WRC MEDIA INC. STOCKHOLDERS AGREEMENT Dated as of June 22, 2005
EXHIBIT
10.3
_____________
_____________
Dated
as of June 22,
2005
TABLE
OF CONTENTS
Page
ARTICLE
I
Information,
Voting and Observation Rights
|
SECTION
1.01.
|
Financial
and Business Information
|
2
|
|
SECTION
1.02.
|
Amendments
to Charter; Other Actions
|
4
|
|
SECTION
1.03.
|
Board
Designees
|
4
|
|
SECTION
1.04.
|
Approval
Right
|
6
|
| SECTION 1.05. |
Remedies
|
6
|
ARTICLE
II
Registration
Rights
|
SECTION
2.01.
|
Required Registration |
6
|
|
SECTION
2.02.
|
Incidental
Registration
|
9
|
|
SECTION
2.03.
|
Registration Procedures |
11
|
|
SECTION
2.04.
|
Reasonable Expenses |
15
|
| SECTION 2.05. | Registration Expenses |
16
|
| SECTION 2.06. | Indemnification; Contribution |
16
|
| SECTION 2.07. | Holdback Agreements; Registration Rights to Others |
20
|
| SECTION 2.08. | Availability of Information |
21
|
| SECTION 2.09. | Tag-Along Rights |
21
|
| SECTION 2.10. | Drag-Along Rights |
23
|
ARTICLE
III
Subscription
Rights
|
SECTION
3.01.
|
Right To Elect Purchase of Additional Shares |
24
|
|
SECTION
3.02.
|
Notice
of Sale of Issuable Shares
|
25
|
|
SECTION
3.03.
|
Notice of Election To Purchase Additional Issuable Shares |
25
|
|
SECTION
3.04.
|
Confirmation Notice |
25
|
| SECTION 3.05. | Closing of Sale |
26
|
ARTICLE
IV
Restrictions
on Transfer, Termination and Other Agreements
|
SECTION
4.01.
|
Restrictions on Transfer to Transferees |
26
|
i
|
SECTION
4.02.
|
Cooperation
by ▇▇▇
|
▇▇
|
|
SECTION
4.03.
|
Legending of Certificates |
27
|
|
SECTION
4.04.
|
Securities Act Restrictions; Legend |
27
|
| SECTION 4.05. | Termination of Restrictions |
27
|
ARTICLE
V
Defined
Terms
|
SECTION
5.01.
|
Terms Defined |
28
|
|
SECTION
5.02.
|
Section
Headings and Table of Contents and Construction
|
38
|
|
SECTION
5.03.
|
GOVERNING LAW |
38
|
ARTICLE
VI
Miscellaneous
|
SECTION
6.01.
|
Communications |
38
|
|
SECTION
6.02.
|
Survival
|
39
|
|
SECTION
6.03.
|
Successors and Assigns |
39
|
|
SECTION
6.04.
|
Amendments and Waivers |
39
|
| SECTION 6.05. | Expenses |
40
|
| SECTION 6.06. | Waiver of Jury Trial; Consent to Jurisdiction; etc. |
41
|
| SECTION 6.07. | Indemnification |
42
|
| SECTION 6.08. | Entire Agreement |
43
|
| SECTION 6.09. | Execution in Counterpart |
43
|
| SECTION 6.10. | Reproduction of Documents |
43
|
| SECTION 6.11. | Effectiveness of this Agreement |
43
|
ii
STOCKHOLDERS
AGREEMENT (as the same may hereafter be amended, supplemented or modified,
this
“Agreement”),
dated
as of June 22, 2005, among WRC MEDIA INC., a Delaware corporation (together
with
its successors and permitted assigns, “WRC”);
EAC
III L.L.C., a Delaware limited liability company (together with its successors
and permitted assigns, the “Initial
Stockholder”);
THE
NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY, a Wisconsin corporation (together
with its successors and permitted assigns, “NML”);
ARES
LEVERAGED INVESTMENT FUND, L.P., a Delaware limited partnership, ARES LEVERAGED
INVESTMENT FUND II, L.P., a Delaware limited partnership (collectively, with
their respective successors and permitted assigns, the “Ares
Funds”);
TCW/CRESCENT MEZZANINE PARTNERS II, L.P., a Delaware limited partnership,
TCW/CRESCENT MEZZANINE TRUST II, a Delaware business trust, SHARED
OPPORTUNITY FUND IIB, L.L.C., a Delaware limited liability company,
TCW
SHARED OPPORTUNITY FUND III, L.P., a Delaware limited liability company, TCW
LEVERAGED INCOME TRUST II, L.P., a Delaware limited partnership, TCW
LEVERAGED INCOME TRUST, L.P., a Delaware limited partnership (collectively,
with
their respective successors and permitted assigns, the “TCW
Funds”);
DLJ
INVESTMENT PARTNERS II, L.P.,
a
Delaware limited partnership, DLJ
INVESTMENT PARTNERS, L.P.,
a
Delaware limited partnership, and DLJIP
II
HOLDINGS, L.P.,
a
Delaware limited partnership (collectively, with their respective successors
and
permitted assigns, the “DLJ
IP Funds”
and
collectively, with NML, the Ares Funds and the TCW Funds, the “Other
Exchangers”);
and
DLJ
MERCHANT BANKING PARTNERS II, L.P.,
a
Delaware limited partnership, DLJ
MERCHANT BANKING PARTNERS II-A, L.P.,
a
Delaware limited partnership, DLJ
MERCHANT BANKING II, INC., a
Delaware corporation, as Advisory General Partner on behalf of DLJ
OFFSHORE PARTNERS II, C.V.,
a
Netherlands Antilles limited partnership, DLJ
DIVERSIFIED PARTNERS, L.P.,
a
Delaware limited partnership, DLJ
DIVERSIFIED PARTNERS-A, L.P.,
a
Delaware limited partnership, DLJMB
FUNDING II, INC.,
a
Delaware corporation, DLJ
MILLENNIUM PARTNERS, L.P.,
a
Delaware limited partnership, DLJ
MILLENNIUM PARTNERS-A, L.P.,
a
Delaware limited partnership, DLJ
EAB
PARTNERS, L.P.,
a
Delaware limited partnership, DLJ ESC II, L.P., a Delaware limited partnership,
and DLJ
FIRST
ESC, L.P.,
a
Delaware limited partnership (each, together with its successors and permitted
assigns, a “DLJMB
Entity”,
collectively, the “DLJMB
Entities”
and
collectively, with the Other Exchangers, the “Exchangers”).
RECITALS
WHEREAS
pursuant to a Redemption and Repurchase Agreement dated as of June 22, 2005
(the
“Redemption
and Repurchase Agreement”)
among
WRC and the Exchangers, WRC has agreed, among other things, to redeem and
repurchase all of
the
Exchangers’ shares of 15% Senior Preferred Stock due 2011, par value $0.01 per
share, of WRC, and warrants to purchase common stock of WRC’s Subsidiaries
Weekly Reader Corporation, a Delaware corporation (“Weekly
Reader”),
and
CompassLearning, Inc., a Delaware corporation (“CompassLearning”)
(the
“Redemption
and Repurchase”)
in
exchange for cash, certain indebtedness and a number of shares (the
“Exchange
Shares”)
of
common stock, par value $0.01 per share, of WRC (the “Common
Stock”)
to be
determined such that upon the closing of the Sale, after giving effect to the
Transactions
(as
defined in the Redemption and Repurchase Agreement) and all related transactions
(including the Note Redemption (as defined in the Redemption and Repurchase
Agreement)),
the
Exchange Shares held by the Exchangers would constitute an aggregate of 30%
of
the outstanding Common Stock, calculated on a fully diluted basis prior to
the
issuance of New Management Options (as defined in the Redemption and Repurchase
Agreement).
WHEREAS
WRC, the Initial Stockholder and the Exchangers wish to define certain of their
respective rights and obligations with regard to the Exchange Shares (certain
capitalized terms used in this Agreement are defined in Section 5.01);
and
WHEREAS
this Agreement shall become effective if and only if the Closing (as defined
in
the Redemption and Repurchase Agreement) shall occur.
AGREEMENT
NOW,
THEREFORE, in consideration of the foregoing and the mutual promises herein
contained, WRC, the Initial Stockholder and the Exchangers mutually agree as
follows:
ARTICLE
I
Information,
Voting and Observation Rights
SECTION
1.01. Financial
and Business Information.
WRC
shall deliver to each holder of Exchange Shares:
(a) Quarterly
Financial Statements.
As
soon as practicable after the end of each quarterly fiscal period in each fiscal
year of WRC (other than the last quarterly fiscal period of each such fiscal
year), and in any event within 50 days thereafter:
(i) a
balance
sheet as at the end of such quarter; and
(ii) an
income
statement and statement of cash flows for such quarter, and, in the case of
the
second and third fiscal quarters of WRC, the comparable information for the
portion of the fiscal year ending with such quarter and a comparison to relevant
budget amounts for such quarter;
2
for
WRC
and its Subsidiaries (on a consolidated basis), setting forth in each case,
in
comparative form, the financial statement for the corresponding period in the
previous fiscal year, all in reasonable detail, prepared in accordance with
GAAP
applicable to quarterly financial statements generally, and certified as
complete and correct by a Senior Financial Officer; provided
that,
should WRC be subject to, or agree with any Person or volunteer to comply with,
the provisions of Section 13 of the Exchange Act, the filing of WRC’s
Quarterly Report on Form 10-Q with the SEC within the time period required
by
SEC rules after the end of such quarterly fiscal period shall be deemed to
satisfy the requirements of this Section 1.01(a).
(b) Annual
Financial Statements.
As soon
as practicable after the end of each fiscal year of WRC, and in any event within
95 days thereafter:
(i)
a
consolidated balance sheet as at the end of such year; and
(ii)
a
consolidated income statement and statement of cash flows for such
year;
for
WRC
and its Subsidiaries, together with the notes thereto, setting forth in each
case, in comparative form, the financial statement for the previous fiscal
year,
all in reasonable detail, prepared in accordance with GAAP, and accompanied
by:
(A)
an
audit
report thereon of independent certified public accountants of recognized
national standing, which report shall state that such financial statements
fairly present in all material respects the consolidated financial condition
of
WRC and its Subsidiaries as at such date and the consolidated results of its
operations and cash flows for such period in conformity with GAAP;
and
(B)
a
certification by a Senior Financial Officer that such financial statements
are
complete and correct;
provided
that,
should WRC be subject to, or agree with any Person or volunteer to comply with,
the provisions of Section 13 of the Exchange Act, the filing of WRC’s Annual
Report on Form 10-K for such fiscal year with the SEC within the time period
required by SEC rules after the end of such fiscal year shall be deemed to
satisfy the requirements of this Section 1.01(b).
(c) SEC
and Other Reports.
Promptly
upon their becoming available:
(i) each
financial statement, report, notice or proxy statement sent by WRC to
stockholders generally;
(ii) each
regular or periodic report (including, without limitation, each Form 10-K,
Form
10-Q and Form 8-K), any registration statement which shall have become effective
(other than any registration statement on Form S-4 or S-8 or any successor
forms thereto) and each final prospectus and all amendments thereto (other
than
any prospectus or amendment relating to a registration
3
statement
on Form S-4 or S-8 or any successor forms thereto) filed by WRC with
the
SEC or on a publicly available basis with any securities exchange (including,
without limitation, any electronic stock quotation system); and
(iii) each
press release or other statement made available by WRC to the public concerning
material developments in the business of WRC;
provided
that,
should WRC be subject to, or agree with any Person or volunteer to comply with,
the provisions of Section 13 of the Exchange Act, the filing with or furnishment
to the SEC of any report, registration statement, final prospectus or amendment
thereto or any press release or other statement described in the foregoing
clause (ii) or (iii) within the time period required by SEC rules for such
filing shall be deemed to satisfy the requirements of clause (ii) or (iii),
as
applicable, of this Section 1.01(c).
(d) Requested
Information.
Prior to
the Public Market Date, with reasonable promptness, such other data and
information as from time to time may be reasonably requested by any holder
of
Exchange Shares.
SECTION
1.02. Amendments
to Charter; Other Actions.
(a) The
Initial Stockholder and WRC shall not cause or permit:
(i) any
amendment to the Charter as in effect on the Closing Date;
(ii) any
voluntary reorganization, transfer of substantial assets, consolidation, merger,
dissolution, liquidation, issuance or sale of Securities of WRC or any of its
Subsidiaries; or
(iii) any
other
voluntary action;
in
each
case that is intended to avoid, or would have the effect of avoiding, the
observance or performance of any of the terms to be observed or performed
hereunder by WRC or the Initial Stockholder, but shall at all times in good
faith assist in the carrying out of all the provisions of this Agreement and
in
the taking of all such actions as may be necessary or appropriate in order
to
protect the rights of the holders of Exchange Shares against
impairment.
(b) The
Initial Stockholder and WRC shall not, directly or indirectly, cause or permit
any amendment to the SGC Stockholders Agreement after the Closing (as defined
in
the Redemption and Repurchase Agreement) or enter into any other agreement
or
arrangement after the Closing that entitles SGC Capital Partners I L.L.C. to
any
rights that are more favorable than the rights granted to the Exchangers
hereunder.
SECTION
1.03. Board
Designees.
(a)
For
so
long as the DLJMB Entities shall collectively hold 5% or more of the outstanding
shares of Common Stock, the Initial Stockholder and each Exchanger shall vote
all of their shares of Common Stock, at each regular or special meeting of
the
shareholders of WRC called for the purpose of filling positions on the Board
of
Directors, or in any written consent executed
4
in
lieu
of such a meeting of shareholders, and shall take all actions necessary to
ensure the election to the Board of Directors of one individual designated
by
DLJMB (the “DLJMB
Board Designee”).
(b) If
a
DLJMB Board Designee shall cease to serve as a director of WRC for any reason
at
a time when the DLJMB Entities collectively hold 5% or more of the outstanding
shares of Common Stock, the Initial Shareholder and each Exchanger shall vote
all of their shares of Common Stock, and WRC shall take all actions necessary,
to ensure the vacancy resulting thereby shall be filled by another individual
designated by DLJMB. Once serving on the Board of Directors, a DLJMB Board
Designee shall not be removed from office without the consent of the DLJMB
Entities other than for cause. In the event that a DLJMB Board Designee is
unable to attend a meeting of the Board of Directors, DLJMB may designate a
representative to attend such meeting as a non-voting observer
only.
(c) WRC
shall
take all actions necessary to cause the DLJMB Board Designee to be appointed
to
the compensation committee and the audit committee of the Board of Directors.
For so long as DLJMB has the right to appoint a DLJMB Board Designee, the Board
of Directors shall not generally delegate its authority to conduct the business
of WRC to a committee of such Board of Directors; provided,
that
the foregoing shall not prohibit delegation of authority to a committee for
a
specific purpose.
(d) WRC
shall
reimburse the DLJMB Board Designee, so long as the DLJMB Board Designee is
serving on the Board of Directors, for all reasonable out-of-pocket expenses
incurred in connection with the DLJMB Board Designee’s services as a
director.
(e) WRC
shall
obtain and cause to be maintained in effect so long as a DLJMB Board Designee
is
serving on the Board of Directors, with financially sound insurers, a policy
of
directors’ and officers’ liability insurance covering each of the members of the
Board of Directors (including, without limitation, each DLJMB Board Designee)
in
an amount of at least $5,000,000 per occurrence.
(f) The
Charter and the by-laws of WRC and other organizational documents of WRC shall
at all times, to the fullest extent permitted by law, provide for
indemnification of, advancement of expenses to, and limitation of the personal
liability of, the members of the Board of Directors and such other persons,
if
any, who, pursuant to a provision of such Charter, by-laws or other
organizational documents, exercise or perform any of the powers or duties
otherwise conferred or imposed upon members of the Board of Directors. Except
as
required pursuant to applicable law or regulation, such provisions may not
be
amended, repealed or otherwise modified in any manner adverse to any member
of
the Board of Directors until at least six years following the date on which
DLJMB is entitled to nominate a DLJMB Board Designee.
(g) The
Board
of Directors shall meet in person at least quarterly, and shall meet at such
other times as called by any two directors.
5
SECTION
1.04. Approval Right. Without the written approval of the
DLJMB Entities, WRC shall not, and shall not cause or permit any Subsidiary
to,
undertake any of the following:
(a) the
entry
into or amendment of any transaction or arrangement (excluding compensation
and
benefit arrangements of employees in the ordinary course of business) between
WRC or any Subsidiary, on the one hand, and any Affiliate (other than a
Subsidiary) of WRC, or any partner, shareholder, director or officer of WRC
or
any such Affiliate, including any entity affiliated with Ripplewood Partners,
on
the other hand, such approval not to be unreasonably withheld or delayed;
or
(b) the
entry
into of any agreement with Ripplewood Partners or any of its Affiliates or
the
amendment, modification or replacement of:
(i) the
Management Agreement, dated as of November 17, 1999, between
CompassLearning and Ripplewood Partners, or
(ii) the
Management Agreement, dated as of November 17, 1999, between Weekly Reader
and
Ripplewood Partners, if any such agreement, amendment, modification or
replacement would result in Ripplewood Partners or any of its Affiliates
receiving any management or similar fees from WRC or any of its
Subsidiaries.
SECTION
1.05. Remedies.
WRC, the
Initial Stockholder and the Exchangers agree that the remedies of the holders
of
Exchange Shares at law in respect of any breach by WRC or the Initial
Stockholder of their obligations pursuant to Article I would be inadequate
and that, upon any finding by any court of competent jurisdiction that WRC
or
the Initial Stockholder has breached any such obligation, the holders of
Exchange Shares shall be entitled to, and WRC and the Initial Stockholder agree
that they will not contest, upon any such finding of any such breach, the award
of specific performance and injunctive relief in favor of such holders of
Exchange Shares and compelling WRC and the Initial Stockholder to comply with
such obligations.
ARTICLE
II
Registration
Rights
SECTION
2.01. Required
Registration.
(a)
Filing
of Registration Statement.
Subject to Section 2.01(f), WRC will, upon the written request of the DLJMB
Entities or the Initial Stockholder (the Person so requesting, the “Initiating
Holder”)
given
at any time following 12 months after the Initial Public Offering Date
(provided,
that if
any other holder of Common Stock is granted a demand registration right with
respect to such Common Stock applicable commencing on an earlier date, the
DLJMB
Entities’ and the Initial Stockholder’s demand registration rights shall be
applicable commencing on such earlier date), requesting that WRC effect the
registration under the Securities Act of all or part of such Initiating Holder’s
Registrable Securities and specifying the Registrable Securities to be sold
and
the intended method of disposition
6
thereof,
promptly give written notice of such requested registration to all holders
of
Registrable Securities, and thereupon will use its reasonable best efforts
to
effect the registration (the “Required
Registration”)
under
the Securities Act of:
(i) the
Registrable Securities that WRC has been so requested to register by the
Initiating Holder; and
(ii) subject
to Section 2.01(d), all other Registrable Securities that WRC has been requested
to register by the holders thereof by written request given to WRC by the
holders which have the right to request such registration within 30 days after
the giving of such written notice by WRC (which request shall specify the
Registrable Securities to be sold and the intended method of disposition of
such
Registrable Securities);
all
to
the extent required to permit the disposition (in accordance with the intended
method thereof as aforesaid) of the Registrable Securities of the Initiating
Holder so to be registered.
(b)
Time
for Filing and Effectiveness.
On
or before the date which is 90 days after the request for such registration,
WRC
shall file, or cause to be filed, with the SEC all documents and materials
necessary to effect the Required Registration with respect to all Registrable
Securities to be so registered, and shall use its reasonable best efforts to
cause such Required Registration to become effective as promptly as practicable
after the filing thereof, but in no event later than the day which is 180 days
after the request for such registration; provided,
however,
that
WRC may delay filing or effecting any Required Registration or suspend any
effective registration statement for not more than an aggregate of 60 days
in
any 12 month period if in the good faith judgment of the Board of Directors
such
Required Registration or registration statement being filed, effected or
effective, as applicable, at such time would impair or interfere with in any
material respect any contemplated financing, acquisition, disposition, corporate
reorganization or other similar, material, corporate transaction or development
involving WRC or any Subsidiary or any of its or their Affiliates or would
require premature disclosure thereof.
(c)
Selection
of Underwriters.
If
Registrable Securities that WRC has been requested to register pursuant to
a
Required Registration are to be disposed of in an underwritten public offering,
the underwriters (including, without limitation, the lead and managing
underwriters) of such offering shall be one or more underwriting firms of
recognized standing selected by the Initiating Holder and reasonably acceptable
to WRC (it being agreed by the parties that Credit Suisse First Boston LLC
shall
be acceptable to WRC). For the avoidance of doubt, the holders of Registrable
Securities other than the Initiating Holder shall have no right to select the
underwriters of any Required Registration.
(d) Priority
on Required Registrations.
If
the managing underwriter shall advise WRC in writing (with a copy to each holder
of Registrable Securities requesting sale) that, in such underwriter’s opinion,
the number of Registrable Securities requested
7
to
be
included in such Required Registration exceeds the number that can be sold
in
such offering within the price range acceptable to the Initiating Holder that
the Initiating Holder shall furnish to such underwriter upon request (such
writing to state the basis of such opinion and the approximate number of
Registrable Securities that may be included in such offering without such
effect), WRC will include in such Required Registration, to the extent of the
number of Registrable Securities that WRC is so advised by the managing
underwriter can be sold in such offering:
(i)
first,
Registrable Securities requested to be sold by the Initiating Holder;
provided,
however,
that if
the Initial Stockholder is the Initiating Holder then Registrable Securities
requested to be sold by the Exchangers shall be included with the Registrable
Securities requested to be sold by the Initial Stockholder (pro
rata
based on
the number of Registrable Securities requested to be sold by the Initial
Stockholder and the DLJMB Entities;
and
provided,
however,
that
with respect to any such registration, to the extent that SGC holds Securities
of the same class as the Registrable Securities being sold by the Initial
Stockholder and SGC has requested, pursuant to the SGC Stockholders Agreement,
any of such Securities to be included in such registration, the Registrable
Securities requested to be sold by the Exchangers shall be included pro
rata
based on
the number of Registrable Securities requested be sold by the Initial
Stockholder, the DLJMB Entities and SGC);
(ii)
second,
subject
to the first proviso in Section 2.01(d)(i) above, Registrable Securities
requested to be sold by the holders thereof other than the Initiating Holder
(pro
rata
based on
the number of Registrable Securities so requested to be sold by such holders);
and
(iii)
third,
all
other Securities proposed to be registered by WRC and any Other Stockholders,
in
such proportions as WRC and such Other Stockholders shall agree.
(e) When
Required Registration Is Deemed Effected.
A
Required Registration pursuant to this Section 2.01 shall not be deemed to
have
been effected for purposes of Section 2.01(f) hereof if:
(i) the
registration statement related thereto does not become effective and remain
effective for a period of at least 180 days (not counting any days during which
a stop order or a suspension pursuant to Section 2.01(b) was in effect
with
respect to such registration statement) after the date such registration
statement becomes effective; provided,
however,
that
WRC shall have no obligation to keep effective such registration statement
at
any time after all Registrable Securities included in such offering have been
sold;
(ii) the
Initiating Holder withdraws its request for registration in its entirety at
any
time because the Initiating Holder reasonably believes that the registration
statement or any prospectus related thereto contained an untrue statement of
a
material fact or omitted to state a material fact required to be stated
8
therein
or necessary to make the statements made therein (in the case of any prospectus,
in light of the circumstances under which they were made) not misleading,
notified WRC of such fact and requested that WRC correct such alleged
misstatement or omission, and WRC has refused to correct such alleged
misstatement or omission;
(iii) any
customary conditions to closing specified in the purchase agreement or
underwriting agreement entered into in connection with such Required
Registration are not satisfied, other than by reason of any breach by any holder
of any Registrable Securities that were to have been registered and sold of
its
obligations thereunder or hereunder; or
(iv) if,
after
it has become effective, such registration is interfered with for any reason
by
any stop order, injunction or other order or requirement of the SEC or any
other
governmental agency or any court, and the result of such interference is to
prevent the Initiating Holder from disposing of at least 75% of the Registrable
Securities included in such registration pursuant to Section 2.01(a) in
accordance with the intended methods of distribution.
(f) Limitation
on Number and Size of Required Registrations.
WRC
shall be required to effect only two Required Registrations requested by the
DLJMB Entities, as Initiating Holder pursuant to this Agreement. WRC shall
be
required to effect any number of Required Registrations requested by the Initial
Stockholder pursuant to this Section 2.01. WRC shall not be required to effect
any Required Registration pursuant to this Agreement during the period starting
with the date of the decision by the Board of Directors to register shares
of
Common Stock on behalf of WRC (provided that a registration statement is filed
within 30 days of such decision and becomes effective within 120 days of such
filing) or the receipt by WRC of a request for a Required Registration and
ending on a date 180 days following the effective date of a registration
statement related to a Required Registration or an Incidental Registration.
WRC
shall not be required to effect any “shelf” registration under Rule 415 under
the Securities Act (or any successor to such rule) pursuant to a Required
Registration. WRC shall also not be required to effect any Required Registration
unless either:
(i)
the
gross
aggregate offering price of all Securities to be included in such Required
Registration (including, without limitation, Securities offered by the holders
of Registrable Securities, WRC and any Other Stockholders proposed to be
registered under such Required Registration) shall exceed $30,000,000;
or
(ii)
such
Required Registration includes all Registrable Securities held by the Initiating
Holder of the class of such Registrable Securities proposed to be sold in such
Required Registration.
SECTION
2.02. Incidental
Registration.
(a)
Filing
of Registration Statement.
If
WRC at any time proposes to register any of its Capital Stock or Rights (an
“Incidental
Registration”)
under
the Securities Act (other than pursuant to Section 2.01 or pursuant
to a
registration statement on Form S-4 or Form S-8 or any successor
forms
9
thereto),
for sale in a Public Offering, including, without limitation, in connection
with
its Initial Public Offering, it will each such time give prompt written notice
to all holders of Registrable Securities of its intention to do so, which notice
shall be given to all such holders at least 20 Business Days prior to the date
that a registration statement relating to such registration is proposed to
be
filed with the SEC. Upon the written request of any such holder to include
its
Registrable Securities under such registration statement (which request shall
be
made within ten Business Days after the receipt of any such notice and shall
specify the Registrable Securities intended to be disposed of by such holder),
WRC will use its reasonable best efforts to effect the registration of all
Registrable Securities that WRC has been so requested to register by such
holder; provided,
however,
that
if, at any time after giving written notice of its intention to register any
Capital Stock or Rights and prior to the effective date of the registration
statement filed in connection with such registration, WRC shall determine for
any reason not to register such Capital Stock or Rights, WRC may, at its
election, give written notice of such determination to each such holder and,
thereupon, shall be relieved of its obligation to register any Registrable
Securities of such holders in connection with such registration.
(b) Selection
of Underwriters.
Notice
of WRC’s intention to register such Capital Stock or Rights shall designate the
proposed underwriters of such offering (which shall be one or more underwriting
firms of established reputation reasonably acceptable to the Requisite Holders)
and shall contain WRC’s agreement to use its reasonable best efforts, if
requested to do so, to arrange for such underwriters to include in such
underwriting the Registrable Securities that WRC has been so requested to
register pursuant to this Section 2.02, it being understood that such
holders of Registrable Securities shall have no right to select different
underwriters for the disposition of their Registrable Securities.
(c) Priority
on Incidental Registrations.
If the
managing underwriter shall advise WRC in writing (with a copy to each holder
of
Registrable Securities requesting sale) that, in such underwriter’s opinion, the
number of Registrable Securities requested to be included in such Incidental
Registration by such holders of Registrable Securities exceeds the number that
can be sold in such offering within a price range acceptable to WRC (such
writing to state the basis of such opinion and the approximate number of
Registrable Securities that may be included in such offering without such
effect), WRC will include in such Incidental Registration, to the extent of
the
number of Registrable Securities that WRC is so advised by the managing
underwriter can be sold in such offering:
(i) in
the
case of any registration initiated by WRC for the purpose of selling Capital
Stock or Rights for its own account:
(A) first,
Securities that WRC proposes to issue and sell for its own account;
and
(B) second,
all
Registrable Securities requested to be sold by the holders thereof pursuant
to
this Section 2.02 and all Securities proposed to be registered by the
Other
Stockholders which have the right to request
10
such
registration, pro
rata
among
such holders on the basis of the number of Securities requested to be so
registered by such holders; and
(ii) in
the
case of a registration initiated by any Other Stockholder pursuant to demand
or
Required Registration rights in favor of such Other Stockholder and provided
to
such Other Stockholder in compliance with Section 2.07(b):
(A) first,
Securities requested to be sold by the Other Stockholders requesting such
Incidental Registration;
(B) second,
Registrable Securities requested to be sold by the holders thereof pursuant
to
this Section 2.02 and all Securities proposed to be registered by Other
Stockholders which have the right to request such registration other than those
requesting such Incidental Registration, pro
rata
among
such holders on the basis of the number of Securities requested to be so
registered by such holders; and
(C) third,
Securities that WRC proposes to issue and sell for its own account.
SECTION
2.03. Registration
Procedures.
WRC will use its reasonable best efforts to effect each Registration, and to
cooperate with the sale of such Registrable Securities in accordance with the
intended method of disposition thereof as quickly as practicable, and WRC will,
as expeditiously as reasonably possible:
(a) subject,
in the case of an Incidental Registration, to the proviso to
Section 2.02(a), prepare and file with the SEC the registration statement
and use its reasonable best efforts to cause the Registration to become
effective; provided,
however,
that:
(i) before
filing any original registration statement, WRC will furnish to the holders
of
the Registrable Securities covered by such registration statement, their
counsel, and the underwriters, if any, and their counsel, copies of reasonably
complete drafts of all such documents proposed to be filed at least 15 days
prior thereto, which drafts will be subject to the reasonable review, within
such 15 day period, of such holders, their counsel and the underwriters;
and
(ii) within
a
reasonable time (giving effect to the nature of such document and, in the case
of any amendment or supplement, the extent of the changes thereto) before filing
any amendment to any registration statement or any prospectus or supplement
thereto, WRC will furnish to the holders of the Registrable Securities covered
by such registration statement or prospectus, their counsel, and the
underwriters, if any, and their counsel, copies of all such documents proposed
to be filed, which documents will be subject to the reasonable review, within
such period, of such holders, their counsel and the underwriters;
11
and
WRC
will not file any registration statement or amendment thereto or any prospectus
or any supplement thereto to which the Requisite Holders shall reasonably object
within the applicable review period (the reasonableness of any such objection
by
any holder or its counsel to be viewed, in the case of an Incidental
Registration, in light of the potential liability of such holder in respect
of
misstatements in and omissions from the registration statement or prospectus
and
the holder’s potential obligations under Section 2.06);
(b) subject,
in the case of an Incidental Registration, to the proviso to
Section 2.02(a), prepare and file with the SEC such amendments and
post-effective amendments to any registration statement and any prospectus
used
in connection therewith as may be necessary to keep such registration statement
continuously effective until the earlier of:
(i) such
time
as all Registrable Securities registered thereby have been disposed of in
accordance with the intended method of distribution; and
(ii) the
date
180 days after the date such registration statement becomes
effective;
(but
in
any event not before the expiration of any longer period required under the
Securities Act, including the rules and regulations promulgated thereunder)
and
to comply with the provisions of the Securities Act with respect to the
disposition of all Registrable Securities covered by such registration
statement; and cause the prospectus to be supplemented by any required
prospectus supplement, and as so supplemented to be filed pursuant to Rule
424
under the Securities Act;
(c) furnish
to each holder of Registrable Securities included in such Registration and
the
underwriter or underwriters, if any, without charge, at least one signed copy
of
the registration statement and any post-effective amendment thereto, upon
request, and such number of conformed copies thereof and such number of copies
of the prospectus (including, without limitation, each preliminary prospectus
and each prospectus filed under Rule 424 under the Securities Act), any
amendments or supplements thereto and any documents incorporated by reference
therein, as such holder or underwriter may reasonably request in order to
facilitate the disposition of the Registrable Securities being sold by such
holder (it being understood that WRC consents to the use of the prospectus
and
any amendment or supplement thereto by each holder of Registrable Securities
covered by such registration statement and the underwriter or underwriters,
if
any, in connection with the offering and sale of the Registrable Securities
covered by the prospectus or any amendment or supplement thereto);
(d) notify
each holder of the Registrable Securities of any stop order or other order
suspending the effectiveness of any registration statement, issued or threatened
by the SEC in connection therewith, and use commercially reasonable efforts
to
attempt to prevent the entry of such stop order or to remove it or obtain
withdrawal of it at the earliest possible moment if entered;
12
(e)
if
requested by the managing underwriter or underwriters, if any, or any holder
of
Registrable Securities in connection with any sale pursuant to a registration
statement, promptly incorporate in the prospectus supplement or post-effective
amendment for such sale information relating to such underwriting as the
managing underwriter or underwriters, if any, or such holder reasonably requests
to be included therein; and make all required filings of such prospectus
supplement or post-effective amendment as soon as practicable after being
notified of the matters incorporated in such prospectus supplement or
post-effective amendment;
(f) on
or
prior to the date on which a Registration is declared effective, use its
reasonable best efforts to register or qualify, and cooperate with the holders
of Registrable Securities included in such Registration, the underwriter or
underwriters, if any, and their counsel, in connection with the registration
or
qualification of the Registrable Securities covered by such Registration for
offer and sale under the securities or “blue sky” laws of each state and other
jurisdiction of the United States as any such holder or the managing
underwriter, if any, reasonably requests in writing; use commercially reasonable
efforts to keep each such registration or qualification effective, including,
without limitation, through new filings, or amendments or renewals, during
the
period such registration statement is effective (in the case of an Incidental
Registration) or required to be kept effective (in the case of a Required
Registration); and to do all other acts or things necessary or advisable to
enable the disposition in all such jurisdictions reasonably requested of the
Registrable Securities covered by such Registration; provided,
however,
that
WRC will not be required to qualify generally to do business in any jurisdiction
where it is not then so qualified or to take any action which would subject
it
to taxation or general service of process in any such jurisdiction where it
is
not then so subject;
(g)
in
connection with any sale pursuant to a Registration, cooperate with the holders
of Registrable Securities and the managing underwriter or underwriters, if
any,
to facilitate the timely preparation and delivery of certificates (not bearing
any restrictive legends) representing Securities to be sold under such
Registration, and enable such Securities to be in such denominations and
registered in such names as the managing underwriter or underwriters, if any,
or
such holders may request;
(h) use
its
reasonable best efforts to cause the Registrable Securities to be registered
with or approved by such other governmental agencies or authorities within
the
United States and having jurisdiction over WRC as may be reasonably necessary
to
enable each holder thereof or the underwriter or underwriters, if any, to
consummate the disposition of such Registrable Securities;
(i) enter
into underwriting agreements in customary form and take such other customary
actions as are reasonably necessary in order to expedite or facilitate the
disposition of such Registrable Securities;
(j) use
its
reasonable best efforts to obtain:
13
(i) at
the
time of effectiveness of each Registration, a “comfort letter” from WRC’s
independent certified public accountants covering such matters of the type
customarily covered by “cold comfort letters” as the underwriters in an
underwritten offering reasonably request; and
(ii) at
the
time of any underwritten sale pursuant to the registration statement, a
“bring-down comfort letter”, dated as of the date of such sale, from WRC’s
independent certified public accountants covering such matters of the type
customarily covered by comfort letters as the underwriters reasonably
request;
(k)
use
its
reasonable best efforts to obtain, at the time of effectiveness of each
Registration and at the time of any sale pursuant to each Registration, such
opinion or opinions, addressed to the underwriters in an underwritten offering
as they may reasonably request, from counsel for WRC in customary
form;
(l) promptly
notify each seller of Registrable Securities covered by such Registration,
upon
discovery that the prospectus included in such Registration, as then in effect,
includes an untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading, and
promptly prepare, file with the SEC and furnish to such seller or holder a
reasonable number of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter delivered to the
purchasers or prospective purchasers of such Securities, such prospectus shall
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 light of the circumstances under which they were made, not
misleading;
(m) otherwise
use its reasonable best efforts to comply with all applicable rules and
regulations of the SEC, and make generally available to its security holders
(as
contemplated by Section 11(a) under the Securities Act) an earnings
statement satisfying the provisions of Rule 158 under the Securities
Act no
later than 90 days after the end of the 12-month period beginning with the
first
month of WRC’s first fiscal quarter commencing after the effective date of the
registration statement, which statement shall cover said 12-month
period;
(n) provide
and cause to be maintained a transfer agent and registrar for all Registrable
Securities covered by each Registration from and after a date not later than
the
effective date of such Registration; and
(o) use
its
reasonable best efforts to cause all Registrable Securities that are shares
of
Common Stock covered by each Registration to be listed subject to notice of
issuance, prior to the date of first sale of such Registrable Securities
pursuant to such Registration, on each securities exchange on which the Common
Stock is then listed; and, if the Common Stock is not so listed, to use its
reasonable best efforts to cause all such Registrable Securities covered by
each
Registration to be designated as National Market System Securities, if the
Common Stock is so designated (and, if the Common Stock is listed on the Nasdaq
National Market or the Nasdaq SmallCap Market, to cause all such
14
Registrable
Securities covered by each Registration to be so listed); and, if the Common
Stock is not so designated, to arrange for at least two market makers to
register with the NASD as such with respect to such Registrable
Securities.
WRC
may
require each holder of Registrable Securities that will be included in such
Registration to furnish WRC with such information in respect of such holder
of
Registrable Securities that will be included in such Registration as WRC may
reasonably request in writing and as is required by applicable laws or
regulations. If a holder of Registrable Securities fails to provide such
information, WRC shall be entitled to exclude the Registrable Securities of
such
holder from any Registration thereunder. If the offering of the Registrable
Securities is to be underwritten, WRC may require that the holders of the
Registrable Securities participating in such Registration Statement enter into
a
reasonable underwriting agreement in customary form; provided,
however,
that
the holders of the Registrable Securities shall not be required to make any
representation, warranty or covenant other than customary representations and
warranties concerning the due authority of such holder of Registrable Securities
to sell such Registrable Securities and execute and deliver such underwriting
agreement, the holder’s good title to the Registrable Securities and the
warranties implied in connection with such transfer under Section 8-108(a)
of the Uniform Commercial Code of the State of New York, and shall not be
required to provide any indemnity or contribution rights to any underwriter
on
terms any more favorable than those provided for in
Section 2.06.
SECTION
2.04. Reasonable
Investigation.
WRC shall:
(a) give
the
holders of Registrable Securities, their underwriters, if any, and their
respective counsel and accountants the opportunity to participate in the
preparation of the registration statement, each prospectus included therein
or
filed with the SEC and each amendment thereof or supplement
thereto;
(b) give
each
such holder and underwriter reasonable opportunities to discuss the business
of
WRC and its Subsidiaries with its officers, counsel and the independent public
accountants who have certified its financial statements;
(c) make
available for inspection by any holder of Registrable Securities included in
any
Registration, any underwriter participating in any disposition pursuant to
any
Registration, and any attorney, accountant or other agent retained by any such
holder or underwriter, all financial and other records, pertinent corporate
documents and Properties of WRC and its Subsidiaries; and
(d) cause
each of WRC’s and its Subsidiaries’ officers, directors and employees to supply
all information reasonably requested by any such Person in connection with
such
Registration;
in
each
such case, as shall be reasonably necessary (in light of the potential liability
of such holder or underwriter in respect of misstatements in and omissions
from
the registration statement or prospectus and any holder’s obligations under
Section 2.06) to enable it to conduct a “reasonable investigation” within
the meaning of Section 11(b)(3)
15
of
the
Securities Act and to satisfy the requirement of reasonable care imposed by
Section 12(a)(2) of the Securities Act.
WRC
agrees to include in the registration statement and each amendment thereto,
and
in each preliminary prospectus, prospectus or prospectus supplement, all
material information requested to be included by any holder of Registrable
Securities or underwriter, in each case, to the extent required to be contained
therein or necessary to correct any misstatement of fact or necessary to make
any statement contained therein, in light of the circumstances under which
it
was made, not misleading. Each holder of Registrable Securities agrees to keep
confidential and not disclose (other than in connection with disclosure by
WRC
pursuant to the foregoing sentence) to any Person (other than its officers,
directors, employees and trustees who need to know such information and other
than any attorney, agent, adviser or accountant who makes the agreement set
forth in this paragraph) any information WRC reasonably determines to be
confidential and so notifies in writing such holder, unless:
(i)
the
release of such information is necessary to avoid or correct a misstatement
of a
fact or omission of a fact required to be stated in any such registration
statement or any amendment thereto, or in any preliminary prospectus, prospectus
or prospectus supplement, or necessary to make the statements made therein,
in
light of the circumstances under which they were made, not
misleading;
(ii)
the
release of such records is ordered pursuant to a subpoena or other order from
a
court of competent jurisdiction;
(iii)
such
disclosure is requested by any governmental authority or self-regulatory
organization having or alleging jurisdiction over such holder of Registrable
Securities, and either such governmental authority or self-regulatory
organization agrees to maintain the confidentiality of such information or
such
holder gives WRC reasonable advance written notice of such intended disclosure,
so as to permit WRC to seek a protective order or similar relief;
(iv)
WRC
otherwise consents; or
(v)
such
information becomes generally available to the public other than through a
breach of this Agreement by such holder.
SECTION
2.05. Registration
Expenses.
WRC shall pay all Registration Expenses in connection with each Registration
of
Registrable Securities, including, without limitation, any such registration
not
effected by WRC.
SECTION
2.06. Indemnification;
Contribution.
(a)
Indemnification
by WRC.
In connection with any registration statement or any offering of Securities
pursuant thereto, WRC shall indemnify, to the fullest extent permitted by law,
each holder of Registrable Securities, its Affiliates, officers, directors,
partners, employees, trustees and agents, if any, and each Person, if any,
who
controls such holder within the meaning of Section 15 of the Securities
Act
or Section 20 of the Exchange Act, against
16
all
losses, claims, damages, liabilities (or proceedings in respect thereof) and
expenses (under the Securities Act or common law or otherwise), joint or
several, resulting from any violation by WRC of the provisions of the Securities
Act or the Exchange Act or any untrue statement or alleged untrue statement
of a
material fact contained in any registration statement or prospectus (and as
amended or supplemented if amended or supplemented) or any preliminary
prospectus or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein (in the case of any prospectus, in light of the circumstances under
which they were made) not misleading, except to the extent that such losses,
claims, damages, liabilities (or proceedings in respect thereof) or expenses
are
caused by any such untrue statement or alleged untrue statement contained in
or
by any omission or alleged omission from information concerning any holder
furnished in writing to WRC by such holder expressly for use therein. If the
offering pursuant to any registration statement provided for under this
Agreement is made through underwriters, no action or failure to act on the
part
of such underwriters (whether or not such underwriter is an Affiliate of any
holder of Registrable Securities) shall affect the obligations of WRC to
indemnify any holder of Registrable Securities or any other Person pursuant
to
the preceding sentence. If the offering pursuant to any registration statement
provided for under this Agreement is made through underwriters, WRC agrees,
to
the extent required by such underwriters, to enter into an underwriting or
other
agreement providing for indemnity of such underwriters, their officers,
directors and agents, if any, and each Person, if any, who controls such
underwriters within the meaning of Section 15 of the Securities Act
or
Section 20 of the Exchange Act to the same extent as hereinbefore provided
with
respect to the indemnification of the holders of Registrable Securities;
provided,
however,
that
WRC shall not be required to indemnify any such underwriter, or any officer
or
director of such underwriter or any Person who controls such underwriter within
the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, to the extent that the loss, claim, damage, liability (or
proceedings in respect thereof) or expense for which indemnification is claimed
results from such underwriter’s failure to send or give a copy of a final
prospectus or an amended or supplemented final prospectus to the Person
asserting an untrue statement or alleged untrue statement or omission or alleged
omission at or prior to the written confirmation of the sale of Registrable
Securities to such Person if such statement or omission was corrected in such
final prospectus or amended or supplemented final prospectus prior to such
written confirmation and the underwriter was provided with such final prospectus
or amended or supplemented final prospectus.
(b)
Indemnification
for Controlling Person Liability.
In
addition to the indemnification provided for in Section 2.06(a), WRC
shall
indemnify each holder of Registrable Securities, its Affiliates, officers,
directors, partners, employees, trustees and agents, if any, and each Person,
if
any, who controls such holder within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, against all losses,
claims, damages, liabilities (or proceedings in respect thereof) and expenses,
joint or several, in each case, under the Securities Act, the Exchange Act,
common law or otherwise, resulting from:
17
(i) any
violation by WRC of the provisions of the Securities Act or the Exchange
Act;
(ii)
any
untrue statement or alleged untrue statement of a material fact contained in
any
registration statement or amendment thereto or prospectus (and as amended or
supplemented if amended or supplemented) or any preliminary prospectus or caused
by any omission or alleged omission to state therein a material fact required
to
be stated therein or necessary to make the statements therein (in the case
of
any prospectus, in light of the circumstances under which they were made) not
misleading, whether or not, in each such case, the registration statement or
amendment thereto or prospectus (or amendment or supplement thereto) or
preliminary prospectus related or relates to any offering or sale of Registrable
Securities by any holder; and
(iii)
any
other
untrue statement or alleged untrue statement of a material fact or omission
or
alleged omission to state a material fact necessary to make the statements
in
any document issued or delivered to any purchaser or potential purchaser or
filed with the SEC pursuant to Section 13 or Section 15(d) of
the
Exchange Act (in light of the circumstances under which they were made) not
misleading, in each case, in connection with any offering or sale of Securities
of WRC by any Person, whether or not such Securities offered or sold are or
were
registered or required to be registered under the Securities Act;
in
each
such case, to the extent that such losses, claims, damages, liabilities (or
proceedings in respect thereof) and expenses, joint or several, are alleged
to
result from or exist by virtue of the fact that any holder of Registrable
Securities controls or is alleged to control (within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange
Act)
WRC or any Subsidiary, whether such claim or allegation arises under
Section 15 of the Securities Act or Section 20 of the Exchange
Act or
otherwise; provided,
however,
that
such indemnification shall not extend to losses, claims, damages, liabilities
(or proceedings in respect thereof) or expenses caused by any untrue statement
or alleged untrue statement contained in or by any omission or alleged omission
from information furnished in writing to WRC by such holder expressly for use
therein, or from any such information provided by an underwriter selected by
the
holders or any of them.
(c) Indemnification
by the Holders.
In
connection with any registration statement in which a holder of Registrable
Securities is participating, each such holder, severally and not jointly, shall
indemnify, to the fullest extent permitted by law, WRC, each underwriter (if
the
underwriter so requires) and their respective officers, directors and agents,
if
any, and each Person, if any, who controls WRC or such underwriter within the
meaning of Section 15 of the Securities Act or Section 20 of
the
Exchange Act, against any losses, claims, damages, liabilities (or proceedings
in respect thereof) and expenses resulting from any untrue statement or alleged
untrue statement of a material fact or any omission or alleged omission of
a
material fact required to be stated in the registration statement or prospectus
or preliminary prospectus or any amendment thereof or supplement thereto or
necessary to make the statements therein (in the case of any
18
prospectus,
in light of the circumstances under which they were made) not misleading, but
only to the extent that such untrue statement is contained in or such omission
is from information concerning a holder furnished in writing by such holder
expressly for use therein; provided,
however,
that
such holder’s obligations hereunder shall be limited to an amount equal to the
proceeds to such holder of the Registrable Securities sold pursuant to such
registration statement.
(d)
Control
of Defense.
Any Person entitled to indemnification under the provisions of this
Section 2.06 shall give prompt notice to the indemnifying party of any
claim with respect to which it seeks indemnification (the failure of any
indemnified party so to notify the indemnifying party shall not relieve the
indemnifying party of its obligations hereunder except to the extent that the
indemnifying party is materially prejudiced by such failure to notify) and
unless in such indemnified party’s reasonable judgment a conflict of interest
between such indemnified and indemnifying parties may exist in respect of such
claim, permit such indemnifying party to assume the defense of such claim,
with
counsel reasonably satisfactory to the indemnified party; and if such defense
is
so assumed, such indemnifying party shall not enter into any settlement without
the consent of the indemnified party; and any underwriting agreement entered
into with respect to any registration statement provided for under this Article
II shall so provide. In the event an indemnifying party shall not be entitled,
or elects not, to assume the defense of a claim, such indemnifying party shall
be obligated to pay the fees and expenses of only one counsel or firm of counsel
for all parties indemnified by such indemnifying party in respect of such claim,
unless in the reasonable judgment of any such indemnified party a conflict
of
interest may exist between such indemnified party and any other of such
indemnified parties in respect to such claim (in which case the indemnifying
party shall pay the fees and expenses of an additional counsel for the
indemnified party).
(e) Contribution.
If
for any reason the foregoing indemnity is unavailable, then the indemnifying
party, in lieu of indemnifying the indemnified party, shall contribute to the
amount paid or payable by the indemnified party as a result of such losses,
claims, damages, liabilities or expenses:
(i)
in
such
proportion as is appropriate to reflect the relative benefits received by the
indemnifying party on the one hand and the indemnified party on the other;
or
(ii)
if
the
allocation provided by clause (i) above is not permitted by applicable law
or
provides a lesser sum to the indemnified party than the amount hereinafter
calculated, in such proportion as is appropriate to reflect not only the
relative benefits received by the indemnifying party on the one hand and the
indemnified party on the other but also the relative fault of the indemnifying
party and the indemnified party as well as any other relevant equitable
considerations.
Notwithstanding
the foregoing, no holder of Registrable Securities shall be required to
contribute any amount in excess of the amount such holder would have been
required to pay to an indemnified party if the indemnity under
Section 2.06(c) hereof was available.
19
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. The obligation of any Person
to
contribute pursuant to this Section 2.06 shall be several and not
joint.
(f)
Timing
of Payments.
An indemnifying party shall make payments of all amounts required to be made
pursuant to the foregoing provisions of this Section 2.06 to or for
the
account of the indemnified party from time to time promptly upon receipt of
bills or invoices relating thereto or when otherwise due or payable. Without
limiting the generality of the foregoing, each indemnifying party, as an interim
measure during the pendency of any claim, action, investigation, inquiry or
proceeding arising out of or based upon any matter or subject for which
indemnity (or contribution in lieu thereof) may be available to any indemnified
party under this Section 2.06, will promptly reimburse each indemnified
party, as often as invoiced therefor (but in no event more often than monthly)
for all reasonable legal or other expenses incurred in connection with the
investigation or defense of any such claim, action, investigation, inquiry
or
proceeding, notwithstanding the absence of any judicial determination as to
the
propriety or enforceability of the indemnifying party’s obligation to reimburse
the indemnified party for such expenses and notwithstanding the possibility
that
the obligations to pay such expenses might later have been held to be improper
by a court of competent jurisdiction. To the extent that any such interim
reimbursement is held to be improper, the indemnified party agrees to promptly
return the amount so advanced to the indemnifying party.
(g) Survival.
The indemnity and contribution agreements contained in this Section 2.06
shall remain in full force and effect regardless of any investigation made
by or
on behalf of a participating holder of Registrable Securities, its officers,
directors, agents or any Person, if any, who controls such holder as aforesaid,
and shall survive the transfer of such Securities by such holder.
SECTION
2.07. Holdback
Agreements; Registration Rights to Others.
(a)
In
connection with each underwritten sale of Registrable Securities, WRC agrees,
and each holder of Registrable Securities by acquisition of such Registrable
Securities severally and not jointly agrees, to enter into customary holdback
agreements for a period not to exceed 180 days concerning the sale or
distribution of Registrable Securities, except, in the case of any holder of
Registrable Securities, such holder shall only be required to make such
agreement to the extent that WRC and the Initial Stockholder shall make similar
agreements.
(b) If
WRC
shall at any time after the date hereof provide to any holder of any of its
Securities rights with respect to the registration of such Securities under
the
Securities Act:
(i)
such
rights shall not be in conflict with or adversely affect any of the rights
provided in this Agreement to the Exchangers; and
20
(ii) if
such rights are provided on terms or conditions more favorable to such holder
than the terms and conditions provided in this Agreement or if rights
(including, without limitation, rights to demand or request a registration
of
similar Securities of WRC) in addition to those granted pursuant to this
Agreement are provided, WRC will provide (by way of amendment to this Agreement
or otherwise) such additional more favorable terms or conditions to the
Exchangers, so long as at such time, the Exchangers have not disposed of more
than 66 2/3% of the aggregate number of Exchange Shares originally received
by
the Exchangers.
SECTION
2.08. Availability
of Information.
At
any time that any class of Capital Stock of WRC is registered under
Section 12(b) or Section 12(g) of the Exchange Act, WRC will
comply
with the reporting requirements of Sections 13 and 15(d) of the Exchange
Act (whether or not it shall be required to do so pursuant to such Sections)
and
will comply with all other public information reporting requirements of the
SEC
from time to time in effect. In addition, WRC, if the Capital Stock of WRC
is so
registered, shall at all times after the Initial Public Offering Date, file
such
reports and information, and shall make available to the public and to the
holders of Exchange Shares such information, as shall be necessary to permit
such holders to offer and sell Registrable Securities pursuant to the provisions
of Rule 144 promulgated under the Securities Act.
WRC,
if
the Capital Stock of WRC is so registered, will also cooperate with each such
holder in supplying such information as may be necessary for such holder to
complete and file any information reporting forms presently or hereafter
required by the SEC as a condition to the availability of an exemption from
the
registration provisions of the Securities Act in connection with the sale of
any
Common Stock.
SECTION
2.09. Tag-Along
Rights.
(a)
Initial
Stockholder Tag-Along Rights.
If the Initial Stockholder and/or, to the extent that such Person has received
Common Stock transferred from the Initial Stockholder, Ripplewood Partners,
any
Affiliate of Ripplewood Partners and/or any shareholder, partner, member or
employee of Ripplewood Partners or any Affiliate of Ripplewood Partners
(collectively, the “Selling
Stockholder”)
proposes to transfer (other than transfers (i) in a Public Offering, (ii) to
Ripplewood Partners or any Affiliate of Ripplewood Partners, (iii) to any
shareholder, partner, member or employee of Ripplewood Partners or any Affiliate
of Ripplewood Partners, (iv) to any employee of the Initial Stockholder, WRC
or
any of their Subsidiaries, (v) to any member of the Initial Stockholder or
any
Affiliate of such member or (vi) pursuant to the Redemption and Repurchase
Agreement, dated the date hereof, among WRC, SGC and the Initial Stockholder)
any shares of Common Stock in a single transaction or in a series of related
transactions (a “Tag-Along
Sale”),
each
Exchanger may, at its option, elect to exercise its rights under this Section
2.09. In the event of a Tag-Along Sale, the Selling Stockholder shall deliver
to
each Exchanger a written notice of the terms and conditions of such Tag-Along
Sale (a “Tag-Along
Notice”)
and
offer each Exchanger the opportunity to participate in such Tag-Along Sale
on
the same terms and conditions, subject to the same agreements and for the same
per share consideration as the Selling Stockholder. The Tag-Along Notice shall
identify the number of shares of Common Stock held by such Exchanger subject
to
the offer (a
21
“Tag-Along
Offer”),
the
per share consideration at which the Tag-Along Sale is proposed to be made,
all
other material terms and conditions of the Tag-Along Sale (including the form
of
the proposed agreement, if any) and the date on which the Tag-Along Sale is
proposed to be consummated. From the date of the Tag-Along Notice until the
date
that is ten days thereafter (the “Tag-Along
Notice Period”),
each
Exchanger shall have the right (a “Tag-Along
Right”),
exercisable by written notice delivered to the Initial Stockholder, to request
that the Selling Stockholder include in the Tag-Along Sale the number of shares
of Common Stock held by such Exchanger as is specified in such notice (each
Exchanger so requesting, a “Tagging
Person”);
provided,
however,
that,
if the aggregate number of shares of Common Stock proposed to be sold by the
Selling Stockholder and all Tagging Persons in the Tag-Along Sale exceeds the
number of shares of Common Stock which can be sold on the terms and conditions
set forth in the Tag-Along Notice, then (x) only the Tag-Along Portion of Common
Stock of each Tagging Person and the Selling Stockholder shall be sold pursuant
to the Tag-Along Offer and (y) the Selling Stockholder shall also be entitled
to
sell such additional shares of Common Stock as is permitted by Section
2.09(d).
(b)
Closing
of Tag-Along Sale.
If any Tagging Person exercises its Tag-Along Right hereunder with respect
to a
Tag-Along Sale, on the closing date for such Tag-Along Sale such Tagging Person
shall deliver (i) to the purchaser specified in the Tag-Along Notice
for
such Tag-Along Sale a certificate or certificates representing the shares of
Common Stock which it has elected to sell (net of any reduction pursuant to
Section 2.09(a)), together with appropriate instruments of transfer
duly
endorsed in blank, against payment by such purchaser of the aggregate
consideration payable for such shares at the per share consideration specified
in such Tag-Along Notice, and (ii) to the Selling Stockholder all costs,
expenses and other amounts to be paid by such Tagging Person in connection
with
such Tag-Along Sale pursuant to Section 2.09(g).
(c)
Non-Participants.
If at the termination of the Tag-Along Notice Period any Tagging Person shall
not have delivered written notice to the Selling Stockholder of its election
to
participate in the Tag-Along Sale, such Tagging Person will have waived its
Tag-Along Right with respect to such Tag-Along Sale.
(d) Certain
Allocations.
If any Tagging Person (i) declines to exercise or waives its Tag-Along Right
with respect to any Tag-Along Sale or (ii) elects to exercise its Tag-Along
Right with respect to less than its Tag-Along Portion with respect to any
Tag-Along Sale, the Selling Stockholder shall be entitled to transfer in such
Tag-Along Sale, in addition to its Tag-Along Portion with respect to such
Tag-Along Sale, a number of shares of Common Stock equal to the number of shares
of Common Stock constituting the portion of such Tagging Person’s Tag-Along
Portion with respect to which such Tagging Person’s Tag-Along Right was not
exercised.
(e)
Permitted
Sale.
The Selling Stockholder and any Tagging Person who exercises its Tag-Along
Right
with respect to a proposed Tag-Along Sale pursuant to this Section 2.09
may
sell the shares of Common Stock subject to the Tag-Along Offer with respect
to
such Tag-Along Sale on the terms and conditions set forth in such Tag-Along
22
Notice
within 120 days of the date on which the Tag-Along Rights with respect to such
Tag-Along Sale shall have been waived, exercised or expire.
(f)
Certain
Other Matters.
For purposes of this Section 2.09 and all definitions used in this
Section 2.09, a Right to acquire one share of Common Stock shall constitute
one share of Common Stock and a Person shall be deemed to own a share of Common
Stock if such Person has a Right to acquire such share whether or not such
Right
is exercisable at such time; provided,
however,
that
any payments to be made to any Exchanger in connection with the exercise of
any
Tag-Along Right with respect to any Right shall be reduced by an amount equal
to
the then applicable exercise price of such Right.
(g) Expense
of Sale.
All out-of-pocket costs and expenses incurred by the Exchangers in connection
with a Tag-Along Sale (including, without limitation, fees and disbursement
of
any counsel retained by the Exchangers) shall be paid by the Exchangers. All
direct selling expenses, discounts or commissions of brokers paid to any Person
on a per share basis in connection with such Tag-Along Sale shall be paid
ratably by the Exchanger and the Selling Stockholder (in proportion to each
Selling Stockholder’s and each Exchanger’s and the Selling Stockholder’s
Tag-Along Portion). All other fees and expenses in connection with such
Tag-Along Sale shall be paid by WRC.
SECTION
2.10. Drag-Along
Rights.
(a)
If,
at
any time prior to the Drag-Along Termination Date, (A) the Selling Stockholder
proposes to transfer in a Bona Fide Sale (other than any transfer (i) in
a
Public Offering, (ii) to Ripplewood Partners or any Affiliate of Ripplewood
Partners, (iii) to any shareholder, partner, member or employee of
Ripplewood Partners or any Affiliate of Ripplewood Partners, (iv) to
any
employee of the Initial Stockholder, WRC or any of their Subsidiaries or
(v) to any member of the Initial Stockholder or any Affiliate of such
member) not less than 75% of the aggregate number of shares of Common Stock
owned by the Selling Stockholder at such time and (B) such transfer constitutes
a “Drag-Along Sale” (as such term is defined in the SGC Stockholders Agreement)
and each holder of “Purchaser Shares” (as such term is defined in the SGC
Stockholders Agreement) shall be required to participate in such Drag-Along
Sale
pursuant to Article II of the SGC Stockholders Agreement (a "Drag-Along
Sale"),
then
the Selling Stockholder may at its option require all, but not less than all,
of
the holders of Exchange Shares to sell in such Drag-Along Sale their respective
Drag-Along Portions of the Exchange Shares then held by such holders
(“Drag-Along
Rights”).
The
Selling Stockholder shall provide written notice of such Drag-Along Sale to
each
such holder (a “Drag-Along
Notice”)
not
later than the tenth day prior to the proposed Drag-Along Sale. The Drag-Along
Notice shall identify, with respect to the Drag-Along Sale, the transferee,
the
number of shares of Common Stock to be sold, the consideration for which a
transfer is proposed to be made, which shall also be stated on a per share
basis
(the “Drag-Along
Sale Price”),
the
date on which such Drag-Along Sale is proposed to be consummated and, in
reasonable detail, all other material terms and conditions of such Drag-Along
Sale.
23
(b)
Subject
to this Section 2.10, each holder of Exchange Shares shall be required
to
participate in the Drag-Along Sale on the terms and conditions set forth in
the
Drag-Along Notice, so long as such terms and conditions constitute a Bona Fide
Sale, and to transfer the Drag-Along Portion of its Exchange Shares as set
forth
below. The price payable per share in such Drag-Along Sale to each holder of
Exchange Shares shall be the Drag-Along Sale Price.
(c) The
Selling Stockholder shall have a period of 90 days from the date of receipt
of
the Drag-Along Notice to consummate the Drag-Along Sale on the terms and
conditions set forth in such Drag-Along Notice, so long as such terms and
conditions constitute a Bona Fide Sale.
(d) On
the
closing date for a Drag-Along Sale, each holder of Exchange Shares shall deliver
to the purchaser specified in the Drag-Along Notice for such Drag-Along Sale
a
certificate or certificates representing such holder’s Drag-Along Portion of the
Exchange Shares, together with appropriate instruments of transfer duly endorsed
in blank, against payment by such purchaser of the total purchase price for
such
shares at the Drag-Along Sale Price per share.
(e) All
expenses and costs of any Drag-Along Sale, including the fees of one counsel
to
the holders of Exchange Shares related to such sale, shall be for the account
of
and paid by the Selling Stockholder.
(f) For
purposes of this Section 2.10 and all definitions used in this
Section 2.10, a Right to acquire one share of Common Stock shall constitute
one share of Common Stock and a Person shall be deemed to own a share of Common
Stock if such Person has a Right to acquire such share whether or not such
Right
is exercisable at such time; provided,
however,
that
any payments to be made to any holder of Exchange Shares in connection with
the
exercise of any Drag-Along Sale with respect to any Right shall be reduced
by an
amount equal to the then applicable exercise price of such Right.
ARTICLE
III
Subscription
Rights
SECTION
3.01. Right
To Elect Purchase of Additional Shares.
In the event that WRC shall at any time offer to sell any Issuable Shares then
WRC shall offer to each Exchanger the right to subscribe for and purchase a
portion of the total number of the Issuable Shares to be so sold equal to the
Additional Issuable Shares Number with respect to such Exchanger at such time,
at the same price, on the same date and on the same terms offered to the
proposed purchasers, on the terms set forth in this Article III. Notwithstanding
any other provision of this Agreement, this Article III shall not apply to
(a)
any offer to sell Issuable Shares in a Public Offering, (b) any issuance of
Issuable Shares pursuant to any employee stock option plan, management option
plan or
24
agreement
or any other compensatory or incentive stock grant or option plan or agreement
or (c) any issuance of Issuable Shares in connection with any
acquisition.
SECTION
3.02. Notice
of Sale of Issuable Shares.
WRC shall give not less than 20 Business Days written notice to each Exchanger
of any sale of Issuable Shares described in Section 3.01, which notice
shall specify:
(a)
the
number of Issuable Shares and the type of Issuable Shares to be
offered;
(b)
the
purchase price per share to be paid by the purchasers of such Issuable
Shares;
(c)
if
any of
such Issuable Shares consist of Rights, a detailed description of the terms
of
such Rights, including the exercise price and expiration date;
(d) the
date
on which such proposed sale is to be consummated (the “Additional
Sale Closing Date”);
(e) the
Additional Issuable Shares Number with respect to such Exchanger;
and
(f) that
such
Exchanger shall have the right to purchase a number of the Issuable Shares
so
offered equal to the Additional Issuable Shares Number with respect to such
Exchanger by following the procedure set forth in Section 3.03.
SECTION
3.03. Notice
of Election To Purchase Additional Issuable Shares.
Each Exchanger may elect to purchase a number of the Issuable Shares so offered
equal to the Additional Issuable Shares Number with respect to such Exchanger
by
delivering notice to WRC on or before the date which is five Business Days
prior
to the date of such proposed sale (the “Additional
Issuable Shares Election Date”).
Such
notice shall constitute an irrevocable subscription to purchase such number
of
Issuable Shares at the purchase price set forth by WRC pursuant to Section
3.02.
SECTION
3.04. Confirmation
Notice.
WRC shall notify each Exchanger electing to purchase additional Issuable Shares
within three Business Days after the Additional Issuable Shares Election Date
of:
(a) the
aggregate consideration to be paid by such Exchanger, which shall equal the
product of the Additional Issuable Shares Number with respect to such Exchanger
times the purchase price per Issuable Share and, in the event that a sale to
the
buyer of such Issuable Shares giving rise to such right on the part of the
Exchangers is to be made for consideration other than cash, such purchase price
per Issuable Share shall be deemed to be the quotient of the aggregate fair
market value of the consideration paid, as determined by the Valuation Agent,
divided by the number of Issuable Shares so purchased by such buyer);
and
25
(b) wire
instructions for the account to which WRC wishes Exchangers electing to
participate in the sale to transfer funds pursuant to Section 3.05.
SECTION
3.05. Closing
of Sale.
Each Exchanger electing to participate in a sale pursuant to this Article III
shall deliver to WRC by wire transfer in immediately available funds on the
Additional Sale Closing Date the aggregate consideration (as set forth in
Section 3.04(b)) for the Additional Issuable Shares Number of Issuable Shares
to
be purchased by such holder; provided,
however,
that
the consideration paid by such Exchanger shall be paid in cash by wire transfer.
WRC shall deliver to each Exchanger electing to participate in a sale pursuant
to this Article III, against such wire transfer, a certificate or certificates
evidencing a number of Issuable Shares of the applicable type or types equal
in
the aggregate to the Additional Issuable Shares Number with respect to such
Exchanger.
ARTICLE
IV
Restrictions
on Transfer,
Termination
and Other Agreements
SECTION
4.01. Restrictions
on Transfer to Transferees.
(a)
Generally.
WRC shall neither issue nor sell any additional shares of Common Stock or Rights
(other than in a Public Offering) to any purchaser (other than the Initial
Stockholder, SGC or the Exchangers) unless such purchaser shall have
acknowledged that such purchaser has notice of the provisions of this Agreement
and is an “Other
Stockholder”
as
defined herein and such purchaser shall have agreed, in writing, to be bound
by
each of the terms and provisions of this Agreement applicable to an
“Other
Stockholder”
pursuant to an undertaking substantially in the form set forth as Exhibit A
hereto. Except for a transaction that causes the termination of the provisions
of this Agreement (other than Section 2.05, Section 2.06, Section 2.08 and
Section 6.07) pursuant to Section 4.05, no other party hereto shall sell,
assign, transfer or otherwise dispose of any Common Stock or any Rights to
any
transferee unless such transferee shall have assumed in writing all of the
obligations of its transferor imposed by this Agreement with respect to such
Common Stock or Rights and shall have agreed to be bound by each of the terms
and provisions of this Agreement to which such transferor was bound with respect
to such Common Stock and Rights pursuant to an undertaking substantially in
the
form set forth as Exhibit A hereto.
(b) Restrictions
on Transfers by Holders of Exchange Shares.
Each of the holders of Exchange Shares agrees that it will not transfer any
Common Stock or Rights it holds at any time prior to the Initial Public Offering
Date to any Person that is an Adverse Party; provided,
however,
that
this Section 4.01(b) shall not prohibit or restrict transfers of Common
Stock or Rights pursuant to Section 2.09 or 2.10 hereof or pursuant to Rule
144.
26
SECTION
4.02. Cooperation
by WRC.
WRC shall refuse to register any transfer of any Common Stock or Rights to
any
transferee unless WRC shall have received from the prospective transferee a
written agreement to be bound by the provisions of this Agreement if required
by
Section 4.01 hereof, and such other evidence as WRC may reasonably require
to establish compliance with such Section 4.01. WRC shall be protected
in,
and shall have no liability to any Person for, and no party hereto shall assert
any claim against WRC for, failing to register any transfer of any Common Stock
or Rights if such transfer is not in compliance with the provisions of this
Agreement.
SECTION
4.03. Legending
of Certificates.
Each certificate representing any Common Stock or Rights shall bear the
following legend:
“THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS OF A
STOCKHOLDERS AGREEMENT, DATED AS OF JUNE 22, 2005, THE PROVISIONS OF WHICH
ARE
INCORPORATED HEREIN BY REFERENCE. SUCH STOCKHOLDERS AGREEMENT PROVIDES, AMONG
OTHER THINGS, THAT THIS SECURITY MAY NOT BE SOLD OR TRANSFERRED TO ANY PERSON
WHO HAS NOT EXPRESSLY ASSUMED THE OBLIGATIONS OF SUCH AGREEMENT (EXCEPT AS
OTHERWISE PERMITTED THEREBY) AND CONTAINS, AMONG OTHER PROVISIONS, PROVISIONS
WHICH LIMIT THE TRANSFER OF THIS SECURITY. A COPY OF SUCH STOCKHOLDERS AGREEMENT
IS AVAILABLE FROM THE SECRETARY OF WRC MEDIA INC. UPON REQUEST.”
SECTION
4.04. Securities
Act Restrictions; Legend.
WRC shall not register any transfer of Common Stock or Rights if it has reason
to believe that such transfer is being requested in violation of the
registration requirements of Section 5 of the Securities Act. Except
as
otherwise permitted by Section 4.05 hereof, each certificate representing
a
share of Common Stock or a Right shall be stamped or otherwise imprinted with
a
legend in substantially the following form:
“THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED OR SOLD EXCEPT IN
A
TRANSACTION REGISTERED UNDER SUCH ACT OR PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF SUCH ACT.”
SECTION
4.05. Termination
of Restrictions.
Each and all of the provisions of this Agreement (other than Section 2.05,
Section 2.06, Section 2.08 and Section 6.07) shall terminate immediately
as
to any Common Stock or Rights (but this Agreement shall remain in force with
respect to any remaining Common Stock or Rights):
27
(a) when
such
Common Stock or Rights have been effectively registered under the Securities
Act
and disposed of in accordance with the registration statement covering such
Common Stock or Rights; or
(b) when
they
shall have been distributed pursuant to Rule 144; or
(c) when
they
shall have been otherwise transferred and subsequent disposition of them shall
not require registration or qualification under the Securities Act or any
similar state law then in force.
Notwithstanding
anything to the contrary contained in Section 4.05(b) or (c), shares
of
Common Stock or Rights distributed or transferred thereunder shall, until the
Public Market Date, remain subject to the provisions of Section 2.10.
Whenever such restrictions shall terminate as to any Common Stock or Rights,
the
holder thereof shall be entitled to receive from WRC, without expenses (other
than transfer taxes, if any), new certificates for such Common Stock or Rights
not bearing the applicable legends set forth in Section 4.03 or
Section 4.04 hereof.
ARTICLE
V
Defined
Terms
SECTION
5.01. Terms
Defined.
As
used herein, the following terms have the respective meanings set forth below
or
set forth in the Section hereof following such term:
“Additional
Issuable Shares Number”
with
respect to any holder of Exchange Shares electing to purchase Issuable Shares
pursuant to Article III hereof, means the product of:
(a) the
aggregate number of Issuable Shares offered to be sold by WRC multiplied
by
(b) the
quotient of:
| (i) |
the aggregate number of Issuable Shares held on the Additional Issuable
Shares Election Date by such holder; divided
by
|
| (ii) |
the aggregate number of Issuable Shares outstanding on the Additional
Issuable Shares Election Date;
|
in
each
case, prior to giving effect to the offering of such Issuable Shares, giving
rise to the rights of such holders to purchase additional Issuable Shares
pursuant to Article III hereof.
“Additional
Issuable Shares Election Date”
shall
have the meaning set forth in Section 3.03.
28
“Additional
Sale Closing Date”
shall
have the meaning set forth in Section 3.02(d).
“Adverse
Party”
means
any Person whose ownership interest in WRC would be reasonably expected to
be
detrimental to the interest of WRC (including, without limitation, its
Subsidiaries), including, without limitation, a competitor of WRC (including,
without limitation, any of its Subsidiaries); provided,
however,
that:
(a) no
Person
described in Rule 501(a)(1) under the Securities Act; and
(b) no
dealer
registered under Section 15 of the Exchange Act or investment adviser registered
under the Investment Advisers Act of 1940, as amended, which, in either case,
owns or invests on a discretionary basis at least $10,000,000 in securities
of
unaffiliated issuers
shall
be
an “Adverse Party” unless such Person is controlled by, controls or is under
common control with a competitor of WRC (including, without limitation, any
of
its Subsidiaries).
“Affiliate”
means,
with respect to any Person, any other Person that directly or indirectly through
one or more intermediaries controls, or is controlled by, or is under common
control with, such Person; provided,
that
with respect to WRC and its Subsidiaries only:
(a) no
Subsidiary, holder of Exchange Shares or any Affiliate of such holder shall
be
an Affiliate of WRC or any Subsidiary;
(b) neither
the “Purchaser” (as defined in the SGC Stockholders Agreement), nor any
Affiliate of such “Purchaser” shall be an Affiliate of WRC or any
Subsidiary;
(c) any
Person other than those specified in clauses (a) and (b) of this definition
that
beneficially owns or holds 10% or more of any class of the Voting Stock of
WRC
shall be an Affiliate of WRC or any Subsidiary; and
(d) any
Person other than those specified in clauses (a) and (b) of this definition,
10%
or more of the Voting Stock (or in the case of a Person that is not a
corporation, 10% or more of the equity interest) of which is beneficially owned
or held by WRC or a Subsidiary shall be an Affiliate of WRC or any
Subsidiary.
As
used
in this definition and in the definition of “Adverse Party”, “control”
means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
“Agreement”
has the
meaning set forth in the introductory paragraph hereof.
29
“Board
of Directors”
means
the board of directors of WRC or any committee thereof that, in the instance,
shall have the lawful power to exercise the power and authority of such board
of
directors.
“Bona
Fide Sale”
means a
sale in which (i) the sale by each holder of Exchange Shares would be on the
same terms and conditions and for the same type of consideration as is to be
received by the Selling Stockholder, (ii) the consideration to be paid to each
holder of Exchange Shares in connection with such transaction consists solely
of
cash, Freely Tradeable Securities or cash and Freely Tradeable Securities,
(iii) no holder of Exchange Shares shall be required to make any
representations or warranties (except as to its title to and authority to convey
the shares of Common Stock to be sold by it and the warranties implied in
connection with such transfer under Section 8-108(a) of the Uniform
Commercial Code of the State of Delaware) and (iv) the prospective purchaser
is
purchasing in an arm’s-length transaction from the Selling Stockholder and is
not an Affiliate of WRC, the Initial Stockholder or Ripplewood
Partners.
“Broker-Dealer”
means
any broker or dealer registered under the Exchange Act.
“Business
Day”
means a
day other than a Saturday, a Sunday or a day on which banks in the State of
New
York are required or permitted by law to be closed.
“Capital
Stock”
means:
(a) with
respect to any corporation, any class of preferred, common or other capital
stock;
(b) with
respect to any partnership, any limited, general or other partnership interests;
and
(c) with
respect to any limited liability company, membership interests or units or
any
similar interests;
or,
in
each such case or in the case of any other Person, all share capital or similar
equity interest of a Person.
“Charter”
means
the Certificate of Incorporation of WRC, as filed with the Secretary of State
of
the State of Delaware on May 14, 1999, as amended and filed with the Secretary
of State of the State of Delaware on July 6, 1999, as amended and filed with
the
Secretary of State of the State of Delaware on October 28, 1999, as amended
and
filed with the Secretary of State of the State of Delaware on November 16,
1999, as amended and filed with the Secretary of State of the State of Delaware
on June 12, 2000 and as thereafter amended in compliance with the provisions
thereof and hereof.
“Closing
Date”
means
the date upon which the Exchange Shares are issued to the
Exchangers.
30
“Common
Stock”
has the
meaning set forth in the first whereas clause.
“CompassLearning”
has the
meaning set forth in the first whereas clause.
“DLJMB”
means
DLJ Merchant Banking Partners II, L.P., together with its successors and
permitted assigns.
“DLJMB
Board Designee”
has the
meaning set forth in Section 1.03(a).
“DLJMB
Entities”
has the
meaning set forth in the introductory paragraph.
“Drag-Along
Notice”
has the
meaning set forth in Section 2.10(a).
“Drag-Along
Portion”
means,
with respect to any holder of Exchange Shares, the number of shares of Common
Stock owned by such holder on a Fully Diluted basis (but without duplication)
multiplied by a fraction, the numerator of which is the number of shares of
Common Stock proposed to be sold by the Selling Stockholder and the denominator
of which is the total number of shares of Common Stock owned by the Selling
Stockholder.
“Drag-Along
Rights”
has the
meaning set forth in Section 2.10(a).
“Drag-Along
Sale”
has the
meaning set forth in Section 2.10(a).
“Drag-Along
Sale Price”
has the
meaning set forth in Section 2.10(a).
“Drag-Along
Termination Date”
means
the earlier of (i) the Public Market Date, (ii) if the Selling
Stockholder owns on the Closing Date, after giving effect to the Transactions
and all related transactions, at least 51% of the aggregate outstanding shares
of Common Stock, the date when the Selling Stockholder ceases to own at least
51% of the aggregate outstanding shares of Common Stock and (iii) if
the
Selling Stockholder does not own on the Closing Date, after giving effect to
the
Transactions and all related transactions, at least 51% of the aggregate
outstanding shares of Common Stock, the date when the Selling Stockholder sells,
assigns, disposes of, exchanges, pledges, encumbers, hypothecates or otherwise
transfers any shares of Common Stock or any participation or interest therein,
whether directly or indirectly, or agrees or commits to do any of the
foregoing.
“Exchange
Act”
means
the Securities Exchange Act of 1934, as amended, and the rules and regulations
of the SEC promulgated thereunder.
“Exchanger”
has the
meaning set forth in the introductory paragraph.
“Exchange
Shares”
means
shares of Common Stock issued to the Exchangers pursuant to the terms of the
Redemption and Repurchase Agreement or Article III.
31
“Fair
Market Value”
means
the fair market value of a Security, determined by the Board of Directors,
giving due consideration to such factors as it deems appropriate, including
the
earnings and certain other financial and operating information of WRC and its
Subsidiaries in recent periods, its potential value and that of its Subsidiaries
as a whole, its future prospects and that of its Subsidiaries and the industries
in which they compete, its history and management and that of its Subsidiaries,
the general condition of the securities markets and the fair market value of
securities of privately owned companies (with transfer restrictions) engaged
in
businesses similar to WRC and its Subsidiaries. The Fair Market Value, as
determined by the Board of Directors in good faith shall be binding and
conclusive upon all parties hereto.
“Freely
Tradeable Securities”
means
Securities:
(a) which
are
of a class:
(i) of
Securities issued or fully guaranteed by the United States of America or any
agency thereof and entitled to the full faith and credit of the United States
of
America, for which price quotations are routinely quoted and for which, in
the
reasonable opinion of the Exchangers, there is a ready liquid market;
or
(ii) both
registered pursuant to either Section 12(b) or Section 12(g) of the Exchange
Act
and either listed on a national securities exchange or on the Nasdaq National
Market; and
(b) which
may
be resold in the public markets by the Exchangers without requirement of further
registration under the Securities Act (excluding the impact of Rule 145 under
the Securities Act, if applicable).
“Fully
Diluted”
means,
with respect to Common Stock and without duplication, all outstanding shares
of
Common Stock and all shares of Common Stock issuable in respect of securities
convertible into or exchangeable for shares of Common Stock, stock appreciation
rights, options, warrants and other rights to purchase or subscribe for shares
of Common Stock or securities convertible into or exchangeable for shares of
Common Stock; provided
that, to
the extent that any of the foregoing stock appreciation rights, options,
warrants or other rights to purchase or subscribe for shares of Common Stock
are
subject to vesting, such shares subject to vesting shall be included in the
definition of “Fully
Diluted”
only
upon and to the extent of such vesting.
“GAAP”
means
generally accepted accounting principles in the United States as set forth
in
the statements and pronouncements of the Financial Accounting Standards Board
or
in such other statements by such other entity as have been approved by a
significant segment of the accounting profession.
“Incidental
Registration”
has the
meaning set forth in Section 2.02(a).
“Initial
Public Offering Date”
means
the first date upon which Common Stock shall have been issued or sold pursuant
to an underwritten public offering (whether
32
on
a firm
commitment basis or a best efforts basis if such best efforts are successful)
thereof pursuant to an effective registration statement filed with the SEC
pursuant to the Securities Act (an “Initial Public
Offering”).
“Initial
Stockholder”
has the
meaning set forth in the introductory paragraph.
“Issuable
Share”
means
and includes, at any time,
(a) a
share
of Common Stock or other Capital Stock of WRC;
(b) a
Right
(including, without limitation, a warrant), and (without duplication) all shares
of Common Stock or other Capital Stock issuable upon exercise of such Right,
in
each case at such time; and/or
(c) for
purposes of Article III, any indebtedness issued by a Subsidiary to
the
Initial Stockholder or any of its Affiliates.
For
purposes of this definition of “Issuable
Share”,
a
Right to acquire one share of Common Stock shall constitute one Issuable Share,
and a Person shall be deemed to own an Issuable Share if such Person has a
Right
to acquire such share whether or not such Right is exercisable at such
time.
“NASD”
means
the National Association of Securities Dealers, Inc.
“NASDAQ”
means
the NASDAQ Stock Market, Inc., a subsidiary of the NASD.
“Nasdaq
National Market”
has the
meaning ascribed thereto in Rule 4200(a) of the NASDAQ.
“Nasdaq
SmallCap Market”
has the
meaning ascribed thereto in Rule 4200(a) of the NASDAQ.
“NML”
has the
meaning set forth in the introductory paragraph.
“Other
Exchangers”
has the
meaning set forth in the introductory paragraph.
“Other
Stockholders”
means
and includes, at any time, all holders of Issuable Shares at such time (other
than the holders of Exchange Shares, SGC and the Initial Stockholder), other
than holders of shares sold in any Public Offering and other than holders of
shares as to which the provisions of this Agreement (other than those specified
in Section 4.05) have terminated pursuant to
Section 4.05.
“Person”
means
an individual, partnership, corporation, limited liability company, trust,
unincorporated organization, or a government or agency or political subdivision
thereof.
33
“Property”
means
any and all interests in any kind of property or asset whatsoever, whether
real,
personal or mixed and whether tangible or intangible.
“Prospectus”
means
the prospectus included in a Registration Statement at the time such
Registration Statement is declared effective, as amended or supplemented by
any
prospectus supplement and by all other amendments thereto, including
post-effective amendments, and all material incorporated by reference into
such
Prospectus.
“Public
Market Date”
means
the first day upon which Common Stock with an aggregate market value of not
less
than $25,000,000 shall have been sold in one or more Public
Offerings.
“Public
Offering”
shall
mean, with respect to any shares of Capital Stock of WRC, any sale in a
transaction registered under Section 5 of the Securities Act.
“Redemption
and Repurchase Agreement”
has the
meaning set forth in the first whereas clause.
“Registrable
Securities”
means,
at any time, in the case of the Initial Stockholder, all shares of Capital
Stock
of WRC and, in the case of the Exchangers, all Exchange Shares and any
Securities issued or issuable in respect of such Exchange Shares by way of
stock
dividend, split or combination; provided,
however,
that,
any such Securities shall cease to be Registrable Securities:
(a) when
a
registration statement with respect to the sale of such Securities shall have
become effective under the Securities Act and such Securities shall have been
disposed of in accordance with the registration statement covering such
Securities;
(b) when
such
Securities shall have been distributed pursuant to Rule 144;
(c) when
such
Securities shall have been otherwise transferred (except to Affiliates of the
transferor) and subsequent disposition of them shall not require registration
or
qualification under the Securities Act or any similar state law then in force;
or
(d) when
such
Securities shall have ceased to be outstanding or issuable upon exercise of
any
Rights (it being understood that the Securities for which such Rights were
exercisable shall continue to be Registrable Securities, unless otherwise
provided in paragraphs (a)-(c) of this definition).
“Registration”
means
and includes each Required Registration and each Incidental
Registration.
“Registration
Expenses”
means
all expenses incident to WRC’s performance of or compliance with
Section 2.01 through Section 2.04, inclusive, including, without
limitation:
34
(a) all
registration and filing fees;
(b) fees
and
expenses of compliance with securities or blue sky laws (including, without
limitation, reasonable fees and disbursements of counsel in connection with
blue
sky qualifications of the Registrable Securities);
(c) all
printing expenses, including, without limitation, expenses of printing
certificates for the Registrable Securities in a form eligible for deposit
with
The Depository Trust Company;
(d) messenger
and delivery expenses;
(e) internal
expenses of WRC (including, without limitation, all salaries and expenses of
its
officers and employees performing legal or accounting duties);
(f) fees
and
disbursements of counsel for WRC and its independent certified public
accountants (including, without limitation, the expenses of any management
review, cold comfort letters or any special audits required by or incident
to
such performance and compliance);
(g) securities
act liability insurance (if WRC elects to obtain such insurance);
(h) the
reasonable fees and expenses of any special experts retained by WRC in
connection with such registration;
(i) fees
and
expenses of other Persons retained by WRC;
(j) fees
and
expenses of one counsel for holders of Registrable Securities, selected by
the
Requisite Holders;
(k) fees
and
expenses in connection with any review of underwriting arrangements by the
NASD
including, without limitation, fees and expenses of any “qualified
independent underwriter”;
and
(l) fees
and
disbursements of underwriters customarily paid by issuers;
but
not
including any underwriting fees, discounts or commissions attributable to the
sale of Registrable Securities or any other selling expenses, discounts,
commissions or transfer taxes, if any, incurred in connection with the sale
of
Registrable Securities, which shall be severally payable by the holders
thereof.
“Required
DLJMB Entities”
means,
at any time, DLJMB Entities holding at least a majority of the aggregate
Exchange Shares then held by all DLJMB Entities.
35
“Required
Holders”
means,
at any time, the holders of Exchange Shares holding at least a majority of
the
aggregate Exchange Shares then held by the Exchangers.
“Required
Registration”
has the
meaning set forth in Section 2.01(a).
“Requisite
Holders”
means:
(a) with
respect to any registration or proposed registration of Registrable Securities
pursuant to Section 2.01, the Initiating Holder; and
(b) with
respect to any registration or proposed registration of Registrable Securities
pursuant to Section 2.02, any holder or holders (other than WRC, any
Subsidiary or any Affiliate of WRC) holding at least a majority of the shares
of
Registrable Securities (excluding any shares of Registrable Securities directly
or indirectly held by WRC, any Subsidiary or any Affiliate of WRC) to be so
registered.
“Right”
means
and includes:
(a) any
warrant, right or other option exercisable into Common Stock or other Capital
Stock of WRC; and
(b) any
conversion or exchange privilege or right pursuant to any indebtedness or
Security (including, without limitation, any share of Capital Stock) which
is
convertible or exchangeable into Common Stock or other Capital Stock of
WRC.
“Ripplewood
Partners”
means
Ripplewood Partners L.P., a Delaware limited partnership, together with its
successors and permitted assigns.
“Rule
144”
means
Rule 144 promulgated under the Securities Act or any successor
provision.
“SEC”
means,
at any time, the Securities and Exchange Commission or any other Federal agency
at such time administering the Securities Act.
“Second
Lien Term Loans”
has the
meaning set forth in the Redemption and Repurchase Agreement.
“Securities
Act”
means
the Securities Act of 1933, as amended, and the rules and regulations of the
SEC
promulgated thereunder.
“Security”
means
“security”
as
defined by Section 2(1) of the Securities Act.
“Selling
Stockholder”
has the
meaning set forth in Section 2.09(a).
36
“Senior
Financial Officer”
means
any one of the chief financial officer, the treasurer, the controller and the
principal accounting officer of WRC, or any officer of WRC acting in such
capacity.
“Senior
Preferred Stock”
has the
meaning set forth in the first whereas clause.
“SGC”
means
SGC Capital Partners I L.L.C.
“SGC
Stockholders Agreement”
means
the Amended and Restated Stockholders Agreement, dated as of November 17,
1999, among WRC, SGC Capital Partners II L.L.C. and the Initial Stockholder,
as
further amended as of the Closing Date.
“Subsidiary”
means,
as to any Person, any other Person the financial position and results of
operations of which would be properly consolidated with those of the first
Person in accordance with GAAP. The term “Subsidiary”, as used herein without
reference to any Person, shall mean a Subsidiary of WRC.
“Tag-Along
Notice”
has the
meaning set forth in Section 2.09(a).
“Tag-Along
Notice Period”
has the
meaning set forth in Section 2.09(a).
“Tag-Along
Offer”
has the
meaning set forth in Section 2.09(a).
“Tag-Along
Portion”
means
the number of shares of Common Stock owned by the Tagging Person or the Selling
Stockholder, as the case may be, multiplied by a fraction, the numerator of
which is the number of shares of Common Stock proposed to be sold in the
Tag-Along Sale pursuant to Section 2.09, and the denominator of which
is
the aggregate number of shares of Common Stock on a Fully Diluted basis owned
by
all Stockholders.
“Tag-Along
Right”
has the
meaning set forth in Section 2.09(a).
“Tag-Along
Sale”
has the
meaning set forth in Section 2.09(a).
“Tagging
Person”
has the
meaning set forth in Section 2.09(a).
“Valuation
Agent”
means
the Board of Directors acting in good faith, except to the extent that any
holders of Exchange Shares shall disagree with any relevant determination of
the
Board of Directors, in which case the Valuation Agent shall be a firm of
independent certified public accountants, an investment banking firm or
appraisal firm (which firm shall own no Securities of, and shall not be an
Affiliate, Subsidiary or a related Person of, WRC) of recognized national
standing retained by WRC and reasonably acceptable to such holders, and whose
fees and disbursements shall be borne by such holders unless the determination
by the Valuation Agent shall differ from that of the Board of Directors by
more
than 2%, in which case such fees and disbursements shall be borne by WRC.
37
“Voting Stock”
means,
with respect to any Person, any Capital Stock of such Person whose holders
are
entitled under ordinary circumstances to vote for the election of directors,
managers, trustees, the managing partner or other individuals fulfilling similar
duties with respect to such Person (irrespective of whether at the time Capital
Stock of any other class or classes shall have or might have voting power by
reason of the happening of any contingency); provided,
however,
that,
except for the purposes of the definition of “Affiliate”, Exchange Shares shall
be deemed not to be Voting Stock.
“Weekly
Reader”
has the
meaning set forth in the first whereas clause.
“WRC”
has the
meaning set forth in the introductory paragraph.
SECTION
5.02. Section Headings
and Table of Contents and Construction.
(a)
Section Headings
and Table of Contents, etc.
The titles of the Articles and Sections of this Agreement and the Table of
Contents of this Agreement appear as a matter of convenience only, do not
constitute a part hereof and shall not affect the construction hereof. The
words
“herein”, “hereof”, “hereunder” and “hereto” refer to this Agreement as a whole
and not to any particular Article or Section or other subdivision.
References to Articles or Sections are, unless otherwise specified, references
to Articles or Sections, as the case may be, of this Agreement. References
to
Annexes and Exhibits are, unless otherwise specified, references to Annexes
and
Exhibits, as the case may be, attached to this Agreement.
(b) Construction.
Each covenant contained herein shall be construed (absent an express contrary
provision herein) as being independent of each other covenant contained herein,
and compliance with any one covenant shall not (absent such an express contrary
provision) be deemed to excuse compliance with one or more other
covenants.
SECTION
5.03. GOVERNING
LAW.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK, EXCEPT TO THE EXTENT THE
DELAWARE GENERAL CORPORATION LAW IS MANDATORILY APPLICABLE.
ARTICLE
VI
Miscellaneous
SECTION
6.01. Communications.
(a)
Method;
Address.
All communications hereunder shall be in writing and shall be delivered either
by nationwide overnight courier or by facsimile transmission (confirmed by
delivery by nationwide overnight courier sent on the day of the sending of
such
facsimile transmission). Communications to WRC shall be addressed
to:
In
care
of Ripplewood Holdings L.L.C.
38
▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
or
at
such other address of which WRC shall have notified the parties hereto.
Communications to an Exchanger shall be addressed as set forth on Annex 1,
or at
such other address of which such Exchanger shall have notified WRC.
Communications to the Initial Stockholder shall be addressed as set forth on
Annex 2, or at such other address of which the Initial Stockholder shall have
notified WRC and each Exchanger. Communications to any Other Stockholders shall
be delivered to such Other Stockholders at the address of WRC as provided
herein, and WRC shall promptly deliver such communications to the Other
Stockholders at the addresses set forth in the register of the holders of the
Common Stock in the manner set forth in this Section 6.01.
(b) When
Given.
Any communication addressed and delivered as herein provided shall be deemed
to
be received when actually delivered to the address of the addressee (whether
or
not delivery is accepted) or received by the telecopy machine of the recipient.
Any communication not so addressed and delivered shall be
ineffective.
(c) Service
of Process.
Notwithstanding the foregoing provisions of this Section 6.01, service
of
process in any suit, action or proceeding arising out of or relating to this
Agreement or any document, agreement or transaction contemplated hereby, or
any
action or proceeding to execute or otherwise enforce any judgment in respect
of
any breach hereunder or under any document or agreement contemplated hereby,
shall be delivered in the manner provided in Section 6.06(c).
SECTION
6.02. Survival.
All warranties, representations, certifications and covenants made by WRC
herein, in the Redemption and Repurchase Agreement or in any certificate or
other instrument delivered by WRC or on behalf of WRC hereunder shall be
considered to have been relied upon by the applicable Exchangers to whom such
representations or certificates were made or covenants given and shall survive
the delivery to the Exchangers, regardless of any investigation made by the
Exchangers or on their behalf. All statements in any certificate or other
instrument delivered by or on behalf of WRC pursuant to the terms hereof shall
constitute warranties and representations by WRC hereunder. All payment and
indemnity obligations of WRC hereunder (including, without limitation,
reimbursement obligations in respect of costs, expenses and fees of or incurred
by the Exchangers) shall survive the termination hereof.
SECTION
6.03. Successors
and Assigns.
Subject to Section 4.05, this Agreement shall inure to the benefit of
and
be binding upon the successors and permitted assigns of each of the parties
hereto. The provisions hereof are intended to be for the benefit of the
Exchangers and their successors and permitted assigns, and shall be enforceable
by them whether or not an express assignment of rights hereunder shall have
been
made by an Exchanger or its successor or permitted assign.
SECTION
6.04. Amendments
and Waivers.
(a)
The
provisions of Article I, Article III and Article VI hereof, and of any term
defined in Article V hereof as used in any such Article, may be amended,
modified or supplemented, and compliance
39
with
any
provision of any such Article waived, only by a writing duly executed by or
on
behalf of the Required Holders and WRC; provided,
however,
that no
amendment, modification or supplement of the provisions of this Section 6.04
or
Sections 1.02, 1.03(a), 1.05, 6.01, 6.03, 6.06, 6.08 or 6.09 hereof which
adversely affect the rights of the Initial Stockholder shall be made without
the
consent of the Initial Stockholder and provided further
that no
amendment, modification or supplement of the provisions of this Section 6.04
or
Section 1.03 or 1.04 hereof that adversely affects the rights of any DLJMB
Entity shall be made without the consent of the Required DLJMB
Entities.
(b) The
provisions of Article II hereof, and of any term defined in Article V
hereof as used in Article II hereof, may be amended, modified or supplemented
only by a writing duly executed by or on behalf of the Required Holders and
WRC;
provided,
however,
that
(i) compliance by WRC with the provisions of Article II hereof, with respect
to
any particular registration, may be waived by the Requisite Holders and (ii)
no
amendment, modification or supplement of the provisions of
Sections 2.01(d), 2.01(f), 2.02(c), 2.07 or 2.10 hereof which adversely
affect the rights of the Initial Stockholder shall be made without the consent
of the Initial Stockholder.
(c) The
provisions of Article IV hereof, and of any term defined in Article V hereof
as
used in Article IV hereof, may be amended, modified or supplemented, and
compliance with such Section hereof waived, only by a writing duly executed
by or on behalf of the Required Holders and WRC; provided,
however,
that no
amendment, modification or supplement of the provisions of Section 4.01 hereof
which adversely affect the rights of the Initial Stockholder shall be made
without the consent of the Initial Stockholder.
(d) Notwithstanding
the foregoing, no provision of this Agreement may be amended in such manner
as
to adversely and differently affect any Other Exchanger’s rights hereunder
without the consent of such Other Exchanger.
SECTION
6.05. Expenses.
(a)
Amendments
and Waivers.
WRC shall pay when billed the reasonable costs and expenses (including, without
limitation, reasonable attorneys’ fees) incurred by the holders of the Exchange
Shares in connection with the consideration, negotiation, preparation or
execution of any amendments, waivers, consents and other similar agreements
with
respect to this Agreement (whether or not any such amendments, waivers, consents
or other similar agreements are executed).
(b) Restructuring
and Workout, Inspections.
At
any time when WRC and the holders of Exchange Shares are conducting
restructuring or workout negotiations in respect hereof, or if WRC shall be
in
violation in any material respect of any of its agreements hereunder, WRC shall
pay when billed the reasonable costs and expenses (including, without
limitation, reasonable attorneys’ fees and the fees of professional advisors)
incurred by the holders of Exchange Shares in connection with the assessment,
analysis or enforcement of any rights or remedies that are or may be available
to the holders of Exchange Shares.
40
SECTION
6.06. Waiver
of Jury Trial; Consent to Jurisdiction; etc.
(a)
WAIVER
OF JURY TRIAL.
THE
PARTIES HERETO VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT ANY OF THEM MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION ARISING OUT OF, UNDER
OR IN
CONNECTION WITH THIS AGREEMENT OR ANY OF THE DOCUMENTS, AGREEMENTS OR
TRANSACTIONS CONTEMPLATED HEREBY.
(b)
CONSENT
TO JURISDICTION.
ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT,
OR
ANY OF THE DOCUMENTS, AGREEMENTS OR TRANSACTIONS CONTEMPLATED HEREBY OR ANY
ACTION OR PROCEEDING TO EXECUTE OR OTHERWISE ENFORCE ANY JUDGMENT IN RESPECT
OF
ANY BREACH UNDER THIS AGREEMENT OR ANY DOCUMENT OR AGREEMENT CONTEMPLATED HEREBY
MAY BE BROUGHT BY SUCH PARTY IN ANY FEDERAL DISTRICT COURT LOCATED IN NEW YORK
CITY, NEW YORK, OR ANY NEW YORK STATE COURT LOCATED IN NEW YORK CITY, NEW YORK
AS SUCH PARTY MAY IN ITS SOLE DISCRETION ELECT, AND BY THE EXECUTION AND
DELIVERY OF THIS AGREEMENT, THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY
SUBMIT TO THE NON-EXCLUSIVE IN
PERSONAM
JURISDICTION OF EACH SUCH COURT, AND EACH OF THE PARTIES HERETO IRREVOCABLY
WAIVES AND AGREES NOT TO ASSERT IN ANY PROCEEDING BEFORE ANY TRIBUNAL, BY WAY
OF
MOTION, AS A DEFENSE OR OTHERWISE, ANY CLAIM THAT IT IS NOT SUBJECT TO THE
IN
PERSONAM
JURISDICTION OF ANY SUCH COURT. IN ADDITION, EACH OF THE PARTIES HERETO
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION THAT
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE IN ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY DOCUMENT,
AGREEMENT OR TRANSACTION CONTEMPLATED HEREBY BROUGHT IN ANY SUCH COURT, AND
HEREBY IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING
BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM.
(c) SERVICE
OF PROCESS.
EACH PARTY HERETO IRREVOCABLY AGREES THAT PROCESS PERSONALLY SERVED OR SERVED
BY
U.S. REGISTERED MAIL AT THE ADDRESSES PROVIDED HEREIN FOR NOTICES SHALL
CONSTITUTE, TO THE EXTENT PERMITTED BY LAW, ADEQUATE SERVICE OF PROCESS IN
ANY
SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
ANY
DOCUMENT, AGREEMENT OR TRANSACTION CONTEMPLATED HEREBY, OR ANY ACTION OR
PROCEEDING TO EXECUTE OR OTHERWISE ENFORCE ANY JUDGMENT IN RESPECT OF ANY BREACH
HEREUNDER OR UNDER ANY DOCUMENT OR AGREEMENT CONTEMPLATED HEREBY. RECEIPT OF
PROCESS SO SERVED SHALL BE CONCLUSIVELY PRESUMED AS EVIDENCED BY A DELIVERY
RECEIPT FURNISHED BY THE UNITED STATES POSTAL SERVICE OR ANY COMMERCIAL DELIVERY
SERVICE.
41
(d) OTHER
FORUMS.
NOTHING HEREIN SHALL IN ANY WAY BE DEEMED TO LIMIT THE ABILITY OF ANY HOLDER
OF
EXCHANGE SHARES TO SERVE ANY WRITS, PROCESS OR SUMMONSES IN ANY MANNER PERMITTED
BY APPLICABLE LAW OR TO OBTAIN JURISDICTION OVER WRC OR THE INITIAL STOCKHOLDER
IN SUCH OTHER JURISDICTION, AND IN SUCH OTHER MANNER, AS MAY BE PERMITTED BY
APPLICABLE LAW.
SECTION
6.07. Indemnification.
From and at all times after the date of this Agreement, and in addition to
all
of the other rights and remedies of any holder of Exchange Shares against WRC,
WRC agrees to indemnify and hold harmless each such holder and each of its
directors, trustees, officers, employees, agents, investment advisors and
Affiliates against any and all claims, losses, damages, liabilities, costs
and
expenses of any kind or nature whatsoever (including, without limitation,
reasonable attorneys’ fees, costs and expenses), incurred by or asserted against
such holder or any such director, trustee, officer, employee, agent, investment
advisor or Affiliate, from and after the date hereof, whether direct or
indirect, as a result of or arising from or in any way relating to any suit,
action or proceeding (including, without limitation, any inquiry or
investigation) by any Person, whether threatened or initiated, asserting a
claim
for any legal or equitable remedy against any Person under any statute or
regulation, including, without limitation, any Federal or state securities
laws,
or under any common law or equitable cause or otherwise, arising from or in
connection with the negotiation, preparation, execution, performance or
enforcement of this Agreement or any transactions contemplated herein or
hereunder, whether or not such holder or any such director, trustee, officer,
employee, agent, investment advisor or Affiliate is a party to any such action,
proceeding, suit or the target of any such inquiry or investigation;
provided,
however,
that no
indemnified party shall have the right to be indemnified hereunder for any
liability to the extent such liability results from the willful misconduct
or
gross negligence of such indemnified party or breach by such indemnified party
of its own obligations under this Agreement or any other agreement with WRC.
All
of the foregoing losses, damages, liabilities, costs and expenses shall be
payable as and when incurred upon demand by each such holder. Without limiting
the generality of the foregoing, each holder of Exchange Shares shall be
entitled to collect, and WRC shall be obligated to advance to each holder of
Exchange Shares and such directors, trustees, officers, employees, agents,
investment advisors and Affiliates, to the fullest extent permitted by
applicable law, all expenses (including, without limitation, reasonable fees
and
disbursements of counsel) attendant to defending against any such claims,
losses, damages, liabilities, costs and expenses when and as incurred,
regardless of whether any judicial determination of entitlement to such
indemnity has been made, until or unless a final judicial determination that
such indemnified party is not entitled to such indemnity as a result of the
willful misconduct or gross negligence of such indemnified party or breach
by
such indemnified party, in which case, such indemnified party shall promptly
repay to WRC, with interest at the applicable statutory rate applicable to
judgments in the relevant jurisdiction, all amounts so advanced by WRC. The
obligations of WRC and the rights of the holders of Exchange Shares under this
Section 6.09 shall survive the termination of this Agreement. It is
understood that this Section 6.07 is not intended to override Section 2.06
and
that, with respect to any registration statement or offering of
42
Securities
pursuant thereto, the provisions of Section 2.06 shall govern and supersede
this
Section 6.07.
SECTION
6.08. Entire
Agreement.
This Agreement, the Redemption and Repurchase Agreement and the Note Agreement
(as defined in the Redemption and Repurchase Agreement), together with all
exhibits and schedules thereto and hereto, constitute the final written
expression of all of the terms hereof and is a complete and exclusive statement
of those terms.
SECTION
6.09. Execution
in Counterpart.
This Agreement may be executed in one or more counterparts and shall be
effective when at least one counterpart shall have been executed by each party
hereto, and each set of counterparts that, collectively, show execution by
each
party hereto shall constitute one duplicate original.
SECTION
6.10. Reproduction
of Documents.
This Agreement and all documents relating hereto, including, without limitation,
consents, waivers and modifications that may hereafter be executed, documents
received by Exchangers at the closing of the Redemption and Repurchase (except
the certificates representing the shares of the Exchange Shares), and financial
statements, certificates and other information previously or hereafter furnished
to any party may be reproduced by any party by any photographic, photostatic,
microfilm, micro-card, miniature photographic, digital or other similar process,
and the Exchangers may destroy any original document so reproduced. Any such
reproduction shall be as admissible into evidence as the original itself in
any
judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by WRC, the Initial
Stockholder or the Exchangers in the regular course of business) and any
enlargement, facsimile or further reproduction of such reproduction shall
likewise be as admissible into evidence as the original itself. Nothing in
this
Section 6.10 shall prohibit any party hereto from contesting the accuracy
or validity of any such reproduction.
SECTION
6.11. Effectiveness
of this Agreement.
This Agreement shall become effective upon, and the rights and obligations
of
each party hereto shall be subject to, the consummation of the Redemption and
Repurchase. Upon the effectiveness of this Agreement and the rights and
obligations of each party hereto, the parties hereto agree that the Preferred
Stockholders Agreement dated as of November 17, 1999, among WRC, JLC Learning
Corporation, Weekly Reader, SGC Capital Partners II L.L.C., the Initial
Stockholder, Ripplewood Partners and the Persons identified as “Purchasers”
in
Annex 1 thereto shall be terminated and of no further force and
effect.
43
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered, all as of the date and year first above
written.
| WRC MEDIA INC. | ||
| |
|
|
| By: | /s/ | |
|
Name:
▇▇▇▇▇▇▇ ▇▇▇▇
|
||
| Title: EVP, Operations | ||
| EAC III L.L.C. | ||
| |
|
|
| By: | EAC IV L.L.C., its Managing Member | |
| By: | Ripplewood Partners, L.P., its Sole Member | |
| By: | Ripplewood Investments L.L.C., its General Partner | |
| By: | /s/ | |
|
Name: |
||
| Title: | ||
| SCG PARTNERS I L.L.C., with respect to the second sentence of Section 6.11 only | ||
| |
|
|
| By: | /s/ | |
|
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ |
||
| Title: Director | ||
| THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY | ||
| |
|
|
| By: | /s/ | |
|
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ |
||
| Title: Its Authorized Representative | ||
| ARES LEVERAGED INVESTMENT FUND, L.P., a Delaware Limited Partnership | ||
| |
|
|
| By: | ARES Management L.P., as General Partner | |
| By: | /s/ | |
|
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ |
||
| Title: Vice President | ||
| ARES LEVERAGED INVESTMENT FUND II, L.P., a Delaware Limited Partnership | ||
| |
|
|
| By: | ARES Management II, L.P., as General Partner | |
| By: | /s/ | |
|
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ |
||
| Title: Vice President | ||
| TCW/CRESCENT MEZZANINE PARTNERS II, L.P., a Delaware Limited Partnership | ||
| TCW/CRESCENT MEZZANINE TRUST II | ||
| |
|
|
| By: | TCW/Crescent Mezzanine II, L.P., as General Partner or Managing Owner | |
| By: | TCW/Crescent Mezzanine, L.L.C., as General Partner | |
| By: | /s/ | |
|
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ |
||
| Title: Managing Director | ||
| SHARED OPPORTUNITY FUND IIB, L.L.C., a Delaware Limited Liability Company | ||
| |
|
|
| By: | TCW Asset Management Company, as Investor Advisor | |
| By: | /s/ | |
|
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ |
||
| Title: Managing Director | ||
| By: | /s/ | |
|
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ |
||
| Title: Managing Director | ||
| TCW SHARED OPPORTUNITY FUND III, L.P., a Delaware Limited Partnership | ||
| |
|
|
| By: | TCW Asset Management Company, as Investor Advisor | |
| By: | /s/ | |
|
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ |
||
| Title: Mananging Director | ||
| By: | /s/ | |
|
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ |
||
| Title: Managing Director | ||
| TCW LEVERAGED INCOME TRUST II, L.P., a Delaware Limited Partnership | ||
| |
|
|
| By: | TCW (LINCII), L.P., as General Partner | |
| By: | TCW Advisors (Bermuda), Ltd., as General Partner | |
| By: | /s/ | |
| Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | ||
| Title: Managing Director | ||
| By: | TCW Investment Management Company, as Investment Advisor | |
| By: | /s/ | |
|
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ |
||
| Title: Managing Director | ||
| TCW LEVERAGED INCOME TRUST, L.P., a Delaware Limited Partnership | ||
| |
|
|
| By: | TCW Investment Management Company, as Investment Advisor | |
| By: | /s/ | |
|
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ |
||
| Title: Managing Director | ||
| By: | TCW Advisors (Bermuda), Ltd., as General Partner | |
| By: | /s/ | |
|
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ |
||
| Title: Managing Director | ||
| DLJ INVESTMENT PARTNERS II, L.P., a Delaware Limited Partnership | ||
| |
|
|
| By: | DLJ Investment Partners II, Inc., as Managing General Partner | |
| By: | /s/ | |
|
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇. |
||
| Title: Managing Director | ||
| DLJ INVESTMENT PARTNERS, L.P., a Delaware Limited Partnership | ||
| |
|
|
| By: | DLJ Investment Partners, Inc., as Managing General Partner | |
| By: | /s/ | |
|
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇. |
||
| Title: Managing Director | ||
| DLJIP HOLDINGS, L.P., a Delaware Limited Partnership | ||
| |
|
|
| By: | DLJ Investment Partners II, Inc., as General Partner | |
| By: | /s/ | |
|
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇. |
||
| Title: Managing Director | ||
| DLJ MERCHANT BANKING PARTNERS II, L.P., a Delaware Limited Partnership | ||
| |
|
|
| By: | DLJ Merchant Banking II, Inc., its Managing General Partner | |
| DLJ MERCHANT BANKING PARTNERS II-A, L.P., a Delaware Limited Partnership | ||
| |
|
|
| By: | DLJ Merchant Banking II, Inc., its Managing General Partner | |
| DLJ MILLENNIUM PARTNERS, L.P., a Delaware Limited Partnership | ||
| |
|
|
| By: | DLJ Merchant Banking II, Inc., as Managing General Partner | |
| DLJ MILLENNIUM PARTNERS-A, L.P., a Delaware Limited Partnership | ||
| |
|
|
| By: | DLJ Merchant Banking II, Inc., as Managing General Partner | |
| DLJ MERCHANT BANKING II, INC., as Advisory General Partner on behalf of DLJ OFFSHORE PARTNERS, II, C.V. | ||
| |
|
|
| Signed By or on Behalf of the Foregoing Entities: | ||
| By: | /s/ | |
|
Name: |
||
| Title | ||
| DLJ DIVERSIFIED PARTNERS, L.P., a Delaware Limited Partnership | ||
| |
|
|
| By: | DLJ Diversified Partners, Inc., as Managing General Partner | |
| DLJ DIVERSIFIED PARTNERS-A, L.P., a Delaware Limited Partnership | ||
| |
|
|
| By: | DLJ Diversified Partners, Inc., as Managing General Partner | |
| Signed By or on Behalf of the Foregoing Entities: | ||
| By: | /s/ | |
|
Name: |
||
| Title | ||
| DLJMB FUNDING II, INC., a Delaware corporation | ||
| |
|
|
| By: | /s/ | |
|
Name: |
||
| Title | ||
| DLJ EAB PARTNERS, L.P., a Delaware Limited Partnership | ||
| |
|
|
| By: | DLJ LBO Plans Management Corporation, as General Partner | |
| DLJ ESC II, L.P., a Delaware Limited Partnership | ||
| |
|
|
| By: | DLJ LBO Plans Management Corporation, as General Partner | |
| DLJ FIRST ESC, L.P., a Delaware Limited Partnership | ||
| |
|
|
| By: | DLJ LBO Plans Management Corporation, as General Partner | |
| |
Signed By or on Behalf of the Foregoing Entities: | |
| By: | /s/ | |
|
Name: |
||
| Title | ||
Annex
1
Name
and
Address of Exchangers
NORTHWESTERN
MUTUAL LIFE INSURANCE COMPANY
▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇ ▇▇▇▇
Fax:
▇▇▇-▇▇▇-▇▇▇▇
with
a
copy of all notices to:
▇▇▇▇▇▇▇
▇▇▇▇ LLP
▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention
of: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, Esq.
Fax:
▇▇▇-▇▇▇-▇▇▇
ARES
LEVERAGED INVESTMENT FUND, L.P.
In
care
of Ares Leveraged Investment Fund, L.P.
▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇ ▇▇▇▇▇▇▇
Fax:
▇▇▇-▇▇▇-▇▇▇▇
ARES
LEVERAGED INVESTMENT FUND II, L.P.
In
care
of Ares Leveraged Investment Fund II, L.P.
▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇ ▇▇▇▇▇▇▇
Fax:
▇▇▇-▇▇▇-▇▇▇▇
TCW/CRESCENT
MEZZANINE PARTNERS II, L.P.
In
care
of TCW/Crescent Mezzanine, L.L.C.
▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇
Fax:
▇▇▇-▇▇▇-▇▇▇▇
TCW/CRESCENT
MEZZANINE TRUST II
In
care
of TCW/Crescent Mezzanine, L.L.C.
▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇
Fax:
▇▇▇-▇▇▇-▇▇▇▇
SHARED
OPPORTUNITY FUND IIB, L.L.C.
In
care
of TCW/Crescent Mezzanine, L.L.C.
▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇
Fax:
▇▇▇-▇▇▇-▇▇▇▇
TCW
SHARED OPPORTUNITY FUND III, L.P.
In
care
of TCW/Crescent Mezzanine, L.L.C.
▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇
Fax:
▇▇▇-▇▇▇-▇▇▇▇
TCW
LEVERAGED INCOME TRUST II, L.P.
In
care
of TCW/Crescent Mezzanine, L.L.C.
▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇
Fax:
▇▇▇-▇▇▇-▇▇▇▇
TCW
LEVERAGED INCOME TRUST, L.P.
In
care
of TCW/Crescent Mezzanine, L.L.C.
▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇
Fax:
▇▇▇-▇▇▇-▇▇▇▇
DLJ
INVESTMENT PARTNERS II, L.P.
Eleven
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
Fax:
DLJ
INVESTMENT PARTNERS, L.P.
Eleven
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
Fax:
DLJIP
HOLDINGS, L.P.
Eleven Madison
Avenue
New
York,
NY 10010
Attention:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
Fax:
DLJ
MERCHANT BANKING PARTNERS II, L.P.,
In
care
of DLJ Merchant Banking II, Inc.
Eleven
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
▇▇▇ ▇▇▇▇▇
Fax:
▇▇▇-▇▇▇-▇▇▇▇
DLJ
MERCHANT BANKING PARTNERS II-A, L.P.
In
care
of DLJ Merchant Banking II, Inc.
Eleven
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
▇▇▇ ▇▇▇▇▇
Fax:
▇▇▇-▇▇▇-▇▇▇▇
DLJ
OFFSHORE PARTNERS II, C.V.,
In
care
of DLJ Merchant Banking, II, Inc.
Eleven
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
▇▇▇ ▇▇▇▇▇
Fax:
▇▇▇-▇▇▇-▇▇▇▇
DLJ
DIVERSIFIED PARTNERS, L.P.,
In
care
of DLJ Merchant Banking, II, Inc.
Eleven
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
▇▇▇ ▇▇▇▇▇
Fax:
▇▇▇-▇▇▇-▇▇▇▇
DLJ
DIVERSIFIED PARTNERS-A, L.P.,
In
care
of DLJ Merchant Banking, II, Inc.
Eleven
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
▇▇▇ ▇▇▇▇▇
Fax:
▇▇▇-▇▇▇-▇▇▇▇
DLJMB
FUNDING II, INC.,
In
care
of DLJ Merchant Banking, II, Inc.
Eleven
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
▇▇▇ ▇▇▇▇▇
Fax:
▇▇▇-▇▇▇-▇▇▇▇
DLJ
MILLENNIUM PARTNERS, L.P.,
In
care
of DLJ Merchant Banking, II, Inc.
Eleven
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
▇▇▇ ▇▇▇▇▇
Fax:
▇▇▇-▇▇▇-▇▇▇▇
DLJ
MILLENNIUM PARTNERS-A, L.P.
In
care
of DLJ Merchant Banking, II, Inc.
Eleven
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
▇▇▇ ▇▇▇▇▇
Fax:
▇▇▇-▇▇▇-▇▇▇▇
DLJ
EAB
PARTNERS, L.P.
In
care
of DLJ Merchant Banking, II, Inc.
Eleven
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
▇▇▇ ▇▇▇▇▇
Fax:
▇▇▇-▇▇▇-▇▇▇▇
DLJ
ESC
II, L.P.
In
care
of DLJ Merchant Banking, II, Inc.
Eleven
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
▇▇▇ ▇▇▇▇▇
Fax:
▇▇▇-▇▇▇-▇▇▇▇
DLJ
FIRST
ESC, L.P.,
In
care
of DLJ Merchant Banking, II, Inc.
Eleven
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
▇▇▇ ▇▇▇▇▇
Fax:
▇▇▇-▇▇▇-▇▇▇▇
with
a
copy of all notices to any DLJMB Entity to:
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Attention:
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Annex
2
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Address
of Initial Stockholder
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EAC
III
L.L.C.
In
care of Ripplewood Partners, L.P.
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EXHIBIT A
FORM
OF
TRANSFEREE UNDERTAKING
[Letterhead
of Transferee]
[Dated
________]
c/o
Ripplewood Partners, L.P.
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Re:
WRC
Media Inc. Issuable Shares
Ladies
and Gentlemen:
Pursuant
to Section 4.01 of that certain Stockholders Agreement, dated as of
June
22, 2005 among WRC, the Exchangers (as defined therein) and the Initial
Stockholder (as defined therein), ________ [name of transferee] (the
“Transferee”),
as
owner and holder of ________ shares of ________ [type of Issuable Shares],
hereby confirms and agrees that it has assumed and is subject to the obligations
of [a holder of Exchange Shares] [the Initial Stockholder] [an Other
Stockholder], as provided in the Stockholders Agreement.
The
address where notices and communications pursuant to Section 6.01
of the
Stockholders Agreement can be delivered to the Transferee is as
follows:
[Transferee]
IN
WITNESS WHEREOF, the Transferee executes and delivers this agreement, as
of the
date and year first above written.
| [TRANSFEREE] | ||
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Name: |
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| Title: | ||