Exhibit 4.3
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REGISTRATION RIGHTS AGREEMENT
Dated as of December 16, 1996
by and among
SCHOLASTIC BRANDS, INC.
AND
LEHMAN BROTHERS INC.
AND
BT SECURITIES CORPORATION
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This Registration Rights Agreement (this "Agreement") is made and
entered into as of December 16, 1996 by and among Scholastic Brands, Inc., a
Delaware corporation (the "Company"), and Lehman Brothers Inc. and BT Securities
Corporation (the "Initial Purchasers"), which have, severally and jointly,
agreed to purchase the Company's 11% Senior Subordinated Notes due 2007 (the
"Senior Subordinated Notes") pursuant to the Purchase Agreement (as defined
below).
This Agreement is made pursuant to the Purchase Agreement, dated
December 10, 1996 (the "Purchase Agreement"), by and between the Company and the
Initial Purchasers. In order to induce the Initial Purchasers to purchase the
Senior Subordinated Notes, the Company has agreed to provide the registration
rights set forth in this Agreement. The execution and delivery of this Agreement
is a condition to the obligations of the Initial Purchasers set forth in Section
2 of the Purchase Agreement.
The parties hereby agree as follows:
1. Definitions. As used in this Agreement, the following capitalized
terms shall have the following meanings:
Broker-Dealer: Any broker or dealer registered under the
Exchange Act.
Closing Date: The date of this Agreement.
Commission: The Securities and Exchange Commission.
Consummate: A Registered Exchange Offer shall be deemed
"Consummated" for purposes of this Agreement upon the occurrence of (i)
the filing and effectiveness under the Securities Act of the Exchange
Offer Registration Statement relating to the New Senior Subordinated Notes
to be issued in the Exchange Offer, (ii) the maintenance of such
Registration Statement continuously effective and the keeping of the
Exchange Offer open for a period not less than the minimum period required
pursuant to Section 3(b) hereof, and (iii) the delivery by the Company 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 that were tendered by Holders thereof pursuant
to the Exchange Offer.
Damages Payment Date: Each Interest Payment Date and, with
respect to any Note being repuchased by the Company pursuant
to Section 410 or 415 of the Indenture, the related Purchase
Date.
Effectiveness Target Date: As defined in Section 5.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Exchange Offer: The registration by the Company under the
Securities Act of the New Senior Subordinated Notes pursuant to a
Registration Statement pursuant to which the Company offers the Holders of
all outstanding Transfer Restricted Securities the opportunity to exchange
all such outstanding Transfer Restricted Securities held by such Holders
for New Senior Subordinated Notes in an aggregate principal amount equal
to the aggregate principal amount of the Transfer Restricted Securities
tendered in such exchange offer by such Holders.
Exchange Offer Registration Statement: The Registration
Statement relating to the Exchange Offer, including the Prospectus which
forms a part thereof.
Exempt Resales: The transactions in which the Initial
Purchaser proposes to sell the Senior Subordinated Notes to certain
"qualified institutional buyers," as such term is defined in Rule 144A
under the Securities Act, and to certain institutional "accredited
investors," as such term is defined in Rule 501(a)(1), (2), (3) or (7) of
Regulation D under the Securities Act ("Accredited Institutions").
Holders: As defined in Section 2(b) hereof.
Indemnified Holder: As defined in Section 8(a) hereof.
Indenture: The Indenture, dated as of December 16, 1996, among
the Company and Marine Midland Bank, as trustee (the "Trustee"), pursuant
to which the Notes are to be issued, as such Indenture is amended or
supplemented from time to time in accordance with the terms thereof.
Initial Purchasers: As defined in the preamble hereto.
Interest Payment Date: As defined in the Notes.
NASD: National Association of Securities Dealers, Inc.
New Senior Subordinated Notes: The Company's 11% Senior
Subordinated Notes due 2007 to be issued pursuant to the Indenture in the
Exchange Offer.
Notes: The Senior Subordinated Notes and the New Senior
Subordinated Notes.
Person: An individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political
subdivision thereof.
Prospectus: The prospectus included in a Registration
Statement, as amended or supplemented by any prospectus supplement and by
all other amendments thereto, including post-effective amendments, and all
material incorporated by reference into such Prospectus.
Purchase Date: As defined in the Indenture.
Record Holder: With respect to any Damages Payment Date
relating to Notes, each Person who is a Holder of Notes on the interest
record date with respect to the Interest Payment Date on which such
Damages Payment Date shall occur.
Registration Default: As defined in Section 5 hereof.
Registration Statement: Any registration statement of the
Company 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, which is filed pursuant to the provisions of this Agreement, in
each case, including
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the Prospectus included therein, all amendments and supplements thereto
(including post-effective amendments) and all exhibits and material
incorporated by reference therein.
Securities Act: The Securities Act of 1933, as amended.
Shelf Filing Deadline: As defined in Section 4 hereof.
Shelf Registration Statement: As defined in Section 4 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 Senior Subordinated Note,
until the earliest to occur of (a) the date on which such Senior
Subordinated Note is exchanged in the Exchange Offer and entitled to be
resold to the public by the Holder thereof without complying with the
prospectus delivery requirements of the Securities Act, (b) the date on
which such Senior Subordinated Note has been effectively registered under
the Securities Act and disposed of in accordance with a Shelf Registration
Statement and (c) the date on which such Senior Subordinated Note is
distributed to the public pursuant to Rule 144 under the Securities Act or
by a Broker-Dealer pursuant to the "Plan of Distribution" contemplated by
the Exchange Offer Registration Statement (including delivery of the
Prospectus contained therein).
Underwritten Registration or Underwritten Offering: A
registration in which securities of the Company are sold to one or more
investment banking firms, acting as underwriters, for reoffering to the
public.
2. Securities Subject to This Agreement.
(a) Transfer Restricted Securities. The securities entitled to
the benefits of this Agreement are the Transfer Restricted Securities.
(b) Holders of Transfer Restricted Securities. A Person is
deemed to be a holder of Transfer Restricted Securities (each, a "Holder")
whenever such Person owns Transfer Restricted Securities.
3. Registered Exchange Offer.
(a) Unless the Exchange Offer shall not be permissible under
applicable law, or Commission policy (after the procedures set forth in
Section 6(a) below have been complied with), the Company shall (i) cause
to be filed with the Commission as soon as practicable after the Closing
Date, but in no event later than 45 days after the Closing Date, a
Registration Statement under the Securities Act relating to the New Senior
Subordinated Notes and the Exchange Offer, (ii) use their best efforts to
cause such Registration Statement to become effective at the earliest
possible time, but in no event later than 120 days after the Closing Date,
(iii) in connection with the foregoing, file (A) all pre-effective
amendments to such Registration Statement as may be necessary in order to
cause such Registration Statement to become effective, (B) if applicable,
a Prospectus pursuant to Rule 430A under the Securities Act and (C)
subject to the proviso in Section 6(c)(xii), cause all necessary filings
in connection with the
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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 the Exchange Offer to be Consummated, and (iv) upon the
effectiveness of such Registration Statement, commence the Exchange Offer.
The Exchange Offer shall be on the appropriate form permitting
registration of the New Senior Subordinated Notes to be offered in
exchange for the Transfer Restricted Securities and to permit resales of
New Senior Subordinated Notes held by Broker-Dealers as contemplated by
Section 3(c) below.
(b) The Company shall 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; provided, however, that in no event shall such period be less than
20 business days. The Company shall cause the Exchange Offer to comply
with all applicable federal and state securities laws. No securities other
than the New Senior Subordinated Notes shall be registered in the Exchange
Offer Registration Statement. The Company shall use its best efforts to
cause the Exchange Offer to be Consummated on the earliest practicable
date after the Exchange Offer Registration Statement has become effective,
but in no event later than 30 days thereafter.
(c) The Company shall indicate in a "Plan of Distribution"
section contained in the Prospectus contained in the Exchange Offer
Registration Statement that any Broker-Dealer who holds Senior
Subordinated Notes that are Transfer Restricted Securities and that were
acquired for its own account as a result of market-making activities or
other trading activities (other than Transfer Restricted Securities
acquired directly from the Company or an affiliate of the Company), may
exchange such Senior Subordinated Notes pursuant to the Exchange Offer;
however, such Broker-Dealer may be deemed to be an "underwriter" within
the meaning of the Securities Act and must, therefore, deliver a
prospectus meeting the requirements of the Securities Act in connection
with any resales of the New Senior Subordinated Notes received by such
Broker-Dealer in the Exchange Offer, which prospectus delivery requirement
may be satisfied by the delivery by such Broker-Dealer of the Prospectus
contained in the Exchange Offer Registration Statement. Such "Plan of
Distribution" section shall also contain all other information with
respect to such resales by Broker-Dealers that the Commission may require
in order to permit such resales pursuant thereto, but such "Plan of
Distribution" shall not name any such Broker-Dealer or disclose the amount
of New Senior Subordinated Notes held by any such Broker-Dealer except to
the extent required by the Commission as a result of a change in policy
announced after the date of this Agreement.
The Company shall use its best efforts to keep the Exchange Offer
Registration Statement continuously effective, supplemented and amended as
required by the provisions of Section 6(c) below to the extent necessary to
ensure that it is available for resales of New Senior Subordinated Notes
acquired by Broker-Dealers for their own accounts as a result of market-making
activities or other trading activities, and to ensure that it conforms with the
requirements of this Agreement, the Securities Act and the policies, rules and
regulations of the Commission as announced from time to time, for a period of
one year from the date on which the Exchange Offer Registration Statement is
declared effective.
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The Company shall provide sufficient copies of the latest version of
such Prospectus to Broker-Dealers promptly upon request at any time, subject to
Section 6(c)(i) hereof, during such one-year period in order to facilitate such
resales.
4. Shelf Registration.
(a) Shelf Registration. If (i) the Company is not required to
file an Exchange Offer Registration Statement or to consummate the
Exchange Offer because the Exchange Offer is not permitted by applicable
law or Commission policy (after the procedures set forth in Section 6(a)
below have been complied with) or (ii) if any Holder of Transfer
Restricted Securities that is a "qualified institutional buyer" (as
defined in Rule 144A under the Securities Act) or an "accredited investor"
(as defined in Rule 501 (A)(1), (2), (3) or (7) under the Securities Act)
shall notify the Company within 20 business days after the Exchange Offer
is Consummated (A) that such Holder is prohibited by applicable law or
Commission policy from participating in the Exchange Offer or (B) that
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
that the Prospectus contained in the Exchange Offer Registration Statement
is not appropriate or available for such resales by such Holder or (C)
that such Holder is a Broker-Dealer and holds Senior Subordinated Notes
acquired directly from the Company or one of its affiliates, then the
Company shall use its best efforts to:
(x) cause to be filed a shelf registration statement
pursuant to Rule 415 under the Securities Act, which may be an
amendment to the Exchange Offer Registration Statement (in either
event, the "Shelf Registration Statement") on or prior to the
earliest to occur of (1) the 30th day after the date on which the
Company determines that it is not required to file the Exchange
Offer Registration Statement or (2) the 30th day after the date on
which the Company receives notice from a Holder of Transfer
Restricted Securities as contemplated by clause (ii) above (such
earliest date being the "Shelf Filing Deadline"), which Shelf
Registration Statement shall provide for resales of all Transfer
Restricted Securities the Holders of which shall have provided the
information required pursuant to Section 4(b) hereof, and
(y) cause such Shelf Registration Statement to be
declared effective by the Commission on or before the 60th day after
the obligation to file the Shelf Registration Statement arises.
The Company shall use its best efforts to keep such Shelf Registration
Statement continuously effective, supplemented and amended as required by
the provisions of Sections 6(b) and (c) hereof to the extent necessary to
ensure that it is available for resales of Notes by the Holders of
Transfer Restricted Securities entitled to the benefit of this Section
4(a), and to ensure that it conforms with the requirements of this
Agreement, the Securities Act and the policies, rules and regulations of
the Commission as announced from time to time, for a period of at least
three years (as extended pursuant to Section 6(c)(i)) following the
Closing Date or such shorter period that will terminate when all Transfer
Restricted Securities covered by the Shelf Registration Statement have
been sold pursuant to the Shelf Registration Statement.
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(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 Company in writing, within 15 business days
after receipt of a request therefor, such information as the Company may
reasonably request for use in connection with any Shelf Registration
Statement or Prospectus or preliminary Prospectus included therein. No
Holder of Transfer Restricted Securities shall be entitled to liquidated
damages pursuant to Section 5 hereof unless and until such Holder shall
have used its best efforts to provide all such reasonably requested
information. Each Holder as to which any Shelf Registration Statement is
being effected agrees to furnish promptly to the Company all information
required to be disclosed in order to make the information previously
furnished to the Company by such Holder not materially misleading.
5. Liquidated Damages.
If (a) any of the Registration Statements required by this Agreement
is not filed with the Commission on or prior to the date specified for such
filing in this Agreement, (b) any of such Registration Statements has not been
declared effective by the Commission on or prior to the date specified for such
effectiveness in this Agreement (the "Effectiveness Target Date"), (c) the
Exchange Offer has not been Consummated within 30 business days after the
Effectiveness Target Date with respect to the Exchange Offer Registration
Statement or (d) subject to the provisions of Section 6(c)(i) below, 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 (otherwise than as permitted hereunder) (each such event
referred to in clauses (a) through (d), a "Registration Default"), the Company
agrees to pay liquidated damages to each Holder of Transfer Restricted
Securities with respect to the first 90-day period immediately following the
occurrence of such Registration Default, in an amount equal to $.05 per week per
$1,000 principal amount of Transfer Restricted Securities held by such Holder
for each week or portion thereof that the Registration Default continues. The
amount of the liquidated damages payable to any Holder of Transfer Restricted
Securities shall increase by an additional $.05 per week per $1,000 in principal
amount of Transfer Restricted Securities held by such Holder 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
principal amount of Transfer Restricted Securities. Except as provided in
Section 4(b), all accrued liquidated damages shall be paid to Record Holders by
the Company by wire transfer of immediately available funds or by federal funds
check on each Damages Payment Date, as provided in the Indenture. Following the
cure of all Registration Defaults relating to any particular Transfer Restricted
Securities, the accrual of liquidated damages with respect to such Transfer
Restricted Securities will cease.
All obligations of the Company set forth in the preceding paragraph
that are outstanding with respect to any Transfer Restricted Security at the
time such security ceases to be a Transfer Restricted Security shall survive
until such time as all such obligations with respect to such Transfer Restricted
Security shall have been satisfied in full.
6. Registration Procedures.
(a) Exchange Offer Registration Statement. In connection with
the Exchange Offer, the Company shall comply with all of the provisions of
Section 6(c) below, shall use its
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best efforts to effect such exchange to permit the sale of Transfer
Restricted Securities being sold in accordance with the intended method or
methods of distribution thereof, and shall comply with all of the
following provisions:
(i) If in the reasonable opinion of counsel to the
Company there is a question as to whether the Exchange Offer is
permitted by applicable law, the Company hereby agrees to seek a
no-action letter or other favorable decision from the Commission
allowing the Company to Consummate an Exchange Offer for such Senior
Subordinated Notes. The Company hereby agrees to pursue the issuance
of such a decision to the Commission staff level but shall not be
required to take commercially unreasonable action to effect a change
of Commission policy. The Company hereby agrees, however, to (A)
participate in telephonic conferences with the Commission, (B)
deliver to the Commission staff an analysis prepared by counsel to
the Company setting forth the legal bases, if any, upon which such
counsel has concluded that such an Exchange Offer should be
permitted and (C) diligently pursue a resolution (which need not be
favorable) by the Commission staff of such submission.
(ii) As a condition to its participation in the Exchange
Offer pursuant to the terms of this Agreement, each Holder of
Transfer Restricted Securities shall furnish, upon the request of
the Company, prior to the date on which the Exchange Offer is
Consummated, a written representation to the Company (which may be
contained in the letter of transmittal contemplated by the Exchange
Offer Registration Statement) to the effect that (A) it is not an
affiliate of the Company (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 New Senior
Subordinated Notes to be issued in the Exchange Offer and (C) it is
acquiring the New Senior Subordinated Notes in its ordinary course
of business. In addition, all such Holders of Transfer Restricted
Securities shall otherwise cooperate in the Company's preparations
for the Exchange Offer. Each Holder hereby acknowledges and agrees
that any Broker-Dealer and any such Holder using the Exchange Offer
to participate in a distribution of the securities to be acquired in
the Exchange Offer (1) could not under Commission policy as in
effect on the date of this Agreement rely on the position of the
Commission enunciated in Morgan Stanley and Co., Inc. (available
June 5, 1991) and Exxon Capital Holdings Corporation (available May
13, 1988), as interpreted in the Commission's letter to Shearman &
Sterling dated July 2, 1993, and similar no-action letters
(including any no-action letter obtained pursuant to clause (i)
above), and (2) must comply with the registration and prospectus
delivery requirements of the Securities Act in connection with a
secondary resale transaction and that such a secondary resale
transaction should 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 if the resales are of
New Senior Subordinated Notes obtained by such Holder in exchange
for Senior Subordinated Notes acquired by such Holder directly from
the Company or an affiliate thereof.
(iii) Prior to effectiveness of the Exchange Offer
Registration Statement, the Company shall provide a supplemental
letter to the Commission (A) stating that the Company is registering
the Exchange Offer in reliance on the position of the Commission
enunciated in Exxon Capital Holdings Corporation (available May 13,
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1988), Morgan Stanley and Co., Inc. (available June 5, 1991) and, if
applicable, any no-action letter obtained pursuant to clause (i)
above and (B) including a representation that the Company has
entered into any arrangement or understanding with any Person to
distribute the New Senior Subordinated Notes to be received in the
Exchange Offer and that, to the best of the Company'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 Company shall comply with all the provisions
of Section 6(c) below and shall use its best efforts to effect such
registration to permit the sale of the Transfer Restricted Securities
being sold in accordance with the intended method or methods of
distribution thereof, and pursuant thereto the Company will as
expeditiously as possible prepare and file with the Commission a
Registration Statement relating to the registration on any appropriate
form under the Securities 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.
(c) General Provisions. In connection with any Registration
Statement and any Prospectus required by this Agreement to permit the sale
or resale of Transfer Restricted Securities (including, without
limitation, any Registration Statement and the related Prospectus required
to permit resales of Notes by Broker-Dealers), the Company shall:
(i) use its 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 a material misstatement or omission
or (B) not to be effective and usable for resale of Transfer
Restricted Securities during the period required by this Agreement,
the Company shall file promptly an appropriate amendment to such
Registration Statement, in the case of clause (A), correcting any
such misstatement or omission, and, in the case of either clause (A)
or (B), use its best efforts to cause such amendment to be declared
effective and such Registration Statement and the related Prospectus
to become usable for their intended purpose(s) as soon as
practicable thereafter. Notwithstanding the foregoing, if the Board
of Directors of the Company determines in good faith that it is in
the best interests of the Company not to disclose the existence of
or facts surrounding any proposed or pending material corporate
transaction involving the Company, the Company may allow the Shelf
Registration Statement or the Exchange Offer Registration Statement
to fail to be effective and usable as a result of such nondisclosure
for up to 90 days during the three year period of effectiveness
required by Section 4 hereof, but in no event for any period in
excess of 45 consecutive days, provided, that in the event the
Exchange Offer is Consummated, the Company shall not allow the
Exchange Offer Registration Statement to fail to be effective and
usable for a period in excess of 30 days during the one year period
of effectiveness required by Section 3 hereof,
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(ii) prepare and file with the Commission such
amendments and post-effective amendments to the Registration
Statement as may be necessary to keep the Registration Statement
effective for the applicable period set forth in Section 3 or 4
hereof, as applicable, or such shorter period as will terminate when
all Transfer Restricted Securities covered by such Registration
Statement have been sold; cause the Prospectus to be supplemented by
any required Prospectus supplement, and as so supplemented to be
filed pursuant to Rule 424 under the Securities Act, and to comply
fully with the applicable provisions of Rules 424 and 430A under the
Securities Act in a timely manner; and comply with the provisions of
the Securities Act with respect to the disposition of all securities
covered by such Registration Statement during the applicable period
in 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 the underwriter(s), if any, and selling
Holders promptly and, if requested by such Persons, to confirm such
advice in writing, (A) when the Prospectus or any Prospectus
supplement or post-effective amendment has been filed, and, with
respect to any 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 Securities 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 or the Prospectus in order to
make the statements therein not misleading, including, without
limitation, under circumstances described in Section 6(c)(i) above.
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 Company shall use its best efforts to obtain the
withdrawal or lifting of such order at the earliest possible time;
(iv) furnish to each of the selling Holders and each of
the underwriter(s), 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 (excluding any documents incorporated by
reference), which documents will be subject to the review of such
Holders and underwriter(s), if any, for a period of at least five
business days, and the Company will not file any such Registration
Statement or Prospectus or any amendment or supplement to any such
Registration Statement or Prospectus (excluding any documents
incorporated by reference) to which a selling Holder of Transfer
Restricted Securities covered by such Registration Statement or the
underwriter(s), if any, shall reasonably object within five business
days after the receipt thereof. A selling Holder or underwriter, if
any, shall be deemed to have
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reasonably objected to such filing if such Registration Statement,
amendment, Prospectus or supplement, as applicable, as proposed to
be filed, contains a material misstatement or omission;
(v) promptly after the filing of any document that is to
be incorporated by reference into a Registration Statement or
Prospectus, provide copies of such document to the selling Holders
and to the underwriter(s), if any, make the Company's
representatives available for discussion of such document and other
customary due diligence matters, and include such information in
such document prior to the filing thereof as such selling Holders or
underwriter(s), if any, reasonably may request;
(vi) if (A) a Shelf Registration Statement is filed
pursuant to this Agreement or (B) a Prospectus contained in an
Exchange Offer Registration Statement filed pursuant to this
Agreement is required to be delivered under the Securities Act by
any participating Broker-Dealer who seeks to sell New Senior
Subordinated Notes, make available at reasonable times for
inspection by the selling Holders, any underwriter participating in
any disposition pursuant to such Registration Statement, and any
attorney or accountant retained by such selling Holders,
Broker-Dealers or any of the underwriter(s), all financial and other
records, pertinent corporate documents and properties of the Company
and cause the Company's officers, directors, managers and employees
to supply all information reasonably requested by any such Holder,
Broker-Dealers, underwriter, or their respective attorneys,
accountants or other agents in connection with such Registration
Statement subsequent to the filing thereof and prior to its
effectiveness, provided that the Company may require any such
selling Holder to enter into a confidentiality agreement in
appropriate form with respect to information provided pursuant to
this clause (vi) or any other provision of this Agreement;
(vii) if requested by any selling Holders or the
underwriter(s), if any, promptly incorporate in any Registration
Statement or Prospectus, pursuant to a supplement or post-effective
amendment if necessary, such information as such selling Holders and
underwriter(s), if any, may reasonably request to have included
therein, including, without limitation, information relating to the
"Plan of Distribution" of the Transfer Restricted Securities,
information with respect to the principal amount of Transfer
Restricted Securities being sold to such underwriter(s), the
purchase price being paid therefor and any other terms of the
offering of the Transfer Restricted Securities to be sold in such
offering; and make all required filings of such Prospectus
supplement or post-effective amendment as soon as practicable after
the Company is notified of the matters to be incorporated in such
Prospectus supplement or post-effective amendment;
(viii) use its reasonable best efforts to cause the
Transfer Restricted Securities covered by the Registration Statement
to be rated with the appropriate rating agencies, if so requested by
the Holders of a majority in aggregate principal amount of Notes
covered thereby or the underwriter(s), if any;
(ix) furnish to each selling Holder and each of the
underwriter(s), if any, without charge, at least one copy of the
Registration Statement, as first filed with the
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Commission, and of each amendment thereto, including all documents
incorporated by reference therein and all exhibits (including
exhibits incorporated therein by reference);
(x) deliver to each selling Holder and each of the
underwriter(s), if any, without charge, as many copies of the
Prospectus (including each preliminary prospectus) and any amendment
or supplement thereto as such Persons reasonably may request; the
Company hereby consents to the use of the Prospectus and any
amendment or supplement thereto by each of the selling Holders and
each of the underwriter(s), if any, in connection with the offering
and the sale of the Transfer Restricted Securities covered by the
Prospectus or any amendment or supplement thereto;
(xi) enter into such agreements (including an
underwriting agreement), and make such 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 Registration Statement
contemplated by this Agreement, all to such extent as may be
reasonably requested by any Holder of Transfer Restricted Securities
or underwriter in connection with any sale or resale pursuant to any
Registration Statement contemplated by this Agreement; and if the
registration is an Underwritten Registration, the Company shall:
(A) upon request, furnish to each selling Holder
and each underwriter in such substance and scope as they may
request and as are customarily made by issuers to
underwriters in primary underwritten offerings, upon the
closing date of such underwritten offering:
(1) a certificate, dated as of such closing
date, signed by (y) the Chairman of the Board or the
President and (z) the Chief Financial Officer of the
Company confirming, as of the date thereof, the
matters set forth in paragraph (f) of Section 7 of the
Purchase Agreement and such other matters as such
parties may reasonably request;
(2) an opinion, dated as of such closing date,
of counsel for the Company covering, to the extent
applicable, the matters covered by the opinion of
Schulte Roth & Zabel LLP delivered pursuant to
paragraph (h) of Section 7 of the Purchase Agreement
and such other matters as such parties may reasonably
request, and in any event including a statement to the
effect that such counsel has participated in
conferences with officers and other representatives of
the Company, and representatives of the independent
public accountants for the Company in connection with
the preparation of such Registration Statement and the
related Prospectus and have considered the matters
required to be stated therein and the statements
contained therein, although such counsel has not
undertaken to investigate or independently verify, and
does not assume any responsibility for, the accuracy,
completeness or fairness of the statements contained
in such Registration Statement or Prospectus; on the
basis of the foregoing, no
-11-
facts came to such counsel's attention that caused
such counsel to believe that the applicable
Registration Statement, at the time such Registration
Statement or any post-effective amendment thereto
became effective, contained an untrue statement of a
material fact or omitted to state a material fact
required to be stated therein or necessary to make the
statements therein not misleading, or that the
Prospectus contained in such Registration Statement as
of its date contained an untrue statement of a
material fact or omitted to state a material fact
necessary in order to make the statements therein, in
light of the circumstances under which they were made,
not misleading (except in each case as to the
financial statements, notes and schedules and other
financial or accounting data included in or omitted
from any Registration Statement contemplated by this
Agreement or the related Prospectus as to which no
belief need be expressed); and
(3) a customary comfort letter addressed to
the underwriters, dated as of such closing date, from
the Company's independent accountants, in the
customary form and covering matters of the type
customarily covered in comfort letters by underwriters
in connection with primary underwritten offerings, and
affirming the matters set forth in the comfort letters
delivered pursuant to paragraph (j) of Section 7 of
the Purchase Agreement, without exception;
(B) set forth in full or incorporate by reference
in the underwriting agreement, if any, the indemnification
provisions and procedures of Section 8 hereof with respect
to all parties to be indemnified pursuant to said Section;
and
(C) deliver such other documents and certificates
as may be reasonably requested by such parties to evidence
compliance with clause (A) above and with any customary
conditions contained in the underwriting agreement entered
into by the Company pursuant to this clause (xi), if any.
If at any time the representations and warranties of the
Company contemplated in clause (A)(1) above cease to be true and
correct, the Company shall so advise the Initial Purchasers and the
underwriter(s), if any, and each selling Holder promptly and, if
requested by such Persons, shall confirm such advice in writing;
(xii) prior to any public offering of Transfer
Restricted Securities, cooperate with the selling Holders, the
underwriter(s), if any, and their respective counsel in connection
with the registration and qualification of the Transfer Restricted
Securities under the securities or Blue Sky laws of such
jurisdictions as the selling Holders or underwriter(s) may
reasonably request and do any and all other acts or things necessary
or advisable to enable the disposition in such jurisdictions of the
Transfer Restricted Securities covered by the Shelf Registration
Statement; provided, however, that the Company shall not be required
to register or qualify as a foreign corporation where they are not
now so qualified or to take any action that would subject them to
the service of
-12-
process in suits or to taxation, other than as to matters and
transactions relating to the Registration Statement, in any
jurisdiction where they are not now so subject;
(xiii) shall issue, upon the request of any Holder of
Senior Subordinated Notes covered by the Shelf Registration
Statement, New Senior Subordinated Notes, having an aggregate
principal amount equal to the aggregate principal amount of Senior
Subordinated Notes surrendered to the Company by such Holder in
exchange therefor or being sold by such Holder; such New Senior
Subordinated Notes to be registered in the name of such Holder or in
the name of the purchaser(s) of such Notes, as the case may be; in
return, the Senior Subordinated Notes held by such Holder shall be
surrendered to the Company for cancellation;
(xiv) cooperate with the selling Holders and the
underwriter(s), if any, to facilitate the timely preparation and
delivery of certificates representing Transfer Restricted Securities
to be sold and not bearing any restrictive legends; and enable such
Transfer Restricted Securities to be in such denominations and
registered in such names as the Holders or the underwriter(s), if
any, may request at least two business days prior to any sale of
Transfer Restricted Securities made by such underwriter(s);
(xv) use its reasonable best efforts to cause the
Transfer Restricted Securities covered by the Registration Statement
to be registered for sale under the securities or Blue Sky laws of
such jurisdictions as may be necessary to enable the seller or
sellers thereof or the underwriter(s), if any, to consummate the
disposition of such Transfer Restricted Securities, subject to the
proviso contained in clause (xii) above;
(xvi) subject to Section 6(c)(i), if any fact or event
contemplated by clause (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 not misleading;
(xvii) provide a CUSIP number for all Transfer
Restricted Securities not later than the effective date of the
Registration Statement and provide the Trustee under the Indenture
with certificates for the Transfer Restricted Securities which are
in a form eligible for deposit with The Depository Trust Company;
(xviii) cooperate and assist in any filings required to
be made with the NASD and in the performance of any due diligence
investigation by any underwriter(including any "qualified
independent underwriter") that is required to be retained in
accordance with the rules and regulations of the NASD, and use its
reasonable best efforts to cause such Registration Statement to
become effective and approved by such governmental agencies or
authorities as may be necessary to enable the Holders selling
Transfer Restricted Securities to consummate the disposition of such
Transfer Restricted Securities;
-13-
(xix) otherwise use its reasonable best efforts to
comply with all applicable rules and regulations of the Commission,
and make generally available to its security holders, as soon as
practicable, a consolidated earnings statement meeting the
requirements of Rule 158 (which need not be audited) for the
twelve-month period (A) commencing at the end of any fiscal quarter
in which Transfer Restricted Securities are sold to underwriters in
a firm or best efforts Underwritten Offering or (B) if not sold to
underwriters in such an offering, beginning with the first month of
the Company's first fiscal quarter commencing after the effective
date of the Registration Statement;
(xx) 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 of Notes 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 its reasonable 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;
(xxi) cause all Transfer Restricted Securities covered
by the Registration Statement to be listed on each securities
exchange on which similar securities issued by the Company are then
listed if requested by the Holders of a majority in aggregate
principal amount of Senior Subordinated Notes or the managing
underwriter(s), if any; and
(xxii) provide promptly to each Holder upon request each
document filed with the Commission pursuant to the requirements of
Section 13 and Section 15 of the Exchange Act.
Each Holder agrees by acquisition of a Transfer Restricted
Security that, upon receipt of any notice from the Company of the
existence of any fact of the kind described in Section 6(c)(iii)(D)
hereof, such Holder will forthwith discontinue disposition of Transfer
Restricted Securities pursuant to the applicable Registration Statement
until such Holder's receipt of the copies of the supplemented or amended
Prospectus contemplated by Section 6(c)(xvi) hereof, or until it is
advised in writing (the "Advice") by the Company that the use of the
Prospectus may be resumed, and has received copies of any additional or
supplemental filings that are incorporated by reference in the Prospectus.
If so directed by the Company, each Holder will deliver to the Company (at
the Company's expense) all copies, other than permanent file copies then
in such Holder's possession, of the Prospectus covering such Transfer
Restricted Securities that was current at the time of receipt of such
notice. In the event the Company shall give any such notice, the time
period regarding the effectiveness of such Registration Statement set
forth in Section 3 or 4 hereof, as applicable, shall be extended by the
number of days during the period from and including the date of the giving
of such notice pursuant to Section 6(c)(iii)(D) hereof to and including
the date when each selling Holder covered by such Registration Statement
shall have received the copies of the supplemented or amended Prospectus
contemplated by Section 6(c)(xvi) hereof or shall have received the
Advice.
7. Registration Expenses.
-14-
(a) All expenses incident to the Company's performance of or
compliance with this Agreement will be borne by the Company regardless of
whether a Registration Statement becomes effective, including without
limitation: (i) all registration and filing fees and expenses (including
filings made by any Purchaser or Holder with the NASD (and, if applicable,
the fees and expenses of any "qualified independent underwriter" and its
counsel that may be required by the rules and regulations of the NASD));
(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 Company and, subject to Section 7(b) below, the Holders of
Transfer Restricted Securities; (v) all application and filing fees in
connection with listing 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 Company (including the expenses of any special audit and comfort
letters required by or incident to such performance).
The Company will, in any event, bear their internal expenses
(including, without limitation, all salaries and expenses of their
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 Company. The Company shall not
be required to pay the costs and expenses of any Holder relating to
underwriters' discounts and commissions or brokerage fees relating to the
Transfer Restricted Securities to be sold by such Holder.
(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 Company
will reimburse the Initial Purchasers and the Holders of Transfer
Restricted Securities being tendered in the Exchange Offer and/or resold
pursuant to the "Plan of Distribution" contained in the Exchange Offer
Registration Statement or registered pursuant to the Shelf Registration
Statement, as applicable, for the reasonable fees and disbursements of not
more than one counsel, who shall be Willkie Farr & Gallagher or such other
counsel as may 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.
8. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless (i) each
Holder and (ii) each person, if any, who controls (within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act) any
Holder (any of the persons referred to in this clause (ii) being referred
to as a "controlling person") and (iii) the respective officers,
directors, partners, employees, representatives and agents of any Holder
or any controlling person (any person referred to in clause (i), (ii), or
(iii) may hereinafter be referred to as an "Indemnified Holder"), from and
against any loss, claim, damage or liability, joint or several, or any
action in respect thereof to which such Indemnified Holder may become
subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of, or is based upon, (i)
any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement or Prospectus or in any amendment
or supplement thereto, (ii) the
-15-
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading, or (iii) any act or failure to act or any alleged act or
failure to act by any Indemnified Holder in connection with, or relating
in any manner to, the Notes or the offering contemplated by the applicable
Registration Statement or Prospectus or any amendment or supplement
thereto, and which is included as part of or referred to in any loss,
claim, damage, liability or action arising out of or based upon matters
covered by clause (i) or (ii) above (provided that the Company shall not
be liable under this clause (iii) to the extent that it is determined in a
final judgment by a court of competent jurisdiction that such loss, claim,
damage, liability or action resulted directly from any such acts or
failures to act undertaken or omitted to be taken by such Indemnified
Holder through its negligence or willful misconduct) and shall reimburse
each Indemnified Holder promptly upon demand for any legal or other
expenses reasonably incurred by such Indemnified Holder in connection with
investigating or defending or preparing to defend against any such loss,
claim, damage, liability or action as such expenses are incurred;
provided, however, that the Company shall not be liable in any such case
to the extent that any such loss, claim, damage, liability or action
arises out of, or is based upon, any untrue statement or alleged untrue
statement or omission or alleged omission made in any Registration
Statement or Prospectus or in any amendment or supplement thereto in
reliance upon and in conformity with written information furnished to the
Company through the Holders by or on behalf of any Holder (or its related
Indemnified Holder) specifically for inclusion therein; and provided
further, however, that the Company shall not be required to indemnify any
such Indemnified Holder 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 amendment or supplement
thereto and the Prospectus does not contain any other untrue statement or
omission or alleged untrue statement or omission of a material fact that
was the subject matter of the related proceeding and any such loss,
liability, claim, damage or expense suffered or incurred by the
Indemnified Holder resulted from any action, claim or suit by any Person
who purchased Notes which are the subject thereof from such Indemnified
Holder and it is established in the related proceeding that such
Indemnified Holder failed to deliver or provide a copy of the Prospectus
(as amended or supplemented) to such Person with or prior to the
confirmation of the sale of such Notes sold to such Person if required by
applicable law, unless such failure to deliver or provide a copy of the
Prospectus (as amended or supplemented) was a result of noncompliance by
the Company with Section 4 of this Agreement. The foregoing indemnity
agreement is in addition to any liability which the Company may otherwise
have to any Indemnified Holder.
(b) Each Holder, severally and not jointly, shall indemnify
and hold harmless each of the Company, its directors, its officers and
each person, if any, who controls the Company within the meaning of the
Securities Act or the Exchange Act, from and against any loss, claim,
damage or liability, joint or several, or any action in respect thereof,
to which the Company or any such director, officer or controlling person
may become subject, under the Securities Act or otherwise, insofar as such
loss, claim, damage, liability or action arises out of, or is based upon,
(i) any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or the Prospectus, or in any
amendment or supplement thereto or (ii) the omission or alleged omission
to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, but in each case
only to the extent that the untrue statement or alleged untrue statement
or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company through the
-16-
Holders by or on behalf of any Holder or its related Indemnified Holder
specifically for inclusion therein, and shall reimburse the Company or
director, officer or controlling person, as the case may be, for any legal
or other expenses reasonably incurred by the Company or director, officer
or controlling person, as the case may be, in connection with
investigating or defending or preparing to defend against any such loss,
claim, damage, liability or action as such expenses are incurred. The
foregoing indemnity agreement is in addition to any liability which any
Holder may otherwise have to the Company or any such director, officer or
controlling person. In no event shall the liability of any selling Holder
hereunder be greater in amount than the dollar amount of the proceeds
received by such Holder upon the sale of Transfer Restricted Securities
giving rise to such indemnification obligation.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under this Section 8, notify the
indemnifying party in writing of the claim or the commencement of that
action; provided, however, that the failure to notify the indemnifying
party shall not relieve it from any liability which it may have under this
Section 8 except to the extent it has been materially prejudiced by such
failure and, provided further, that the failure to notify the indemnifying
party pursuant to this Section 8 shall not relieve it from any liability
which it may have to an indemnified party otherwise than under this
Section 8. If any such claim or action shall be brought against an
indemnified party, and it shall notify the indemnifying party thereof, the
indemnifying party shall be entitled to participate therein and, to the
extent that it wishes, jointly with any other similarly notified
indemnifying party, to assume the defense thereof with counsel reasonably
satisfactory to the indemnified party. After notice from the indemnifying
party to the indemnified party of its election to assume the defense of
such claim or action, the indemnifying party shall not be liable to the
indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the
defense thereof other than reasonable costs of investigation; provided,
however, that any indemnified party shall have the right to employ
separate counsel in any such action and to participate in the defense
thereof but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the employment thereof has been
specifically authorized by the indemnifying party in writing, (ii) such
indemnified party shall have been 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 and in the
reasonable judgment of such counsel it is advisable for such indemnified
party to employ separate counsel or (iii) the indemnifying party has
failed to reasonably and promptly assume the defense of such action and
employ counsel reasonably satisfactory to the indemnified party, in which
case, if such indemnified party notifies the indemnifying party in writing
that it elects to employ separate counsel at the expense of the
indemnifying party, the indemnifying party shall not have the right to
assume the defense of such action on behalf of such indemnified party, it
being understood, however, that the indemnifying party shall not, in
connection with any one such 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 reasonable fees
and expenses of more than one separate firm of attorneys (in addition to
no more than one local counsel) at any time for all such indemnified
parties, which firm shall be designated in writing by the Holders, if the
indemnified parties under this Section 8 consist of any Holder or any of
their related Indemnified Holders, or by the Company if the indemnified
parties under this Section 8 consist of the Company, or any of the
-17-
Company's directors, officers or controlling persons. No indemnifying
party shall be liable for any settlement of any such action effected
without its written consent (which consent shall not be unreasonably
withheld), but if settled with its written consent or if there be a final
judgment of the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and
against any loss or liability by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 8
shall for any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 8(a) or 8(b) in respect of any loss,
claim, damage or liability, or any action in respect thereof, referred to
therein, then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such
indemnified party as a result of such loss, claim, damage or liability, or
action in respect thereof, (i) in such proportion as shall be appropriate
to reflect the relative benefits received by the Company on the one hand
and any Holder on the other from such Holder's sale of Transfer Restricted
Securities or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to
reflect the relative fault of the Company on the one hand and such Holder
on the other with respect to the statements or omissions which resulted in
such loss, claim, damage or liability, or action in respect thereof, as
well as any other relevant equitable considerations. The relative fault of
the Company on the one hand and of such Holder on the other shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the
Company on the one hand, or such Holder, on the other hand, the intent of
the parties and their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company
and each Holder of Transfer Restricted Securities agree that it would not
be just and equitable if contributions pursuant to this Section 8(d) were
to be 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 into account the equitable considerations referred to
herein. The amount paid or payable by an indemnified party as a result of
the loss, claim, damage or liability, or action in respect thereof,
referred to above in this Section 8(d) shall be deemed to include, for
purposes of this Section 8(d), any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or
defending any such action or claim. Notwithstanding the provisions of this
Section 8(d), none of the Holders (or any of their related Indemnified
Holders) shall be required to contribute any amount in excess of the
amount by which the total discount received by such Holder with respect to
the Notes exceeds the amount of any damages which such Holder has
otherwise paid or become liable to pay by reason of any untrue or alleged
untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11 of the
Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The Holders' obligations
to contribute as provided in this Section 8(d) are several in proportion
to the respective principal amount of Notes held by each of the Holders
hereunder and not joint.
9. Rule 144A.
The Company hereby agrees with each Holder, for so long as any
Transfer Restricted Securities remain outstanding, to make available upon
request to any Holder or beneficial owner of
-18-
Transfer Restricted Securities in connection with any sale thereof and any
prospective purchaser of such Transfer Restricted Securities 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 Transfer Restricted Securities
pursuant to Rule 144A.
10. Participation in Underwritten Registrations.
No Holder may participate in any Underwritten Registration hereunder
unless such Holder (a) agrees to sell such Holder's Transfer Restricted
Securities on the basis provided in any underwriting arrangements approved by
the Persons entitled hereunder to approve such arrangements and (b) completes
and executes all reasonable questionnaires, powers of attorney, indemnities,
underwriting agreements, lock-up letters and other documents required under the
terms of such underwriting arrangements.
11. Selection of Underwriters.
The Holders of Transfer Restricted Securities covered by the Shelf
Registration Statement who desire to do so may sell such Transfer Restricted
Securities in an Underwritten Offering. In any such 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 the Transfer Restricted Securities included in
such offering; provided, that such investment bankers and managers must be
reasonably satisfactory to the Company.
12. Miscellaneous.
(a) Remedies. The Company agrees that monetary damages
(including the liquidated damages contemplated hereby) would not be
adequate compensation for any loss incurred by reason of a breach by it of
the provisions of this Agreement otherwise than with respect to
Registration Defaults and hereby agrees to waive the defense in any action
for specific performance that a remedy at law would be adequate.
(b) No Inconsistent Agreements. The Company will not on or
after the date of this Agreement enter into any agreement with respect to
its securities that is inconsistent with the rights granted to the Holders
in this Agreement or otherwise conflicts with the provisions hereof.
Except as disclosed in the Offering Memorandum (as defined in the Purchase
Agreement), the Company has not previously entered into any agreement
granting any registration rights with respect to their 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 Company's securities under any agreement in effect on the
date hereof.
(c) Adjustments Affecting the Notes. The Company will not take
any action, or permit any change to occur, with respect to the Notes that
would materially and adversely affect the ability of the Holders to
Consummate any Exchange Offer.
(d) Amendments and Waivers. The provisions of this Agreement
may not be amended, modified or supplemented, and waivers or consents to
or departures from the provisions hereof may not be given unless the
Company has obtained the written consent of
-19-
Holders of a majority of the outstanding principal amount of Transfer
Restricted Securities. Notwithstanding the foregoing, a waiver or consent
to departure from the provisions hereof that relates exclusively to the
rights of Holders whose securities are being tendered pursuant to the
Exchange Offer and that does not affect directly or indirectly the rights
of other Holders whose securities are not being tendered pursuant to such
Exchange Offer may be given by the Holders of a majority of the
outstanding principal amount of Transfer Restricted Securities being
tendered or registered.
(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 Company:
Scholastic Brands, Inc.
7211 Circle S Road
Austin, Texas 78745-6603
Attention: Jeffrey H. Brennan
Fax: (512) 443-5213
With a copy to:
Schulte Roth & Zabel LLP
900 Third Avenue
New York, New York 10022
Attention: Janet C. Walden
Fax: (212) 593-5955
All such notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; five
business days after being deposited in the mail, postage prepaid, if mailed;
when answered back, if telexed; when receipt acknowledged, if telecopied; and on
the next business day, if timely delivered to an air courier guaranteeing
overnight delivery.
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 of Transfer Restricted Securities;
provided, however, that this Agreement shall not inure to the benefit of
or be binding upon a successor or assign of a Holder unless and to the
extent such successor or assign acquired Transfer Restricted Securities
from such Holder.
-20-
(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 expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties
hereto in respect of the subject matter contained herein. There are no
restrictions, promises, warranties or undertakings, other than those set
forth or referred to herein with respect to the registration rights
granted by the Company with respect to the Transfer Restricted Securities.
This Agreement supersedes all prior agreements and understandings between
the parties with respect to such subject matter.
(signature page follows)
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IN WITNESS OF, the parties have executed this Agreement as of the
date first written above.
SCHOLASTIC BRANDS, INC.
By: /s/ David B. Pittaway
-----------------------------------
Name: David B. Pittaway
Title: President
LEHMAN BROTHERS INC.
By: /s/ Michael A. Goldberg
-----------------------------------
Name: Michael A. Goldberg
Title: Vice President
BT SECURITIES CORPORATION
By: /s/ Richard W. Thaler
-----------------------------------
Name: Richard W. Thaler
Title: Managing Director
-22-