Exhibit 4.8
REGISTRATION RIGHTS AGREEMENT
Dated as of February 2, 2000
by and among
MUZAK LLC,
MUZAK FINANCE CORP.,
THE GUARANTORS
named herein
and
CIBC INC.
as Purchaser
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Up to $50,000,000
SENIOR SUBORDINATED FLOATING RATE NOTES DUE 2009
TABLE OF CONTENTS
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Page
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1. Definitions.......................................................................................1
2. Exchange Offer....................................................................................6
3. Shelf Registration...............................................................................10
4. Additional Interest..............................................................................12
5. Registration Procedures..........................................................................15
6. Registration Expenses............................................................................26
7. Indemnification..................................................................................28
8. Rules 144 and 144A...............................................................................32
9. Underwritten Registrations.......................................................................32
10. Miscellaneous....................................................................................33
(a) Remedies.....................................................................................33
(b) No Inconsistent Agreements...................................................................33
(c) Adjustments Affecting Registrable Notes......................................................33
(d) Amendments and Waivers.......................................................................34
(e) Notices..................................................................................... 34
(f) Successors and Assigns.......................................................................36
(g) Counterparts.................................................................................36
(h) Headings.....................................................................................36
(i) Governing Law................................................................................36
(j) Severability.................................................................................37
(k) Notes Held by any Issuer or Its Affiliates...................................................37
(l) Third Party Beneficiaries....................................................................37
(m) Entire Agreement.............................................................................37
(n) Joint and Several Obligations................................................................38
(o) PIK Notes....................................................................................38
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REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made
and entered into as of February 2, 2000, by and among Muzak LLC, a Delaware
limited liability company (the "Company"), Muzak Finance Corp., a Delaware
corporation (together with the Company, the "Notes Issuers"), the Guarantors (as
defined) and CIBC Inc. (the "Purchaser").
This Agreement is entered into in connection with the Purchase
Agreement, dated the date hereof, by and among the Notes Issuers, the Guarantors
and the Purchaser (the "Purchase Agreement") relating to the sale by the Notes
Issuers to the Purchaser of up to $50,000,000 aggregate principal amount of the
Notes Issuers' Senior Subordinated Floating Rate Notes due 2009 and any notes
issued as pay-in-kind interest on such Senior Subordinated Notes due 2009
pursuant to the terms thereof (collectively, the "Notes") and the unconditional
guarantee thereof by the Guarantors on a joint and several, senior subordinated
basis (the "Guarantee"). In order to induce the Purchaser to enter into the
Purchase Agreement, the Issuers (as defined) have agreed to provide the
registration rights set forth in this Agreement for the benefit of the holders
of Registrable Notes (as defined), including, without limitation, the Purchaser.
The execution and delivery of this Agreement is a condition to the Purchaser's
obligation to purchase the Notes under the Purchase Agreement.
The parties hereby agree as follows:
1. Definitions
As used in this Agreement, the following terms shall have the
following meanings:
Additional Interest: See Section 4(a).
Advice: See the last paragraph of Section 5.
Agreement: See the first introductory paragraph to this
Agreement.
Applicable Period: See Section 2(b).
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Business Day: A day that is not a Saturday, a Sunday, or a day
on which banking institutions in New York, New York are required to be closed.
Conversion Date: November 1, 2000.
Commission: The Securities and Exchange Commission.
Company: See the first introductory paragraph to this
Agreement.
Effectiveness Date: The 210th day after the Conversion Date,
in the case of the Exchange Registration Statement, and the 210th day after the
delivery of the Shelf Notice, in the case of the Initial Shelf Registration.
Effectiveness Period: See Section 3(a).
Event Date: See Section 4(b).
Exchange Act: The Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission promulgated thereunder.
Exchange Notes: See Section 2(a).
Exchange Offer: See Section 2(a).
Exchange Registration Statement: See Section 2(a).
Filing Date: The 150th day after the Conversion Date
(regardless of whether the actual filing precedes such date).
Guarantee: See the second introductory paragraph to this
Agreement.
Guarantors: Each of Business Sound, Inc., an Ohio Corporation,
Muzak Capital Corporation, a Delaware corporation, MLP Environmental Music, LLC,
a Washington limited liability company, Muzak Holdings LLC, a Delaware limited
liability company, Audio Environments, Inc., a California corporation, BI
Acquisition, L.L.C., a Delaware limited liability company, and Background Music
Broadcasters, Inc., a California corporation.
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Holder: Any registered holder of Registrable Notes.
Indemnified Person: See Section 7(c).
Indemnifying Person: See Section 7(c).
Indenture: The Indenture, dated as of February 2, 2000, by and
among the Notes Issuers, the Guarantors and State Street Bank and Trust Company,
as trustee, pursuant to which the Notes are being issued, as amended or
supplemented from time to time in accordance with the terms thereof.
Initial Shelf Registration: See Section 3(a).
Inspectors: See Section 5(o).
Issuers: The Notes Issuers and the Guarantors, collectively.
NASD: National Association of Securities Dealers, Inc.
Notes: See the second introductory paragraph to this
Agreement.
Participant: See Section 7(a).
Participating Broker-Dealer: See Section 2(b).
Person: Any individual, corporation, partnership, limited
liability company, joint venture, association, joint stock company, trust,
unincorporated organization or government (including any agency or political
subdivision thereof).
PIK Notes: See Section 10(o).
Private Exchange: See Section 2(b).
Private Exchange Notes: See Section 2(b).
Prospectus: The prospectus included in any Registration
Statement (including, without limitation, any prospectus subject to completion
and a prospectus that includes any information previously omitted from a
prospectus filed as part of an effective registration statement in reliance upon
Rule 430A
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promulgated under the Securities Act), as amended or supplemented by any
prospectus supplement, with respect to the terms of the offering of any portion
of the Registrable Notes covered by such Registration Statement, and all other
amendments and supplements to the Prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such Prospectus.
Purchaser: See the first introductory paragraph to this
Agreement.
Purchase Agreement: See the second introductory paragraph to
this Agreement.
Records: See Section 5(o).
Registrable Notes: Each Note upon original issuance thereof
and at all times subsequent thereto, each Exchange Note as to which Section
2(c)(iv) hereof is applicable upon original issuance thereof and at all times
subsequent thereto and each Private Exchange Note upon original issuance thereof
and at all times subsequent thereto, until, in the case of any such Note,
Exchange Note or Private Exchange Note, as the case may be, the earliest to
occur of (i) a Registration Statement (other than, with respect to any Exchange
Note as to which Section 2(c)(iv) hereof is applicable) covering such Note,
Exchange Note or Private Exchange Note, as the case may be, has been declared
effective by the Commission and such Note, Exchange Note or Private Exchange
Note, as the case may be, has been disposed of in accordance with such effective
Registration Statement, (ii) such Note, Exchange Note or Private Exchange Note,
as the case may be, is sold in compliance with Rule 144, (iii) in the case of
any Note, such Note has been exchanged pursuant to the Exchange Offer for an
Exchange Note or Exchange Notes which may be resold without restriction under
federal securities laws, or (iv) such Note, Exchange Note or Private Exchange
Note, as the case may be, ceases to be outstanding for purposes of the
Indenture.
Registration Statement: Any registration statement of any of
the Issuers, including, but not limited to, the Exchange Registration Statement,
that covers any of the Registrable Notes pursuant to the provisions of this
Agreement, including the Prospectus, amendments and supplements to such
registration statement, including post-effective amendments, all ex-
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hibits, and all material incorporated by reference or deemed to be incorporated
by reference in such registration statement.
Rule 144: Rule 144 under the Securities Act, as such Rule may
be amended from time to time, or any similar rule (other than Rule 144A) or
regulation hereafter adopted by the Commission providing for offers and sales of
securities made in compliance therewith resulting in offers and sales by
subsequent holders that are not affiliates of an issuer of such securities being
free of the registration and prospectus delivery requirements of the Securities
Act.
Rule 144A: Rule 144A under the Securities Act, as such Rule
may be amended from time to time, or any similar rule (other than Rule 144) or
regulation hereafter adopted by the Commission.
Rule 415: Rule 415 under the Securities Act, as such Rule may
be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission.
Securities Act: The Securities Act of 1933, as amended, and
the rules and regulations of the Commission promulgated thereunder.
Shelf Notice: See Section 2(c).
Shelf Registration: See Section 3(b).
Subsequent Shelf Registration: See Section 3(b).
TIA: The Trust Indenture Act of 1939, as amended.
Trustee: The trustee under the Indenture and, if existent, the
trustee under any indenture governing the Exchange Notes and Private Exchange
Notes (if any).
Underwritten registration or underwritten offering: A
registration in which securities of one or more of the Issuers are sold to an
underwriter for reoffering to the public.
2. Exchange Offer
(a) Each of the Issuers agrees to file with the Commission no
later than the Filing Date, an offer to exchange
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(the "Exchange Offer") any and all of the Registrable Notes (other than Private
Exchange Notes, if any) for a like aggregate principal amount of debt securities
of the Notes Issuers which are identical in all material respects to the Notes
(the "Exchange Notes") (and which are entitled to the benefits of the Indenture
or a trust indenture which is identical in all material respects to the
Indenture (other than such changes to the Indenture or any such identical trust
indenture as are necessary to comply with any requirements of the Commission to
effect or maintain the qualification thereof under the TIA) and which, in either
case, has been qualified under the TIA and which shall also be entitled to the
benefits of the Guarantees of the Guarantors), except that the Exchange Notes
shall have been registered pursuant to an effective Registration Statement under
the Securities Act and shall contain no restrictive legend thereon. The Exchange
Offer shall be registered under the Securities Act on the appropriate form (the
"Exchange Registration Statement") and shall comply with all applicable tender
offer rules and regulations under the Exchange Act. Each of the Issuers agrees
to use its reasonable best efforts to (x) cause the Exchange Registration
Statement to be declared effective under the Securities Act on or before the
Effectiveness Date; (y) keep the Exchange Offer open for at least 30 days (or
longer if required by applicable law) after the date that notice of the Exchange
Offer is first mailed to Holders; and (z) consummate the Exchange Offer on or
prior to the 60th day following the date on which the Exchange Registration
Statement is declared effective. If after such Exchange Registration Statement
is initially declared effective by the Commission, the Exchange Offer or the
issuance of the Exchange Notes thereunder is interfered with by any stop order,
injunction or other order or requirement of the Commission or any other
governmental agency or court, such Exchange Registration Statement shall be
deemed not to have become effective for purposes of this Agreement. Each Holder
who participates in the Exchange Offer will be required to represent that any
Exchange Notes received by it will be acquired in the ordinary course of its
business, that at the time of the consummation of the Exchange Offer such Holder
will have no arrangement or understanding with any Person to participate in the
distribution of the Exchange Notes, that such Holder is not an affiliate of any
Issuer within the meaning of the Securities Act, and any additional
representations that in the written opinion of counsel to the Issuers are
necessary under then-existing interpretations of
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the Commission in order for the Exchange Registration Statement to be declared
effective. Upon consummation of the Exchange Offer in accordance with this
Section 2, the provisions of this Agreement shall continue to apply, mutatis
mutandis, solely with respect to Registrable Notes that are Private Exchange
Notes and Exchange Notes held by Participating Broker-Dealers, and the Issuers
shall have no further obligation to register Registrable Notes (other than
Private Exchange Notes and other than in respect of any Exchange Notes as to
which clause 2(c)(iv) hereof applies) pursuant to Section 3 of this Agreement.
(b) The Issuers shall include within the Prospectus contained
in the Exchange Registration Statement a section entitled "Plan of
Distribution," reasonably acceptable to the Purchaser, 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
Exchange Act) of Exchange Notes received by such broker-dealer in the 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, in the reasonable judgment of the Purchaser, represent the prevailing
views of the Staff of the Commission. Such "Plan of Distribution" section shall
also allow, to the extent permitted by applicable policies and regulations of
the Commission, the use of the Prospectus by all Persons subject to the
prospectus delivery requirements of the Securities Act, including, to the extent
so permitted, all Participating Broker-Dealers, and include a statement
describing the manner in which Participating Broker-Dealers may resell the
Exchange Notes.
Each of the Issuers shall use its reasonable best efforts to
keep the Exchange 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, not to exceed 180
days from the date the Exchange Offer is consummated, as such Persons must
comply with such requirements in connection with offers and sales of the
Exchange Notes (the "Applicable Period").
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If, upon consummation of the Exchange Offer, the Purchaser
holds any Notes acquired by it and having the status of an unsold allotment in
an initial distribution, the Issuers upon the request of the Purchaser shall,
simultaneously with the delivery of the Exchange Notes in the Exchange Offer,
issue and deliver to the Purchaser, in exchange (the "Private Exchange") for the
Notes held by the Purchaser, a like principal amount of debt securities of the
Notes Issuers that are identical in all material respects to the Exchange Notes
except for the existence of restrictions on transfer thereof under the
Securities Act and securities laws of the several states of the U.S. (the
"Private Exchange Notes") (and which are issued pursuant to the same indenture
as the Exchange Notes and which will have the Guarantees of the Guarantors). The
Private Exchange Notes shall bear the same CUSIP number as the Exchange Notes.
Interest on the Exchange Notes and Private Exchange Notes will accrue from the
last interest payment date on which interest was paid on the Notes surrendered
in exchange therefor or, if no interest has been paid on the Notes, from the
dates of original issuance of the Notes.
In connection with the Exchange Offer, the Issuers shall:
(1) mail to each Holder a copy of the Prospectus forming
part of the Exchange Registration Statement, together with an
appropriate letter of transmittal and related documents;
(2) utilize the services of a depositary for the Exchange
Offer with an address in the Borough of Manhattan, The City of New
York, which may be the Trustee or an affiliate thereof;
(3) permit Holders to withdraw tendered Registrable Notes at
any time prior to the close of business, New York time, on the last
Business Day on which the Exchange Offer shall remain open; and
(4) otherwise comply in all material respects with all
applicable laws.
As soon as practicable after the close of the Exchange Offer
or the Private Exchange, as the case may be, the Issuers shall:
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(1) accept for exchange all Registrable Notes validly
tendered and not validly withdrawn pursuant to the Exchange Offer or
the Private Exchange;
(2) deliver to the Trustee for cancellation all Registrable
Notes so accepted for exchange; and
(3) cause the Trustee to authenticate and deliver promptly
to each Holder tendering such Registrable 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 identical in all material
respects 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,
if any, 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, if any, will
have the right to vote or consent as a separate class on any matter.
(c) If, (i) because of any change in law or in currently
prevailing interpretations of the staff of the Commission, the Notes Issuers are
not permitted to effect an Exchange Offer, (ii) the Exchange Offer is not
consummated within 270 days of the Conversion Date, (iii) any holder of Private
Exchange Notes so requests in writing to the Company or (iv) in the case of any
Holder that participates in the Exchange Offer (and tenders its Registrable
Notes prior to the expiration thereof), such Holder does not receive Exchange
Notes on the date of the exchange that may be sold without restriction under
federal securities laws (other than due solely to the status of such Holder as
an affiliate of any Issuer within the meaning of the Securities Act) and so
notifies the Company within 30 days following the consummation of the Exchange
Offer (and providing a reasonable basis for its conclusions), in the case of
each of clauses (i)-(iv), then the Issuers shall promptly deliver to the Holders
and the Trustee written notice thereof (the "Shelf Notice") and shall file a
Shelf Registration pursuant to Section 3.
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3. Shelf Registration
If a Shelf Notice is delivered as contemplated by Section
2(c), then:
(a) Shelf Registration. The Issuers shall as promptly as
reasonably practicable file with the Commission a Registration Statement for an
offering to be made on a continuous basis pursuant to Rule 415 covering all of
the Registrable Notes (the "Initial Shelf Registration"). If the Issuers shall
not have yet filed the Exchange Registration Statement, each of the Issuers
shall use its reasonable best efforts to file with the Commission the Initial
Shelf Registration on or prior to the Filing Date and shall use its reasonable
best efforts to cause such Initial Shelf Registration to be declared effective
under the Securities Act on or prior to the Effectiveness Date applicable to the
Exchange Registration Statement. Otherwise, each of the Issuers shall file with
the Commission the Initial Shelf Registration within 150 days of the delivery of
the Shelf Notice and shall use its reasonable best efforts to cause such Shelf
Registration to be declared effective under the Securities Act on or prior to
the Effectiveness Date. The Initial Shelf Registration shall be on Form S-1 or
another appropriate form permitting registration of such Registrable Notes for
resale by Holders in the manner or manners designated by them (including,
without limitation, one or more underwritten offerings). The Issuers shall not
permit any securities other than the Registrable Notes to be included in any
Shelf Registration. Each of the Issuers shall use its reasonable best efforts to
keep the Initial Shelf Registration continuously effective under the Securities
Act until the date which is 24 months from the effective date of such Initial
Shelf Registration (or, if Rule 144(k) under the Securities Act is amended to
permit unlimited resales by non-affiliates within a lesser period, such lesser
period) (subject to extension pursuant to the last paragraph of Section 5
hereof) (the "Effectiveness Period") or such shorter period ending when (i) all
Registrable Notes covered by the Initial Shelf Registration have been sold in
the manner set forth and as contemplated in the Initial Shelf Registration or
(ii) a Subsequent Shelf Registration covering all of the Registrable Notes has
been declared effective under the Securities Act.
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(b) Subsequent Shelf Registrations. If the Initial Shelf
Registration or any Subsequent Shelf Registration ceases to be effective for any
reason at any time during the Effectiveness Period (other than because of the
sale of all of the securities registered thereunder), each of the Issuers shall
use its reasonable best efforts to obtain the prompt withdrawal of any order
suspending the effectiveness thereof, and in any event shall within 45 days of
such cessation of effectiveness amend the Shelf Registration in a manner to
obtain the withdrawal of the order suspending the effectiveness thereof, or file
an additional "shelf" Registration Statement pursuant to Rule 415 covering all
of the Registrable Notes (a "Subsequent Shelf Registration"). If a Subsequent
Shelf Registration is filed, each of the Issuers shall use its reasonable best
efforts to cause the Subsequent Shelf Registration to be declared effective as
soon as practicable after such filing and to keep such Subsequent Shelf
Registration continuously effective for a period equal to the number of days in
the Effectiveness Period less the aggregate number of days during which the
Initial Shelf Registration or any Subsequent Shelf Registrations was previously
continuously effective. As used herein the term "Shelf Registration" means the
Initial Shelf Registration and any Subsequent Shelf Registration.
(c) Supplements and Amendments. Each of the Issuers shall
promptly supplement and amend any Shelf Registration if required by the rules,
regulations or instructions applicable to the registration form used for such
Shelf Registration, if required by the Securities Act, or if reasonably
requested by the Holders of a majority in aggregate principal amount of the
Registrable Notes covered by such Shelf Registration or by any underwriter of
such Registrable Notes, in each case, with each Issuer's consent, which consent
shall not be unreasonably withheld or delayed.
4. Additional Interest
(a) The Issuers and the Purchaser agree that the Holders of
Registrable Notes will suffer damages if the Issuers fail to fulfill their
obligations under Section 2 or Section 3 hereof and that it would not be
feasible to ascertain the extent of such damages with precision. Accordingly,
each of the Issuers agrees to pay, as liquidated damages, additional interest on
the Registrable Notes ("Additional Interest") under
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the circumstances and to the extent set forth below (each of which shall be
given independent effect):
(i) if (A) neither the Exchange Registration Statement nor
the Initial Shelf Registration has been filed on or prior to the Filing
Date or (B) notwithstanding that the Issuers have consummated or will
consummate an Exchange Offer, the Issuers are required to file a Shelf
Registration and such Shelf Registration is not filed on or prior to
the 150th day after delivery of the Shelf Notice, then, in the case of
subclause (A), commencing on the day after the Filing Date or, in the
case of subclause (B), commencing on the 151st day following delivery
of the Shelf Notice, Additional Interest shall accrue on the
Registrable Notes over and above the stated interest at a rate of 0.50%
per annum for the first 90 days immediately following the Filing Date
or such 150th day, as the case may be, such Additional Interest rate
increasing by an additional 0.25% per annum at the beginning of each
subsequent 90-day period;
(ii) if (A) neither the Exchange Registration Statement nor
the Initial Shelf Registration is declared effective on or prior to the
Effectiveness Date applicable thereto or (B) notwithstanding that the
Issuers have consummated or will consummate an Exchange Offer, the
Issuers are required to file a Shelf Registration and such Shelf
Registration is not declared effective by the Commission on or prior to
the Effectiveness Date, then, commencing on the day after such
applicable Effectiveness Date, Additional Interest shall accrue on the
Registrable Notes over and above the stated interest at a rate of 0.50%
per annum for the first 90 days immediately following the day after the
applicable Effectiveness Date, such Additional Interest rate increasing
by an additional 0.25% per annum at the beginning of each subsequent
90-day period; and
(iii) if (A) the Issuers have not exchanged Exchange Notes for
all Notes validly tendered in accordance with the terms of the Exchange
Offer on or prior to 35 days after the date on which the Exchange
Registration Statement was declared effective, (B) the Exchange
Registration Statement ceases to be effective prior to consummation of
the Exchange Offer or (C) if applicable, a Shelf Registration has been
declared effective and such Shelf Registra-
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tion ceases to be effective at any time during the Effectiveness
Period, then Additional Interest shall accrue on the Registrable Notes
over and above the stated interest at a rate of 0.50% per annum for the
first 90 days commencing on the (x) 36th day after such effective date
in the case of (A) above or (y) the day such Exchange Registration
Statement or Shelf Registration ceases to be effective in the case of
(B) and (C) above, such Additional Interest rate increasing by an
additional 0.25% per annum at the beginning of each such subsequent
90-day period;
provided, however, that the Additional Interest rate on the Registrable Notes
may not exceed in the aggregate 2.0% per annum; provided further that (1) upon
the filing of the Exchange Registration Statement or each Shelf Registration (in
the case of (i) above), (2) upon the effectiveness of the Exchange Registration
Statement or each Shelf Registration, as the case may be (in the case of (ii)
above), or (3) upon the exchange of Exchange Notes for all Registrable Notes
validly tendered (in the case of (iii)(A) above) or upon the effectiveness of an
Exchange Registration Statement or Shelf Registration which had ceased to remain
effective (in the case of (iii)(B) and (C) above), Additional Interest on any
Registrable Notes then accruing Additional Interest as a result of such clause
(or the relevant subclause thereof), as the case may be, shall cease to accrue.
(b) The Issuers shall notify the Trustee within one business
day after each and every date on which an event occurs in respect of which
Additional Interest is required to be paid (an "Event Date"). Any amounts of
Additional Interest due pursuant to (a)(i), (a)(ii) or (a)(iii) of this Section
4 will be payable in cash quarterly on each regular interest payment date
specified in the Indenture (to the Holders of Registrable Notes of record on the
regular record date therefor (as specified in the Indenture) immediately
preceding such dates), commencing with the first such regular interest payment
date occurring after any such Additional Interest commences to accrue. The
amount of Additional Interest will be determined by multiplying the applicable
Additional Interest rate by the principal amount of the Notes subject thereto,
multiplied 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 and the actual days
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elapsed occurring in the period for which payable) and the denominator of which
is 360.
5. Registration Procedures
In connection with the filing of any Registration Statement
pursuant to Sections 2 or 3 hereof, each Issuer shall effect such registrations
to permit the sale of such securities covered thereby in accordance with the
intended method or methods of disposition thereof, and pursuant thereto and in
connection with any Registration Statement filed by each Issuer hereunder, each
Issuer shall:
(a) Prepare and file with the Commission prior to the Filing
Date, the Exchange Registration Statement or if the Exchange Registration
Statement is not filed or is unavailable, a Shelf Registration as prescribed by
Section 2 or 3, and use its reasonable best efforts to cause each such
Registration Statement to become effective and remain effective as provided
herein; provided that, if (1) a Shelf Registration is filed pursuant to Section
3, or (2) a Prospectus contained in an Exchange Registration Statement filed
pursuant to Section 2 is required to be delivered under the Securities Act by
any Participating Broker-Dealer who seeks to sell Exchange Notes during the
Applicable Period and has advised the Company that it is a Participating
Broker-Dealer, before filing any Registration Statement or Prospectus or any
amendments or supplements thereto, the Issuers shall, if requested, furnish to
and afford the Holders of the Registrable Notes to be registered pursuant to
such Shelf Registration or each such Participating Broker-Dealer, as the case
may be, covered by such Registration Statement, their counsel and the managing
underwriters, if any, a reasonable opportunity to review copies of all such
documents (including copies of any documents to be incorporated by reference
therein and all exhibits thereto) proposed to be filed (in each case, to the
extent practicable at least five Business Days prior to such filing). The
Issuers shall not file any such Registration Statement or Prospectus or any
amendments or supplements thereto if the Holders of a majority in aggregate
principal amount of the Registrable Notes covered by such Registration
Statement, or any such Participating Broker-Dealer, as the case may be, their
counsel, or the managing underwriters, if any, shall reasonably object.
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(b) Prepare and file with the Commission such amendments and
post-effective amendments to each Shelf Registration or Exchange Registration
Statement, as the case may be, as may be necessary to keep such Registration
Statement continuously effective for the Effectiveness Period or the Applicable
Period, as the case may be; cause the related Prospectus to be supplemented by
any Prospectus supplement required by applicable law, and as so supplemented to
be filed pursuant to Rule 424 (or any similar provisions then in force) under
the Securities Act; and comply with the provisions of the Securities Act and the
Exchange Act applicable to it with respect to the disposition of all securities
covered by such Registration Statement as so amended or in such Prospectus as so
supplemented and with respect to the subsequent resale of any securities being
sold by a Participating Broker-Dealer covered by any such Prospectus. The
Issuers shall be deemed not to have used their reasonable best efforts to keep a
Registration Statement effective during the Applicable Period if they
voluntarily take any action that would result in selling Holders of the
Registrable Notes covered thereby or Participating Broker-Dealers seeking to
sell Exchange Notes not being able to sell such Registrable Notes or such
Exchange Notes during that period unless such action is required by applicable
law, rule or regulation or unless the Issuers comply with this Agreement,
including, without limitation, the provisions of paragraph 5(k) hereof and the
last paragraph of Section 5.
(c) If (1) a Shelf Registration is filed pursuant to Section
3, or (2) a Prospectus contained in an Exchange Registration Statement filed
pursuant to Section 2 is required to be delivered under the Securities Act by
any Participating Broker-Dealer who seeks to sell Exchange Notes during the
Applicable Period from whom the Issuers have received written notice that it
will be a Participating Broker-Dealer, notify the selling Holders of Registrable
Notes, and each such Participating Broker-Dealer, their counsel and the managing
underwriters, if any, promptly (but in any event within two Business Days), and
confirm such notice in writing, (i) when a Prospectus or any Prospectus
supplement or post-effective amendment has been filed, and, with respect to a
Registration Statement or any post-effective amendment, when the same has become
effective (including in such notice a written statement that any Holder may,
upon request, obtain, without charge, one conformed copy of such Registration
Statement or post-effective
-16-
amendment including financial statements and schedules, documents incorporated
or deemed to be incorporated by reference and exhibits), (ii) of the issuance by
the Commission of any stop order suspending the effectiveness of a Registration
Statement or of any order preventing or suspending the use of any preliminary
prospectus or the initiation of any proceedings for that purpose, (iii) if at
any time when a prospectus is required by the Securities Act to be delivered in
connection with sales of the Registrable Notes the representations and
warranties of any Issuer contained in any agreement (including any underwriting
agreement contemplated by Section 5(n) hereof) cease to be true and correct in
any material respect, (iv) of the receipt by any Issuer of any notification with
respect to the suspension of the qualification or exemption from qualification
of a Registration Statement or any of the Registrable Notes or the Exchange
Notes to be sold by any Participating Broker-Dealer for offer or sale in any
jurisdiction, or the initiation or threatening of any proceeding for such
purpose, (v) of the happening of any event, the existence of any condition or
any information becoming known that makes any statement made in such
Registration Statement or related Prospectus or any document incorporated or
deemed to be incorporated therein by reference untrue in any material respect or
that requires the making of any changes in, or amendments or supplements to,
such Registration Statement, Prospectus or documents so that, in the case of the
Registration Statement, it will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and that in the case of
the Prospectus, it will not contain any untrue statement of a material fact or
omit to state any 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 (vi) of the Issuers' reasonable determination that a
post-effective amendment to a Registration Statement would be appropriate.
(d) If (1) a Shelf Registration is filed pursuant to Section
3, or (2) a Prospectus contained in an Exchange Registration Statement filed
pursuant to Section 2 is required to be delivered under the Securities Act by
any Participating Broker-Dealer who seeks to sell Exchange Notes during the
Applicable Period, use its reasonable best efforts to prevent the issuance of
any order suspending the effectiveness of a
-17-
Registration Statement or of any order preventing or suspending the use of a
Prospectus or suspending the qualification (or exemption from qualification) of
any of the Registrable Notes or the Exchange Notes to be sold by any
Participating Broker-Dealer, for sale in any jurisdiction, and, if any such
order is issued, to use its reasonable best efforts to obtain the withdrawal of
any such order at the earliest possible date.
(e) If a Shelf Registration is filed pursuant to Section 3 and
if requested by the managing underwriters, if any, or the Holders of a majority
in aggregate principal amount of the Registrable Notes being sold in connection
with an underwritten offering, (i) as promptly as practicable incorporate in a
prospectus supplement or post-effective amendment such information or revisions
to information therein relating to such underwriters or selling Holders as the
managing underwriters, if any, or such Holders or their counsel reasonably
request to be included or made therein, (ii) make all required filings of such
prospectus supplement or such post-effective amendment as soon as practicable
after the Issuers have received notification of the matters to be incorporated
in such prospectus supplement or post-effective amendment, and (iii) supplement
or make amendments to such Registration Statement.
(f) If (1) a Shelf Registration is filed pursuant to Section
3, or (2) a Prospectus contained in an Exchange Registration Statement filed
pursuant to Section 2 is required to be delivered under the Securities Act by
any Participating Broker-Dealer who seeks to sell Exchange Notes during the
Applicable Period, furnish to each selling Holder of Registrable Notes and to
each such Participating Broker-Dealer who so requests and to counsel and each
managing underwriter, if any, without charge, one conformed copy of the
Registration Statement or Registration Statements and each post-effective
amendment thereto, including financial statements and schedules, and, if
requested, all documents incorporated or deemed to be incorporated therein by
reference and all exhibits.
(g) If (1) a Shelf Registration is filed pursuant to Section
3, or (2) a Prospectus contained in an Exchange Registration Statement filed
pursuant to Section 2 is required to be delivered under the Securities Act by
any Participating Broker-Dealer, deliver to each selling Holder of Registrable
-18-
Notes or each such Participating Broker-Dealer, as the case may be, their
respective counsel, and the underwriters, if any, without charge, as many copies
of the Prospectus or Prospectuses (including each form of preliminary
prospectus) and each amendment or supplement thereto and any documents
incorporated by reference therein as such Persons may reasonably request; and,
subject to the last paragraph of this Section 5, the Issuers hereby consent to
the use of such Prospectus and each amendment or supplement thereto by each of
the selling Holders of Registrable Notes and each Participating Broker-Dealer,
and the underwriters or agents, if any, and dealers (if any), in connection with
the offering and sale of the Registrable Notes covered by, or the sale by
Participating Broker-Dealers of the Exchange Notes pursuant to, such Prospectus
and any amendment or supplement thereto.
(h) Prior to any public offering of Registrable Notes or any
delivery of a Prospectus contained in the Exchange Registration Statement by any
Participating Broker-Dealer who seeks to sell Exchange Notes during the
Applicable Period, use its reasonable best efforts to register or qualify, and
cooperate with the selling Holders of Registrable Notes and each such
Participating Broker-Dealer, the underwriters, if any, and their respective
counsel in connection with the registration or qualification (or exemption from
such registration or qualification) of such Registrable Notes or Exchange Notes,
as the case may be, for offer and sale under the securities or Blue Sky laws of
such jurisdictions within the United States as any selling Holder, Participating
Broker-Dealer, or the managing underwriter or underwriters, if any, reasonably
request in writing; provided that where Exchange Notes held by Participating
Broker-Dealers or Registrable Notes are offered pursuant to an underwritten
offering, counsel to the underwriters shall, at the reasonable cost and expense
of the Issuers, perform the Blue Sky investigations and file registrations and
qualifications required to be filed pursuant to this Section 5(h); keep each
such registration or qualification (or exemption therefrom) effective during the
period such Registration Statement is required to be kept effective and do any
and all other acts or things reasonably necessary or advisable to enable the
disposition in such jurisdictions of the Exchange Notes by Participating
Broker-Dealers or the Registrable Notes covered by the applicable Registration
Statement; provided that no Issuer shall be required to (A) qualify generally to
do business in any
-19-
jurisdiction where it is not then so qualified, (B) take any action that would
subject it to general service of process in any such jurisdiction where it is
not then so subject or (C) subject itself to taxation in excess of a nominal
dollar amount in any such jurisdiction where it is not then so subject.
(i) If a Shelf Registration is filed pursuant to Section 3,
cooperate with the selling Holders of Registrable Notes, any Participating
Broker-Dealer and the managing underwriter or underwriters, if any, to
facilitate the timely preparation and delivery of certificates representing
Registrable Notes to be sold, which certificates shall not bear any restrictive
legends and shall be in a form eligible for deposit with The Depository Trust
Company; and enable such Registrable Notes to be in such denominations and
registered in such names as the managing underwriter or underwriters, if any, or
Holders may reasonably request.
(j) Use its reasonable best efforts to cause the Registrable
Notes covered by the Registration Statement to be registered with or approved by
such governmental agencies or authorities as may be necessary to enable the
seller or sellers thereof or the underwriters, if any, to consummate the
disposition of such Registrable Notes, in which case the Issuers will cooperate
in all reasonable respects with the filing of such Registration Statement and
the granting of such approvals.
(k) If (1) a Shelf Registration is filed pursuant to Section
3, or (2) a Prospectus contained in an Exchange Registration Statement filed
pursuant to Section 2 is required to be delivered under the Securities Act by
any Participating Broker-Dealer who seeks to sell Exchange Notes during the
Applicable Period, upon the occurrence of any event contemplated by paragraph
5(c)(v) or 5(c)(vi) hereof, as promptly as reasonably practicable prepare and
(subject to Section 5(a) hereof) file with the Commission, at the Issuers' sole
expense, a supplement or post-effective amendment to the Registration Statement
or a supplement to the related Prospectus or any document incorporated or deemed
to be incorporated therein by reference, or file any other required document so
that, as thereafter delivered to the purchasers of the Registrable Notes being
sold thereunder or to the purchasers of the Exchange Notes to whom such
Prospectus will be delivered by a Participating Broker-Dealer, any such
-20-
Prospectus will not contain an untrue statement of a material fact or omit to
state 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.
(l) Use its reasonable best efforts to cause the Registrable
Notes covered by a Registration Statement to be rated with the appropriate
rating agencies, if so requested by the Holders of a majority in aggregate
principal amount of Registrable Notes covered by such Registration Statement or
the managing underwriter or underwriters, if any.
(m) Prior to the effective date of the first Registration
Statement relating to the Registrable Notes, (i) provide the Trustee with
printed certificates for the Registrable Notes in a form eligible for deposit
with The Depository Trust Company and (ii) provide a CUSIP number for the
Registrable Notes.
(n) In connection with an underwritten offering of Registrable
Notes pursuant to a Shelf Registration, enter into an underwriting agreement as
is customary in underwritten offerings of debt securities similar to the Notes
and take all such other actions as are reasonably requested by the managing
underwriter or underwriters in order to expedite or facilitate the registration
or the disposition of such Registrable Notes and, in such connection, (i) make
such reasonable representations and warranties to the underwriters, with respect
to the business of the Issuers and their subsidiaries and the Registration
Statement, Prospectus and documents, if any, incorporated or deemed to be
incorporated by reference therein, in each case, as are customarily made by
issuers to underwriters in underwritten offerings of debt securities similar to
the Notes, and confirm the same in writing if and when requested; (ii) obtain
the opinion of counsel to the Issuers and updates thereof in form and substance
reasonably satisfactory to the managing underwriter or underwriters, addressed
to the underwriters covering the matters customarily covered in opinions
requested in underwritten offerings of debt securities similar to the Notes and
such other matters as may be reasonably requested by underwriters; (iii) obtain
"cold comfort" letters and updates thereof in form and substance reasonably
satisfactory to the managing underwriter or underwriters from the independent
certified public accountants
-21-
of the Issuers (and, if necessary, any other independent certified public
accountants of any subsidiary of any Issuer or of any business acquired by any
Issuer (including Muzak Limited Partnership, a Delaware limited partnership) for
which financial statements and financial data are, or are required to be,
included in the Registration Statement), addressed to each of the underwriters,
such letters to be in customary form and covering matters of the type
customarily covered in "cold comfort" letters in connection with underwritten
offerings of debt securities similar to the Notes and such other matters as
reasonably requested by the managing underwriter or underwriters; and (iv) if an
underwriting agreement is entered into, the same shall contain indemnification
provisions and procedures no less favorable than those set forth in Section 7
hereof (or such other provisions and procedures acceptable to Holders of a
majority in aggregate principal amount of Registrable Notes covered by such
Registration Statement and the managing underwriter or underwriters or agents)
with respect to all parties to be indemnified pursuant to said Section. The
above shall be done at each closing under such underwriting agreement, or as and
to the extent required thereunder.
(o) If (1) a Shelf Registration is filed pursuant to Section
3, or (2) a Prospectus contained in an Exchange Registration Statement filed
pursuant to Section 2 is required to be delivered under the Securities Act by
any Participating Broker-Dealer who seeks to sell Exchange Notes during the
Applicable Period, make available for inspection by any selling Holder of such
Registrable Notes being sold, and each Participating Broker-Dealer, any
underwriter participating in any such disposition of Registrable Notes, if any,
and any attorney, accountant or other agent retained by any such selling Holder,
each Participating Broker-Dealer, as the case may be, or underwriter
(collectively, the "Inspectors"), at the offices where normally kept, during
reasonable business hours, all financial and other records, pertinent corporate
documents and properties of each Issuer and its subsidiaries (collectively, the
"Records") as shall be reasonably necessary to enable them to exercise any
applicable due diligence responsibilities, and cause the officers, directors and
employees of each Issuer and its subsidiaries to supply all information
reasonably requested by any such Inspector in connection with such Registration
Statement. Records which an Issuer determines, in good faith, to be confidential
and any
-22-
Records which it notifies the Inspectors are confidential shall not be disclosed
by the Inspectors unless (i) the disclosure of such Records is necessary to
avoid or correct a misstatement or omission in such Registration Statement, (ii)
the release of such Records is ordered pursuant to a subpoena or other order
from a court of competent jurisdiction or (iii) the information in such Records
has been made generally available to the public other than as a result of a
disclosure or failure to safeguard by such Inspector. Each selling Holder of
such Registrable Notes and each Participating Broker-Dealer will be required to
agree that information obtained by it as a result of such inspections shall be
deemed confidential and shall not be used by it as the basis for any market
transactions in the securities of any Issuer unless and until such is made
generally available to the public. Each Inspector, each selling Holder of such
Registrable Notes and each Participating Broker-Dealer will be required to
further agree that it will, upon learning that disclosure of such Records is
sought in a court of competent jurisdiction pursuant to clause (ii) of the
previous sentence or otherwise, give notice to the Issuers and allow the Issuers
to undertake appropriate action to obtain a protective order or otherwise
prevent disclosure of the Records deemed confidential at its expense.
(p) Provide an indenture trustee for the Registrable Notes or
the Exchange Notes, as the case may be, and cause the Indenture or the trust
indenture provided for in Section 2(a), as the case may be, to be qualified
under the TIA not later than the effective date of the Exchange Offer or the
first Registration Statement relating to the Registrable Notes; and in
connection therewith, cooperate with the trustee under any such indenture and
the Holders of the Registrable Notes, to effect such changes to such indenture
as may be required for such indenture to be so qualified in accordance with the
terms of the TIA; and execute, and use its reasonable best efforts to cause such
trustee to execute, all documents as may be required to effect such changes, and
all other forms and documents required to be filed with the Commission to enable
such indenture to be so qualified in a timely manner.
(q) Comply in all material respects with all applicable rules
and regulations of the Commission and make generally available to its
securityholders earnings statements satisfying the provisions of Section 11(a)
of the Securities Act and Rule 158 thereunder (or any similar rule promulgated
-23-
under the Securities Act) no later than 90 days after the end of any 12-month
period (i) commencing at the end of any fiscal quarter in which Registrable
Notes are sold to underwriters in a firm commitment or best efforts underwritten
offering and (ii) if not sold to underwriters in such an offering, commencing on
the first day of the first fiscal quarter of the Company after the effective
date of a Registration Statement, which statements shall cover said 12-month
periods.
(r) Upon consummation of the Exchange Offer or a Private
Exchange, obtain an opinion of counsel to the Issuers, in a form customary for
underwritten transactions, addressed to the Trustee for the benefit of all
Holders of Registrable Notes participating in the Exchange Offer or the Private
Exchange, as the case may be, that the Exchange Notes or the Private Exchange
Notes, as the case may be, the Guarantees and the related indenture constitute
legally valid and binding obligations of the Issuers, enforceable against the
Issuers in accordance with their respective terms.
(s) If the Exchange Offer or a Private Exchange is to be
consummated, upon delivery of the Registrable Notes by Holders to the Issuers
(or to such other Person as directed by the Company) in exchange for the
Exchange Notes or the Private Exchange Notes, as the case may be, the Issuers
shall xxxx, or caused to be marked, on such Registrable Notes that such
Registrable Notes are being canceled in exchange for the Exchange Notes or the
Private Exchange Notes, as the case may be; in no event shall such Registrable
Notes be marked as paid or otherwise satisfied.
(t) Cooperate with each seller of Registrable Notes covered by
any Registration Statement and each underwriter, if any, participating in the
disposition of such Registrable Notes and their respective counsel in connection
with any filings required to be made with the NASD.
(u) Use its reasonable best efforts to take all other steps
reasonably necessary to effect the registration of the Registrable Notes covered
by a Registration Statement contemplated hereby.
The Issuers may require each seller of Registrable Notes as to
which any registration is being effected to furnish to the Issuers such
information regarding such seller and the
-24-
distribution of such Registrable Notes as the Issuers may, from time to time,
reasonably request. The Issuers may exclude from such registration the
Registrable Notes of any seller who fails to furnish such information within a
reasonable time after receiving such request. Each seller as to which any Shelf
Registration Statement is being effected agrees to furnish promptly to the
Issuers all information required to be disclosed in order to make the
information previously furnished to the Issuers by such seller not materially
misleading.
Each Holder of Registrable Notes and each Participating
Broker-Dealer agrees by acquisition of such Registrable Notes or Exchange Notes
to be sold by such Participating Broker-Dealer, as the case may be, that, upon
receipt of any notice from the Issuers of the happening of any event of the kind
described in Section 5(c)(ii), 5(c)(iv), 5(c)(v), or 5(c)(vi), such Holder will
forthwith discontinue disposition of such Registrable Notes covered by such
Registration Statement or Prospectus or Exchange Notes to be sold by such Holder
or Participating Broker-Dealer, as the case may be, and, in each case,
dissemination of such Prospectus until such Holder's or Participating
Broker-Dealer's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 5(k), or until it is advised in writing (the "Advice")
by the Company that the use of the applicable Prospectus may be resumed, and has
received copies of any amendments or supplements thereto. In the event the
Issuers shall give any such notice, each of the Effectiveness Period and the
Applicable Period shall be extended by the number of days during such periods
from and including the date of the giving of such notice to and including the
date when each seller of Registrable Notes covered by such Registration
Statement or Exchange Notes to be sold by such Participating Broker-Dealer, as
the case may be, shall have received (x) the copies of the supplemented or
amended Prospectus contemplated by Section 5(k) or (y) the Advice.
6. Registration Expenses
All reasonable fees and expenses incident to the performance
of or compliance with this Agreement by the Issuers shall be borne by the
Issuers whether or not the Exchange Offer or a Shelf Registration is filed or
becomes effective, including, without limitation, (i) all registration and
filing fees (including, without limitation, (A) fees with respect to filings
required to be made with the NASD in connection with an
-25-
underwritten offering and (B) fees and expenses of compliance with state
securities or Blue Sky laws (including, without limitation, reasonable fees and
disbursements of counsel in connection with Blue Sky qualifications of the
Registrable Notes or Exchange Notes and determination of the eligibility of the
Registrable Notes or Exchange Notes for investment under the laws of such
jurisdictions (x) where the holders of Registrable Notes are located, in the
case of the Exchange Notes, or (y) as provided in Section 5(h) hereof, in the
case of Registrable Notes or Exchange Notes to be sold by a Participating
Broker-Dealer during the Applicable Period)), (ii) printing expenses, including,
without limitation, expenses of printing certificates for Registrable Notes or
Exchange Notes in a form eligible for deposit with The Depository Trust Company
and of printing prospectuses if the printing of prospectuses is requested by the
managing underwriter or underwriters, if any, or by the Holders of a majority in
aggregate principal amount of the Registrable Notes included in any Registration
Statement or by any Participating Broker-Dealer, as the case may be, (iii)
reasonable messenger, telephone and delivery expenses incurred in connection
with the Exchange Registration Statement and any Shelf Registration, (iv) fees
and disbursements of counsel for the Issuers and fees and disbursements of
special counsel for the Purchaser and the sellers of Registrable Notes, (v) fees
and disbursements of all independent certified public accountants referred to in
Section 5(n)(iii) (including, without limitation, the expenses of any special
audit and "cold comfort" letters required by or incident to such performance),
(vi) rating agency fees, (vii) Securities Act liability insurance, if any Issuer
desires such insurance, (viii) fees and expenses of all other Persons retained
by the Issuers, (ix) internal expenses of the Issuers (including, without
limitation, all salaries and expenses of officers and employees of the Issuers
performing legal or accounting duties), (x) the expense of any annual or special
audit, (xi) the fees and expenses incurred in connection with the listing of the
securities to be registered on any securities exchange, (xii) the fees and
disbursements of underwriters, if any, customarily paid by issuers or sellers of
securities (but not including any underwriting discounts or commissions or
transfer taxes, if any, attributable to the sale of the Registrable Notes which
discounts, commissions or taxes shall be paid by Holders of such Registrable
Notes) and (xiii) the expenses relating to printing, word processing and
distributing all Registration Statements, underwriting agreements, securities
sales agree-
-26-
ments, indentures and any other documents necessary in order to comply with this
Agreement.
7. Indemnification
(a) Each of the Issuers jointly and severally agrees to
indemnify and hold harmless each Holder of Registrable Notes and each
Participating Broker-Dealer, the officers, directors, employees and agents of
each such Person, and each Person, if any, who controls any such Person within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act (each, a "Participant"), from and against any and all losses,
claims, damages and liabilities (including, without limitation, the reasonable
legal fees and other reasonable expenses actually incurred in connection with
any suit, action or proceeding or any claim asserted) caused by, arising out of
or based upon any untrue statement or alleged untrue statement of a material
fact contained in any Registration Statement or Prospectus (as amended or
supplemented if the Issuers shall have furnished any amendments or supplements
thereto) or caused by, arising out of or based upon any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except insofar as such losses,
claims, damages or liabilities are caused by any untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in conformity
with information relating to any Participant furnished to the Issuers in writing
by or on behalf of such Participant expressly for use therein; provided,
however, that the Issuers shall not be liable if such untrue statement or
omission or alleged untrue statement or omission was contained or made in any
preliminary prospectus and corrected in the Prospectus or any amendment or
supplement thereto and the Issuers shall have furnished the Prospectus or an
amendment or supplement thereto in compliance with Section 5 of this Agreement.
(b) Each Participant will be required to agree, severally and
not jointly, to indemnify and hold harmless each Issuer, its directors and
officers and each Person who controls each Issuer within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act to the same extent as
the foregoing indemnity from the Issuers to each Participant, but only with
reference to information relating to such Participant
-27-
furnished to the Issuers in writing by such Participant expressly for use in any
Registration Statement or Prospectus, any amendment or supplement thereto, or
any preliminary prospectus. The liability of any Participant under this
paragraph shall in no event exceed the proceeds received by such Participant
from sales of Registrable Notes or Exchange Notes giving rise to such
obligations.
(c) If any suit, action, proceeding (including any
governmental or regulatory investigation), claim or demand shall be brought or
asserted against any Person in respect of which indemnity may be sought pursuant
to either of the two preceding paragraphs, such Person (the "Indemnified
Person") shall promptly notify the Person against whom such indemnity may be
sought (the "Indemnifying Person") in writing, and the Indemnifying Person, upon
request of the Indemnified Person, shall retain counsel reasonably satisfactory
to the Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may reasonably designate in such proceeding and shall pay
the reasonable fees and expenses actually incurred by such counsel related to
such proceeding; provided, however, that the failure to so notify the
Indemnifying Person shall not relieve it of any obligation or liability which it
may have hereunder or otherwise except to the extent it has been materially
prejudiced by such failure. In any such proceeding, any Indemnified Person shall
have the right to retain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such Indemnified Person unless (i) the
Indemnifying Person and the Indemnified Person shall have mutually agreed in
writing to the contrary, (ii) the Indemnifying Person has failed within a
reasonable time to retain counsel reasonably satisfactory to the Indemnified
Person or (iii) the named parties in any such proceeding (including any
impleaded parties) include both the Indemnifying Person and the Indemnified
Person and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It is
understood that the Indemnifying Person shall not, in connection with any
proceeding or related proceeding in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all Indemnified Persons, and that all such fees and expenses shall
be reimbursed promptly upon demand. Any such separate firm for the Participants
and such control Persons of Participants shall be designated in writing by
Participants who
-28-
sold a majority in interest of Registrable Notes sold by all such Participants
and any such separate firm for each Issuer, its directors, officers and such
control Persons of each Issuer shall be designated in writing by the Company.
The Indemnifying Person shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there is a final non-appealable judgment for the plaintiff, the Indemnifying
Person agrees to indemnify any Indemnified Person from and against any loss or
liability by reason of such settlement or judgment. No Indemnifying Person
shall, without the prior written consent (which consent shall not be
unreasonably withheld) of the Indemnified Person, effect any settlement of any
pending or threatened proceeding in respect of which any Indemnified Person is
or could have been a party and indemnity could have been sought hereunder by
such Indemnified Person, unless such settlement (A) includes an unconditional
release of such Indemnified Person, in form and substance satisfactory to such
Indemnified Person, from all liability on claims that are the subject matter of
such proceeding and (B) does not include any statement as to an admission of
fault, culpability or failure to act by or on behalf of an Indemnified Person.
(d) If the indemnification provided for in the first and
second paragraphs of this Section 7 is unavailable to, or insufficient to hold
harmless, an Indemnified Person in respect of any losses, claims, damages or
liabilities referred to therein, then each Indemnifying Person under such
paragraphs, in lieu of indemnifying such Indemnified Person thereunder and in
order to provide for just and equitable contribution, shall contribute to the
amount paid or payable by such Indemnified Person as a result of such losses,
claims, damages or liabilities in such proportion as is appropriate to reflect
the relative fault of the Indemnifying Person or Persons on the one hand and the
Indemnified Person or Persons 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) as well as any
other relevant equitable considerations. 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 Issuers on the one hand
or by the Participants or such other Indemnified Person, as the case may be, on
the other, the parties' relative
-29-
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission and any other equitable considerations appropriate
under the circumstances.
(e) The parties agree that it would not be just and equitable
if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Participants were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an Indemnified Person as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any reasonable legal or other expenses actually incurred by such
Indemnified Person in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 7, in no event shall a
Participant be required to contribute any amount in excess of the amount by
which proceeds received by such Participant from sales of Registrable Notes or
Exchange Notes, as the case may be, exceeds the amount of any damages that such
Participant has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation.
(f) The indemnity and contribution agreements contained in
this Section 7 will be in addition to any liability which the Indemnifying
Persons may otherwise have to the Indemnified Persons referred to above.
8. Rules 144 and 144A
Each of the Issuers covenants that it will file the reports
required to be filed by it under the Securities Act and the Exchange Act and the
rules and regulations adopted by the Commission thereunder in a timely manner
and, if at any time it is not required to file such reports, it will, upon the
request of any Holder of Registrable Notes, make publicly available other
information so long as necessary to permit sales pursuant to Rule 144 and Rule
144A under the Securities Act. Each of the Issuers further covenants, for so
long as any Registrable
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Notes remain outstanding, to make available to any Holder or beneficial owner of
Registrable Notes in connection with any sale thereof and any prospective
purchaser of such Registrable Notes from such Holder or beneficial owner, the
information required by Rule 144A(d)(4) under the Securities Act in order to
permit resales of such Registrable Notes pursuant to Rule 144A.
9. Underwritten Registrations
If any of the Registrable Notes covered by any Shelf
Registration are to be sold in an underwritten offering, the investment banker
or investment bankers and manager or managers that will manage the offering will
be selected by the Holders of a majority in aggregate principal amount of such
Registrable Notes included in such offering and reasonably acceptable to the
Issuers.
No Holder of Registrable Notes may participate in any
underwritten registration hereunder unless such Holder (a) agrees to sell such
Holder's Registrable Notes on the basis provided in any underwriting
arrangements approved by the Persons entitled hereunder to approve such
arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents required
under the terms of such underwriting arrangements.
10. Miscellaneous
(a) Remedies. In the event of a breach by any Issuer of any of
its obligations under this Agreement, each Holder of Registrable Notes and each
Participating Broker-Dealer holding Exchange Notes, in addition to being
entitled to exercise all rights provided herein, in the Indenture or, in the
case of the Purchaser, in the Purchase Agreement, or granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this Agreement. Each Issuer agrees that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by it of any
of the provisions of this Agreement and hereby further agrees that, in the event
of any action for specific performance in respect of such breach, it shall waive
the defense that a remedy at law would be adequate.
(b) No Inconsistent Agreements. None of the Issuers has
entered, as of the date hereof, and none of the Issuers
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shall enter, after the date of this Agreement, into any agreement with respect
to any of its securities that is inconsistent with the rights granted to the
Holders of Registrable Notes in this Agreement or otherwise conflicts with the
provisions hereof. None of the Issuers has entered and none of the Issuers shall
enter into any agreement with respect to any of its securities which will grant
to any Person piggy-back rights with respect to a Registration Statement.
(c) Adjustments Affecting Registrable Notes. None of the
Issuers shall, directly or indirectly, take any action with respect to the
Registrable Notes as a class that would adversely affect the ability of the
Holders of Registrable Notes to include such Registrable Notes in a registration
undertaken pursuant to this Agreement.
(d) 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, otherwise than with the
prior written consent of (A) the Holders of not less than a majority in
aggregate principal amount of the then outstanding Registrable Notes and (B) in
circumstances that would adversely affect Participating Broker-Dealers, the
Participating Broker-Dealers holding not less than a majority in aggregate
principal amount of the Exchange Notes held by all Participating Broker-Dealers.
Notwithstanding the foregoing, a waiver or consent to depart from the provisions
hereof with respect to a matter that relates exclusively to the rights of
Holders of Registrable Notes whose securities are being tendered pursuant to the
Exchange Offer or sold pursuant to a Registration Statement and that does not
directly or indirectly affect, impair, limit or compromise the rights of other
Holders of Registrable Notes may be given by Holders of at least a majority in
aggregate principal amount of the Registrable Notes being tendered or being sold
by such Holders pursuant to such Registration Statement.
(e) Notices. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, next-day air courier or telecopier:
1. if to a Holder of Registrable Notes or any Participating
Broker-Dealer, at the most current address of
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such Holder or Participating Broker-Dealer, as the case may be, set
forth on the records of the registrar under the Indenture, with a copy
in like manner to the Purchaser as follows:
CIBC Inc.
000 Xxxxxxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
Attention: Corporate Finance
ssDepartment
with a copy to:
Xxxxxx Xxxxxx & Xxxxxxx
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxx X. Xxxxxxxxx, Esq.
2. if to the Purchaser, at the address specified in Section
10(e)(1);
3. if to the Issuers, as follows:
Muzak LLC
0000 Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxx X. Xxxxxxxx
with copies to:
Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxx Xxxxxxx, Esq.
and to:
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ABRY Partners, Inc.
00 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxx Xxxxxx
All such notices and communications shall be deemed to have
been duly given: when delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; one business
day after being timely delivered to a next-day air courier guaranteeing
overnight delivery; and when receipt is acknowledged by the addressee, if
telecopied.
Copies of all such notices, demands or other communications
shall be concurrently delivered by the Person giving the same to the Trustee
under the Indenture at the address specified in such 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
hereto and the Holders; provided, however, that this Agreement shall not inure
to the benefit of or be binding upon a successor or assign of a Holder unless
and to the extent such successor or assign holds Registrable Notes.
(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, AS APPLIED TO
CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO
THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.
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(j) Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their best efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.
(k) Notes Held by any Issuer or Its Affiliates. Whenever the
consent or approval of Holders of a specified percentage of Registrable Notes is
required hereunder, Registrable Notes held by any Issuer or its affiliates (as
such term is defined in Rule 405 under the Securities Act) shall not be counted
in determining whether such consent or approval was given by the Holders of such
required percentage.
(l) Third Party Beneficiaries. Holders of Registrable Notes
and Participating Broker-Dealers are intended third party beneficiaries of this
Agreement and this Agreement may be enforced by such Persons.
(m) Entire Agreement. This Agreement, together with the
Purchase Agreement and the Indenture, is intended by the parties as a final and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein and therein and any and all prior
oral or written agreements, representations, or warranties, contracts,
understandings, correspondence, conversations and memoranda among the Purchaser
on the one hand and the Issuers on the other, or between or among any agents,
representatives, parents, subsidiaries, affiliates, predecessors in interest or
successors in interest with respect to the subject matter hereof and thereof are
merged herein and replaced hereby.
(n) Joint and Several Obligations. All of the obligations of
the Issuers hereunder shall be joint and several obligations of each of them.
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(o) PIK Notes. If the issuance of any Notes as interest on
outstanding Notes ("PIK Notes") requires registration under the Securities Act
and any such issuance shall not have been effectively registered under the
Securities Act then, prior to any issuance of PIK Notes, the Issuers shall file
with the Commission and cause to become effective a registration statement
registering the issuance of such PIK Notes.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
MUZAK LLC
By: /s/ Xxxxxx X. XxxXxxxx
--------------------------
Name: Xxxxxx XxxXxxxx
Title: Vice President
MUZAK FINANCE CORP.
By: /s/ Xxxxxx X. XxxXxxxx
--------------------------
Name: Xxxxxx XxxXxxxx
Title: Vice President
MUZAK CAPITAL CORPORATION, a
Delaware corporation
By: /s/ Xxxxxx X. XxxXxxxx
--------------------------
Name: Xxxxxx XxxXxxxx
Title: Vice President
MLP ENVIRONMENTAL MUSIC, LLC, a
Washington limited liability
company
By: /s/ Xxxxxx X. XxxXxxxx
--------------------------
Name: Xxxxxx XxxXxxxx
Title: Vice President
BUSINESS SOUND INC., an Ohio
corporation
By: /s/ Xxxxxx X. XxxXxxxx
--------------------------
Name: Xxxxxx XxxXxxxx
Title: Vice President
MUZAK HOLDINGS LLC, a Delaware
limited liability company
By: /s/ Xxxxxx X. XxxXxxxx
--------------------------
Name: Xxxxxx XxxXxxxx
Title: Vice President
AUDIO ENVIRONMENTS, INC., a
California corporation
By: /s/ Xxxxxx X. XxxXxxxx
--------------------------
Name: Xxxxxx XxxXxxxx
Title: Vice President
BI ACQUISITIONS, L.L.C., a
Delaware limited liability company
By: /s/ Xxxxxx X. XxxXxxxx
--------------------------
Name: Xxxxxx XxxXxxxx
Title: Vice President
BACKGROUND MUSIC BROADCASTERS,
INC., a California corporation
By: /s/ Xxxxxx X. XxxXxxxx
--------------------------
Name: Xxxxxx XxxXxxxx
Title: Vice President
CIBC INC.
By: /s/ Xxxxxxx Xxxxxxxxx
-------------------------
Name:
Title:
