such Transfer Restricted Securities included in
such offering, subject to the consent of the Issuers (which shall not be
unreasonably withheld or delayed), and such Holders shall be responsible for all
underwriting commissions, discounts, fees and expenses in connection therewith.
No person may participate in any underwritten registration hereunder
unless such person (i) agrees to sell such person's Transfer Restricted
Securities on the basis reasonably provided in any underwriting arrangements
approved by the persons entitled hereunder to approve Such arrangements and (ii)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements.
SECTION 11 MISCELLANEOUS
(a) REMEDIES. The Issuers and the Note Guarantors acknowledge and agree
that any failure by the Issuers and/or the Note Guarantors to comply with their
respective obligations under Sections 3 and 4 hereof may result in material
irreparable injury to the Initial Purchasers or the Holders for which there is
no adequate remedy at law, that it will not be possible to measure damages for
such injuries precisely and that, in the event of any such failure, other than
with respect to Sections 3 and 4 hereof for which liquidated damages have been
paid pursuant to Section 5 hereof, the Initial Purchasers or any Holder may
obtain such relief as may be required to specifically enforce the Issuers' and
the Note Guarantors' obligations under Sections 3 and 4 hereof. The Issuers and
the Note Guarantors further agree to waive the defense in any action for
specific performance as contemplated by this Section 11(a) that a remedy at law
would be adequate.
17
(b) NO INCONSISTENT AGREEMENTS. Neither any Issuer nor any Note
Guarantor will, 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.
Neither any Issuer nor any Note Guarantor has previously entered into any
agreement which remains in effect granting any registration rights with respect
to its debt securities to any Person. 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 Issuers' and the Note Guarantors'
securities under any agreement 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 (1) in the case of Section 5
hereof and this Section 11 (c)(i), the Issuers have obtained the written consent
of Holders of all outstanding Transfer Restricted Securities and (ii) in the
case of all other provisions hereof, the Issuers have obtained the written
consent of Holders of a majority of the outstanding principal amount of Transfer
Restricted Securities (excluding Transfer Restricted Securities held by the
Issuers or their respective Affiliates). Notwithstanding the foregoing, a waiver
or consent to departure from the provisions hereof that relates exclusively to
the rights of Holders whose Transfer Restricted Securities are being tendered or
sold pursuant to a Registration Statement, and that does not affect directly or
indirectly the rights of other Holders whose Transfer Restricted Sectilities are
not being tendered or sold pursuant to such Registration Statement, may be given
by the Holders of a majority of the outstanding principal amount of Transfer
Restricted Securities subject to such Registration Statement.
(d) THIRD PARTY BENEFICIARY. The Holders shall be third party
beneficiaries to the agreements made hereunder between the Issuers and the Note
Guarantors, on the one hand, and the Initial Purchasers, on the other hand, and
shall have the right to enforce such agreements directly to the extent they may
deem such enforcement necessary or advisable to protect its nights or the rights
of Holders hereunder.
(e) 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 Registrar under the Indenture, with a copy to the Registrar
under the Indenture; and
(ii) if to the Issuers or the Note Guarantors:
WRC Media Inc.
Weekly Reader Corporation
JLC Learning Corporation
0 Xxxxxxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Chief Executive Officer
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when receipt
acknowledged, if telecopied; and on the next Business Day, if timely delivered
to an air courier guaranteeing overnight delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.
(f) 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,
subsequent Holders; PROVIDED, that nothing herein
18
shall be deemed to permit any assignment, transfer or other disposition of
Transfer Restricted Securities in violation of the terms hereof or of the
Purchase Agreement or the Indenture. If any transferee of any Holder shall
acquire Transfer Restricted Securities in any manner, whether by operation of
law or otherwise, such Transfer Restricted Securities shall be held subject to
all of the terms of this Agreement, and by taking and holding such Transfer
Restricted Securities such Person shall be conclusively deemed to have agreed to
be bound by and to perform all of the terms and provisions of this Agreement,
including the restrictions on resale set forth in this Agreement and, if
applicable, the Purchase Agreement, and such Person shall be entitled to receive
the benefits hereof .
(g) 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.
(h) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(i) 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.
(j) 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.
(k) ENTIRE AGREEMENT. This 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 with respect to the Transfer
Restricted Securities. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
WRC MEDIA INC.
By: /s/ Xxxxxxx Xxxxxx
--------------------
Name: Xxxxxxx Xxxxxx
Title: Secretary
WEEKLY READER CORPORATION
By: /s/ Xxxxxxx Xxxxxx
--------------------
Name: Xxxxxxx Xxxxxx
Title: Secretary
JLC LEARNING CORPORATION
By: /s/ Xxxxxxx Xxxxxx
--------------------
Name: Xxxxxxx Xxxxxx
Title: Secretary
19
PRIMEDIA REFERENCE INC.
By: /s/ Xxxxxxx Xxxxxx
--------------------
Name: Xxxxxxx Xxxxxx
Title: Secretary
FUNK & WAGNALLS YEARBOOK
CORPORATION
By: /s/ Xxxxxxx Xxxxxx
--------------------
Name: Xxxxxxx Xxxxxx
Title: Secretary
LIFETIME LEARNING SYSTEMS, INC.
By: /s/ Xxxxxxx Xxxxxx
--------------------
Name: Xxxxxxx Xxxxxx
Title: Secretary
REGISTRATION RIGHTS AGREEMENT SIGNATURE PAGE 1
20
XXXXXX XXXXXXX, INC.
By: /s/ Xxxxxxx Xxxxxx
--------------------
Name: Xxxxxxx Xxxxxx
Title: Secretary
AMERICAN GUIDANCE SERVICE, INC.
By: /s/ Xxxxxxx Xxxxxx
--------------------
Name: Xxxxxxx Xxxxxx
Title: Secretary
AGS INTERNATIONAL SALES, INC.
By: /s/ Xxxxxxx Xxxxxx
--------------------
Name: Xxxxxxx Xxxxxx
Title: Secretary
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
BANC OF AMERICA SECURITIES LLC
By: Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation
By: /s/ X. Xxxx Xxxxxxxx
----------------------
Name: X. Xxxx Xxxxxxxx
Title: Vice President
REGISTRATION RIGHTS AGREEMENT SIGNATURE PAGE 2
