Exhibit 4.4
School Specialty, Inc.
$130,000,000
6% Convertible Subordinated Notes due 2008
REGISTRATION AGREEMENT
New York, New York
July 30, 2001
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
As Representative of the Initial Purchasers Named in
Schedule I to the Purchase Agreement (as defined below)
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
School Specialty, Inc., a Wisconsin corporation (the "Company"),
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proposes to issue and sell (such issuance and sale, the "Initial Placement") to
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the several parties named in Schedule I to the Purchase Agreement (the "Initial
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Purchasers") for whom you (the "Representative") are acting as representative,
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upon the terms set forth in a purchase agreement dated July 24, 2001 (the
"Purchase Agreement"), $130,000,000 aggregate principal amount (plus up to an
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additional $19,500,000 aggregate principal amount to cover over-allotments, if
any) of its 6% Convertible Subordinated Notes due 2008 (the "Securities"). The
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Securities will be convertible into shares of Common Stock (as defined herein),
at the conversion price set forth in the Offering Memorandum (as defined
herein), as the same may be adjusted from time to time pursuant to the Indenture
(as defined herein). As an inducement to you to enter into the Purchase
Agreement and in satisfaction of a condition to your obligations thereunder, the
Company agrees with you, (i) for your benefit and (ii) for the benefit of the
holders from time to time of the Securities and the Common Stock issuable upon
conversion of the Securities (including you), as follows:
1. Definitions. Capitalized terms used herein without definition
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shall have the respective meanings set forth in the Purchase Agreement. As used
in this Agreement, the following capitalized terms shall have the following
meanings:
"Act" means the Securities Act of 1933, as amended, and the rules and
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regulations of the SEC promulgated thereunder.
"Affiliate" of any specified person means any other person, directly
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or indirectly, controlling or controlled by or under direct or indirect common
control with such specified person. For the purposes of this definition,
"control" (including, with correlative meanings, the
terms "controlling", "controlled by" and "under common control with"), as used
with respect to any person, shall mean the possession, directly or indirectly,
of the power either (a) to direct or cause the direction of the management or
policies of such person or (b) to vote 10% or more of the securities having
ordinary voting power for the election of director of such person, in the case
of each of (a) and (b), whether through the ownership of voting securities or by
agreement or otherwise.
"Broker-Dealer" means any broker or dealer registered as such under
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the Exchange Act.
"Business Day" has the meaning set forth in the Indenture.
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"Closing Date" means July 30, 2001.
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"Common Stock" means the common stock, par value $0.001 per share, of
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the Company, as it exists on the date of this Agreement and any other shares of
capital stock or other securities of the Company into which such Common Stock
may be reclassified or changed, together with any and all other securities which
may from time to time be issuable upon conversion of Securities.
"Damages Payment Date" means, with respect to the Securities or the
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Common Stock issuable upon conversion thereof, as applicable, each Interest
Payment Date; and in the event that any Security, or portion thereof, is called
for redemption or surrendered for purchase by the Company and not withdrawn
pursuant to a Designated Event Offer (as defined in the Indenture), the relevant
redemption date or Designated Event Payment Date (as defined in the Indenture),
as the case may be, shall also be a Damages Payment Date with respect to such
Security, or portion thereof, unless the Indenture provides that accrued and
unpaid interest on the Security (or portion thereof) to be redeemed or
repurchased, as the case may be, is to be paid to the person who was the Record
Holder thereof on a record date prior to such redemption date or Designated
Event Payment Date, as the case may be, in which case the relevant Damages
Payment Date shall be the date on which interest is payable to such Record
Holder.
"Default Rate" means the rate of interest payable with respect to
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overdue amounts on the Securities pursuant to Section 4.01 of the Indenture.
"DTC" has the meaning set forth in Section 3(k) hereof.
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"Exchange Act" means the Securities Exchange Act of 1934, as amended,
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and the rules and regulations of the SEC promulgated thereunder.
"Final Maturity Date" means August 1, 2008.
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"Holder" means a person who is a holder or beneficial owner (including
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the Initial Purchasers) of any Securities or shares of Common Stock issued upon
conversion of Securities;
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provided that, unless otherwise expressly stated herein, only registered holders
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of Securities or Common Stock issued on conversion thereof shall be counted for
purposes of calculating any proportion of holders entitled to take any action or
give notice pursuant to this Agreement.
"Indenture" means the Indenture relating to the Securities dated as of
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July 30, 2001, between the Company and BNY Midwest Trust Company, as trustee, as
the same may be amended from time to time in accordance with the terms thereof.
"Initial Placement" has the meaning set forth in the preamble hereto.
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"Initial Purchasers" has the meaning set forth in the preamble hereto.
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"Interest Payment Date" shall mean January 31 and July 31.
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"Liquidated Damages" has the meaning set forth in Section 2(e) hereof.
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"Losses" has the meaning set forth in Section 5(d) hereof.
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"Majority Holders" means the Holders of a majority of the then
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outstanding aggregate principal amount of Securities registered under a Shelf
Registration Statement; provided that Holders of Common Stock issued upon
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conversion of Securities shall be deemed to be Holders of the aggregate
principal amount of Securities from which such Common Stock was converted; and
provided, further, that Securities or Common Stock which have been sold or
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otherwise transferred pursuant to the Shelf Registration Statement shall not be
included in the calculation of Majority Holders.
"Majority Underwriting Holders" means, with respect to any
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Underwritten Offering, the Holders of a majority of the then outstanding
aggregate principal amount of Securities registered under any Shelf Registration
Statement whose Securities are or are to be included in such Underwritten
Offering; provided that Holders of Common Stock issued upon conversion of
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Securities shall be deemed to be Holders of the aggregate principal amount of
Securities from which such Common Stock was converted.
"Managing Underwriters" means the Underwriter or Underwriters that
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shall administer an Underwritten Offering.
"NASD" has the meaning set forth in Section 3(i) hereof.
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"Notice and Questionnaire" means a Notice of Registration Statement
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and Selling Securityholder Questionnaire substantially in the form of Exhibit A
hereto.
"Notice Holder" shall mean, on any date, any Holder of Transfer
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Restricted Securities that has delivered a completed and signed Notice and
Questionnaire to the Company on or prior to such date.
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"Offering Memorandum" means the Final Memorandum as defined in the
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Purchase Agreement.
"Person" has the meaning set forth in the Indenture.
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"Prospectus" means the prospectus included in any Shelf Registration
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Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A under the Act), as amended or
supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the Securities or Common Stock issuable upon
conversion thereof covered by such Shelf Registration Statement, and all
amendments and supplements to such prospectus, including all documents
incorporated or deemed to be incorporated by reference in such prospectus.
"Purchase Agreement" has the meaning set forth in the preamble hereto.
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"Record Holder" means (i) with respect to any Damages Payment Date
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which occurs on an Interest Payment Date, each person who is registered on the
books of the registrar as the holder of Securities at the close of business on
the record date with respect to such Interest Payment Date and (ii) with respect
to any Damages Payment Date relating to the Common Stock issued upon conversion
thereof, each person who is a holder of record of such Common Stock fifteen days
prior to the Damages Payment Date.
"Registration Default" has the meaning set forth in Section 2(e)
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hereof.
"Representative" has the meaning set forth in the preamble hereto.
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"Rule 144" means Rule 144 (or any successor provision) under the Act.
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"SEC" means the Securities and Exchange Commission.
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"Securities" has the meaning set forth in the preamble hereto.
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"Shelf Registration" means a registration effected pursuant to Section
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2 hereof.
"Shelf Registration Period" has the meaning set forth in Section 2(c)
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hereof.
"Shelf Registration Statement" means a "shelf" registration statement
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of the Company filed pursuant to the provisions of Section 2 hereof which covers
some or all of the Securities and the Common Stock issuable upon conversion
thereof, as applicable, on Form S-3 or on another appropriate form for an
offering to be made on a delayed or continuous basis pursuant to Rule 415 under
the Act, or any similar rule that may be adopted by the SEC, and all amendments
and supplements to such registration statement, including post-effective
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amendments, in each case including the Prospectus contained therein, all
exhibits thereto and all documents incorporated or deemed to be incorporated by
reference therein.
"Suspension Period" has the meaning set forth in Section 2(d) hereof.
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"Transfer Restricted Securities" means each Security and each share of
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Common Stock issuable or issued upon conversion thereof until the date on which
such Security or share of Common Stock, as the case may be, (i) has been
transferred pursuant to the Shelf Registration Statement or another registration
statement covering such Security or share of Common Stock which has been filed
with the SEC pursuant to the Act, in either case after such registration
statement has become effective and while such registration statement is
effective under the Act, (ii) has been transferred pursuant to Rule 144 under
the Act (or any similar provision then in force) or (iii) may be sold or
transferred pursuant to Rule 144(k) under the Act (or any successor provision
then in force).
"Trustee" means the trustee with respect to the Securities under the
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Indenture.
"Underwriter" means any underwriter of the Securities or Common Stock
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issuable upon conversion thereof in connection with an offering thereof under a
Shelf Registration Statement.
"Underwritten Offering" means an offering in which the Securities or
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Common Stock issued upon conversion thereof are sold to an Underwriter or with
the assistance of an Underwriter for reoffering to the public.
All references in this Agreement to financial statements and schedules
and other information which is "contained", "included", or "stated" in the Shelf
Registration Statement, any preliminary Prospectus or Prospectus (and all other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
or deemed to be incorporated by reference in such Shelf Registration Statement,
preliminary Prospectus or Prospectus, as the case may be; and all references in
this Agreement to amendments or supplements to the Shelf Registration Statement,
any preliminary Prospectus or Prospectus shall be deemed to mean and include any
document filed with the SEC under the Exchange Act, after the date of such Shelf
Registration Statement, preliminary Prospectus or Prospectus, as the case may
be, which is incorporated or deemed to be incorporated by reference therein.
2. Shelf Registration Statement.
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(a) The Company shall prepare and file with the SEC within 90 days
following the Closing Date a Shelf Registration Statement with respect to
resales of the Transfer Restricted Securities by the Holders from time to time
in accordance with the methods of distribution elected by such Holders and set
forth in such Shelf Registration Statement (subject to
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Section 3(v)) and thereafter shall use its reasonable best efforts to cause such
Shelf Registration Statement to be declared effective under the Act within 150
days after the Closing Date; provided that if any Securities are issued upon
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exercise of the over-allotment option granted to the Initial Purchasers in the
Purchase Agreement and the date on which such Securities are issued occurs after
the Closing Date, the Company will take such steps, prior to the effective date
of the Shelf Registration Statement, to ensure that such Securities and Common
Stock issuable upon conversion thereof are included in the Shelf Registration
Statement on the same terms as the Securities issued on the Closing Date. The
Company shall supplement or amend the Shelf Registration Statement if required
by the rules, regulations or instructions applicable to the registration form
used by the Company for the Shelf Registration Statement, or by the Act, the
Exchange Act or the SEC.
(b) (1) Not less than 30 calendar days prior to the effectiveness of
the Shelf Registration Statement, the Company shall mail the Notice and
Questionnaire to the Holders of Transfer Restricted Securities. The Company
shall take action to name each Holder that is a Notice Holder as of the date
that is 10 calendar days prior to the effectiveness of the Shelf Registration
Statement so that such Holder is named as a selling securityholder in the Shelf
Registration Statement at the time of its effectiveness and is permitted to
deliver the Prospectus forming a part thereof as of such time to purchasers of
such Holder's Transfer Restricted Securities in accordance with applicable law.
The Company shall be under no obligation to name any Holder that is not a Notice
Holder as a selling security holder in the Shelf Registration Statement.
(2) After the Shelf Registration Statement has become effective, the
Company shall, upon the request of any Holder of Transfer Restricted Securities,
promptly send a Notice and Questionnaire to such Holder. From and after the
date on which the Shelf Registration Statement has become effective, the Company
shall (i) as promptly as is practicable after the date a completed and signed
Notice and Questionnaire is delivered to the Company, and in any event within
five Business Days after such date, prepare and file with the SEC (x) a
supplement to the Prospectus or, if required by applicable law, a post-effective
amendment to the Shelf Registration Statement and (y) any other document
required by applicable law, so that the Holder delivering such Notice and
Questionnaire is named as a selling securityholder in the Shelf Registration
Statement and is permitted to deliver the Prospectus to purchasers of such
Holder's Transfer Restricted Securities in accordance with applicable law, and
(ii) if the Company shall file a post-effective amendment to the Shelf
Registration Statement, use its reasonable best efforts to cause such post-
effective amendment to become effective under the Act as promptly as is
practicable; provided, however, that if a Notice and Questionnaire is delivered
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to the Company during a Suspension Period, the Company shall not be obligated to
take the actions set forth in clauses (i) and (ii) until the termination of such
Suspension Period.
(c) The Company shall use its reasonable best efforts to keep the
Shelf Registration Statement continuously effective under the Act in order to
permit the Prospectus
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forming a part thereof to be usable, subject to Section 2(d), by all Notice
Holders until the earliest of (i) the second anniversary of the Closing Date or,
if later, the second anniversary of the last date on which any Securities are
issued upon exercise of the Initial Purchasers' over-allotment option, (ii) the
date on which all the Securities and Common Stock issued or issuable upon
conversion thereof may be sold by non-affiliates ("affiliates" for such purpose
having the meaning set forth in Rule 144) of the Company pursuant to paragraph
(k) of Rule 144 (or any successor provision) promulgated by the SEC under the
Act, (iii) the date as of which all the Securities and Common Stock issued or
issuable upon conversion thereof have been transferred pursuant to Rule 144
under the Securities Act (or any similar provision then in force) and (iv) such
date as of which all the Securities and the Common Stock issued or issuable upon
conversion thereof have been sold pursuant to the Shelf Registration Statement
(in any such case, such period being called the "Shelf Registration Period").
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The Company will, (x) subject to Section 2(d), prepare and file with the SEC
such amendments and post-effective amendments to the Shelf Registration
Statement as may be necessary to keep the Shelf Registration Statement
continuously effective for the Shelf Registration Period, (y) subject to Section
2(d), cause the related Prospectus to be supplemented by any required
supplement, and as so supplemented to be filed pursuant to Rule 424 (or any
similar provisions then in force) under the Act and (z) comply in all material
respects with the provisions of the Act with respect to the disposition of all
securities covered by the Shelf Registration Statement during the applicable
period in accordance with the intended methods of disposition by the sellers
thereof set forth in such Shelf Registration Statement as so amended or such
Prospectus as so supplemented.
(d) The Company may suspend the use of the Prospectus for a period not
to exceed 30 days in any three-month period or for three periods not to exceed
an aggregate of 60 days in any 12-month period (the "Suspension Period") for
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valid business reasons, to be determined by the Company in its sole reasonable
judgment (not including avoidance of the Company's obligations hereunder),
including, without limitation, the acquisition or divestiture of assets, public
filings with the SEC, pending corporate developments and similar events;
provided that the Company promptly thereafter complies with the requirements of
Section 3(j) hereof, if applicable; provided, further, that the existence of a
Suspension Period will not prevent the occurrence of a Registration Default or
otherwise limit the obligation of the Company to pay Liquidated Damages.
(e) If (i) the Shelf Registration Statement is not filed with the SEC
on or prior to 90 days after the Closing Date, (ii) the Shelf Registration
Statement has not been declared effective by the SEC within 150 days after the
Closing Date, or (iii) the Shelf Registration Statement is filed and declared
effective but shall thereafter cease to be effective (without being succeeded
immediately by a replacement shelf registration statement filed and declared
effective) or usable (including as a result of a Suspension Period) for the
offer and sale of Transfer Restricted Securities for a period of time (including
any Suspension Period) which shall exceed 60 days in the aggregate in any 12-
month period during the period beginning on the Closing Date and ending on the
second anniversary of the Closing Date or, if later, the second anniversary of
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the last date on which any Securities are issued upon exercise of the Initial
Purchasers' over allotment option (each such event referred to in clauses (i)
through (iii), a "Registration Default"), the Company will pay liquidated
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damages ("Liquidated Damages") to each Holder of Transfer Restricted Securities
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who has complied with such Holder's obligations under this Agreement. The
amount of Liquidated Damages payable during any period in which a Registration
Default has occurred and is continuing is the amount which is equal to one-
quarter of one percent (25 basis points) per annum per $1,000 principal amount
of Securities and $2.50 per annum per 30.969 shares of Common Stock (subject to
adjustment in the event of a stock split, stock recombination, stock dividend
and the like) constituting Transfer Restricted Securities for the first 90 days
during which a Registration Default has occurred and is continuing and one-half
of one percent (50 basis points) per annum per $1,000 principal amount of
Securities and $5.00 per annum per 30.969 shares of Common Stock (subject to
adjustment as set forth above) constituting Transfer Restricted Securities for
any additional days during which a Registration Default has occurred and is
continuing (in each case subject to further adjustment from time to time in the
event of a stock split, stock recombination, stock dividend and the like), it
being understood that all calculations pursuant to this and the preceding
sentence shall be carried out to five decimals. Following the cure of all
Registration Defaults, Liquidated Damages will cease to accrue with respect to
such Registration Default. Liquidated Damages shall cease to accrue in respect
of any Transfer Restricted Security when it shall cease to be such. All accrued
Liquidated Damages shall be paid by wire transfer of immediately available funds
or by federal funds check by the Company on each Damages Payment Date and
Liquidated Damages will be calculated on the basis of a 360-day year consisting
of twelve 30-day months. In the event that any Liquidated Damages are not paid
when due, then to the extent permitted by law, such overdue Liquidated Damages,
if any, shall bear interest until paid at the Default Rate, compounded semi-
annually. The parties hereto agree that the Liquidated Damages provided for in
this Section 2(e) constitute a reasonable estimate of the damages that may be
incurred by Holders by reason of a Registration Default.
(f) All of the Company's obligations (including, without limitation,
the obligation to pay Liquidated Damages) set forth in the preceding paragraph
which are outstanding or exist 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 security
shall have been satisfied in full.
(g) Immediately upon the occurrence or the termination of a
Registration Default, the Company shall give the Trustee, in the case of notice
with respect to the Securities, and the transfer and paying agent for the Common
Stock, in the case of notice with respect to Common Stock issued or issuable
upon conversion thereof, notice of such commencement or termination, of the
obligation to pay Liquidated Damages with regard to the Securities and Common
Stock and the amount thereof and of the event giving rise to such commencement
or termination (such notice to be contained in an Officers' Certificate (as such
term is defined in the Indenture)), and prior to receipt of such Officers'
Certificate the Trustee and such transfer and
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paying agent shall be entitled to assume that no such commencement or
termination has occurred, as the case may be.
(h) All Securities which are redeemed, purchased or otherwise
acquired by the Company or any of its subsidiaries or affiliates (as defined in
Rule 144 (or any successor provision) under the Act) prior to the Final Maturity
Date shall be delivered to the Trustee for cancellation and the Company may not
hold or resell such Securities or issue any new Securities to replace any such
Securities or any Securities that any Holder has converted pursuant to the
Indenture. All shares of Common Stock issued upon conversion of the Securities
which are repurchased or otherwise acquired by the Company or any of its
subsidiaries or affiliates (as defined in Rule 144 (or any successor provision)
under the Act) at any time while such shares are "restricted securities" within
the meaning of Rule 144 shall not be resold or otherwise transferred except
pursuant to a registration statement which has been declared effective under the
Act.
3. Registration Procedures. In connection with any Shelf
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Registration Statement, the following provisions shall apply:
(a) The Company shall (i) furnish to the Representative, prior to the
filing thereof with the SEC, a copy of any Shelf Registration Statement, and
each amendment thereof, and a copy of any Prospectus, and each amendment or
supplement thereto (excluding amendments caused by the filing of a report under
the Exchange Act), and shall use its reasonable best efforts to reflect in each
such document, when so filed with the SEC, such comments as the Representative
reasonably may promptly propose; and (ii) include information regarding the
Notice Holders and the methods of distribution they have elected for their
Transfer Restricted Securities provided to the Company in Notice and
Questionnaires as necessary to permit such distribution by the methods specified
therein.
(b) Subject to Section 2(d), the Company shall ensure that (i) any
Shelf Registration Statement and any amendment thereto and any Prospectus
forming a part thereof and any amendment or supplement thereto comply in all
material respects with the Act and the rules and regulations thereunder, (ii)
any Shelf Registration Statement and any amendment thereto does not, when it
becomes effective, 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 not misleading and (iii) any Prospectus forming a part of any
Shelf Registration Statement, and any amendment or supplement to such
Prospectus, does not include an untrue statement of a material fact or omit 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; provided
that the Company makes no representation with respect to information with
respect to any Underwriter or any Holder required to be included in any Shelf
Registration Statement or Prospectus pursuant to the Act or the rules and
regulations thereunder and which information is included therein in reliance
upon and in conformity with information furnished to the Company in writing by
such Underwriter or Holder.
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(c) The Company, as promptly as reasonably practicable, shall
advise the Representative and each Notice Holder and, if requested by you or any
such Holder, confirm such advice in writing:
(i) when a Shelf Registration Statement and any amendment thereto
has been filed with the SEC and when the Shelf Registration Statement or any
post-effective amendment thereto has become effective;
(ii) of any request by the SEC following effectiveness of the Shelf
Registration Statement for amendments or supplements to the Shelf Registration
Statement or the Prospectus or for additional information (other than any such
request relating to a review of the Company's Exchange Act filings);
(iii) of the determination by the Company that a post-effective
amendment to the Shelf Registration Statement would be appropriate;
(iv) of the commencement or termination of (but not the nature of or
details concerning) any Suspension Period;
(v) of the issuance by the SEC of any stop order suspending the
effectiveness of the Shelf Registration Statement or the initiation of any
proceedings for that purpose;
(vi) of the receipt by the Company of any notification with respect
to the suspension of the qualification of the Transfer Restricted Securities
included in any Shelf Registration Statement for sale in any jurisdiction or the
initiation or threat of any proceeding for such purpose;
(vii) of the happening of (but not the nature of or details
concerning) any event that requires the making of any changes in the Shelf
Registration Statement or the Prospectus so that, as of such date, the
statements therein are not misleading and the Shelf Registration Statement or
the Prospectus, as the case may be, does not include 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 the case of the Prospectus, in
light of the circumstances under which they were made) not misleading; and
(viii) of the Company's suspension of the use of the Prospectus as a
result of any of the events or circumstances described in paragraphs (ii)
through (vii) above, and of the termination of any such suspension.
(d) The Company shall use its reasonable best efforts to obtain the
withdrawal of any order suspending the effectiveness of any Shelf Registration
Statement or the lifting of any suspension of the qualification (or exemption
from qualification) of any of the Transfer Restricted Securities for offer or
sale in any jurisdiction at the earliest possible time.
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(e) The Company shall promptly furnish to each Notice Holder, without
charge, at least one copy of any Shelf Registration Statement and any post-
effective amendment thereto, including all exhibits (including those
incorporated by reference), financial statements and schedules.
(f) The Company shall, during the Shelf Registration Period, promptly
deliver to each Initial Purchaser, each Notice Holder and any sales or placement
agent or underwriters acting on their behalf, without charge, as many copies of
the Prospectus (including each preliminary Prospectus) included in any Shelf
Registration Statement (excluding documents incorporated by reference), and any
amendment or supplement thereto, as such person may reasonably request; and,
except as provided in Sections 2(d) and 3(s) hereof, the Company consents to the
use of the Prospectus or any amendment or supplement thereto by each of the
selling Holders in connection with the offering and sale of the Transfer
Restricted Securities covered by the Prospectus or any amendment or supplement
thereto.
(g) Prior to any offering of Transfer Restricted Securities pursuant
to any Shelf Registration Statement, the Company shall register or qualify or
cooperate with the Notice Holders and their respective counsel in connection
with the registration or qualification (or exemption from such registration or
qualification) of such Transfer Restricted Securities for offer and sale, under
the securities or blue sky laws of such jurisdictions within the United States
as any such Notice Holders reasonably request and shall maintain such
qualification in effect so long as required and do any and all other acts or
things necessary or advisable to enable the offer and sale in such jurisdictions
of the Transfer Restricted Securities covered by such Shelf Registration
Statement; provided, however, that the Company will not be required to (A)
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qualify generally to do business as a foreign corporation or as a dealer in
securities in any jurisdiction where it is not then so qualified or to (B) take
any action which would subject it to service of process or taxation in any such
jurisdiction where it is not then so subject.
(h) The Company shall cooperate with the Holders to facilitate the
timely preparation and delivery of certificates representing Transfer Restricted
Securities sold pursuant to any Shelf Registration Statement free of any
restrictive legends and in such denominations permitted by the Indenture and
registered in such names as Holders may request at least two Business Days prior
to settlement of sales of Transfer Restricted Securities pursuant to such Shelf
Registration Statement.
(i) Subject to the exceptions contained in (A) and (B) of Section 3(g)
hereof, the Company shall use its reasonable best efforts to cause the Transfer
Restricted Securities covered by the applicable Shelf Registration Statement to
be registered with or approved by such other federal, state and local
governmental agencies or authorities, and self-regulatory organizations in the
United States as may be necessary to enable the Holders to consummate the
disposition of such Transfer Restricted Securities as contemplated by the Shelf
Registration Statement; without limitation to the foregoing, the Company shall
make all filings and provide all such information as may be required by the
National Association of Securities Dealers, Inc.
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(the "NASD") in connection with the offering under the Shelf Registration
Statement of the Transfer Restricted Securities (including, without limitation,
such as may be required by NASD Rule 2710 or 2720), and shall cooperate with
each Holder in connection with any filings required to be made with the NASD by
such Holder in that regard.
(j) Upon the occurrence of any event described in Section 3(c)(vii)
hereof, the Company shall promptly prepare and file with the SEC a post-
effective amendment to any Shelf Registration Statement or an amendment or
supplement to the related Prospectus or any document incorporated therein by
reference or file a document which is incorporated or deemed to be incorporated
by reference in such Shelf Registration Statement or Prospectus, as the case may
be, so that, as thereafter delivered to purchasers of the Transfer Restricted
Securities included therein, the Shelf Registration Statement and the
Prospectus, in each case as then amended or supplemented, will not include an
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein (in
the case of the Prospectus in light of the circumstances under which they were
made) not misleading and, in the case of a post-effective amendment, use its
reasonable best efforts to cause it to become effective as promptly as
practicable; provided that the Company's obligations under this paragraph (j)
shall be suspended if the Company has suspended the use of the Prospectus in
accordance with Section 2(d) hereof and given notice of such suspension to
Notice Holders, it being understood that the Company's obligations under this
Section 3(j) shall be automatically reinstated at the end of such Suspension
Period.
(k) The Company shall use its reasonable best efforts to provide, on
or prior to the first Business Day following the effective date of any Shelf
Registration Statement hereunder (i) a CUSIP number for the Transfer Restricted
Securities registered under such Shelf Registration Statement and (ii) global
certificates for such Transfer Restricted Securities to the Trustee, in a form
eligible for deposit with DTC.
(l) The Company shall use its best efforts to comply with all
applicable rules and regulations of the SEC and shall make generally available
to its security holders as soon as practicable but in any event not later than
50 days after the end of a 12-month period (or 105 days, if such period is a
fiscal year) after (i) the effective date of the applicable Shelf Registration
Statement, (ii) the effective date of each post-effective amendment to any Shelf
Registration Statement, and (iii) the date of each filing by the Company with
the SEC of an Annual Report on Form 10-K that is incorporated by reference or
deemed to be incorporated by reference in the Shelf Registration Statement, an
earnings statement satisfying the provisions of Section 11(a) of the Act and
Rule 158 promulgated by the SEC thereunder.
(m) The Company shall use its reasonable best efforts to cause the
Indenture to be qualified under the TIA (as defined in the Indenture) in a
timely manner.
(n) The Company shall cause all Common Stock issued or issuable upon
conversion of the Securities to be listed on each securities exchange or
quotation system on
12
which the Common Stock is then listed no later than the date the applicable
Shelf Registration Statement is declared effective and, in connection therewith,
to make such filings as may be required under the Exchange Act and to have such
filings declared effective as and when required thereunder.
(o) The Company may require each Holder of Transfer Restricted
Securities to be sold pursuant to any Shelf Registration Statement to furnish to
the Company such information regarding the Holder and the distribution of such
Transfer Restricted Securities sought by the Notice and Questionnaire and such
additional information as may, from time to time, be required by the Act and the
rules and regulations promulgated thereunder, and the obligations of the Company
to any Holder hereunder shall be expressly conditioned on the compliance of such
Holder with such request.
(p) The Company shall, if reasonably requested, use its reasonable
best efforts to promptly incorporate in a Prospectus supplement or post-
effective amendment to a Shelf Registration Statement (i) such information as
the Majority Holders provide or, if Transfer Restricted Securities are being
sold in an Underwritten Offering, as the Managing Underwriters or the Majority
Underwriting Holders reasonably agree should be included therein and provide to
the Company in writing for inclusion in the Shelf Registration Statement or
Prospectus, and (ii) such information as a Holder may provide from time to time
to the Company in writing for inclusion in a Prospectus or any Shelf
Registration Statement concerning such Holder and the distribution of such
Holder's Transfer Restricted Securities and, in either case, shall make all
required filings of such Prospectus supplement or post-effective amendment
promptly after being notified in writing of the matters to be incorporated in
such Prospectus supplement or post-effective amendment, provided that the
Company shall not be required to take any action under this Section 3(p) that is
not, in the reasonable opinion of counsel for the Company, in compliance with
applicable law.
(q) The Company shall enter into such customary agreements (including
underwriting agreements) and take all other appropriate actions as may be
requested in order to expedite or facilitate the registration or the disposition
of the Transfer Restricted Securities, and in connection therewith, if an
underwriting agreement is entered into, cause the same to contain
indemnification and contribution provisions and procedures no less favorable
than those set forth in Section 5 (or such other reasonable and customary
provisions and procedures acceptable to the Majority Underwriting Holders and
the Managing Underwriters, if any, with respect to all parties to be indemnified
pursuant to Section 5). The plan of distribution in the Shelf Registration
Statement and the Prospectus included therein shall permit resales of Transfer
Restricted Securities to be made by selling securityholders through
underwriters, brokers and dealers, and shall also include such other information
as the Representative may reasonably request.
(r) The Company shall if reasonably requested in writing by Majority
Holders, by Majority Underwriting Holders or by the Managing Underwriter:
13
(i) make reasonably available for inspection during normal business
hours by any Underwriter participating in any disposition pursuant to such Shelf
Registration Statement, and any attorney, accountant or other agent retained by
any such Underwriter all relevant financial and other records, pertinent
corporate documents and properties of the Company and its subsidiaries as is
customary for due diligence examinations in connection with public offerings;
(ii) cause the Company's officers, directors, employees, accountants
and auditors to supply all relevant information reasonably requested by any such
Underwriter, attorney, accountant or agent in connection with any such Shelf
Registration Statement as is customary for similar due diligence examinations;
provided, however, that any information that is designated in writing by the
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Company, in good faith, as confidential at the time of delivery of such
information shall be kept confidential by the Holders or any such Underwriter,
attorney, accountant or agent, unless disclosure thereof is made in connection
with a court, administrative or regulatory proceeding or required by law, or
such information has become available to the public generally through the
Company or through a third party without an accompanying obligation of
confidentiality;
(iii) deliver a letter, addressed to the selling Holders and the
Underwriters, if any, in which the Company shall make such representations and
warranties in form, substance and scope as are customarily made by issuers to
Underwriters;
(iv) obtain opinions of counsel to the Company and updates thereof
(which counsel and opinions, in form, scope and substance, shall be reasonably
satisfactory to the Managing Underwriters, if any) addressed to each selling
Holder and the Underwriters, if any, covering such matters as are customarily
covered in opinions requested in public offerings;
(v) obtain "cold comfort" letters and updates thereof from the current
and former independent certified public accountants of the Company (and, if
necessary, any other independent certified public accountants of any subsidiary
of the Company or of any business acquired by the Company for which financial
statements and financial data are, or are required to be, included in the Shelf
Registration Statement), addressed to each selling Holder (provided such Holder
furnishes the accountants, prior to the date such "cold comfort" letter is
required to be delivered, with such representations as the accountants
customarily require in similar situations) and the Underwriters, if any, in
customary form and covering matters of the type customarily covered in "cold
comfort" letters in connection with primary underwritten offerings; and
(vi) deliver such documents and certificates as may be reasonably
requested by the Majority Holders or, in the case of an Underwritten Offering,
the Majority Underwriting Holders, and the Managing Underwriters, if any,
including those to evidence compliance with Section 3(j) and with any customary
conditions contained in the underwriting agreement or other agreement entered
into by the Company.
14
The foregoing actions set forth in clauses (iii), (iv), (v) and (vi)
of this Section 3(r) shall be performed at (A) the effectiveness of such Shelf
Registration Statement and each post-effective amendment thereto and (B) each
closing under any underwriting or similar agreement as and to the extent
required thereunder.
(s) Each Notice Holder agrees that, upon receipt of notice of the
happening of an event described in Sections 3(c)(ii) through and including
3(c)(vii), each Holder shall forthwith discontinue (and shall cause its agents
and representatives to discontinue) disposition of Transfer Restricted
Securities and will not resume disposition of Transfer Restricted Securities
until such Holder has received copies of an amended or supplemented Prospectus
contemplated by Section 3(j) hereof, or until such Holder is advised in writing
by the Company that the use of the Prospectus may be resumed or that the
relevant Suspension Period has been terminated, as the case may be, provided
that, the foregoing shall not prevent the sale, transfer or other disposition of
Transfer Restricted Securities by a Notice Holder in a transaction which is
exempt from, or not subject to, the registration requirements of the Act, so
long as such Notice Holder does not and is not required to deliver the
applicable Prospectus or Shelf Registration Statement in connection with such
sale, transfer or other disposition, as the case may be; and provided, further,
that the provisions of this Section 3(s) shall not prevent the occurrence of a
Registration Default or otherwise limit the obligation of the Company to pay
Liquidated Damages.
(t) The Company shall in connection with an Underwritten Offering use
its reasonable best efforts (i) if the Securities have been rated prior to the
initial sale of such Securities, to confirm that such ratings will apply to the
Securities covered by the Shelf Registration Statement; or (ii) if the
Securities were not previously rated, to cause the Securities covered by the
Shelf Registration Statement to be rated with at least one nationally recognized
statistical rating agency, if so requested by the Majority Holders or by any
Managing Underwriters.
(u) In the event that any Broker-Dealer shall underwrite any
Securities or participate as a member of an underwriting syndicate or selling
group or "assist in the distribution" (within the meaning of the NASD Rules)
thereof, whether as a Holder of such Transfer Restricted Securities or as an
underwriter, a placement or sales agent or a broker or dealer in respect
thereof, or otherwise, the Company shall assist such Broker-Dealer in complying
with the NASD Rules, including, without limitation, by:
(i) if the NASD Rules shall so require, engaging a "qualified
independent underwriter" (as defined in the NASD Rules) to participate in
the preparation of the Shelf Registration Statement, to exercise usual
standards of due diligence with respect thereto and, if any portion of the
offering contemplated by the Shelf Registration Statement is an
Underwritten Offering or is made through a placement or sales agent, to
recommend the price of such Transfer Restricted Securities;
15
(ii) indemnifying any such qualified independent underwriter to the
extent of the indemnification of Underwriters provided in Section 5 hereof;
and
(iii) providing such information to such Broker-Dealer as may be
required in order for such Broker-Dealer to comply with the requirements of
the NASD Rules.
(iv) Anything herein to the contrary notwithstanding, the Company
will not be required to pay the costs and expenses of, or to participate in
the marketing or "road show" presentations of, more than one Underwritten
Offering initiated at the request of the Holders of Securities or shares of
Common Stock issued or issuable upon conversion thereof, or to effect more
than one Underwritten Offering at the request of such Holders. The Company
will not be required to pay the costs and expenses of, or to participate in
the marketing or "road show" presentations of, an Underwritten Offering
unless Holders of at least the Minimum Amount (as defined below) of
Securities and/or Common Stock issued or issuable on conversion thereof
have requested that such Securities and/or shares of Common Stock be
included in such an Underwritten Offering. For purposes of this Agreement,
the "Minimum Amount" means 50% of the aggregate principal amount of
--------------
Securities originally issued under the Indenture; provided that, for
purposes of computing the Minimum Amount, Holders of Common Stock issued
upon conversion of Securities shall be deemed to be holders of the
aggregate principal amount of Securities which were converted into those
shares of Common Stock. Only Holders of Securities or shares of Common
Stock issued or issuable upon conversion thereof which are Transfer
Restricted Securities shall be entitled to include such Securities or
shares of Common Stock in an Underwritten Offering and only Transfer
Restricted Securities shall be included in the computation of the Minimum
Amount. The Underwritten Offering initiated by Holders as aforesaid shall
include both Securities and Common Stock if so requested by the Holders.
Upon receipt by the Company, from Holders of at least the Minimum Amount of
Securities and/or Common Stock issued or issuable upon conversion thereof,
of a request for an Underwritten Offering, the Company will, within 10 days
thereafter, mail notice to all Holders of Securities and shares of Common
Stock issued upon conversion thereof stating that: (i) the Company has
received a request from the Holders of the requisite amount of Securities
and/or Common Stock issued or issuable on conversion thereof to effect an
Underwritten Offering on behalf of such Holders; (ii) under the terms of
this Agreement, all Holders of Securities and shares of Common Stock issued
or issuable upon conversion thereof which are Transfer Restricted
Securities may include their Securities and shares of Common Stock in such
Underwritten Offering, subject to the terms and conditions set forth in
this Agreement and subject to the right of the Managing Underwriters to
reduce, in light of market conditions and other similar factors, the
aggregate principal amount of Securities and number of shares of Common
Stock included in such Underwritten Offering; (iii) all Holders electing to
include Securities or shares of Common Stock in such Underwritten Offering
must notify the
16
Company in writing of such election (the "Election"), and setting forth an
--------
address and facsimile number to which such written elections may be sent
and the deadline (which shall be 12:00 midnight on the 10/th/ calendar day
after such notice is mailed to Holders or, if not a Business Day, the next
succeeding Business Day (the "Deadline")) by which such elections must be
--------
received by the Company; and (iv) setting forth such other instructions as
shall be necessary to enable Holders to include their Securities and shares
of Common Stock in such Underwritten Offering. No Holder shall be entitled
to participate in an Underwritten Offering unless such Holder notifies the
Company of such Election by the Deadline. Notwithstanding anything to the
contrary contained herein, if the Managing Underwriters for an Underwritten
Offering to be effected pursuant to this Section 3(v) advise the Holders of
the Securities and shares of the Common Stock to be included in such
Underwritten Offering that, because of aggregate principal amount of
Securities and/or number of shares of Common Stock that such Holders have
requested be included in the Underwritten Offering, the success of the
offering would likely be materially adversely affected by the inclusion of
all of the Securities and shares of Common Stock requested to be included,
then the principal amount of Securities and the number of shares of Common
Stock to be offered for the accounts of Holders shall be reduced pro rata,
according to the aggregate principal amount of Securities and number of
shares of Common Stock, respectively, requested for inclusion by each such
Holder, to the extent necessary to reduce the size of the offering to the
size recommended by the Managing Underwriter. Notwithstanding anything to
the contrary contained herein, neither the Company nor any Person, other
than a Holder of Securities or shares of Common Stock issued or issuable
upon conversion thereof and only with respect to its Transfer Restricted
Securities, shall be entitled to include any securities in the Underwritten
Offering.
4. Registration Expenses. The Company shall bear all expenses
---------------------
incurred in connection with the performance of its obligations under Sections 2
and 3 hereof and shall reimburse the Holders for the reasonable fees and
disbursements of one firm or counsel designated by the Majority Holders to act
as counsel for the Holders in connection therewith. Notwithstanding the
provisions of this Section 4, each Holder shall bear the expense of any broker's
commission, agency fee or Underwriter's discount or commission.
5. Indemnification and Contribution.
--------------------------------
(a) The Company agrees to indemnify and hold harmless each Holder of
Transfer Restricted Securities covered by any Shelf Registration Statement
(including each of the Initial Purchasers), the directors, officers, employees
and agents of each such Holder and each person who controls any such Holder
within the meaning of either the Act or the Exchange Act against any and all
losses, claims, damages or liabilities, joint or several, to which they or any
of them may become subject under the Act, the Exchange Act or other Federal or
state law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue
17
statement of a material fact contained in the Shelf Registration Statement as
originally filed or in any amendment thereof, or in any preliminary Prospectus
or Prospectus, or in any amendment thereof or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, and agrees to reimburse each such indemnified party, as incurred,
for any legal or other expenses reasonably incurred by any of them in connection
with investigating or defending any such loss, claim, damage, liability or
action; provided, however, that the Company will not be liable in any such case
-------- -------
to the extent that any such loss, claim, damage or liability arises out of or is
based upon (A) any such untrue statement or alleged untrue statement or omission
or alleged omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any such Holder or any
Initial Purchaser specifically for inclusion therein, (B) use of a Shelf
Registration Statement or the related Prospectus during a period when use of
such Prospectus has been suspended pursuant to Section 2(d) or Section 3(s)
hereof; provided, further, in each case, that Holders received prior notice of
-------- -------
such suspension, or (C) if the Holder fails to deliver a Prospectus, as then
amended or supplemented, provided that the Company shall have delivered to such
Holder such Prospectus, as then amended or supplemented. This indemnity
agreement will be in addition to any liability which the Company may otherwise
have.
(b) Each Holder of Transfer Restricted Securities covered by a Shelf
Registration Statement (including the Initial Purchasers) severally and not
jointly agrees to indemnify and hold harmless (i) the Company, (ii) each of its
directors, (iii) each of its officers and (iv) each person who controls the
Company within the meaning of either the Act or the Exchange Act to the same
extent as the foregoing indemnity from the Company to each such Holder, but only
with reference to written information relating to such Holder furnished to the
Company by or on behalf of such Holder specifically for inclusion in the
documents referred to in the foregoing indemnity. This indemnity agreement shall
be in addition to any liability which any such Holder may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section
5 of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 5, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses. The indemnifying party
shall be entitled to appoint counsel of the indemnifying party's choice at the
indemnifying party's expense to represent the indemnified party in any action
for which indemnification is sought (in which case the indemnifying party shall
not thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be reasonably satisfactory to the
-------- -------
indemnified party. Notwithstanding the indemnifying party's election to appoint
counsel to represent the
18
indemnified party in an action, the indemnified party shall have the right to
employ separate counsel (including local counsel), and the indemnifying party
shall bear the reasonable fees, costs and expenses of such separate counsel if
(i) the use of counsel chosen by the indemnifying party to represent the
indemnified party would present such counsel with a conflict of interest; (ii)
the actual or potential defendants in, or targets of, any such action include
both the indemnified party and the indemnifying party and the indemnified party
shall have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to those
available to the indemnifying party and that representation of the indemnified
party by counsel chosen by the indemnifying party would be inappropriate due to
actual or potential differing interests among the parties represented by such
counsel; (iii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of the institution of such action; or (iv) the
indemnifying party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party. Neither an indemnifying party
nor an indemnified party will, without the prior written consent of the other
parties, settle or compromise or consent to the entry of any judgment with
respect to any pending or threatened claim, action, suit or proceeding in
respect of which indemnification or contribution may be sought hereunder
(whether or not such other parties are actual or potential parties to such claim
or action) unless such settlement, compromise or consent includes an
unconditional release of such other parties from all liability arising out of
such claim, action, suit or proceeding. An indemnifying party shall not be
liable for any losses, claims, damages or liabilities by reason of any
settlement of any action or proceeding effected without such indemnifying
party's prior written consent, which consent will not be unreasonably withheld.
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 5 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, then each applicable indemnifying party shall
have an obligation to contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in connection
with investigating or defending same) (collectively "Losses"), as incurred, to
------
which such indemnified party may be subject in such proportion as is appropriate
to reflect the relative benefits received by such indemnifying party, on the one
hand, and such indemnified party, on the other hand, from the Initial Placement
and any sales of Transfer Restricted Securities under the Shelf Registration
Statement; provided, however, that in no case shall the Initial Purchasers be
responsible, in the aggregate, for any amount in excess of the purchase discount
or commission applicable to the Securities, as set forth in the Purchase
Agreement. If the allocation provided by the immediately preceding sentence is
unavailable for any reason, the indemnifying party and the indemnified party
shall contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of such indemnifying party, on the
one hand, and such indemnified party, on the other hand, in connection with the
statements or omissions which resulted in such Losses as well as any other
relevant equitable considerations. Benefits received by the Company shall be
deemed to be equal to the sum of (x) the total net proceeds from the Initial
Placement (before deducting expenses) and (y) the total amount of Liquidated
19
Damages which the Company was not required to pay as a result of registering the
Transfer Restricted Securities covered by the Shelf Registration Statement which
resulted in such Losses. Benefits received by the Initial Purchasers shall be
deemed to be equal to the total purchase discounts and commissions received in
connection with the Initial Placement, and benefits received by any other
Holders shall be deemed to be equal to the value of receiving Transfer
Restricted Securities registered under the Act. Benefits received by any
Underwriter shall be deemed to be equal to the total underwriting discounts and
commissions, as set forth on the cover page of the Prospectus forming a part of
the Shelf Registration Statement which resulted in such Losses. Relative fault
shall be determined by reference to whether any untrue statement or omission or
alleged untrue statement or omission relates to information provided by the
indemnifying party, on the one hand, or by the indemnified party, on the other
hand, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission. The parties agree that it would not be just and equitable if
contribution were determined by pro rata allocation or any other method of
allocation which does not take account of the equitable considerations referred
to above. Notwithstanding the provisions of this Section 5(d), no person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 5, each person who
controls a Holder within the meaning of either the Act or the Exchange Act and
each director, officer, employee and agent of such Holder shall have the same
rights to contribution as such Holder, and each person who controls the Company
within the meaning of either the Act or the Exchange Act, each officer of the
Company who signed the Shelf Registration Statement and each director of the
Company shall have the same rights to contribution as the Company, and each
person who controls an Underwriter within the meaning of either the Act or the
Exchange Act and each officer and director of each Underwriter shall have the
same rights to contribution as such Underwriter, subject in each case to the
applicable terms and conditions of this paragraph (d).
(e) The provisions of this Section 5 will remain in full force and
effect, regardless of any investigation made by or on behalf of any Holder, any
Underwriter or the Company or any of the officers, directors or controlling
persons referred to in Section 5 hereof, and will survive the sale by a Holder
of Transfer Restricted Securities covered by a Shelf Registration Statement.
6. Miscellaneous.
-------------
(a) No Inconsistent Agreements. The Company has not, as of the date
--------------------------
hereof, entered into nor shall it, on or after the date hereof, enter into, any
agreement with respect to its securities that is inconsistent with the rights
granted to the Holders herein or otherwise conflicts with the provisions hereof.
(b) Amendments and Waivers. The provisions of this Agreement,
----------------------
including the provisions of this sentence, may not be amended, qualified,
modified or supplemented, and
20
waivers or consents to departures from the provisions hereof may not be given,
unless the Company has obtained the written consent of the Majority Holders;
provided that with respect to any matter that directly or indirectly affects the
--------
rights of the Initial Purchasers hereunder, the Company shall obtain the written
consent of each of the Initial Purchasers against which such amendment,
qualification, supplement, waiver or consent is to be effective. Notwithstanding
the foregoing (except the foregoing proviso), a waiver or consent to departure
from the provisions hereof with respect to a matter that relates exclusively to
the rights of Holders whose Transfer Restricted Securities are being sold
pursuant to a Shelf Registration Statement and that does not directly or
indirectly affect the rights of other Holders may be given by the Majority
Holders, determined on the basis of the Transfer Restricted Securities being
sold rather than registered under such Shelf Registration Statement.
(c) Notices. All notices and other communications provided for or
-------
permitted hereunder shall be made in writing by hand-delivery, first-class mail,
telecopier, or air courier guaranteeing overnight delivery:
(1) if to the Representative, initially at its address set forth in
the Purchase Agreement;
(2) if to any other Holder, at the most current address of such Holder
maintained by the Registrar under the Indenture or the registrar of the Common
Stock (provided that while the Securities or the Common Stock are in book-entry
form, notice to the Trustee shall serve as notice to the Holders), or, in the
case of the Notice Holder, the address set for in its Notice and Questionnaire;
and
(3) if to the Company, initially at its address set forth in the
Purchase Agreement.
All such notices and communications shall be deemed to have been duly
given when received, if delivered by hand or air courier, and when sent, if sent
by first-class mail or telecopier.
The Initial Purchasers or the Company by notice to the other may
designate additional or different addresses for subsequent notices or
communications.
(d) 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 the need for an express assignment or any consent by the
Company thereto, subsequent Holders. The Company hereby agrees to extend the
benefits of this Agreement to any Holder and Underwriter and any such Holder and
Underwriter may specifically enforce the provisions of this Agreement as if an
original party hereto. In the event that any other person shall succeed to the
Company under the Indenture, then such successor shall enter into an agreement,
in form and substance
21
reasonably satisfactory to the Representative, whereby such successor shall
assume all of the Company's obligations under this Agreement.
(e) 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.
(f) Headings. The headings in this Agreement are for convenience of
--------
reference only and shall not limit or otherwise affect the meaning hereof.
(g) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
-------------
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS
MADE AND TO BE PERFORMED IN SAID STATE.
(h) Severability. In the event that any one of more of the provisions
------------
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions hereof shall not be in any way impaired or affected
thereby, it being intended that all of the rights and privileges of the parties
shall be enforceable to the fullest extent permitted by law.
(i) Securities Held by the Company, etc. Whenever the consent or
------------------------------------
approval of Holders of a specified percentage of principal amount of Securities
or the Common Stock issuable upon conversion thereof is required hereunder,
Securities or the Common Stock issued upon conversion thereof held by the
Company or its Affiliates (other than subsequent Holders of Securities or the
Common Stock issued upon conversion thereof if such subsequent Holders are
deemed to be Affiliates solely by reason of their holdings of such Securities)
shall not be counted in determining whether such consent or approval was given
by the Holders of such required percentage.
(j) Termination. This Agreement and the obligations of the parties
hereunder shall terminate upon the end of the Shelf Registration Period, except
for any liabilities or obligations under Section 2(e), 4 or 5 to the extent
arising prior to the end of the Shelf Registration Period.
22
Please confirm that the foregoing correctly sets forth the agreement
between the Company and you.
Very truly yours,
SCHOOL SPECIALTY, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chief Executive Officer
The foregoing Agreement is hereby
confirmed and accepted as of the date first
above written.
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Managing Director
For itself and the other Initial
Purchasers named in Schedule I to the
Purchase Agreement.
23
EXHIBIT A
Form of Selling Securityholder Notice and Questionnaire
The undersigned beneficial holder (the "Selling Securityholder") of 6%
Convertible Subordinated Notes due 2008 (the "Notes") of School Specialty, Inc.
(the "Company") or shares of Company common stock issuable upon conversion of
the Notes (together with the Notes, the "Transfer Restricted Securities") of the
Company understands that the Company has filed or intends to file with the
Securities and Exchange Commission (the "Commission") a registration statement
on Form S-3 (the "Shelf Registration Statement") for the registration and resale
under Rule 415 of the Securities Act of 1933, as amended (the "Securities Act"),
of the Transfer Restricted Securities in accordance with the terms of the
Registration Agreement (the "Registration Agreement") dated as of July 30, 2001
between the Company and the Initial Purchasers named therein. The Registration
Agreement is available from the Company upon request at the address set forth
below. All capitalized terms not otherwise defined herein shall have the
meaning ascribed thereto in the Registration Agreement.
In order to sell or otherwise dispose of any Transfer Restricted Securities
pursuant to the Shelf Registration Statement, a beneficial owner of Transfer
Restricted Securities generally will be required to be named as a selling
securityholder in the related prospectus, deliver a prospectus to purchasers of
Transfer Restricted Securities and be bound by those provisions of the
Registration Agreement applicable to such beneficial owner (including certain
indemnification provisions as described below). Beneficial owners are
encouraged to complete and deliver this Notice and Questionnaire prior to the
effectiveness of the Shelf Registration Statement so that such beneficial owners
may be named as selling securityholders in the related prospectus at the time of
effectiveness.
Certain legal consequences arise from being named as selling
securityholders in the Shelf Registration Statement and the related prospectus.
Accordingly, holders and beneficial owners of Transfer Restricted Securities are
advised to consult their own securities law counsel regarding the consequences
of being named or not being named as a selling securityholder in the Shelf
Registration Statement and the related prospectus.
Notice
The undersigned beneficial owner (the "Selling Securityholder") of Transfer
Restricted Securities hereby gives notice to the Company of its intention to
sell or otherwise dispose of Transfer Restricted Securities beneficially owned
by it and listed below in Item 3 (unless otherwise specified under Item 3)
pursuant to the Shelf Registration Statement. The undersigned, by signing and
returning this Notice and Questionnaire, understands that it will be bound by
the terms and conditions of this Notice and Questionnaire and the Registration
Agreement.
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The undersigned hereby provides the following information to the Company
and represents and warrants that such information is accurate and complete:
Questionnaire
1. (a) Full legal name of Selling Securityholder:
_____________________________________________________________________
(b) Full legal name of registered holder (if not the same as (a) above)
through which Transfer Restricted Securities listed in (3) below are
held (if the Transfer Restricted Securities are held through a broker-
dealer or other third party and, as a result, you do not know the
legal name of the registered holder, please complete item (1)(c)
below):
_____________________________________________________________________
(c) Full legal name of broker-dealer or other third party through which
Transfer Restricted Securities listed in Item (3) below are held:
_____________________________________________________________________
(d) Full Legal Name of DTC Participant (If applicable and if not the same
as (b) or (c) above) through which Transfer Restricted Securities
listed in (3) below are held:
_____________________________________________________________________
2. Address for Notices to Selling Securityholder:
__________________________________________________________________________
__________________________________________________________________________
Telephone: _______________________________________________________________
Fax: _____________________________________________________________________
Contact Person: __________________________________________________________
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3. Beneficial Ownership of Transfer Restricted Securities:
(a) Type and principal amount (or number of shares) of Transfer Restricted
Securities beneficially owned:
_____________________________________________________________________
_____________________________________________________________________
(b) CUSIP No(s). of such Transfer Restricted Securities beneficially
owned:
_____________________________________________________________________
_____________________________________________________________________
Unless otherwise indicated in the space provided below, all Notes and
all shares of common stock listed in response to Item (3)(a) above,
and all shares of common stock issuable upon conversion of the Notes
listed in response to Item (3)(a)above, will be included in the Shelf
Registration Statement. If the undersigned does not wish all such
Notes or shares of common stock to be so included, please indicate
below the principal amount or the number of shares to be included:
_____________________________________________________________________
_____________________________________________________________________
4. Beneficial ownership of other securities of the Company owned by the
Selling Securityholder:
Except as set forth below in this Item (4), the undersigned is not the
beneficial or registered owner of any securities of the Company other than
the Transfer Restricted Securities listed above in Item (3).
(a) Type and Amount of other securities of the Company beneficially owned
by the Selling Securityholder:
_____________________________________________________________________
_____________________________________________________________________
(b) CUSIP No(s). of such other securities of the company beneficially
owned:
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_____________________________________________________________________
_____________________________________________________________________
5. Relationship with the Company:
Except as set forth below, neither the undersigned nor any of its
affiliates, directors or principal equity holder (5% or more) has held any
position or office or has had any other material relationship with the
Company (or its predecessors or affiliates) during the past three years.
State any exceptions here:
__________________________________________________________________________
__________________________________________________________________________
6. Plan of Distribution
Except as set forth below, the undersigned (including its donees or
pledgees) intends to distribute the Transfer Restricted Securities listed
above in Item (3) pursuant to the Shelf Registration Statement only as
follows (if at all): Such Transfer Restricted Securities may be sold from
time to time directly by the undersigned or alternatively through
underwriters or broker-dealers or agents. If the Transfer Restricted
Securities are sold through underwriters or broker-dealers, the Selling
Securityholder will be responsible for underwriting discounts or
commissions or agent's commissions. Such Transfer Restricted Securities
may be sold in one or more transactions at fixed prices, at prevailing
market prices at the time of sale, at varying prices determined at the time
of sale, or at negotiated prices. Such sales may be effected in
transactions (which may involve block transactions) (i) on any national
securities exchange or quotation service on which the Transfer Restricted
Securities may be listed or quoted at the time of sale, (ii) in the over-
the-counter market, (iii) in transactions otherwise than on such exchanges
or services or in the over-the-counter market, or (iv) through the writing
of options. In connection with sales of the Transfer Restricted Securities
or otherwise, the undersigned may enter into hedging transactions with
broker-dealers, which may in turn engage in short sales of the Transfer
Restricted Securities, short and deliver Transfer Restricted Securities to
close out such short positions, or loan or pledge Transfer Restricted
Securities to broker-dealers that in turn may sell such securities. The
Selling Securityholder may pledge or grant security interest in some or all
of the Transfer Restricted Securities owned by it and, if it defaults in
the performance of its secured obligations, the pledgees or secured parties
may offer and sale the Transfer Restricted Securities from time to time
pursuant to the Prospectus. The Selling Securityholder also may transfer
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and donate shares in other circumstances in which case the transferees,
donees, pledgees or other successors in interest will be the selling
securityholder for purposes of the Prospectus.
State any exceptions here:
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
Note: The Company's obligation to cooperate in an underwritten offering of
the Transfer Restricted Securities is limited under Section 3(v) of
the Registration Agreement.
The undersigned acknowledges that it understands its obligation to comply
with the provisions of the Securities Exchange Act of 1934, as amended, and the
rules thereunder relating to stock manipulation, particularly Regulation M
thereunder (or any successor rules or regulations) and the provisions of the
Securities Act of 1933 relating to prospectus delivery, in connection with any
offering of Transfer Restricted Securities pursuant to the Shelf Registration
Statement. The undersigned agrees that neither it nor any person acting on its
behalf will engage in any transaction in violation of such provisions.
The Selling Securityholder hereby acknowledges its obligations under the
Registration Agreement to indemnify and hold harmless certain persons set forth
therein.
Pursuant to the Registration Agreement, the Company has agreed under
certain circumstances indemnify the Selling Securityholders against certain
liabilities.
In accordance with the undersigned's obligation under the Registration
Agreement to provide such information as may be required by law for inclusion in
the Shelf Registration Statement, the undersigned agrees to promptly notify the
Company of any inaccuracies or changes in the information provided herein that
may occur subsequent to the date hereof at any time while the Shelf Registration
Statement remains effective. All notices hereunder and pursuant to the
Registration Agreement shall be made in writing at the address set forth below.
By signing below, the undersigned consents to the disclosure of the
information contained herein in its answers to items (1) through (6) above and
the inclusion of such information in the Shelf Registration Statement and the
related prospectus. The undersigned understands that such information will be
relied upon by the Company in connection with the preparation or amendment of
the Shelf Registration Statement and the related prospectus.
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IN WITNESS WHEREOF, the undersigned, by authority duly give, has caused
this Notice and Questionnaire to be executed and delivered either in person or
by its duly authorized agent.
Beneficial Owner
By: _______________________________
Name:
Title:
Dated:
PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND
QUESTIONNAIRE
TO THE COMPANY:
School Specialty, Inc.
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Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ & ▇▇▇▇, S.C.
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Attention: ▇▇▇▇▇ Drought
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