[Draft--5/8/98]
LA PETITE ACADEMY, INC.
LPA HOLDING CORP.
$145,000,000
10% Senior Notes due 2008
EXCHANGE AND REGISTRATION RIGHTS AGREEMENT
May 11, 1998
CHASE SECURITIES INC.
NATIONSBANC ▇▇▇▇▇▇▇▇▇▇
SECURITIES LLC
c/o Chase Securities Inc.
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
LPA Holding Corp., a Delaware corporation ("Parent"), and La Petite
Academy, Inc., a Delaware corporation and a wholly owned subsidiary of Parent
(the "Company" and, together with Parent, the"Issuers"), propose to issue and
sell $145,000,000 aggregate principal amount of their 10% Senior Notes due 2008
(the "Securities"). The Securities will be issued pursuant to an Indenture to be
dated as of May 11, 1998 (the "Indenture") among the Issuers, LPA Services, Inc.
(the "Guarantor") and PNC Bank, National Association, as trustee (the "Trustee")
and will be guaranteed on an unsecured senior basis by the Guarantor.
Capitalized terms used but not defined herein shall have the meanings given to
such terms in the Purchase Agreement.
As an inducement to the Initial Purchasers to enter into the Purchase
Agreement and in satisfaction of a condition to the obligations of the Initial
Purchasers thereunder, each of the Issuers and the Guarantor agree with the
Initial Purchasers, for the benefit of the holders (including the Initial
Purchasers and the Market-Maker (as defined below)) of the Securities, the
Exchange Securities (as defined herein) and the Private Exchange Securities (as
defined herein) (collectively, the "Holders"), as follows:
1. Registered Exchange Offer. The Issuers and the Guarantor shall (i)
prepare and, not later than 60 days following the date of original issuance of
the Securities (the "Issue Date"), file with the Commission a registration
statement (the "Exchange Offer Registration Statement") on an appropriate form
under the Securities Act with respect to a proposed offer to the Holders of the
Securities (the "Registered Exchange Offer") to issue and deliver to such
Holders, in exchange for the Securities, a like aggregate principal amount of
debt securities of the Issuers (the "Exchange Securities") that are identical in
all material respects to the Securities, except for the transfer restrictions
relating to the Securities, (ii) use their reasonable best efforts to cause the
Exchange Offer Registration Statement to become effective under the Securities
Act no later than 120 days after the Issue Date and the Registered Exchange
Offer to be consummated no later than 180 days after the Issue Date and (iii)
keep the Exchange Offer Registration Statement effective for not less than 30
days (or longer, if required by applicable law) after the date on which notice
of the Registered Exchange Offer is mailed to the Holders (such period being
called the "Exchange Offer Registration Period"). The Exchange Securities will
be issued under the Indenture or an indenture (the "Exchange Securities
Indenture") among the Issuers, the Guarantor and the Trustee or such other bank
or trust company that is reasonably satisfactory to the Initial Purchasers, as
trustee (the "Exchange Securities Trustee"), such
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indenture to be identical in all material respects to the Indenture, except for
the transfer restrictions relating to the Securities (as described above). All
references in this Agreement to "prospectus" and "Registration Statement" shall,
except where the context otherwise requires, include any prospectus (or
amendment or supplement thereto) and Registration Statement (or amendment
thereto), respectively, filed with the Commission pursuant to Section 6 of this
Agreement.
Upon the effectiveness of the Exchange Offer Registration Statement, the
Issuers shall promptly commence the Registered Exchange Offer, it being the
objective of such Registered Exchange Offer to enable each Holder electing to
exchange Securities for Exchange Securities (assuming that such Holder (a) is
not an affiliate of the Issuers or an Exchanging Dealer (as defined herein) not
complying with the requirements of the next sentence, (b) is not an Initial
Purchaser holding Securities that have, or that are reasonably likely to have,
the status of an unsold allotment in an initial distribution, (c) acquires the
Exchange Securities in the ordinary course of such Holder's business and (d) has
no arrangements or understandings with any person to participate in the
distribution of the Exchange Securities) and to trade such Exchange Securities
from and after their receipt without any limitations or restrictions under the
Securities Act and without material restrictions under the securities laws of
the several states of the United States. The Issuers, the Guarantor, the Initial
Purchasers and each Exchanging Dealer acknowledge that, pursuant to current
interpretations by the Commission's staff of Section 5 of the Securities Act,
each Holder that is a broker-dealer electing to exchange Securities, acquired
for its own account as a result of market-making activities or other trading
activities, for Exchange Securities (an "Exchanging Dealer"), is required to
deliver a prospectus containing substantially the information set forth in Annex
A hereto on the cover, in Annex B hereto in the "Exchange Offer Procedures"
section and the "Purpose of the Exchange Offer" section and in Annex C hereto in
the "Plan of Distribution" section of such prospectus in connection with a sale
of any such Exchange Securities received by such Exchanging Dealer pursuant to
the Registered Exchange Offer.
If, prior to the consummation of the Registered Exchange Offer, any Holder
holds any Securities acquired by it that have, or that are reasonably likely to
be determined to have, the status of an unsold allotment in an initial
distribution, or any Holder is not entitled to participate in the Registered
Exchange Offer, the Issuers shall, upon the request of any such Holder,
simultaneously with the delivery of the Exchange Securities in the Registered
Exchange Offer, issue and deliver to any such Holder, in exchange for the
Securities held by such Holder (the "Private Exchange"), a like aggregate
principal amount of debt securities of the Issuers (the "Private Exchange
Securities") that are identical in all material respects to the Exchange
Securities, except for the transfer restrictions relating to such Private
Exchange Securities. The Private Exchange Securities will be issued under the
same indenture as the Exchange Securities, and the Issuers shall use their
reasonable best efforts to cause the Private Exchange Securities to bear the
same CUSIP number as the Exchange Securities.
In connection with the Registered Exchange Offer, the Issuers shall:
(a) mail to each Holder a copy of the prospectus forming part of the
Exchange Offer Registration Statement, together with an appropriate letter
of transmittal and related documents;
(b) keep the Registered Exchange Offer open for not less than 30 days
(or longer, if required by applicable law) after the date on which notice
of the Registered Exchange Offer is mailed to the Holders;
(c) utilize the services of a depositary for the Registered Exchange
Offer with an address in the Borough of Manhattan, The City of New York;
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(d) permit Holders to withdraw tendered Securities at any time prior
to the close of business, New York City time, on the last business day on
which the Registered Exchange Offer shall remain open; and
(e) otherwise comply in all respects with all laws that are applicable
to the Registered Exchange Offer.
As soon as practicable after the close of the Registered Exchange Offer and
any Private Exchange, as the case may be, the Issuers shall:
(a) accept for exchange all Securities tendered and not validly
withdrawn pursuant to the Registered Exchange Offer and the Private
Exchange;
(b) deliver to the Trustee for cancelation all Securities so accepted
for exchange; and
(c) cause the Trustee or the Exchange Securities Trustee, as the case
may be, promptly to authenticate and deliver to each Holder, Exchange
Securities or Private Exchange Securities, as the case may be, equal in
principal amount to the Securities of such Holder so accepted for exchange.
The Issuers shall use their reasonable best efforts to keep the Exchange
Offer Registration Statement effective and to amend and supplement the
prospectus contained therein in order to permit such prospectus to be used by
all persons subject to the prospectus delivery requirements of the Securities
Act for such period of time as such persons must comply with such requirements
in order to resell the Exchange Securities; provided that (i) in the case where
such prospectus and any amendment or supplement thereto must be delivered by an
Exchanging Dealer, such period shall be the lesser of 180 days and the date on
which all Exchanging Dealers have sold all Exchange Securities held by them and
(ii) the Issuers shall make such prospectus and any amendment or supplement
thereto available to any broker-dealer for use in connection with any resale of
any Exchange Securities for a period of not less than 90 days after the
consummation of the Registered Exchange Offer.
The Indenture or the Exchange Securities Indenture, as the case may be,
shall provide that the Securities, the Exchange Securities and the Private
Exchange Securities shall vote and consent together on all matters as one class
and that none of the Securities, the Exchange Securities or the Private Exchange
Securities will have the right to vote or consent as a separate class on any
matter.
Interest on each Exchange Security and Private Exchange Security issued
pursuant to the Registered Exchange Offer and in the Private Exchange will
accrue from the last interest payment date on which interest was paid on the
Securities surrendered in exchange therefor or, if no interest has been paid on
the Securities, from the Issue Date.
Each Holder participating in the Registered Exchange Offer shall be
required to represent to the Issuers that at the time of the consummation of the
Registered Exchange Offer (i) any Exchange Securities received by such Holder
will be acquired in the ordinary course of business, (ii) such Holder will have
no arrangements or understandings with any person to participate in the
distribution of the Securities or the Exchange Securities within the meaning of
the Securities Act and (iii) such Holder is not an affiliate of the Issuers or,
if it is such an affiliate, such Holder will comply with the registration and
prospectus delivery requirements of the Securities Act to the extent applicable.
Notwithstanding any other provisions hereof, the Issuers and the Guarantor
will use their reasonable best efforts to ensure that (i) any Exchange Offer
Registration Statement and any amendment thereto and any prospectus forming part
thereof and any supplement thereto
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complies in all material respects with the Securities Act and the rules and
regulations of the Commission thereunder, (ii) any Exchange Offer 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 part of any Exchange Offer Registration
Statement, and any supplement to such prospectus, does not, as of the
consummation of the Registered Exchange Offer, include an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
2. Shelf Registration. If (i) because of any change in law or applicable
interpretations thereof by the Commission's staff the Issuers are not permitted
to effect the Registered Exchange Offer as contemplated by Section 1 hereof, or
(ii) any Securities validly tendered pursuant to the Registered Exchange Offer
are not exchanged for Exchange Securities within 180 days after the Issue Date,
or (iii) any Initial Purchaser so requests with respect to Securities or Private
Exchange Securities not eligible to be exchanged for Exchange Securities in the
Registered Exchange Offer and held by it following the consummation of the
Registered Exchange Offer, or (iv) any applicable law or interpretations do not
permit any Holder to participate in the Registered Exchange Offer, or (v) any
Holder that participates in the Registered Exchange Offer does not receive
freely transferable Exchange Securities in exchange for tendered Securities, or
(vi) the Issuers so elect, then the following provisions shall apply:
(a) The Issuers and the Guarantor shall use their reasonable best
efforts to file as promptly as practicable (but in no event more than 30
days after so required or requested pursuant to this Section 2) with the
Commission, and thereafter shall use their reasonable best efforts to cause
to be declared effective, a shelf registration statement on an appropriate
form under the Securities Act relating to the offer and sale of the
Transfer Restricted Securities (as defined below) by the Holders thereof
from time to time in accordance with the methods of distribution set forth
in such registration statement (hereafter, a "Shelf Registration Statement"
and, together with any Exchange Offer Registration Statement, a
"Registration Statement").
(b) The Issuers and the Guarantor shall use their reasonable best
efforts to keep the Shelf Registration Statement continuously effective in
order to permit the prospectus forming part thereof to be used by Holders
of Transfer Restricted Securities for a period ending on the earlier of (i)
two years from the Issue Date or such shorter period that will terminate
when all the Transfer Restricted Securities covered by the Shelf
Registration Statement have been sold pursuant thereto and (ii) the date on
which the Securities become eligible for resale without volume restrictions
pursuant to Rule 144 under the Securities Act (in any such case, such
period being called the "Shelf Registration Period"). The Issuers and the
Guarantor shall be deemed not to have used their reasonable best efforts to
keep the Shelf Registration Statement effective during the requisite period
if any of them voluntarily take any action that would result in Holders of
Transfer Restricted Securities covered thereby not being able to offer and
sell such Transfer Restricted Securities during that period, unless (i)
such action is required by applicable law or (ii) such action is taken by
the Issuers in good faith and for valid business reasons (not including
avoidance of their obligations hereunder), provided that the Issuers within
120 days thereafter comply with the requirements of Section 4(j) hereof.
Any such period during which the Issuers fail to keep the registration
statement effective and usable for offers and sales of Securities, Private
Exchange Securities and Exchange Securities is referred to as a "Suspension
Period." A Suspension Period shall commence on and include the date the
Issuers give notice that the Shelf Registration Statement is no longer
effective or the prospectus included therein is no longer usable for offers
and sales of Securities, Private Exchange Securities and Exchange
Securities and shall end on the date when each Holder of Securities,
Private Exchange Securities and Exchange Securities covered by such
registration statement either receives the copies of
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the supplemented or amended prospectus contemplated by Section 4(j) hereof
or is advised in writing by the Issuers that use of the prospectus may be
resumed. If one or more Suspension Periods occur, the two-year time period
referenced above shall be extended by the number of days included in each
such Suspension Period.
(c) Notwithstanding any other provisions hereof, the Issuer and the
Guarantor will use their reasonable best efforts to ensure that (i) any
Shelf Registration Statement and any amendment thereto and any prospectus
forming part thereof and any supplement thereto complies in all material
respects with the Securities Act and the rules and regulations of the
Commission thereunder, (ii) any Shelf Registration Statement and any
amendment thereto (in either case, other than with respect to information
included therein in reliance upon or in conformity with written information
furnished to the Issuers by or on behalf of any Holder specifically for use
therein (the "Holders' Information")) does not contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading and
(iii) any prospectus forming part of any Shelf Registration Statement, and
any supplement to such prospectus (in either case, other than with respect
to Holders' Information), 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 the light of the circumstances under which they
were made, not misleading.
3. Liquidated Damages. (a) The parties hereto agree that the Holders of
Transfer Restricted Securities will suffer damages if the Issuers and the
Guarantor fail to fulfill their obligations under Section 1 or Section 2, as
applicable, and that it would not be feasible to ascertain the extent of such
damages. Accordingly, if (i) the applicable Registration Statement is not filed
with the Commission on or prior to 60 days after the Issue Date, (ii) the
Exchange Offer Registration Statement or the Shelf Registration Statement, as
the case may be, is not declared effective within 120 days after the Issue Date
(or in the case of a Shelf Registration Statement required to be filed in
response to a change in law or the applicable interpretations of Commission's
staff, if later, within 45 days after publication of the change in law or
interpretation), (iii) the Registered Exchange Offer is not consummated on or
prior to 180 days after the Issue Date, or (iv) the Shelf Registration Statement
is filed and declared effective within 120 days after the Issue Date (or in the
case of a Shelf Registration Statement required to be filed in response to a
change in law or the applicable interpretations of Commission's staff, if later,
within 45 days after publication of the change in law or interpretation) but
shall thereafter cease to be effective (at any time that the Issuers are
obligated to maintain the effectiveness thereof) without being succeeded within
30 days by an additional Registration Statement filed and declared effective
(each such event referred to in clauses (i) through (iv), a "Registration
Default"), the Issuers and the Guarantor will be jointly and severally obligated
to pay liquidated damages to each Holder of Transfer Restricted Securities,
during the period of one or more such Registration Defaults, in an amount equal
to $ 0.192 per week per $1,000 principal amount of Transfer Restricted
Securities held by such Holder until (i) the applicable Registration Statement
is filed, (ii) the Exchange Offer Registration Statement is declared effective
and the Registered Exchange Offer is consummated, (iii) the Shelf Registration
Statement is declared effective or (iv) the Shelf Registration Statement again
becomes effective, as the case may be. Following the cure of all Registration
Defaults, the accrual of liquidated damages will cease. As used herein, the term
"Transfer Restricted Securities" means (i) each Security until the date on which
such Security has been exchanged for a freely transferable Exchange Security in
the Registered Exchange Offer, (ii) each Security or Private Exchange Security
until the date on which it has been effectively registered under the Securities
Act and disposed of in accordance with the Shelf Registration Statement or (iii)
each Security or Private Exchange Security until the date on which it is
distributed to the public pursuant to Rule 144 under the Securities Act or is
saleable pursuant to Rule 144(k) under the Securities Act. Notwithstanding
anything to the contrary in this Section 3(a), the Issuers shall not be required
to pay liquidated damages to a Holder of Transfer Restricted Securities if such
Holder failed to comply with its obligations to make the
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representations set forth in the second to last paragraph of Section 1 or failed
to provide the information required to be provided by it, if any, pursuant to
Section 4(n).
(b) The Issuers shall notify the Trustee and the Paying Agent under the
Indenture within two business days after the happening of each and every
Registration Default. The Issuers and the Guarantor shall pay the liquidated
damages due on the Transfer Restricted Securities by depositing with the Paying
Agent (which may not be the Company for these purposes), in trust, for the
benefit of the Holders thereof, prior to 10:00 a.m., New York City time, on the
next interest payment date specified by the Indenture and the Securities, sums
sufficient to pay the liquidated damages then due. The liquidated damages due
shall be payable on each interest payment date specified by the Indenture and
the Securities to the record holder entitled to receive the interest payment to
be made on such date. Each obligation to pay liquidated damages shall be deemed
to accrue from and including the date of the applicable Registration Default.
(c) The parties hereto agree that the liquidated damages provided for in
this Section 3 constitute a reasonable estimate of and are intended to
constitute the sole damages that will be suffered by Holders of Transfer
Restricted Securities by reason of the failure of (i) the Shelf Registration
Statement or the Exchange Offer Registration Statement to be filed, (ii) the
Shelf Registration Statement to remain effective or (iii) the Exchange Offer
Registration Statement to be declared effective and the Registered Exchange
Offer to be consummated, in each case to the extent required by this Agreement.
4. Registration Procedures. In connection with any Registration Statement,
the following provisions shall apply:
(a) The Issuers shall (i) furnish to each Initial Purchaser, prior to
the filing thereof with the Commission, a copy of the Registration
Statement and each amendment thereof and each supplement, if any, to the
prospectus included therein and shall use its reasonable best efforts to
reflect in each such document, when so filed with the Commission, such
comments as any Initial Purchaser may reasonably propose; (ii) include the
information set forth in Annex A hereto on the cover, in Annex B hereto in
the "Exchange Offer Procedures" section and the "Purpose of the Exchange
Offer" section and in Annex C hereto in the "Plan of Distribution" section
of the prospectus forming a part of the Exchange Offer Registration
Statement, and include the information set forth in Annex D hereto in the
Letter of Transmittal delivered pursuant to the Registered Exchange Offer;
and (iii) if requested by any Initial Purchaser, include the information
required by Items 507 or 508 of Regulation S-K, as applicable, in the
prospectus forming a part of the Exchange Offer Registration Statement.
(b) The Issuers shall advise each Initial Purchaser, and in case of a
Shelf Registration Statement, the Holders (if applicable), and, if
requested by any such person, confirm such advice in writing (which advice
pursuant to clauses (ii)-(v) hereof shall be accompanied by an instruction
to suspend the use of the prospectus until the requisite changes have been
made):
(i) when any Registration Statement and any amendment thereto has
been filed with the Commission and when such Registration Statement or
any post-effective amendment thereto has become effective;
(ii) of any request by the Commission for amendments or
supplements to any Registration Statement or the prospectus included
therein or for additional information;
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(iii) of the issuance by the Commission of any stop order
suspending the effectiveness of any Registration Statement or the
initiation of any proceedings for that purpose;
(iv) of the receipt by the Issuers of any notification with
respect to the suspension of the qualification of the Securities, the
Exchange Securities or the Private Exchange Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for
such purpose; and
(v) of the happening of any event that requires the making of any
changes in any Registration Statement or the prospectus included
therein in order that the statements therein are not misleading and do
not omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading.
(c) The Issuers and the Guarantor will make every reasonable effort to
obtain the withdrawal at the earliest possible time of any order suspending
the effectiveness of any Registration Statement.
(d) The Issuers will furnish to each Holder of Transfer Restricted
Securities included within the coverage of any Shelf Registration
Statement, without charge, at least one conformed copy of such Shelf
Registration Statement and any post-effective amendment thereto, including
financial statements and schedules and, if any such Holder so requests in
writing, all exhibits thereto (including those, if any, incorporated by
reference).
(e) The Issuers will, during the Shelf Registration Period, promptly
deliver to each Holder of Transfer Restricted Securities included within
the coverage of any Shelf Registration Statement, without charge, as many
copies of the prospectus (including each preliminary prospectus) included
in such Shelf Registration Statement and any amendment or supplement
thereto as such Holder may reasonably request; and the Issuers consent to
the use of such prospectus or any amendment or supplement thereto by each
of the selling Holders of Transfer Restricted Securities in connection with
the offer and sale of the Transfer Restricted Securities covered by such
prospectus or any amendment or supplement thereto.
(f) The Issuers will furnish to each Initial Purchaser and each
Exchanging Dealer, and to any other Holder who so requests in writing,
without charge, at least one conformed copy of the Exchange Offer
Registration Statement and any post-effective amendment thereto, including
financial statements and schedules and, if any Initial Purchaser or
Exchanging Dealer or any such Holder so requests in writing, all exhibits
thereto (including those, if any, incorporated by reference).
(g) The Issuers will, during the Exchange Offer Registration Period or
the Shelf Registration Period, as applicable, promptly deliver to each
Initial Purchaser, each Exchanging Dealer and such other persons that are
required to deliver a prospectus following the Registered Exchange Offer,
without charge, as many copies of the final prospectus included in the
Exchange Offer Registration Statement or the Shelf Registration Statement
and any amendment or supplement thereto as such Initial Purchaser,
Exchanging Dealer or other persons may reasonably request; and the Issuers
and the Guarantor consent to the use of such prospectus or any amendment or
supplement thereto by any such Initial Purchaser, Exchanging Dealer or
other persons, as applicable, as aforesaid.
(h) Prior to the effective date of any Registration Statement, the
Issuers and the Guarantor will use their reasonable best efforts to
register or qualify, or cooperate with
8
the Holders of Securities, Exchange Securities or Private Exchange
Securities included therein and their respective counsel in connection with
the registration or qualification of, such Securities, Exchange Securities
or Private Exchange Securities for offer and sale under the securities or
blue sky laws of such jurisdictions as any such Holder reasonably requests
in writing and do any and all other acts or things necessary or advisable
to enable the offer and sale in such jurisdictions of the Securities,
Exchange Securities or Private Exchange Securities covered by such
Registration Statement; provided that the Issuers and the Guarantor will
not be required to qualify generally to do business in any jurisdiction
where they are not then so qualified or to take any action which would
subject them to general service of process or to taxation in any such
jurisdiction where they are not then so subject.
(i) The Issuers and the Guarantor will cooperate with the Holders of
Securities, Exchange Securities or Private Exchange Securities to
facilitate the timely preparation and delivery of certificates representing
Securities, Exchange Securities or Private Exchange Securities to be sold
pursuant to any Registration Statement free of any restrictive legends and
in such denominations and registered in such names as the Holders thereof
may request in writing prior to sales of Securities, Exchange Securities or
Private Exchange Securities pursuant to such Registration Statement.
(j) If (i) any event contemplated by Section 4(b)(ii) through (v)
occurs during the period for which the Issuers and the Guarantor are
required to maintain an effective Registration Statement or (ii) any
Suspension Period remains in effect for more than 120 days after the
occurrence thereof, the Issuers and the Guarantor will promptly prepare and
file with the Commission a post-effective amendment to the Registration
Statement or a supplement to the related prospectus or file any other
required document so that, as thereafter delivered to purchasers of the
Securities, Exchange Securities or Private Exchange Securities from a
Holder, the prospectus will 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 the light of the circumstances under which they were
made, not misleading.
(k) Not later than the effective date of the applicable Registration
Statement, the Issuers will provide a CUSIP number for the Securities, the
Exchange Securities and the Private Exchange Securities, as the case may
be, and provide the applicable trustee with printed certificates for the
Securities, the Exchange Securities or the Private Exchange Securities, as
the case may be, in a form eligible for deposit with The Depository Trust
Company.
(l) The Issuers and the Guarantor will comply with all applicable
rules and regulations of the Commission and the Issuers will make generally
available to its security holders as soon as practicable after the
effective date of the applicable Registration Statement an earning
statement satisfying the provisions of Section 11(a) of the Securities Act;
provided that in no event shall such earning statement be delivered later
than 45 days after the end of a 12-month period (or 90 days, if such period
is a fiscal year) beginning with the first month of the Issuers' first
fiscal quarter commencing after the effective date of the applicable
Registration Statement, which statement shall cover such 12-month period.
(m) The Issuers and the Guarantor will cause the Indenture or the
Exchange Securities Indenture, as the case may be, to be qualified under
the Trust Indenture Act as required by applicable law in a timely manner.
(n) The Issuers may require each Holder of Transfer Restricted
Securities to be registered pursuant to any Shelf Registration Statement to
furnish to the Issuers such information concerning the Holder and the
distribution of such Transfer Restricted
9
Securities as the Issuers may from time to time reasonably require for
inclusion in such Shelf Registration Statement, and the Issuers may exclude
from such registration the Transfer Restricted Securities of any Holder
that fails to furnish such information within a reasonable time after
receiving such request.
(o) In the case of a Shelf Registration Statement, each Holder of
Transfer Restricted Securities to be registered pursuant thereto agrees by
acquisition of such Transfer Restricted Securities that, upon receipt of
any notice from the Issuers pursuant to Section 4(b)(ii) through (v), such
Holder will discontinue disposition of such Transfer Restricted Securities
until such Holder's receipt of copies of the supplemental or amended
prospectus contemplated by Section 4(j) or until advised in writing (the
"Advice") by the Issuers that the use of the applicable prospectus may be
resumed. If the Issuers shall give any notice under Section 4(b)(ii)
through (v) during the period that the Issuers are required to maintain an
effective Registration Statement (the "Effectiveness Period"), such
Effectiveness Period shall be extended by the number of days during such
period from and including the date of the giving of such notice to and
including the date when each seller of Transfer Restricted Securities
covered by such Registration Statement shall have received (x) the copies
of the supplemental or amended prospectus contemplated by Section 4(j) (if
an amended or supplemental prospectus is required) or (y) the Advice (if no
amended or supplemental prospectus is required).
(p) In the case of a Shelf Registration Statement, the Issuers and the
Guarantor shall enter into such customary agreements (including, if
requested, an underwriting agreement in customary form) and take all such
other action, if any, as Holders of a majority in aggregate principal
amount of the Securities, Exchange Securities and Private Exchange
Securities being sold or the managing underwriters (if any) shall
reasonably request in order to facilitate any disposition of Securities,
Exchange Securities or Private Exchange Securities pursuant to such Shelf
Registration Statement.
(q) In the case of a Shelf Registration Statement, the Issuers shall
(i) make reasonably available for inspection by a representative of, and
Special Counsel (as defined below) acting for, Holders of a majority in
aggregate principal amount of the Securities, Exchange Securities and
Private Exchange Securities being sold and any underwriter participating in
any disposition of Securities, Exchange Securities or Private Exchange
Securities pursuant to such Shelf Registration Statement, all relevant
financial and other records, pertinent corporate documents and properties
of the Company and its subsidiaries and (ii) use its reasonable best
efforts to have its officers, directors, employees, accountants and counsel
supply all relevant information reasonably requested by such
representative, Special Counsel or any such underwriter (an "Inspector") in
connection with such Shelf Registration Statement.
(r) In the case of a Shelf Registration Statement, the Issuers shall,
if requested by Holders of a majority in aggregate principal amount of the
Securities, Exchange Securities and Private Exchange Securities being sold,
their Special Counsel or the managing underwriters (if any) in connection
with such Shelf Registration Statement, use their reasonable best efforts
to cause (i) their counsel to deliver an opinion relating to the Shelf
Registration Statement and the Securities, Exchange Securities or Private
Exchange Securities, as applicable, in customary form, (ii) their officers
to execute and deliver all customary documents and certificates requested
by Holders of a majority in aggregate principal amount of the Securities,
Exchange Securities and Private Exchange Securities being sold, their
Special Counsel or the managing underwriters (if any) and (iii) their
independent public accountants to provide a comfort letter or letters in
customary form, subject to receipt of appropriate documentation as
contemplated, and only if permitted, by Statement of Auditing Standards No.
72.
10
5. Registration Expenses. The Issuers and the Guarantor will jointly and
severally bear all expenses incurred in connection with the performance of its
obligations under Sections 1, 2, 3 and 4 and the Issuers will reimburse the
Initial Purchasers and the Holders for the reasonable fees and disbursements of
one firm of attorneys (in addition to any local counsel) chosen by the Holders
of a majority in aggregate principal amount of the Securities, the Exchange
Securities and the Private Exchange Securities to be sold pursuant to each
Registration Statement (the "Special Counsel") acting for the Initial Purchasers
or Holders in connection therewith.
6. Market Making. (a) The Issuers will, for the sole benefit of Chase
Securities Inc. (the "Market-Maker"), and for so long as any of the Securities,
Exchange Securities or Private Exchange Securities are outstanding and the
Market-Maker or any of its affiliates owns any equity securities of Parent or
the Company and proposes to make a market in the Securities, Exchange Securities
or Private Exchange Securities as part of its business in the ordinary course:
(i) (A) On the date that the Exchange Offer Registration Statements is
filed with the Commission, the Issuers shall file a Registration Statement
(which may be the Exchange Offer Registration Statement or the Shelf
Registration Statement if permitted by the rules and regulations of the
Commission) and shall use its best efforts to cause such Registration
Statement to be declared effective by the Commission on or prior to the
consummation of the Exchange Offer; (B) periodically amend such
Registration Statement so that the information contained therein complies
with the requirements of Section 10(a) under the Securities Act; (C) within
45 days following the end of each of the Issuers' fiscal quarters file a
supplement to the prospectus contained in the Registration Statement that
sets forth the financial results of the Issuers for such quarter; (D) amend
the Registration Statement or supplement the related prospectus when
necessary to reflect any material changes in the information provided
therein; and (E) amend the Registration Statement when required to do so in
order to comply with Section 10(a)(3) of the Securities Act; provided,
however, that (1) prior to filing any post-effective amendment to the
Registration Statement or any supplement to the related prospectus, the
Issuers will furnish to the Market-Maker copies of all such documents
proposed to be filed, which documents will be subject to the review of the
Market-Maker and its counsel, (2) the Issuers will not file any
post-effective amendment to the Registration Statement or any supplement to
the related prospectus to which the Market-Maker and its counsel shall
reasonably object unless the Issuers are advised by counsel that such
post-effective amendment or supplement is required to be filed and (3) the
Issuers will provide the Market-Maker and its counsel with copies of each
amendment or supplement filed.
(ii) If at any time the Issuers become no longer eligible to use Form
S-3 under the Securities Act with respect to sales of the Securities,
Exchange Securities or Private Exchange Securities, file a post-effective
amendment to the Registration Statement to convert it to a Form S-1
registration statement as soon as practicable.
(iii) Notify the Market-Maker, and (if requested by the Market-Maker)
confirm such advice in writing, (A) when any post-effective amendment to
the Registration Statement or any amendment or supplement to the related
prospectus has been filed, and, with respect to any post-effective
amendment, when the same has become effective; (B) of any request by the
Commission for any post-effective amendment to the Registration Statement,
any supplement or amendment to the related prospectus or for additional
information; (C) the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose; (D) of the receipt by the
Issuers of any notification with respect to the suspension of the
qualification of the Securities for sale in any jurisdiction or the
initiation or threatening of any proceedings for such purpose; (E) of the
happening of any event that makes any statement made in the Registration
Statement, the related
11
prospectus or any amendment or supplement thereto untrue or that requires
the making of any changes in the Registration Statement, such prospectus or
any amendment or supplement thereto, in order to make the statements
therein not misleading; and (F) of any advice from a nationally recognized
statistical rating organization that such organization has placed Parent or
the Company under surveillance or review with negative implications or has
determined to downgrade the rating of the Securities, Exchange Securities
or Private Exchange Securities or any other debt obligation of Parent or
the Company whether or not such downgrade shall have been publicly
announced.
(iv) Furnish to the Market-Maker, without charge, (i) at least one
conformed copy of any post-effective amendment to the Registration
Statement; and (ii) as many copies of the related prospectus and any
amendment or supplement thereto as the Market-Maker may reasonably request.
(v) Consent to the use of the prospectus contained in the Registration
Statement or any amendment or supplement thereto by the Market-Maker in
connection with the offering and sale of the Securities.
(vi) For so long as the Securities, Exchange Securities or Private
Exchange Securities shall be outstanding, furnish to the Market-Maker (A)
as soon as practicable after the end of each of the Issuers' fiscal years,
the number of copies reasonably requested by the Market-Maker of the
Issuers' annual report to stockholders for such year, (B) as soon as
available, the number of copies reasonably requested by the Market-Maker of
each report (including, without limitation, Reports on Forms 10-K, 10-Q,
and 8-K) or definitive proxy statements of the Issuers filed under the
Exchange Act or mailed to stockholders and (C) all public reports and all
reports and financial statements furnished by the Issuers to the Nasdaq
National Market System or any U.S. national securities exchange or
quotation service upon which the Securities or Exchange Securities may be
listed pursuant to requirements of or agreements with such exchange or
quotation service or to the Commission pursuant to the Exchange Act or any
rule or regulation of the Commission thereunder.
(vii)In the event of the issuance of any stop order suspending the
effectiveness of the Registration Statement or of any order suspending the
qualification of the Securities, Exchange Securities or Private Exchange
Securities for sale in any jurisdiction, to use promptly its best efforts
to obtain its withdrawal.
(b) The Issuers represent that any post-effective amendments to the
Registration Statement, any amendments or supplements to the related prospectus
and any documents filed by them under the Exchange Act will, when they become
effective or are filed with the Commission, as the case may be, conform in all
respects to the requirements of the Securities Act and the Exchange Act and the
rules and regulations of the Commission thereunder and will not, as of the
effective date of such post-effective amendments and as of the filing date of
amendments or supplements to such prospectus or filings under the Exchange Act,
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; provided that no representation or warranty is made as to
information contained in or omitted from the Registration Statement or the
related prospectus in reliance upon and in conformity with written information
furnished to the Issuers by the Market-Maker specifically for inclusion therein,
which information the parties hereto agree will be limited to the statements
concerning the Market-Making activities of the Market-Maker to be set forth on
the cover page and in the "Plan of Distribution" section of the prospectus.
(c) Each time that the Registration Statement or the related prospectus
shall be amended or such prospectus shall be supplemented, each Issuer shall (if
requested by the
12
Market-Maker), concurrently which such amendment or supplement, furnish the
Market-Maker and its counsel with a certificate of its Chairman of the Board or
its President and its chief financial officer to the effect that:
(i) The Registration Statement has been declared effective and such
amendment has become effective under the Securities Act as of the date and
time specified in such certificate, if applicable, such amendment to the
prospectus (or such supplement to the prospectus, as the case may be) was
filed with the Commission pursuant to the subparagraph of Rule 424(b) under
the Securities Act specified in such certificate on the date specified
therein; and, to the knowledge of such officers, no stop order suspending
the effectiveness of the Registration Statement has been issued and no
proceeding for that purpose is pending or threatened by the Commission; and
(ii) Such officers have carefully examined the Registration Statement
and the prospectus and such amendment or supplement thereto and as of the
date of such amendment or supplement, the Registration Statement and the
prospectus, as amended or supplemented, as the case may be, did not include
any untrue statement of a material fact and did not omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading.
(d) Each time that the Registration Statement or the related prospectus
shall be amended or such prospectus shall be supplemented, the Issuers shall (if
requested by the Market-Maker), concurrently with such amendment or supplement,
furnish the Market-Maker and its counsel with the written opinion of counsel for
the Issuers satisfactory to the Market-Maker to the effect that;
(i) The Registration Statement has been declared effective and such
amendment has become effective under the Securities Act as of the date and
time specified in such certificate, if applicable, such amendment to the
prospectus (or such supplement to the prospectus, as the case may be) was
filed with the Commission pursuant to the subparagraph Rule 424(b) under
the Securities Act specified in such opinion on the date specified therein;
and, to the knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceeding for that purpose is pending or threatened by the Commission; and
(ii) Counsel for the Issuers has reviewed such amendment or supplement
and participated with officers of the Issuers and independent public
accountants for the Issuers in the preparation of such amendment or
supplement and has no reason to believe that the Registration Statement (or
any post-effective amendment thereto), at the time of its effective date,
contained any 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 contains any
untrue statement of a material fact or omits to state 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.
(e) Each time that the Registration Statement or the related prospectus
shall be amended or such prospectus shall be supplemented to include audited
annual financial information, the Issuers shall (if requested by the
Market-Maker), concurrently with such amendment or supplement, furnish the
Market-Maker and its counsel with a letter of Deloitte & Touche LLP (or other
independent public accountants for the Issuers of nationally recognized
standing), in form satisfactory to the Market-Maker, addressed to the
Market-Maker and dated the date of delivery of such letter, (i) confirming that
they are independent public accountants within the meaning of the Securities Act
and are in compliance with the applicable requirements relating to the
qualification of accountants under Rule 2-01 of Regulation S-X of the Commission
and (ii) a letter substantially in the form of the letter delivered to the
Initial
13
Purchasers pursuant to Section 5(f) of the Purchase Agreement with such changes
as may be necessary to reflect the amended or supplemented financial
information.
(f) The Issuers hereby agree to indemnify the Market-Maker, and, if
applicable, contribute to the Market-Maker, in accordance with Section 7 and 8
of this Agreement.
(g) The Issuers will comply with the provisions of this Section 6 at their
own expense and will reimburse the Market-Maker for its expenses associated with
this Section 6 (including fees of counsel).
(h) The agreements contained in this Section 6 and the representations,
warranties and agreements contained in this Agreement shall survive all offers
and sales of the Securities and shall remain in full force and effect,
regardless of any termination or cancellation of this Agreement or any
investigation made by or on behalf of any indemnified party.
(i) For purposes of this Section 6, any reference to the terms "amend",
"amendment" or "supplement" with respect to the Registration Statement or the
prospectus contained therein shall be deemed to refer to and include the filing
under the Exchange Act of any document deemed to be incorporated therein by
reference.
7. Indemnification. (a) In the event of a Shelf Registration Statement or
in connection with any prospectus delivery pursuant to an Exchange Offer
Registration Statement by an Initial Purchaser or Exchanging Dealer, as
applicable, or in connection with any prospectus delivery by the Market-Maker,
the Issuers and the Guarantor shall jointly and severally indemnify and hold
harmless each Holder (including, without limitation, any such Initial Purchaser,
the Market-Maker or any such Exchanging Dealer), its affiliates, its officers,
directors, employees, representatives and agents, and each person, if any, who
controls such Holder within the meaning of the Securities Act or the Exchange
Act (collectively referred to for purposes of this Section 7 and Section 8 as a
Holder) from and against any loss, claim, damage or liability, joint or several,
or any action in respect thereof (including, without limitation, any loss,
claim, damage, liability or action relating to purchases and sales of
Securities, Exchange Securities or Private Exchange Securities), to which that
Holder may become subject, whether commenced or threatened, under the Securities
Act, the Exchange Act, any other federal or state statutory law or regulation,
at common law 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 such Registration Statement
or any prospectus forming part thereof or in any amendment or supplement
thereto, (ii) the omission or alleged omission to state therein a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading or (iii) in the case of the Market-Maker, any material breach by the
Issuers of their representations, warranties and agreements contained in Section
6, and shall reimburse each Holder promptly upon demand for any legal or other
expenses reasonably incurred by that Holder in connection with investigating or
defending or preparing to defend against or appearing as a third party witness
in connection with any such loss, claim, damage, liability or action as such
expenses are incurred; provided, however, that the Issuers and the Guarantor
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, an untrue statement
or alleged untrue statement in or omission or alleged omission from any of such
documents in reliance upon and in conformity with any Holders' Information; and
provided, further, that with respect to any such untrue statement in or omission
from any related preliminary prospectus, the indemnity agreement contained in
this Section 7(a) shall not inure to the benefit of any Holder from whom the
person asserting any such loss, claim, damage, liability or action received
Securities, Exchange Securities or Private Exchange Securities to the extent
that such loss, claim, damage, liability or action of or with respect to such
Holder results from the fact that both (A) a copy of the final prospectus was
not sent or given to such person at or prior to the written confirmation of the
sale of such Securities, Exchange Securities or Private Exchange Securities to
such person and (B) the untrue statement in or omission from the related
14
preliminary prospectus was corrected in the final prospectus unless, in
either case, such failure to deliver the final prospectus was a result of
non-compliance by the Issuers with Section 4(d), 4(e), 4(f) or 4(g).
(b) In the event of a Shelf Registration Statement or in connection with
any prospectus delivery by the Market-Maker, each Holder (including, if
applicable, the Market-Maker) shall indemnify and hold harmless the Issuers,
their affiliates, their respective officers, directors, employees,
representatives and agents, and each person, if any, who controls the Issuers
within the meaning of the Securities Act or the Exchange Act (collectively
referred to for purposes of this Section 7(b) and Section 8 as the Issuers),
from and against any loss, claim, damage or liability, joint or several, or any
action in respect thereof, to which the Issuers may become subject, whether
commenced or threatened, under the Securities Act, the Exchange Act, any other
federal or state statutory law or regulation, at common law 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 such Registration Statement or any prospectus forming part
thereof 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 in order to make the statements therein, in the light of the
circumstances under which they were made, 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 any
Holders' Information furnished to the Issuers by such Holder, and shall
reimburse the Issuers for any legal or other expenses reasonably incurred by the
Issuers in connection with investigating or defending or preparing to defend
against or appearing as a third party witness in connection with any such loss,
claim, damage, liability or action as such expenses are incurred; provided,
however, that no such Holder shall be liable for any indemnity claims hereunder
in excess of the amount of net proceeds received by such Holder from the sale of
Securities, Exchange Securities or Private Exchange Securities pursuant to such
Shelf Registration Statement.
(c) Promptly after receipt by an indemnified party under this Section 7 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 pursuant to Section 7(a) or 7(b), 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
that it may have under this Section 7 except to the extent that it has been
materially prejudiced (through the forfeiture of substantive rights or defenses)
by such failure; and provided, further, that the failure to notify the
indemnifying party shall not relieve it from any liability that it may have to
an indemnified party otherwise than under this Section 7. 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 7 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than the reasonable costs of investigation; provided, however,
that an indemnified party shall have the right to employ its own counsel in any
such action, but the fees, expenses and other charges of such counsel for the
indemnified party will be at the expense of such indemnified party unless (1)
the employment of counsel by the indemnified party has been authorized in
writing by the indemnifying party, (2) the indemnified party has reasonably
concluded (based upon advice of counsel to the indemnified party) that there may
be legal defenses available to it or other indemnified parties that are
different from or in addition to those available to the indemnifying party, (3)
a conflict or potential conflict exists (based upon advice of counsel to the
indemnified party) between the indemnified party and the indemnifying party (in
which case the indemnifying party will not have the right to direct the defense
of such action on behalf of the indemnified party) or (4) the indemnifying party
has not in fact employed
15
counsel reasonably satisfactory to the indemnified party to assume the defense
of such action within a reasonable time after receiving notice of the
commencement of the action, in each of which cases the reasonable fees,
disbursements and other charges of counsel will be at the expense of the
indemnifying party or parties. It is understood that the indemnifying party or
parties shall not, in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the reasonable fees, disbursements and
other charges of more than one separate firm of attorneys (in addition to any
local counsel) at any one time for all such indemnified party or parties. Each
indemnified party, as a condition of the indemnity agreements contained in
Sections 7(a) and 7(b), shall use all reasonable efforts to cooperate with the
indemnifying party in the defense of any such action or claim. 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 for 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. No indemnifying party shall, without the
prior written consent of the indemnified party (which consent shall not be
unreasonably withheld), effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
8. Contribution. If the indemnification provided for in Section 7 is
unavailable or insufficient to hold harmless an indemnified party under Section
7(a) or 7(b), 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 Issuers and the Guarantor from the offering and sale of
the Securities, on the one hand, and a Holder with respect to the sale by such
Holder of Securities, Exchange Securities or Private Exchange Securities, on the
other, or (ii) if the allocation provided by clause (i) above is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Issuers and the Guarantor, on the one hand, and such Holder, on the other,
with respect to the statements or omissions that resulted in such loss, claim,
damage or liability, or action in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the Issuers and the
Guarantor, on the one hand, and a Holder, on the other, with respect to such
offering and such sale shall be deemed to be in the same proportion as the total
net proceeds from the offering of the Securities (before deducting expenses)
received by or on behalf of the Issuers as set forth in the table on the cover
of the Offering Memorandum, on the one hand, bear to the total proceeds received
by such Holder with respect to its sale of Securities, Exchange Securities or
Private Exchange Securities, on the other. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to the Issuers and the Guarantor or information supplied
by the Issuers and the Guarantor, on the one hand, or to any Holders'
Information supplied by such Holder, on the other, 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 hereto agree that it
would not be just and equitable if contributions pursuant to this Section 8 were
to be determined by pro rata allocation or by any other method of allocation
that 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 shall be deemed to include, for purposes of this Section 8, any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending or preparing to defend any such
action or claim. Notwithstanding the provisions of this Section 8, an
indemnifying party that is a Holder of Securities, Exchange Securities or
Private Exchange Securities shall not be required to contribute any amount in
excess of the amount by which the total price at which the Securities, Exchange
Securities or Private Exchange Securities sold by
16
such indemnifying party to any purchaser exceeds the amount of any damages which
such indemnifying party 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(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
9. Rules 144 and 144A. The Issuers shall use their reasonable best efforts
to file the reports required to be filed by them under the Securities Act and
the Exchange Act in a timely manner and, if at any time the Issuers are not
required to file such reports, they will, upon the written request of any Holder
of Transfer Restricted Securities or the Market-Maker, make publicly available
other information so long as necessary to permit sales of such Holder's
securities pursuant to Rules 144 and 144A. The Issuers and the Guarantor
covenant that they will take such further action as any Holder of Transfer
Restricted Securities or the Market-Maker may reasonably request, all to the
extent required from time to time to enable such Holder or Market-Maker to sell
Transfer Restricted Securities without registration under the Securities Act
within the limitation of the exemptions provided by Rules 144 and 144A
(including, without limitation, the requirements of Rule 144A(d)(4)).
Notwithstanding the foregoing, nothing in this Section 9 shall be deemed to
require the Issuers to register any of its securities pursuant to the Exchange
Act.
10. Underwritten Registrations. If any of the Transfer Restricted
Securities covered by any Shelf Registration Statement are to be sold in an
underwritten offering, the investment banker or investment bankers and manager
or managers that will administer the offering will be selected by the Holders of
a majority in aggregate principal amount of such Transfer Restricted Securities
included in such offering, subject to the consent of the Issuers (which shall
not be unreasonably withheld or delayed), and such Holders shall be responsible
for all underwriting commissions and discounts in connection therewith.
No person may participate in any underwritten registration hereunder unless
such person (i) agrees to sell such person's Transfer Restricted Securities on
the basis reasonably provided in any underwriting arrangements approved by the
persons entitled hereunder to approve such arrangements and (ii) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms of such
underwriting arrangements.
11. Miscellaneous. (a) Amendments and Waivers. No failure or delay by any
Holder or the Market-Maker in exercising any right under this Agreement shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right or any abandonment or discontinuance of steps to enforce any such
right preclude any other or further exercise thereof or the exercise of any
other right. The provisions of this Agreement may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the Company has obtained the written consent of Holders
of a majority in aggregate principal amount of the Securities, the Exchange
Securities and the Private Exchange Securities, taken as a single class (and,
with respect to the provisions of Section 6, the written consent of the
Market-Maker). Notwithstanding the foregoing, a waiver or consent to depart from
the provisions hereof with respect to a matter that relates exclusively to the
rights of Holders whose Securities, Exchange Securities or Private Exchange
Securities are being sold pursuant to a Registration Statement and that does not
directly or indirectly affect the rights of other Holders may be given by
Holders of a majority in aggregate principal amount of the Securities, the
Exchange Securities and the Private Exchange Securities being sold by such
Holders pursuant to such Registration Statement.
(b) 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 next-day delivery:
17
(1) if to a Holder, at the most current address given by such Holder
to the Company in accordance with the provisions of this Section 11(b),
which address initially is, with respect to each Holder, the address of
such Holder maintained by the Registrar under the Indenture, with a copy in
like manner to Chase Securities Inc. and NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities
LLC;
(2) if to an Initial Purchaser, initially at its address set forth in
the Purchase Agreement; and
(3) if to the Issuers, initially at the address of the Company set
forth in the Purchase Agreement.
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; one business day after
being delivered to a next-day air courier; five business days after being
deposited in the mail; and when receipt is acknowledged by the recipient's
telecopier machine, if sent by telecopier.
(c) Successors And Assigns. This Agreement shall be binding upon each of
the parties hereto and their successors and assigns.
(d) Counterparts. This Agreement may be executed in any number of
counterparts (which may be delivered in original form or by telecopier) 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.
(e) Definition of Terms. For purposes of this Agreement, (a) the term
"business day" means any day on which the New York Stock Exchange, Inc. is open
for trading, (b) the term "subsidiary" has the meaning set forth in Rule 405
under the Securities Act and (c) except where otherwise expressly provided, the
term "affiliate" has the meaning set forth in Rule 405 under the Securities Act.
(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.
(h) Remedies. In the event of a breach by the Issuers, the Guarantor or by
any Holder of any of their obligations under this Agreement, each Holder, the
Issuers or the Guarantor, as the case may be, in addition to being entitled to
exercise all rights granted by law, including recovery of damages (other than
the recovery of damages for a breach by the Issuers or the Guarantor of their
obligations under Sections 1 or 2 hereof for which liquidated damages have been
paid pursuant to Section 3 hereof), will be entitled to specific performance of
its rights under this Agreement. The Issuers, the Guarantor and the Holders
agree that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by each such person of any of the provisions of
this Agreement and hereby further agree that, in the event of any action for
specific performance in respect of such breach, each such person shall waive the
defense that a remedy at law would be adequate.
(i) No Inconsistent Agreements. Each of the Issuers and the Guarantor
represents, warrants and agrees that (i) it has not entered into, shall not, on
or after the date of this Agreement, enter into any agreement that is
inconsistent in any material respect with the rights granted to the Holders in
this Agreement or otherwise conflicts with the provisions hereof and (ii) (with
respect to the Issuers) without limiting the generality of the foregoing,
without the written consent of the Holders of a majority in aggregate principal
amount of the then
18
outstanding Transfer Restricted Securities and the Market-Maker, it shall not
grant to any person the right to request the Issuers to register any of their
debt securities under the Securities Act unless the rights so granted are not
inconsistent in any material respect with, or conflict with, the provisions of
this Agreement.
(j) No Piggyback on Registrations. None of the Issuers or any of their
security holders (other than the Holders of Transfer Restricted Securities in
such capacity) shall have the right to include any securities of the Issuers in
any Shelf Registration or Registered Exchange Offer other than Transfer
Restricted Securities, other than any such right existing on the date hereof.
(k) Severability. The remedies provided herein are cumulative and not
exclusive of any remedies provided by law. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their reasonable best efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and
declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable.
19
Please confirm that the foregoing correctly sets forth the agreement among
the Issuers, the Guarantor and the Initial Purchasers.
Very truly yours,
LA PETITE ACADEMY, INC.,
by
-------------------------------
Name:
Title:
LPA HOLDING CORP.,
by
-------------------------------
Name:
Title:
LPA SERVICES, INC.,
by
-------------------------------
Name:
Title:
Accepted:
CHASE SECURITIES INC.,
by
---------------------------------
Authorized Signatory
NAITONSBANC ▇▇▇▇▇▇▇▇▇▇
SECURITIES LLC,
by
---------------------------------
Authorized Signatory
ANNEX A
Each broker-dealer that receives Exchange Securities for its own account
pursuant to the Registered Exchange Offer must acknowledge that it will deliver
a prospectus in connection with any resale of such Exchange Securities. The
Letter of Transmittal states that by so acknowledging and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. This Prospectus, as it
may be amended or supplemented from time to time, may be used by a broker-dealer
in connection with resales of Exchange Securities received in exchange for
Securities where such Securities were acquired by such broker-dealer as a result
of market-making activities or other trading activities. The Company has agreed
that, for a period of 180 days after the Expiration Date (as defined herein), it
will make this Prospectus available to any broker-dealer for use in connection
with any such resale. See "Plan of Distribution".
ANNEX B
Each broker-dealer that receives Exchange Securities for its own account in
exchange for Securities, where such Securities were acquired by such
broker-dealer as a result of market-making activities or other trading
activities, must acknowledge that it will deliver a prospectus in connection
with any resale of such Exchange Securities. See "Plan of Distribution".
ANNEX C
PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Securities for its own account
pursuant to the Registered Exchange Offer must acknowledge that it will deliver
a prospectus in connection with any resale of such Exchange Securities. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by a broker-dealer in connection with resales of Exchange Securities received in
exchange for Securities where such Securities were acquired as a result of
market-making activities or other trading activities. The Company has agreed
that, for a period of 180 days after the Expiration Date, it will make this
prospectus, as amended or supplemented, available to any broker-dealer for use
in connection with any such resale. In addition, until [ ] 199[ ], all dealers
effecting transactions in the Exchange Securities may be required to deliver a
prospectus.
The Company will not receive any proceeds from any sale of Exchange
Securities by broker-dealers. Exchange Securities received by broker-dealers for
their own account pursuant to the Registered Exchange Offer may be sold from
time to time in one or more transactions in the over-the-counter market, in
negotiated transactions, through the writing of options on the Exchange
Securities or a combination of such methods of resale, at market prices
prevailing at the time of resale, at prices related to such prevailing market
prices or at negotiated prices. Any such resale may be made directly to
purchasers or to or through brokers or dealers who may receive compensation in
the form of commissions or concessions from any such broker-dealer or the
purchasers of any such Exchange Securities. Any broker-dealer that resells
Exchange Securities that were received by it for its own account pursuant to the
Registered Exchange Offer and any broker or dealer that participates in a
distribution of such Exchange Securities may be deemed to be an "underwriter"
within the meaning of the Securities Act and any profit on any such resale of
Exchange Securities and any commission or concessions received by any such
persons may be deemed to be underwriting compensation under the Securities Act.
The Letter of Transmittal states that, by acknowledging that it will deliver and
by delivering a prospectus, a broker-dealer will not be deemed to admit that it
is an "underwriter" within the meaning of the Securities Act.
For a period of 180 days after the Expiration Date the Company will
promptly send additional copies of this Prospectus and any amendment or
supplement to this Prospectus to any broker-dealer that requests such documents
in the Letter of Transmittal. The Company has agreed to pay all expenses
incident to the Registered Exchange Offer (including the expenses of one counsel
for the Holders of the Securities) other than commissions or concessions of any
broker-dealers and will indemnify the Holders of the Securities (including any
broker-dealers) against certain liabilities, including liabilities under the
Securities Act.
ANNEX D
|_| CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10
ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR
SUPPLEMENTS THERETO.
Name:
Address:
If the undersigned is not a broker-dealer, the undersigned represents that it is
not engaged in, and does not intend to engage in, a distribution of Exchange
Securities. If the undersigned is a broker-dealer that will receive Exchange
Securities for its own account in exchange for Securities that were acquired as
a result of market-making activities or other trading activities, it
acknowledges that it will deliver a prospectus in connection with any resale of
such Exchange Securities; however, by so acknowledging and by delivering a
prospectus, the undersigned will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.