Document:

<PAGE>

                                                                   EXHIBIT 10.46

                              PLATO LEARNING, INC.
                         EMPLOYEE STOCK OPTION AGREEMENT

      PLATO Learning, Inc., a Delaware corporation (the "Company"), hereby
grants to ________ (the "Employee") on this ____ day of ________, 200__ (the
"Option Date"), pursuant to the provisions of the PLATO Learning, Inc. 2002
Stock Plan (the "Plan"), a __________ stock option (the "Option") to purchase
from the Company ________ shares of its Common Stock, $.01 par value ("Stock"),
at the price of $________ per share upon and subject to the terms and conditions
set forth below.

      1. Option Subject to Acceptance of Agreement.

      The Option shall become null and void unless the Employee shall accept
this Agreement by executing it in the space provided below and return it to the
Company within 60 days following the Option Date.

      2. Time and Manner of Exercise of Option.

      2.1 Maximum Term of Option. In no event may the Option be exercised, in
whole or in part, after 5:00 p.m., Minneapolis time, on the date, which is eight
(8) years after the Option Date (the "Expiration Date").

      2.2 Exercise of Option. Except as otherwise provided in the Plan, the
Option shall become exercisable with respect to (i) 33-1/3% of the aggregate
number of shares of Stock subject to the Option on ________ (the "First Exercise
Date"); (ii) with respect to 66-2/3% of the aggregate number of shares subject
to the Option on ________ (the "Second Exercise Date"); and (iii) with respect
to 100% of the aggregate number of shares subject to the Option on (the "Third
Exercise Date") (the First Exercise Date, the Second Exercise Date and the Third
Exercise Date each being referred to herein as an "Exercise Date").

      2.3 Method of Exercise. Subject to the limitations set forth in this
Agreement, the Option may be exercised (i) by giving written notice to the
Secretary of the Company or the Secretary's designee, specifying the number of
whole shares to be purchased and accompanied by the payment therefore in full in
cash or, if permitted by the Compensation Committee, (A) in previously owned
whole shares of Stock (for which the Employee has good title, free and clear of
all liens and encumbrances) having a fair market value, determined as of the
date of exercise, equal to the aggregate purchase price payable pursuant to the
Option by reason of such exercise, (B) in cash by a broker-dealer to whom the
Employee has submitted an irrevocable notice of exercise, or (C) a combination
of cash and Stock as described in this Section; and (ii) by executing such
documents as the Company may reasonably request. No shares shall be issued until
the full purchase price and all applicable taxes have been paid.

<PAGE>

      2.4 Termination of Option. In no event may the Option be exercised after
it terminates as set forth in this Section 2.4. The Option shall terminate on
its Expiration Date, or earlier to the extent not exercised pursuant to Section
2.2 and pursuant to Sections 6.8, 6.9, 6.10, 6.11 and 6.12 of the Plan. In the
event that the Employee shall forfeit rights to purchase all or a portion of the
shares to which this Option relates, the Employee shall, within 10 days of the
date of the Company's written request, return this Agreement to the Company for
cancellation.

      3. Additional Terms and Conditions of Option.

      3.1 Withholding Taxes. As a condition precedent to any exercise of the
Option, the Employee shall, upon request by the Company, pay to the Company in
addition to the purchase price of the shares such amount of cash as the Company
may be required, under all applicable federal, state or local laws or
regulations. The employee will recognize ordinary income at the time of exercise
in an amount equal to the excess, if any, of the fair market value of a share of
Common Stock at the time of exercise over the option price, multiplied by the
number of shares as to which the option is exercised. The Employee may elect, by
written notice to the Company, to satisfy part or all of the withholding tax
requirements associated with the exercise by delivering to the Company from
shares of Stock already owned by the Employee, that number of shares having an
aggregate Fair Market Value equal to part or all of the tax payable by the
Employee under this Section 3.1. Any such election shall be in accordance with,
and subject to, applicable tax and securities laws, regulations and rulings.

      3.3 Agreement Subject to Plan. This Agreement is subject to the provisions
of the Plan, and shall be interpreted in accordance therewith, except where
specifically provided otherwise in this Agreement. The Employee hereby
acknowledges receipt of a copy of the Plan.

                                                PLATO LEARNING, INC.

                                                By: ____________________________

Accepted this _________  day of

______________________, 200____

_______________________________

<PAGE>

                 PLATO LEARNING UNITED KINGDOM SHARE OPTION PLAN

                               OPTION CERTIFICATE

1.    THIS IS TO CERTIFY THAT ___________ has been granted an Option to acquire
      the number of Shares in PLATO Learning, Inc. as indicted in Box (1) below
      at the price per Share in Box (2) in accordance with and subject to the
      Rules of the PLATO Learning United Kingdom Share Option Plan ("the UK
      Plan"), which was established under the provisions of the PLATO Learning
      2002 Stock Plan.

<TABLE>
<CAPTION>
      (1)                                                  (3)
Number of Shares                 (2)               Total amount payable              (4)
comprised in the        Option Price per Share    on exercise of Option       Date of Grant of
     Option                     (US $)                in full (US$)                Option
----------------        ----------------------    ---------------------       ----------------
<S>                     <C>                       <C>                         <C>
</TABLE>

      (NOTE: THESE FIGURES MAY BE SUBJECT TO ADJUSTMENT IN THE EVENT OF ANY
      VARIATION IN THE SHARE CAPITAL OF PLATO LEARNING, INC.)

1.    The Option will lapse on _________.

2.    The Option is exercisable in whole or in part in accordance with the Rules
      of the UK Plan. It will vest one-third on _________, one-third on
      _________, and one-third on _________.

3.    The Option is not transferable, assignable or chargeable.

4.    All Options that you hold under the UK Plan at any Date of Grant cannot
      have a value of more than (pound)30,000 sterling (value taken at Date of
      Grant using the closing US dollar/pound sterling exchange rate taken from
      the Wall Street Journal on the Date of Grant).

5.    You will not pay income tax when you exercise this Option as long as:

            a.    the Option is exercised at least 3 years from its Date of
                  Grant; and

            b.    the UK Plan remains approved at the date of exercise.

6.    If the conditions in 5 above are not satisfied, you will normally have to
      pay Income Tax under PAYE and National Insurance Contributions on the
      exercise of the Option, unless you leave due to one of the specified
      statutory `good leaver' reasons.

7.    This Agreement is subject to the provisions of the UK Plan and the US 2002
      Stock Plan, and shall be interpreted in accordance therewith, except where
      specifically provided otherwise in this Agreement. The Employee hereby
      acknowledges receipt of copies of the Plans.

      Executed and delivered as a deed by PLATO LEARNING, INC. acting by:

                                                  ______________________________

Accepted this ____ day of _____, 200__.

______________________________________

<PAGE>

                         PLATO LEARNING 2002 STOCK PLAN

                               OPTION CERTIFICATE

1.    THIS IS TO CERTIFY THAT has been granted an Option to acquire the number
      of Shares in PLATO Learning, Inc. as indicted in Box (1) below at the
      price per Share in Box (2) in accordance with and subject to the Rules of
      the PLATO Learning 2002 Stock Plan.

<TABLE>
<CAPTION>
          (1)                        (2)                       (3)                        (4)
                                                       Total amount payable
                                                      on exercise of Option
   Number of Shares         Option Price per Share              in
comprised in the Option             (US $)                  full (US$)          Date of Grant of Option
-----------------------     ----------------------    ---------------------     -----------------------
<S>                         <C>                       <C>                       <C>
</TABLE>

      (NOTE: THESE FIGURES MAY BE SUBJECT TO ADJUSTMENT IN THE EVENT OF ANY
      VARIATION IN THE SHARE CAPITAL OF PLATO LEARNING, INC.)

2.    The Option will lapse on _______.

3.    The Option is exercisable in whole or in part in accordance with the Rules
      of the 2002 Stock Plan. It will vest one-third on _______, one-third on
      _______, and one-third on _______.

4.    The Option is not transferable, assignable or chargeable.

5.    As a condition precedent to any exercise of the Option, you will normally
      have to pay Income Tax under PAYE and National Insurance Contributions on
      the exercise of the Option, unless you leave due to one of the specified
      statutory `good leaver' reasons. Upon request by the Company, you will pay
      to the Company in addition to the purchase price of the shares such amount
      of cash as the Company may be required, under all applicable federal,
      state or local laws or regulations. You may elect, by written notice to
      the Company, to satisfy part or all of the withholding tax requirements
      associated with the exercise by delivering to the Company from shares of
      Stock already owned by you, that number of shares having an aggregate Fair
      Market Value equal to part or all of the tax payable by the Employee under
      this Section 5. Any such election shall be in accordance with, and subject
      to, applicable tax and securities laws, regulations and rulings.

6.    This Agreement is subject to the provisions of the 2002 Stock Plan, and
      shall be interpreted in accordance therewith, except where specifically
      provided otherwise in this Agreement. The Employee hereby acknowledges
      receipt of a copy of the Plan.

      Executed and delivered as a deed by PLATO LEARNING, INC. acting by:

                                                  ______________________________

Accepted this ____ day of _____, 200__.

______________________________________

<PAGE>

                              PLATO LEARNING, INC.
                  NON-EMPLOYEE DIRECTOR STOCK OPTION AGREEMENT

      PLATO Learning, Inc., a Delaware corporation (the "Company"), hereby
grants to _______ (the "Director") on this ____ day of ____, 200__ (the "Option
Date"), pursuant to the provisions of the PLATO Learning, Inc. 2002 Stock Plan
(the "Plan"), a non-qualified stock option (the "Option") to purchase from the
Company shares of its Common Stock, $.01 par value ("Stock"), at the price of
$___ per share upon and subject to the terms and conditions set forth below.

      1. Option Subject to Acceptance of Agreement.

      The Option shall become null and void unless the Director shall accept
this Agreement by executing it in the space provided below and return it to the
Company within 60 days following the Option Date.

      2. Time and Manner of Exercise of Option.

      2.1 Maximum Term of Option. In no event may the Option be exercised, in
whole or in part, after 5:00 p.m., Minneapolis time, on the date, which is eight
(8) years after the Option Date (the "Expiration Date").

      2.2 Exercise of Option. Except as otherwise provided in the Plan, the
Option shall become immediately exercisable with respect to 100% of the shares
subject to the Option.

      2.3 Method of Exercise. Subject to the limitations set forth in this
Agreement, the Option may be exercised (i) by giving written notice to the
Secretary of the Company or the Secretary's designee, specifying the number of
whole shares to be purchased and accompanied by the payment therefore in full in
cash or, if permitted by the Compensation Committee, (A) in previously owned
whole shares of Stock (for which the Director has good title, free and clear of
all liens and encumbrances) having a fair market value, determined as of the
date of exercise, equal to the aggregate purchase price payable pursuant to the
Option by reason of such exercise, (B) in cash by a broker-dealer to whom the
Director has submitted an irrevocable notice of exercise, or (C) a combination
of cash and Stock as described in this Section; and (ii) by executing such
documents as the Company may reasonably request. No shares shall be issued until
the full purchase price and all applicable taxes have been paid.

      2.4 Termination of Option. In no event may the Option be exercised after
it terminates as set forth in this Section 2.4. The Option shall terminate on
its Expiration Date, or earlier to the extent not exercised pursuant to Section
2.2 and pursuant to Sections 6.8, 6.9, 6.10, 6.11 and 6.12 of the Plan. In the
event that the Director shall forfeit rights to purchase all or a portion of the
shares to which this Option relates, the Director shall, within 10 days of the
date of the Company's written request, return this Agreement to the Company for
cancellation.

<PAGE>

      3. Additional Terms and Conditions of Option.

      3.1 Withholding Taxes. As a condition precedent to any exercise of the
Option, the Director shall, upon request by the Company, pay to the Company in
addition to the purchase price of the shares such amount of cash as the Company
may be required, under all applicable federal, state or local laws or
regulations. The Director will recognize ordinary income at the time of exercise
in an amount equal to the excess, if any, of the fair market value of a share of
Common Stock at the time of exercise over the option price, multiplied by the
number of shares as to which the option is exercised. The Director may elect, by
written notice to the Company, to satisfy part or all of the withholding tax
requirements associated with the exercise by delivering to the Company from
shares of Stock already owned by the Director, that number of shares having an
aggregate Fair Market Value equal to part or all of the tax payable by the
Director under this Section 3.1. Any such election shall be in accordance with,
and subject to, applicable tax and securities laws, regulations and rulings.

      3.3 Agreement Subject to Plan. This Agreement is subject to the provisions
of the Plan, and shall be interpreted in accordance therewith, except where
specifically provided otherwise in this Agreement. The Director hereby
acknowledges receipt of a copy of the Plan.

                                                PLATO LEARNING, INC.

                                                By: ____________________________

Accepted this _________  day of

_______________________, 200___

_______________________________

<PAGE>

                              PLATO LEARNING, INC.
                         EMPLOYEE STOCK OPTION AGREEMENT

      PLATO Learning, Inc., a Delaware corporation (the "Company"), hereby
grants to _______ (the "Employee") on this 31st day of October, 2001 (the
"Option Date"), pursuant to the provisions of a PLATO Learning, Inc. ______
Stock Incentive Plan (the "Plan"), a non-qualified stock option (the "Option")
to purchase from the Company ________ shares of its Common Stock, $.01 par value
("Stock"), at the price of $___ per share upon and subject to the terms and
conditions set forth below.

      1. Option Subject to Acceptance of Agreement.

      The Option shall become null and void unless the Employee shall accept
this Agreement by executing it in the space provided below and return it to the
Company within 60 days following the Option Date.

      2. Time and Manner of Exercise of Option.

      2.1 Maximum Term of Option. In no event may the Option be exercised, in
whole or in part, after 5:00 p.m., Minneapolis time, on the date, which is 10
years after the Option Date (the "Expiration Date").

      2.2 Exercise of Option. (a) Except as otherwise provided in this Section
2.2, the Option shall become immediately exercisable with respect to 100% of the
aggregate number of shares subject to the Option on October 31, 2001 (the
"Exercise Date").

      (b) If the Employee's employment by the Company terminates by reason of
Disability or death, the Option may thereafter be exercised by the Employee (or
the Employee's executor, administrator or legal representative) for a period of
one year from the date of the Employee's termination of employment or until the
expiration of the term of the Option, whichever period is shorter. For purposes
of this Agreement, "Disability" shall mean the inability of the Employee to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or which has lasted or can be expected to last for a continuous period of
not less than 12 months, determined by the Compensation Committee in its sole
discretion.

      (c) If the Employee's employment by the Company terminates by reason of
retirement on or after age 62 after a minimum of three years of employment with
the Company, the Option may thereafter be exercised for a period of 90 days from
the date of the Employee's termination of employment or until the expiration of
the term of the Option, whichever period is shorter.

      (d) If the Employee's employment by the Company terminates for any reason
other than Disability or death, the Option may thereafter be exercised for a
period of 90 days from the date of the Employee's termination of employment or
until the expiration of the term of the Option, whichever period is shorter;
provided, however, that if the Employee's employment is terminated for Cause,
the Option shall terminate automatically on the date of

<PAGE>

such termination of employment. For purposes of this Agreement, termination of
employment for "Cause" shall mean a termination of employment resulting from, or
caused by, the Employee's theft or embezzlement from the Company or other act of
dishonesty, the violation of a material term or condition of the Employee's
employment, the conviction of the Employee of a crime involving moral turpitude,
the violation by the Employee of any statutory or common law duty of loyalty to
the Company, or the Employee's engagement in acts or conduct which, in the
opinion of the Board of Directors of the Company (the "Board"), are harmful to
the interests of the Company.

      (e) If the Employee dies during the one-year period following termination
of employment by reason of Disability or retirement on or after age 62 after a
minimum of three years of employment with the Company or during the 90-day
period following the termination of employment for any other reason other than
termination of employment for Cause, the Option may thereafter be exercised by
the Employee's executor, administrator or legal representative for a period of
one year from the date of such death or until the expiration of the term of the
Option, whichever period is shorter.

      2.3 Method of Exercise. (a) Subject to the limitations set forth in this
Agreement, the Option may be exercised (i) by giving written notice to the
Secretary of the Company specifying the number of whole shares to be purchased
and accompanied by the payment therefore in full in cash or, if permitted by the
Compensation Committee, (A) in previously owned whole shares of Stock (for which
the Employee has good title, free and clear of all liens and encumbrances)
having a fair market value, determined as of the date of exercise, equal to the
aggregate purchase price payable pursuant to the Option by reason of such
exercise, (B) in cash by a broker-dealer to whom the Employee has submitted an
irrevocable notice of exercise, or (C) a combination of cash and (A); and (ii)
by executing such documents as the Company may reasonably request. No shares
shall be issued until the full purchase price has been paid.

      (b) Unless the Compensation Committee otherwise determines, if the
Employee is subject to Section 16 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), the following provisions shall apply to the
Employee's election to deliver to the Company previously owned whole shares of
Stock in accordance with Section 2.3 (a), upon exercise of this Option in
payment of all or a portion of the Option price: such election (i) may not take
effect during the six-month period beginning on the date of grant of this Option
(other than in the event of the Employee's death), (ii) must be filed with the
Company during (or in advance of, but take effect during) the 20 business day
period beginning on the third business day following the date of release of the
Company's quarterly or annual summary statements of sales and earnings and (iii)
the exercise of this Option must occur during such 20 business day period. Any
such election may be revoked or changed prior to the exercise of this Option
during the 20 business day period.

      2.4 Termination of Option. (a) In no event may the Option be exercised
after it terminates as set forth in this Section 2.4. The Option shall
terminate, to the extent not exercised pursuant to Section 2.3 or earlier
terminated pursuant to Section 2.2, on its Expiration Date.

<PAGE>

      (b) In the event that the Employee shall forfeit rights to purchase all or
a portion of the shares to which this Option relates, the Employee shall, within
10 days of the date of the Company's written request, return this Agreement to
the Company for cancellation.

      3. Additional Terms and Conditions of Option.

      3.1 Nontransferability of Option. Neither the Option nor any rights under
this Agreement may be transferred by the Employee other than by will or the laws
of descent and distribution, and the Option may be exercised during the
Employee's lifetime only by the Employee or the Employee's guardian or legal
representative. The Option shall not be subject to execution, attachment or
other process, and no person shall be entitled to exercise any rights of the
Employee hereunder or possess any rights hereunder by virtue of any attempted
execution, attachment or other process.

      3.2 Investment Representation. The Employee hereby represents and
covenants that (a) any shares purchased upon exercise of the Option will be
purchased for investment and not with a view to the distribution thereof within
the meaning of the Securities Act of 1933, as amended (the "Securities Act"),
unless such purchase has been registered under the Securities Act or applicable
state securities law; (b) any subsequent sale of any such shares shall be made
either pursuant to an effective registration statement under the Securities Act
and any applicable state securities laws, or pursuant to an exemption from
registration under the Securities Act and such state securities laws; and (c) if
requested by the Company, the Employee shall submit a written statement, in form
satisfactory to counsel for the Company, to the effect that such representation
(x) is true and correct as of the date of purchase of any shares hereunder, or
(y) is true and correct as of the date of any sale of any such shares, as
applicable. As a further condition precedent to any exercise of the Option, the
Employee shall comply with all regulations and requirements of any regulatory
authority having control of or supervision over the issuance of the shares and,
in connection therewith, shall execute any documents which the Board or any
committee authorized by the Board shall in its sole discretion deem necessary or
advisable.

      3.3 Withholding Taxes. (a) As a condition precedent to any exercise of the
Option, the Employee shall, upon request by the Company, pay to the Company in
addition to the purchase price of the shares such amount of cash as the Company
may be required, under all applicable federal, state or local laws or
regulations, to withhold any pay over as income or other withholding taxes (the
"Required Tax Payments") with respect to such exercise of the Option. If the
Employee shall fail to advance the Required Tax Payments after request by the
Company, the Company may, in its discretion, deduct any Required Tax Payments
from any amount then or thereafter payable by the Company to the Employee.

      (b) The Employee may, at his election, subject to approval by the
Compensation Committee, satisfy his obligation to advance the Required Tax
Payments by any of the following means: (i) a cash payment to the Company
pursuant to Section 3.3 (a), (ii) delivery to the Company of previously owned
whole shares of Stock (for which the Employee has good title, free and clear of
all liens and encumbrances) having a fair market value determined as of the date
the obligation to withhold or pay taxes first arises in connection with the
Option (the "Tax Date") equal to the amount necessary to satisfy any such
obligations, (iii) a cash payment by a broker-dealer acceptable to the Company
to whom the

<PAGE>

Employee has submitted an irrevocable notice of exercise, or (iv) any
combination of (i), (ii) and (iii). Any fraction of a share, which would be
required to satisfy such an obligation, shall be disregarded and the Employee
shall pay the remaining amount due in cash.

      (c) Unless the Compensation Committee otherwise determines, if the
Employee is subject to Section 16 of the Exchange Act, the following provisions
shall apply to the Employee's election to deliver to the Company previously
owned whole shares of Stock in accordance with Section 3.3 (b), upon exercise of
this Option in payment of all or a portion of the Employee's tax liability; such
election (A) may not take effect during the six-month period beginning on this
Option Date (other than in the event of the Employee's death), (B) must be filed
with the Company during (or in advance of, but take effect during) the 30
business day period beginning on the third business day following the date of
release of the Company's quarterly or annual summary statements of sales and
earnings and (C) the exercise of this Option must occur during such 30 business
day period. Any such election may be revoked or changed prior to the exercise of
this Option during the 30 business day period.

      3.4 Adjustment. In the event of any stock dividend, stock split,
combination or exchange of shares of Stock, merger, consolidation, spin-off,
recapitalization or other distribution (other than normal cash dividends) of the
Company assets to stockholders, or any other change affecting Stock or share
price, the number and class of shares under the Option and the purchase price
per share shall be appropriately adjusted by the Committee without a change in
the aggregate purchase price, other than a change in the aggregate purchase
price resulting from rounding. The decision of the Compensation Committee
regarding the amount and timing of any adjustment pursuant to this Section 3.4
shall be conclusive.

      3.5 Compliance with Applicable Law. The Option is subject to the condition
that if the listing of the shares covered by the Option on any securities
exchange, the registration or qualification of such shares under any federal or
state law or the consent or approval of any regulatory body shall be required as
a condition of, or in connection with, the granting of the Option or the
purchase or delivery of shares hereunder, the Option may not be exercised, in
whole or in part, unless and until such listing, registration, qualification,
consent or approval shall have been effected or obtained. The Company agrees to
make every reasonable effort to effect or obtain any such listing, registration,
qualification, consent or approval.

      3.6 Delivery of Certificates. Upon the exercise of the Option, in whole or
in part, the Company shall deliver or cause to be delivered one or more
certificates representing the number of shares purchased against full payment
therefore. The Company shall pay all original issue or transfer taxes and all
fees and expenses incident to such delivery, except as otherwise provided in
Section 3.3.

      3.7 Option Confers No Rights as Shareholder. The Employee shall not be
entitled to any privileges of ownership with respect to shares subject to the
Option unless and until purchased and delivered upon the exercise of the Option,
in whole or in part, and the Employee becomes a shareholder of record with
respect to such delivered shares; and the Employee shall not be considered a
shareholder of the Company with respect to any such shares not so purchased and
delivered.

<PAGE>

      3.8 Option Confers No Rights to Continued Employment. In no event shall
the granting of the Option or its acceptance by the Employee give or be deemed
to give the Employee any right to continued employment by the Company.

      3.9 Decisions of Compensation Committee. The Compensation Committee shall
have the right to resolve all questions, which may arise in connection with the
Option or its exercise. Any interpretation, determination or other action made
or taken by the Compensation Committee regarding the Plan or this Agreement
shall be final, binding and conclusive.

      3.10 Company to Reserve Shares. The Company shall at all times prior to
the expiration or termination of the Option reserve and keep available, either
in its treasury or out of its authorized but unissued shares of Stock, the full
number of shares subject to the Option from time to time.

      3.11 Agreement Subject to Plan. This Agreement is subject to the
provisions of the Plan, and shall be interpreted in accordance therewith, except
where specifically provided otherwise in this Agreement. The Employee hereby
acknowledges receipt of a copy of the Plan.

      4. Miscellaneous Provisions.

      4.1 Designation as Non-Qualified Stock Option. The Option is hereby
designated as a "non-qualified stock option"; this Agreement shall be
interpreted and treated consistently with such designation.

      4.2 Meaning of Certain Terms. As used herein, employment by the Company
shall include employment by a corporation, which is a "subsidiary corporation"
of the Company; as such term is defined in section 424 of the Code. References
in this Agreement to sections of the Code shall be deemed to refer to any
successor section of the Code or any successor internal revenue law.

      4.3 Successors. This Agreement shall be binding upon and inure to the
benefit of any successor or successors of the Company and any person or persons,
who shall, upon the death of the Employee, acquire any rights in accordance with
this Agreement or the Plan.

      4.4 Notices. All notices, requests or other communications provided for in
this Agreement shall be made in writing either (a) by actual delivery to the
party entitled thereto, or (b) by mailing in the United States mail to the last
known address of the party entitled thereto, via certified or registered mail,
return receipt requested. The notice shall be deemed to be received in case of
delivery, on the date of its actual receipt by the party entitled thereto, and
in case of mailing, five days following the date of such mailing.

      4.5 Governing Law. This Agreement shall be governed by, and interpreted in
accordance with, the internal laws of the State of Minnesota.

<PAGE>

      4.6 Counterparts. This Agreement may be executed in two counterparts each
of which shall be deemed an original and both of which together shall constitute
one and the same instrument.

                                              PLATO LEARNING, INC.

                                              By: ______________________________

Accepted this _________ day of

______________________, 200______

_________________________________

<PAGE>

                              PLATO LEARNING, INC.
                    EMPLOYEE INCENTIVE STOCK OPTION AGREEMENT

      PLATO Learning, Inc., a Delaware corporation (the "Company"), hereby
grants to _________________ (the "Employee") on this _____ day of __________,
_____ (the "Option Date"), pursuant to the provisions of the PLATO Learning,
Inc. Stock Incentive Plan (the "Plan"), an option (the "Option") to purchase
from the Company _________ shares of its Common Stock, $.01 par value ("Stock"),
at the price of $_______ per share upon and subject to the terms and conditions
set forth below.

      The Option is intended to be and shall for all purposes be treated as an
incentive stock option under Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code").

      1. Option Subject to Acceptance of Agreement.

      The Option shall become null and void unless the Employee shall accept
this Agreement by executing it in the space provided below and return it to the
Company within 30 days following the Option Date.

      2. Time and Manner of Exercise of Option.

      2.1 Maximum Term of Option. In no event may the Option be exercised, in
whole or in part, after 5:00 p.m., Chicago time, on the date which is 10 years
after the Option Date (the "Expiration Date").

      2.2 Exercise of Option. (a) Except as otherwise provided in this Section
2.2, the Option shall become exercisable with respect to 33-1/3% of the
aggregate number of shares of Stock subject to the Option on ______________ (the
"First Exercise Date"), with respect to 66-2/3% of the aggregate number of
shares subject to the Option on _____________ (the "Second Exercise Date"), and
with respect to 100% of the aggregate number of shares subject to the Option on
________________ (the "Third Exercise Date") (the First Exercise Date, the
Second Exercise Date and the Third Exercise Date each being referred to herein
as an "Exercise Date").

      (b) If the Employee's employment by the Company terminates by reason of
Disability or death, the Option shall become fully exercisable and may
thereafter be exercised by the Employee (or the Employee's executor,
administrator or legal representative) for a period of one year from the date of
the Employee's termination of employment or until the expiration of the term of
the Option, whichever period is shorter. For purposes of this Agreement,
"Disability" shall mean the inability of the Employee to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death or which has lasted
or can be expected to last for a continuous period of not less that 12 months,
determined by the Compensation Committee in its sole discretion.

<PAGE>

      (c) If the Employee's employment by the Company terminates by reason of
retirement on or after age 62 after a minimum of three years of employment with
the Company, the Option shall become fully exercisable and may thereafter be
exercised for a period of 90 days from the date of the Employee's termination of
employment or until the expiration of the term of the Option, whichever period
is shorter.

      (d) If the Employee's employment by the Company terminates for any reason
other than Disability or death, the Option shall be exercisable only to the
extent that it was exercisable on the date of the Employee's termination of
employment, and may thereafter be exercised for a period of 90 days from the
date of the Employee's termination of employment or until the expiration of the
term of the Option, whichever period is shorter; provided, however, that if the
Employee's employment is terminated for Cause, the Option shall terminate
automatically on the date of such termination of employment. For purposes of
this Agreement, termination of employment for "Cause" shall mean a termination
of employment resulting from, or caused by, the Employee's theft or embezzlement
from the Company or other act of dishonesty, the violation of a material term or
condition of the Employee's employment, the conviction of the Employee of a
crime involving moral turpitude, the violation by the Employee of any statutory
or common law duty of loyalty to the Company, or the Employee's engagement in
acts or conduct which, in the opinion of the Board of Directors of the Company
(the "Board"), are harmful to the interests of the Company.

      (e) If the Employee dies during the one-year period following termination
of employment by reason of Disability or retirement on or after age 62 after a
minimum of three years of employment with the Company or during the 90-day
period following the termination of employment for any other reason other than
termination of employment for Cause, the Option shall be exercisable only to the
extent that it was exercisable on the date of such death and may thereafter be
exercised by the Employee's executor, administrator or legal representative for
a period of one year from the date of such death or until the expiration of the
term of the Option, whichever period is shorter.

      2.3 Method of Exercise. (a) Subject to the limitations set forth in this
Agreement, the Option may be exercised (i) by giving written notice to the
Secretary of the Company specifying the number of whole shares to be purchased
and accompanied by the payment therefor in full in cash or, if permitted by the
Compensation Committee, (A) in previously owned whole shares of Stock (for which
the Employee has good title, free and clear of all liens and encumbrances)
having a fair market value, determined as of the date of exercise, equal to the
aggregate purchase price payable pursuant to the Option by reason of such
exercise, (B) by authorizing the Company to retain whole shares which would
otherwise be issuable upon exercise of the Option having a fair market value,
determined as of the date of exercise, equal to the aggregate purchase price
payable pursuant to the Option by reason of such exercise, (C) in cash by a
broker-dealer to whom the Employee has submitted an irrevocable notice of
exercise, or (D) a combination of cash, (A) and (B), and (ii) by executing such
documents as the Company may reasonably request. No shares shall be issued until
the full purchase price has been paid.

      (b) Unless the Compensation Committee otherwise determines, if the
Employee is subject to Section 16 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), the following provisions shall apply to the
Employee's election to authorize the

<PAGE>

Company to retain whole shares purchasable upon exercise of the Option in
payment of all or a portion of the option price: such election (i) may not take
effect during the six-month period beginning on the date of grant of the Option
(other than in the event of the Employee's death), (ii) must be filed with the
Vice President, Human Resources in advance of, but take effect during (or must
be filed with the Vice President, Human Resources in advance of, but take effect
during) the 30 business day period beginning on the third business day following
the date of release of the Company's quarterly or annual summary statements of
sales and earnings and (iii) the exercise of the Option must occur during such
30 business day period. Any such election may be revoked or changed prior to the
exercise of the Option during the 30 business day period.

      2.4 Termination of Option. (a) In no event may the Option be exercised
after it terminates as set forth in this Section 2.4. The Option shall
terminate, to the extent not exercised pursuant to Section 2.3 or earlier
terminated pursuant to Section 2.2, on its Expiration Date.

      (b) In the event that the Employee shall forfeit rights to purchase all or
a portion of the shares to which this Option relates, the Employee shall, within
10 days of the date of the Company's written request, return this Agreement to
the Company for cancellation. If the Employee continues to have vested rights
hereunder, the Company shall, within 10 days of the Employee's delivery of this
Agreement to the Company for cancellation, issue to the Employee a substitute
option agreement applicable to the Employee's vested rights hereunder, which
agreement shall be substantially similar to this Agreement in form and
substance.

      3. Additional Terms and Conditions of Option.

      3.1 Nontransferability of Option. Neither the Option nor any rights under
this Agreement may be transferred by the Employee other than by will or the laws
of descent and distribution, and the Option may be exercised during the
Employee's lifetime only by the Employee or the Employee's guardian or legal
representative. The Option shall not be subject to execution, attachment or
other process, and no person shall be entitled to exercise any rights of the
Employee hereunder or possess any rights hereunder by virtue of any attempted
execution, attachment or other process.

      3.2 Investment Representation. The Employee hereby represents and
covenants that (a) any shares purchased upon exercise of the Option will be
purchased for investment and not with a view to the distribution thereof within
the meaning of the Securities Act of 1933, as amended (the "Securities Act"),
unless such purchase has been registered under the Securities Act or applicable
state securities law; (b) any subsequent sale of any such shares shall be made
either pursuant to an effective registration statement under the Securities Act
and any applicable state securities laws, or pursuant to an exemption from
registration under the Securities Act and such state securities laws; and (c) if
requested by the Company, the Employee shall submit a written statement, in form
satisfactory to counsel for the Company, to the effect that such representation
(x) is true and correct as of the date of purchase of any shares hereunder, or
(y) is true and correct as of the date of any sale of any such shares, as
applicable. As a further condition precedent to any exercise of the Option, the
Employee shall comply with all regulations and requirements of any regulatory
authority having control of or supervision over the issuance of the shares and,
in connection therewith, shall execute any

<PAGE>

documents which the Board or any committee authorized by the Board shall in its
sole discretion deem necessary or advisable.

      3.3 Withholding Taxes. (a) As a condition precedent to any exercise of the
Option, the Employee shall, upon request by the Company, pay to the Company in
addition to the purchase price of the shares such amount of cash as the Company
may be required, under all applicable federal, state or local laws or
regulations, to withhold any pay over as income or other withholding taxes (the
"Required Tax Payments") with respect to such exercise of the Option. If the
Employee shall fail to advance the Required Tax Payments after request by the
Company, the Company may, in its discretion, deduct any Required Tax Payments
from any amount then or thereafter payable by the Company to the Employee.

      (b) The Employee may, at his election, subject to approval by the
Compensation Committee, satisfy his obligation to advance the Required Tax
Payments by any of the following means: (i) a cash payment to the Company
pursuant to Section 3.3 (a), (ii) delivery to the Company of previously owned
whole shares of Stock (for which the Employee has good title, free and clear of
all liens and encumbrances) having a fair market value determined as of the date
the obligation to withhold or pay taxes first arises in connection with the
Option (the "Tax Date") equal to the amount necessary to satisfy any such
obligations, (iii) authorizing the Company to withhold from the shares otherwise
issuable to the Employee pursuant to the Option a number of whole shares having
a fair market value determined as of the Tax Date equal to the amount necessary
to satisfy any such obligations, (iv) a cash payment by a broker-dealer
acceptable to the Company to whom the Employee has submitted an irrevocable
notice of exercise, or (v) any combination of (i), (ii) and (iii). Shares to be
delivered or withheld may have an aggregate fair market value in excess of the
minimum amount to the Required Tax Payments, but not in excess of the amount
determined by applying the Employee's maximum marginal tax rate. Any fraction of
a share which would be required to satisfy such an obligation shall be
disregarded and the remaining amount due shall be paid in cash by the Employee.

      (c) Unless the Compensation Committee otherwise determines, if the
Employee is subject to Section 16 of the Exchange Act, the following provisions
shall apply to the Employee's election to deliver to the Company whole shares of
Stock or to authorize the Company to retain whole shares purchasable upon
exercise of the Option in payment of all or a portion of the Employee's tax
liability in connection with such exercise:

      (1) The Employee may deliver to the Company previously owned whole shares
of Stock in accordance with Section 3.3 (b), if such delivery is in connection
with the delivery of shares in payment of the exercise price of the Option;

      (2) The Employee may authorize the Company to retain whole shares
purchasable upon exercise of the Option in accordance with Section 3.3 (b);
provided, that the following provisions shall apply to such election:

      Such election (A) may not take effect during the six-month period
beginning on the Option Date (other than in the event of the Employee's death),
(B) must be filed with the Vice President, Human Resources during (or must be
filed with the Vice President, Human Resources in advance of, but take effect
during) the 30 business day period beginning on the

<PAGE>

third business day following the date of release of the Company's quarterly or
annual summary statements of sales and earnings and (C) the exercise of the
Option must occur during such 30 business day period. Any such election may be
revoked or changed prior to the exercise of the Option during the 30 business
day period.

      3.4 Adjustment. In the event of any stock dividend, stock split,
combination or exchange of shares of Stock, merger, consolidation, spin-off,
recapitalization or other distribution (other than normal cash dividends) of the
Company assets to stockholders, or any other change affecting Stock or share
price, the number and class of shares under the Option and the purchase price
per share shall be appropriately adjusted by the Committee without a change in
the aggregate purchase price, other than a change in the aggregate purchase
price resulting from rounding. the decision of the Compensation Committee
regarding the amount and timing of any adjustment pursuant to this Section 3.4
shall be conclusive.

      3.5 Compliance with Applicable Law. The Option is subject to the condition
that if the listing of the shares covered by the Option on any securities
exchange, the registration or qualification of such shares under any federal or
state law or the consent or approval of any regulatory body shall be required as
a condition of, or in connection with, the granting of the Option or the
purchase or delivery of shares hereunder, the Option may not be exercised, in
whole or in part, unless and until such listing, registration, qualification,
consent or approval shall have been effected or obtained. The Company agrees to
make every reasonable effort to effect or obtain any such listing, registration,
qualification, consent or approval.

      3.6 Delivery of Certificates. Upon the exercise of the Option, in whole or
in part, the Company shall deliver or cause to be delivered one or more
certificates representing the number of shares purchased against full payment
therefor. The Company shall pay all original issue or transfer taxes and all
fees and expenses incident to such delivery, except as otherwise provided in
Section 3.3.

      3.7 Option Confers No Rights as Shareholder. The Employee shall not be
entitled to any privileges of ownership with respect to shares subject to the
Option unless and until purchased and delivered upon the exercise of the Option,
in whole or in part, and the Employee becomes a shareholder of record with
respect to such delivered shares; and the Employee shall not be considered a
shareholder of the Company with respect to any such shares not so purchased and
delivered.

      3.8 Option Confers No Rights to Continued Employment. In no event shall
the granting of the Option or its acceptance by the Employee give or be deemed
to give the Employee any right to continued employment by the Company.

      3.9 Decisions of Compensation Committee. The Compensation Committee shall
have the right to resolve all questions which may arise in connection with the
Option or its exercise. Any interpretation, determination or other action made
or taken by the Compensation Committee regarding the Plan or this Agreement
shall be final, binding and conclusive.

      3.10 Company to Reserve Shares. The Company shall at all times prior to
the expiration or termination of the Option reserve and keep available, either
in its treasury or out

<PAGE>

of its authorized but unissued shares of Stock, the full number of shares
subject to the Option from time to time.

      3.11 Agreement Subject to Plan. This Agreement is subject to the
provisions of the Plan, and shall be interpreted in accordance therewith, except
where specifically provided otherwise in this Agreement. The Employee hereby
acknowledges receipt of a copy of the Plan.

      3.12 Agreement Subject to Stockholder Approval. This Agreement and the
grant of the Option made hereunder are expressly subject to the approval of the
Plan by the stockholders of the Company at a meeting of stockholders or any
adjournment thereof. If the Plan in not so approved at such a meeting, this
Agreement and all rights hereunder shall be null and void and of no force or
effect.

      4. Miscellaneous Provisions.

      4.1 Designation as Qualified Stock Option. The Option is hereby designated
as an "incentive stock option" within the meaning of Section 422 of the Code;
this Agreement shall be interpreted and treated consistently with such
designation.

      4.2 Meaning of Certain Terms. As used herein, employment by the Company
shall include employment by a corporation which is a "subsidiary corporation" of
the Company, as such term is defined in section 424 of the Code. References in
this Agreement to sections of the Code shall be deemed to refer to any successor
section of the Code or any successor internal revenue law.

      4.3 Successors. This Agreement shall be binding upon and inure to the
benefit of any successor or successors of the Company and any person or persons
who shall, upon the death of the Employee, acquire any rights in accordance with
this Agreement or the Plan.

      4.4 Notices. All notices, requests or other communications provided for in
this Agreement shall be made in writing either (a) by actual delivery to the
party entitled thereto, or (b) by mailing in the United States mail to the last
known address of the party entitled thereto, via certified or registered mail,
return receipt requested. The notice shall be deemed to be received in case of
delivery, on the date of its actual receipt by the party entitled thereto, and
in case of mailing, five days following the date of such mailing.

      4.5 Governing Law. This Agreement shall be governed by, and interpreted in
accordance with, the internal laws of the State of Illinois.

      4.6 Counterparts. This Agreement may be executed in two counterparts each
of which shall be deemed an original and both of which together shall constitute
one and the same instrument.

<PAGE>

                                           PLATO LEARNING, INC.

                                           By: _________________________________

Accepted this _________ day of

______________________, ___________

___________________________________
             Employeeexv4w1xcy

 

Exhibit 4.1(c)

EXECUTION COPY

REGISTRATION RIGHTS AGREEMENT

Dated as of March 25, 2004

by and among

Rural Cellular Corporation

as Issuer,

the Guarantors

and

Lehman Brothers Inc.,

Banc of America Securities LLC

and

Lazard Frères & Co. LLC

as the Initial Purchasers

 

 

     This Registration Rights Agreement (this “Agreement”) is dated as of March
25, 2004, by and among Rural Cellular Corporation, a Minnesota corporation (the
"Company”), RCC Paging, Inc., RCC Atlantic, Inc., RCC Atlantic Long Distance,
Inc., RCC Holdings, Inc., RCC Minnesota, Inc., RCC Network, Inc., TLA Spectrum,
LLC, RGI Group, Inc., RCC Transport, Inc., BMCT Equipment Company, L.L.C.,
Ferry Equipment Company, L.L.C., Alexandria Indemnity Corporation
(collectively, the “Guarantors”) and Lehman Brothers Inc., Banc of America
Securities LLC and Lazard Frères & Co. LLC (each, an “Initial Purchaser” and,
collectively, the “Initial Purchasers”), each of whom has agreed to purchase
the $350,000,000 in aggregate principal amount of the Company’s 81⁄4% Senior
Secured Notes due March 15, 2012 (the “2012 Notes”) and $160,000,000 in
aggregate principal amount of the Company’s Senior Secured Floating Rate Notes
due March 15, 2010 (the “2010 Notes,” and, together with the 2012 Notes, the
"Notes”), which Notes are guaranteed by the Guarantors (the “Guarantees”), in
each case, pursuant to the Purchase Agreement (as defined below). The Notes
and the Guarantees are referred to together as the “Securities”. The 2010
Notes and the Guarantees thereof are referred to together as the “2010
Securities”, and the 2012 Notes and the Guarantees thereof are referred to
together as the “2012 Securities”.

     This Agreement is made pursuant to the Purchase Agreement, dated as of
March 15, 2004, and amended as of March 25, 2004 (as amended, the “Purchase
Agreement”), by and among the Company, the Guarantors and the Initial
Purchasers. In order to induce the Initial Purchasers to purchase the
Securities, the Company has agreed to provide the registration rights set forth
in this Agreement. The execution and delivery of this Agreement is a condition
to the obligations of the Initial Purchasers set forth in Section 5 of the
Purchase Agreement. Capitalized terms used herein and not otherwise defined
shall have the meanings assigned to them in the Indenture, dated the date
hereof (the “Indenture”), among the Company, the Guarantors and U.S. Bank
National Association, as Trustee (the “Trustee”), relating to the Securities
and the Exchange Securities (as defined below).

     The parties hereby agree as follows:

SECTION 1. DEFINITIONS

     As used in this Agreement, the following capitalized terms shall have the
following meanings:

     Act: The U.S. Securities Act of 1933.

     Affiliate: As defined in Rule 144 of the Act.

     Broker-Dealer: Any broker or dealer registered under the Exchange Act.

     Closing Date: The date of this Agreement.

     Commission: The U.S. Securities and Exchange Commission.

 

 

     Consummate: An Exchange Offer shall be deemed “Consummated” for purposes
of this Agreement upon the occurrence of (a) the filing and effectiveness under
the Act of the Exchange Offer Registration Statement relating to the Exchange
Securities to be issued in the Exchange Offer, (b) the maintenance of such
Exchange Offer Registration Statement continuously effective and the keeping of
the Exchange Offer open for a period not less than the minimum period required
pursuant to Section 3(b) hereof and (c) the delivery by the Company to the
Registrar under the Indenture of Exchange Securities in the same aggregate
principal amount as the aggregate principal amount of Securities of like class
tendered by Holders thereof pursuant to the Exchange Offer.

     Consummation Deadline: As defined in Section 3(b) hereof.

     Effectiveness Deadline: As defined in Section 3(a) and 4(a) hereof.

     Exchange Act: The U.S. Securities Exchange Act of 1934.

     Exchange Offer: The offer to exchange (a) New 2012 Securities (whose
issuance shall be registered pursuant to the Exchange Offer Registration
Statement) for a like outstanding principal amount of 2012 Securities that are
tendered by the Holders thereof, and (b) New 2010 Securities (whose issuance
shall be registered pursuant to the Exchange Offer Registration Statement) for
a like outstanding principal amount of 2010 Securities that are tendered by the
Holders thereof.

     Exchange Offer Registration Statement: The Registration Statement
relating to the Exchange Offer, including the related Prospectus.

     Exempt Resales: The transactions in which the Initial Purchasers propose
to sell the Securities to certain “qualified institutional buyers,” as such
term is defined in Rule 144A under the Act, and pursuant to Regulation S under
the Act.

     Exchange Securities: The New 2010 Securities (with respect to the 2010
Securities) and the New 2012 Securities (with respect to the 2012 Securities),
each of whose issuance is registered under the Act, to be issued pursuant to
the Indenture (a) in the Exchange Offer or (b) as contemplated by Section 4
hereof.

     Filing Deadline: As defined in Sections 3(a) and 4(a) hereof.

     Holders: As defined in Section 2 hereof.

     Interest Payment Date: With respect to the 2010 Securities, each March
15, June 15, September 15 and December 15, commencing on June 15, 2004 and,
with respect to the 2010 Securities, each March 15 and September 15, commencing
on September 15, 2004.

     New 2010 Securities: The Company’s Series B Senior Secured Floating Rate
Notes due 2010 and the guarantees of the Guarantors thereof.

2

 

     New 2012 Securities: The Company’s Series B 81⁄4% Senior Secured
Notes due 2012 and the guarantees of the Guarantors thereof.

     Person: As defined in the Indenture.

     Prospectus: 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.

     Recommencement Date: As defined in Section 6(e) hereof.

     Registration Default: As defined in Section 5 hereof.

     Registration Statement: Any registration statement of the Company
relating to (a) an offering of Exchange Securities pursuant to an Exchange
Offer or (b) the registration for resale of Transfer Restricted Securities
pursuant to the Shelf Registration Statement, in each case (i) that is filed
pursuant to the provisions of this Agreement and (ii) including the Prospectus
included therein, all amendments and supplements thereto (including
post-effective amendments) and all exhibits and material incorporated by
reference therein.

     Regulation S: Regulation S promulgated under the Act.

     Rule 144: Rule 144 promulgated under the Act.

     Shelf Registration Statement: As defined in Section 4(a) hereof.

     Suspension Notice: As defined in Section 6(e) hereof.

     TIA: The U.S. Trust Indenture Act of 1939 (15 U.S.C. Section
77aaa-77bbbb) as in effect on the date of the Indenture.

     Transfer Restricted Securities: Each Security, until the earliest to
occur of (a) the date on which such Security has been exchanged by a Person
other than a Broker-Dealer for an Exchange Security in the Exchange Offer, (b)
following the exchange by a Broker-Dealer in the Exchange Offer of a Security
for an Exchange Security, the date on which such Exchange Security is sold to a
purchaser who receives from such Broker-Dealer on or prior to the date of such
sale a copy of the Prospectus contained in the Exchange Offer Registration
Statement, (c) the date on which such Security has been effectively registered
under the Act and disposed of in accordance with the Shelf Registration
Statement, (d) the date on which such Security is distributed to the public
pursuant to Rule 144 under the Act, or is saleable pursuant to Rule 144(k)
under the Act (or similar provision then in effect), or (e) the date on which
such Security ceases to be outstanding; provided, however, that for purposes of
this Agreement (other than Section 9 hereof), Securities with respect to which
the Company has caused to be filed and declared effective an Exchange Offer
Registration Statement and has Consummated an Exchange Offer, in each case
pursuant to and in accordance with Section 3 hereof, and

3

 

which have not been tendered by the date such Exchange Offer is
Consummated by the holder thereof shall not be deemed to be Transfer Restricted
Securities, except to the extent the holder thereof provides the notice
contemplated by Section 4(a)(ii).

     Underwritten Registration or Underwritten Offering: A registration in
which securities of the Company and/or the Guarantors are sold to an
underwriter for reoffering to the public.

SECTION 2. HOLDERS

     A Person is deemed to be a holder of Transfer Restricted Securities (each,
a “Holder”) whenever such Person owns Transfer Restricted Securities.

SECTION 3. REGISTERED EXCHANGE OFFER

     (a) Unless the Exchange Offer shall not be permitted by applicable law or
Commission policy (after the procedures set forth in Section 6(a)(iii)(A) below
have been complied with), the Company and the Guarantors shall (i) cause the
Exchange Offer Registration Statement to be filed with the Commission on or
prior to 180 days after the Closing Date (the “Filing Deadline”), (ii) use
their commercially reasonable efforts to cause such Exchange Offer Registration
Statement to become effective on or prior to 120 days after the Exchange Offer
Registration Statement is filed (the “Effectiveness Deadline”), (iii) in
connection with the foregoing, (A) file all pre-effective amendments to such
Exchange Offer Registration Statement as may be reasonably necessary in order
to cause it to become effective, (B) file, if applicable, a post-effective
amendment to such Exchange Offer Registration Statement pursuant to Rule 430A
under the Act and (C) cause all necessary filings, if any, in connection with
the registration and qualification of the Exchange Securities to be made under
the Blue Sky laws of such jurisdictions as are necessary to permit Consummation
of the Exchange Offer, and (iv) upon the effectiveness of such Exchange Offer
Registration Statement, commence, and use their commercially reasonable efforts
to Consummate, the Exchange Offer. The Exchange Offer shall be on the
appropriate form permitting (I) registration of the Exchange Securities to be
offered in exchange for the Securities that are Transfer Restricted Securities
and (II) resales of Exchange Securities by Broker-Dealers that tendered into
the Exchange Offer Securities that such Broker-Dealer acquired for its own
account as a result of market making activities or other trading activities
(other than Securities acquired directly from the Company or any Affiliate of
the Company) as contemplated by Section 3(c) below.

     (b) The Company and the Guarantors shall use their commercially reasonable
efforts to cause the Exchange Offer Registration Statement to be effective
continuously, and shall keep the Exchange Offer open for a period of not less
than the minimum period required under applicable federal and state securities
laws to Consummate the Exchange Offer; provided, however, that in no event
shall such period be less than 20 Business Days. The Company and the
Guarantors shall cause the Exchange Offer to comply with all applicable federal
and state securities laws. No securities other than the Exchange Securities
shall be included in the Exchange Offer

4

 

Registration Statement. The Company and the Guarantors shall use their
commercially reasonable efforts to cause the Exchange Offer to be Consummated
no later than 30 Business Days thereafter (the “Consummation Deadline”).

     (c) The Company and the Guarantors shall include a “Plan of Distribution”
section in the Prospectus contained in the Exchange Offer Registration
Statement and indicate therein that any Broker-Dealer who holds Transfer
Restricted Securities that were acquired for the account of such Broker-Dealer
as a result of market-making activities or other trading activities (other than
Transfer Restricted Securities acquired directly from the Company or any
Affiliate of the Company), may exchange such Transfer Restricted Securities
pursuant to the Exchange Offer. Such “Plan of Distribution” section shall also
contain all other information with respect to such sales by such Broker-Dealers
that the Commission may require in order to permit such sales pursuant thereto,
but such “Plan of Distribution” shall not name any such Broker-Dealer or
disclose the amount of Transfer Restricted Securities held by any such
Broker-Dealer, except to the extent required by the Commission as a result of a
change in policy, rules or regulations after the date of this Agreement.

     Because such a Broker-Dealer may be deemed to be an “underwriter” within
the meaning of the Act and must, therefore, deliver a prospectus meeting the
requirements of the Act in connection with its initial sale of any Exchange
Securities received by such Broker-Dealer in the Exchange Offer, the Company
and the Guarantors shall permit the use of the Prospectus contained in the
Exchange Offer Registration Statement by such Broker-Dealer to satisfy such
prospectus delivery requirement. To the extent necessary to ensure that the
prospectus contained in the Exchange Offer Registration Statement is available
for sales of Exchange Securities by Broker-Dealers, the Company and the
Guarantors agree to use their commercially reasonable efforts to keep the
Exchange Offer Registration Statement continuously effective, supplemented,
amended and current as required by and subject to the provisions of Section
6(a) and (c) hereof and in conformity with the requirements of this Agreement,
the Act and the policies, rules and regulations of the Commission as announced
from time to time, for a period of one year from the date on which the Exchange
Offer is Consummated or such shorter period as will terminate when all Transfer
Restricted Securities covered by such Registration Statement have been sold
pursuant thereto. The Company and the Guarantors shall provide sufficient
copies of the latest version of such Prospectus to such Broker-Dealers,
promptly upon request, at any time during such period.

SECTION 4. SHELF REGISTRATION

     (a) Shelf Registration. If (i) the Exchange Offer Registration Statement
is not required to be filed or the Exchange Offer is not permitted by
applicable law or Commission policy (after the Company and the Guarantors have
complied with the procedures set forth in Section 6(a)(iii)(A) hereof) or (ii)
any Holder of Transfer Restricted Securities shall notify the Company and the
Guarantors within 20 Business Days following the Consummation of the Exchange
Offer that (A) such Holder was prohibited by applicable law or Commission
policy from participating in the Exchange Offer, (B) such Holder may not resell
the Exchange Securities acquired by it in the

5

 

Exchange Offer to the public without delivering a prospectus and the
Prospectus contained in the Exchange Offer Registration Statement is not
appropriate or available for such resales by such Holder or (C) such Holder is
a Broker-Dealer and holds Securities acquired directly from the Company or any
Affiliate of the Company, then the Company and the Guarantors shall:

     (I) cause to be filed, on or prior to 180 days after the earlier of (x)
the date on which the Company and the Guarantors determine that the Exchange
Offer Registration Statement cannot be filed as a result of clause (a)(i) of
this Section and (y) the date on which the Company receives the notice
specified in clause (a)(ii) of this Section (such earlier date, the “Filing
Deadline”), a shelf registration statement pursuant to Rule 415 under the Act
(which may be an amendment to the Exchange Offer Registration Statement (in
either event, the “Shelf Registration Statement”)), relating to all Transfer
Restricted Securities; and

     (II) use their commercially reasonable efforts to cause such Shelf
Registration Statement to be declared effective on or prior to 120 days after
the Filing Deadline for the Shelf Registration Statement (the “Effectiveness
Deadline”).

     If, after the Company and the Guarantors have filed an Exchange Offer
Registration Statement that satisfies the requirements of Section 3(a) above,
the Company and the Guarantors are required to file and make effective a Shelf
Registration Statement solely because the Exchange Offer is not permitted under
applicable law or Commission policy, then the filing of the Exchange Offer
Registration Statement shall be deemed to satisfy the requirements of clause
(I) above; provided that, in such event, the Company and the Guarantors shall
remain obligated to meet the Effectiveness Deadline in the manner set forth in
clause (II) above.

     To the extent necessary to ensure that the Shelf Registration Statement is
available for sales of Transfer Restricted Securities by the Holders thereof
entitled to the benefit of this Section 4(a) and the other securities required
to be registered therein pursuant to Section 6(b)(ii) hereof, the Company and
the Guarantors shall use their commercially reasonable efforts to keep any
Shelf Registration Statement required by this Section 4(a) continuously
effective, supplemented, amended and current as required by and subject to the
provisions of Sections 6(b) and (c) hereof and in conformity with the
requirements of this Agreement, the Act and the policies, rules and regulations
of the Commission as announced from time to time, for a period of at least two
years (as extended pursuant to Section 6(c)(i) hereof) following the Closing
Date, or such shorter period as will terminate when all Transfer Restricted
Securities covered by such Shelf Registration Statement have been sold pursuant
thereto.

     (b) Provision by Holders of Certain Information in Connection with the
Shelf Registration Statement. No Holder of Transfer Restricted Securities may
include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Company in writing, within 20 days after receipt of a request therefor, the
information specified in Item 507 or 508 of Regulation S-K, as applicable, of
the Act for use in connection with

6

 

any Shelf Registration Statement or Prospectus or preliminary Prospectus
included therein. No Holder of Transfer Restricted Securities shall be
entitled to liquidated damages pursuant to Section 5 hereof unless and until
such Holder shall have provided all such information. By its acceptance of
Transfer Restricted Securities, each Holder agrees to promptly furnish
additional information required to be disclosed in order to make the
information previously furnished to the Company by such Holder not materially
misleading.

SECTION 5. LIQUIDATED DAMAGES

     If (a) any Registration Statement required by this Agreement is not filed
with the Commission on or prior to the applicable Filing Deadline, (b) any such
Registration Statement has not been declared effective by the Commission on or
prior to the applicable Effectiveness Deadline, (c) the Exchange Offer has not
been Consummated on or prior to the Consummation Deadline or (d) any
Registration Statement required by this Agreement is filed and declared
effective but shall thereafter cease to be effective or fail to be usable for
its intended purpose during the periods in which it is required to be effective
pursuant to Section 3 or 4 without being succeeded within two Business Days by
a post-effective amendment to such Registration Statement that cures such
failure and that is itself declared effective within five Business Days after
filing such post-effective amendment to such Registration Statement (each such
event referred to in clauses (a) through (d), a “Registration Default”), then
the Company and the Guarantors hereby jointly and severally agree to pay to
each Holder of Transfer Restricted Securities affected thereby liquidated
damages in an amount equal to $0.05 per week per $1,000 in principal amount of
Transfer Restricted Securities held by such Holder for the first 90-day period
immediately following the occurrence of such Registration Default. The amount
of the liquidated damages shall increase by an additional $0.05 per week per
$1,000 in principal amount of Transfer Restricted Securities with respect to
each subsequent 90-day period until all Registration Defaults have been cured,
up to a maximum amount of liquidated damages of $0.50 per week per $1,000 in
principal amount of Transfer Restricted Securities; provided that the Company
and the Guarantors shall in no event be required to pay liquidated damages for
more than one Registration Default at any given time. Notwithstanding anything
to the contrary set forth herein, (i) upon filing of the Exchange Offer
Registration Statement (and/or, if applicable, the Shelf Registration
Statement), in the case of (a) above, (ii) upon the effectiveness of the
Exchange Offer Registration Statement (and/or, if applicable, the Shelf
Registration Statement), in the case of (b) above, (iii) upon Consummation of
the Exchange Offer, in the case of (c) above, or (iv) upon the filing of a
post-effective amendment to the Registration Statement or an additional
Registration Statement that causes the Exchange Offer Registration Statement
(and/or, if applicable, the Shelf Registration Statement) to again be declared
effective or made usable, in the case of (d) above, the liquidated damages
payable with respect to the Transfer Restricted Securities as a result of such
clause (a), (b), (c) or (d), as applicable, shall cease to accrue.

     All accrued liquidated damages shall be paid to the Holders of a class of
Transfer Restricted Securities entitled thereto, in the manner provided for the
payment of interest in the Indenture, on each Interest Payment Date for such
class of Transfer

7

 

Restricted Securities, as more fully set forth in the Indenture and the
Securities and the Exchange Securities. Notwithstanding the fact that any
securities for which liquidated damages are due cease to be Transfer Restricted
Securities, all obligations of the Company and the Guarantors to pay liquidated
damages with respect to securities shall survive until such time as such
obligations with respect to such securities shall have been satisfied in full.

SECTION 6. REGISTRATION PROCEDURES

     (a) Exchange Offer Registration Statement. In connection with the
Exchange Offer, the Company and the Guarantors shall (i) comply with all
applicable provisions of Section 6(c) below, (ii) use their commercially
reasonable efforts to effect such exchange and to permit the resale of Exchange
Securities by any Broker-Dealer that tendered Securities in the Exchange Offer
that such Broker-Dealer acquired for its own account as a result of its
market-making activities or other trading activities (other than Securities
acquired directly from the Company, the Guarantors or any Affiliate of the
Company or the Guarantors) being sold in accordance with the intended method or
methods of distribution thereof, and (iii) comply with all of the following
provisions:

     (A) If, following the date hereof, there has been announced a change
in Commission policy with respect to exchange offers such as the Exchange
Offer that in the reasonable opinion of counsel to the Company raises a
substantial question as to whether the Exchange Offer is permitted by
applicable federal law or Commission policy, the Company and the
Guarantors hereby agree to seek a no-action letter or other favorable
decision from the Commission allowing the Company and the Guarantors to
Consummate an Exchange Offer for such Transfer Restricted Securities.
The Company and the Guarantors hereby agree to pursue the issuance of
such a decision to the Commission staff level. In connection with the
foregoing, the Company and the Guarantors hereby agree to take all such
other actions as may be requested by the Commission or otherwise required
in connection with the issuance of such decision, including without
limitation (I) participating in telephonic conferences with the
Commission staff, (II) delivering to the Commission staff an analysis
prepared by counsel to the Company setting forth the legal bases, if any,
upon which such counsel has concluded that such an Exchange Offer should
be permitted and (III) diligently pursuing a resolution (which need not
be favorable) by the Commission staff.

     (B) As a condition to its participation in the Exchange Offer, each
Holder of Transfer Restricted Securities (including, without limitation,
any Holder who is a Broker-Dealer) shall furnish, upon the request of the
Company or any of the Guarantors, prior to the Consummation of the
Exchange Offer, a written representation to the Company and the
Guarantors (which may be contained in the letter of transmittal
contemplated by the Exchange Offer Registration Statement) to the effect
that (I) it is not an Affiliate of the Company or any of the Guarantors,
(II) it is not engaged in, and does not intend to engage in, and has no
arrangement or understanding with any person to participate in, a
distribution of the Exchange Securities to be issued in the Exchange
Offer, (III) it

8

 

is acquiring the Exchange Securities in its ordinary course of
business and (IV) such other representations as may be necessary under
applicable Commission rules, regulations or interpretations. Each Holder
using the Exchange Offer to participate in a distribution of the Exchange
Securities will be required to acknowledge and agree that, if the resales
are of Exchange Securities obtained by such Holder in exchange for
Securities acquired directly from the Company or an Affiliate thereof, it
(1) could not, under Commission policy as in effect on the date of this
Agreement, rely on the position of the Commission enunciated in Morgan
Stanley and Co., Inc. (available June 5, 1991) and Exxon Capital Holdings
Corporation (available May 13, 1988), as interpreted in the Commission’s
letter to Shearman & Sterling dated July 2, 1993, and similar no-action
letters (including, if applicable, any no-action letter obtained pursuant
to clause (A) above), and (2) must comply with the registration and
prospectus delivery requirements of the Act in connection with a
secondary resale transaction and that such a secondary resale transaction
must be covered by an effective registration statement containing the
selling security holder information required by Item 507 or 508, as
applicable, of Regulation S-K.

     (C) Prior to effectiveness of the Exchange Offer Registration
Statement, the Company and the Guarantors shall provide a supplemental
letter to the Commission (I) stating that the Company and the Guarantors
are registering the Exchange Offer in reliance on the position of the
Commission enunciated in Exxon Capital Holdings Corporation (available
May 13, 1988), Morgan Stanley and Co., Inc. (available June 5, 1991), as
interpreted in the Commission’s letter to Shearman & Sterling dated July
2, 1993, and, if applicable, any no-action letter obtained pursuant to
clause (A) above, (II) including a representation that the Company and
the Guarantors have not entered into any arrangement or understanding
with any Person to distribute the Exchange Securities to be received in
the Exchange Offer and that, to the best of the Company’s and the
Guarantors’ information and belief, each Holder participating in the
Exchange Offer is acquiring the Exchange Securities in its ordinary
course of business and has no arrangement or understanding with any
Person to participate in the distribution of the Exchange Securities
received in the Exchange Offer and (III) any other undertaking or
representation required by the Commission as set forth in any no-action
letter obtained pursuant to clause (A) above, if applicable;

     (D) At the completion of the Exchange Offer, each Guarantor shall
affirm in writing to the Trustee that its Guarantee applies to each
Exchange Security. The Exchange Offer Registration Statement shall state
that the receipt of such affirmations is a condition to the closing of
the Exchange Offer, and the Exchange Offer shall be deemed not to have
been Consummated unless such affirmations have been made at the closing
of the Exchange Offer.

9

 

     (b) Shelf Registration Statement. In connection with the Shelf
Registration Statement, the Company shall:

     (i) comply with all the provisions of Section 6(c) and (d) below and use
its commercially reasonable efforts to effect such registration to permit the
sale of the Transfer Restricted Securities being sold in accordance with the
intended method or methods of distribution thereof (as indicated in the
information furnished to the Company pursuant to Section 4(b) hereof), and
pursuant thereto the Company and the Guarantors will prepare and file with the
Commission a Registration Statement relating to the registration on any
appropriate form under the Act, which form shall be available for the sale of
the Transfer Restricted Securities in accordance with the intended method or
methods of distribution thereof within the time periods and otherwise in
accordance with the provisions hereof; and

     (ii) issue, upon the request of any Holder or purchaser of Securities
covered by any Shelf Registration Statement contemplated by this Agreement,
Exchange Securities of the same class having an aggregate principal amount
equal to the aggregate principal amount of Securities sold pursuant to the
Shelf Registration Statement and surrendered to the Company for cancellation;
the Company and the Guarantors shall register the Exchange Securities on the
Shelf Registration Statement for this purpose and issue the Exchange Securities
to the purchaser(s) of securities subject to the Shelf Registration Statement
in such names as the purchaser(s) shall designate.

     (c) General Provisions. In connection with any Registration Statement and
any related Prospectus required by this Agreement, the Company and the
Guarantors shall:

     (i) use their commercially reasonable efforts to keep such Registration
Statement continuously effective and provide all requisite financial statements
for the period specified in Section 3 or 4 hereof, as applicable. Upon the
occurrence of any event that would cause any such Registration Statement or the
Prospectus contained therein (A) to contain an untrue statement of material
fact or omit to state any material fact necessary to make the statements
therein not misleading or (B) not to be effective and usable for resale of
Transfer Restricted Securities during the periods required by this Agreement,
the Company and the Guarantors shall file promptly an appropriate amendment to
such Registration Statement curing such defect, and, if Commission review is
required, use their commercially reasonable efforts to cause such amendment to
be declared effective as soon as practicable. If at any time the Commission
shall issue any stop order suspending the effectiveness of any Registration
Statement, or any state securities commission or other regulatory authority
shall issue an order suspending the qualification or exemption from
qualification of the Transfer Restricted Securities under state securities or
Blue Sky laws, the Company and the Guarantors shall use their commercially
reasonable efforts to obtain the withdrawal or lifting of such order at the
earliest possible time;

     (ii) use their commercially reasonable efforts to prepare and file with
the Commission such amendments and post-effective amendments to the

10

 

applicable Registration Statement as may be necessary to keep such
Registration Statement effective for the applicable period set forth in Section
3 or 4 hereof, as the case may be; use its commercially reasonable efforts to
cause the Prospectus to be supplemented by any required Prospectus supplement,
and as so supplemented to be filed pursuant to Rule 424 under the Act, and to
comply fully with Rules 424, 430A and 462, as applicable, under the Act in a
timely manner during the applicable period; and comply with the provisions of
the Act with respect to the disposition of all securities covered by such
Registration Statement during the applicable period in accordance with the
intended method or methods of distribution by the sellers thereof set forth in
such Registration Statement or supplement to the Prospectus;

     (iii) in connection with any sale of Transfer Restricted Securities that
will result in such securities no longer being Transfer Restricted Securities,
cooperate with the Holders to facilitate the timely preparation and delivery of
certificates representing such Transfer Restricted Securities to be sold and
not bearing any restrictive legends; and to register such Transfer Restricted
Securities in such denominations and such names as the selling Holders may
request at least two Business Days prior to such sale of Transfer Restricted
Securities;

     (iv) use their commercially reasonable efforts to cause the disposition of
the Transfer Restricted Securities covered by the Registration Statement to be
registered with or approved by such other governmental agencies or authorities
as may be necessary to enable the seller or sellers thereof to consummate the
disposition of such Transfer Restricted Securities; provided, however, that
none of the Company and the Guarantors shall be required to register or qualify
as a foreign corporation where it is not now so qualified or to take any action
that would subject it to the service of process in suits or to taxation, other
than as to matters and transactions relating to the Registration Statement, in
any jurisdiction where it is not now so subject;

     (v) provide a CUSIP number for all Transfer Restricted Securities not
later than the effective date of a Registration Statement covering such
Transfer Restricted Securities and provide the Trustee under the Indenture with
certificates for the Transfer Restricted Securities which are in a form
eligible for deposit with the Depositary under the Indenture;

     (vi) otherwise (A) use their commercially reasonable efforts to comply
with all applicable rules and regulations of the Commission, and (B) make
generally available to its security holders with regard to any applicable
Registration Statement, as soon as reasonably practicable, a consolidated
earnings statement meeting the requirements of Rule 158 (which need not be
audited) covering a twelve-month period beginning after the effective date of
the Registration Statement (as such term is defined in paragraph (c) of Rule
158 under the Act); and

     (vii) cause the Indenture to be deemed qualified under the TIA upon the
effectiveness of the applicable Registration Statement required by this
Agreement and, in connection therewith, cooperate with the Trustee and the
Holders to effect such changes to the Indenture as may be required for such
Indenture to be so

11

 

qualified in accordance with the terms of the TIA; and execute, and use
their commercially reasonable efforts to cause the Trustee to execute, all
documents that may be required to effect such changes and all other forms and
documents required to be filed with the Commission to enable such Indenture to
be so qualified in a timely manner.

     (d) Additional Provisions Applicable to Shelf Registration Statements and
Certain Exchange Offer Prospectuses. In connection with each Shelf
Registration Statement, and each Exchange Offer Registration Statement if and
to the extent that an Initial Purchaser has notified the Company and the
Guarantors that it is a holder of Exchange Securities that are Transfer
Restricted Securities (for so long as such Exchange Securities are Transfer
Restricted Securities or for the period provided in Section 3 hereof, whichever
is shorter), the Company and the Guarantors shall:

     (i) advise each selling Holder promptly and, if requested by such Holder,
confirm such advice in writing, (A) when the Prospectus or any Prospectus
supplement or post-effective amendment has been filed, and, with respect to any
applicable Registration Statement or any post-effective amendment thereto, when
the same has become effective, (B) of any request by the Commission for
amendments to the Registration Statement or amendments or supplements to the
Prospectus or for additional information relating thereto, (C) of the issuance
by the Commission of any stop order suspending the effectiveness of the
Registration Statement under the Act or of the suspension by any state
securities commission of the qualification of the Transfer Restricted
Securities for offering or sale in any jurisdiction, or the initiation of any
proceeding for any of the preceding purposes, (D) of the existence of any fact
or the happening of any event that makes any statement of a material fact made
in the Registration Statement, the Prospectus, any amendment or supplement
thereto or any document incorporated by reference therein untrue, or that
requires the making of any additions to or changes in the Registration
Statement in order to make the statements therein not misleading, or that
requires the making of any additions to or changes in the Prospectus in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading (it being understood that in the case of this
clause 6(d)(i)(D), only the existence of the fact or event must be disclosed
and the nature of the facts or events may be kept confidential for such period
as reasonably required for bona fide business reasons);

     (ii) if any fact or event contemplated by Section 6(d)(i)(D) above shall
exist or have occurred, prepare a supplement or post-effective amendment to the
Registration Statement or related Prospectus or any document incorporated
therein by reference or file any other required document so that, as thereafter
delivered to the purchasers of Transfer Restricted Securities, the Prospectus
will not contain an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;

     (iii) subject to Section 6(e), furnish to each selling Holder in
connection with such exchange or sale, if any, before filing with the
Commission, copies of any Registration Statement or any Prospectus included
therein (except the Prospectus

12

 

included in the Exchange Offer Registration Statement at the time it was
declared effective) or any amendments or supplements to any such Registration
Statement or Prospectus (including all documents incorporated by reference
after the initial filing of such Registration Statement), which documents will
be subject to the review and comment of such Holders in connection with such
sale, if any, for a period of at least five Business Days, and the Company will
not file any such Registration Statement or Prospectus or any amendment or
supplement to any such Registration Statement or Prospectus (including all such
documents incorporated by reference) to which a Holder of Transfer Restricted
Securities covered by such Registration Statement shall reasonably object in
writing within five Business Days after the receipt thereof. A Holder shall be
deemed to have reasonably objected to such filing if such Registration
Statement, amendment, Prospectus or supplement, as applicable, as proposed to
be filed, contains an untrue statement of a material fact or omits to state any
material fact necessary to make the statements therein not misleading or fails
to comply with the applicable requirements of the Act;

     (iv) promptly prior to the filing of any document that is to be
incorporated by reference into a Registration Statement or Prospectus, provide
copies of such document to each selling Holder named in the Registration
Statement in connection with such exchange or sale, if any, make the Company’s
representatives available as may be reasonably necessary for discussion of such
document and other customary due diligence matters, and include such
information in such document prior to the filing thereof as such Holders may
reasonably request;

     (v) make available, subject to appropriate confidentiality agreements,
during reasonable business hours, for inspection in the offices where such
records are normally maintained by each selling Holder and any attorney or
accountant retained by such selling Holders, all relevant financial and other
records, pertinent corporate documents of the Company and the Guarantors as may
be reasonably necessary to enable them to exercise the appropriate due
diligence responsibility, and cause the Company’s officers, directors and
employees to supply all information that is (a) reasonably requested by any
such selling Holder, attorney or accountant in connection with such
Registration Statement or any post-effective amendment thereto subsequent to
the filing thereof and prior to its effectiveness and (b) customarily furnished
in transactions of the type contemplated by such Registration Statement;

     (vi) if requested by any selling Holders in connection with such exchange
or sale, promptly include in any Registration Statement or Prospectus, pursuant
to a supplement or post-effective amendment if necessary, such information as
such selling Holders may reasonably request to have included therein,
including, without limitation, information relating to the “Plan of
Distribution” of the Transfer Restricted Securities; and make all required
filings of such Prospectus supplement or post-effective amendment as soon as
practicable after the Company is notified of the matters to be included in such
Prospectus supplement or post-effective amendment;

     (vii) furnish to each selling Holder in connection with such exchange or
sale without charge, at least one copy of the Registration Statement, as first

13

 

filed with the Commission, and of each amendment thereto, including all
documents incorporated by reference therein and all exhibits (including
exhibits incorporated therein by reference);

     (viii) deliver to each selling Holder without charge, as many copies of
the Prospectus (including each preliminary prospectus) and any amendment or
supplement thereto as such Holders reasonably may request; the Company and the
Guarantors hereby consent to the use (in accordance with law) of the Prospectus
and any amendment or supplement thereto by each selling Holder in connection
with the offering and the sale of the Transfer Restricted Securities covered by
the Prospectus or any amendment or supplement thereto;

     (ix) upon the request of any selling Holder, enter into such agreements
(including underwriting agreements) and make such reasonable representations
and warranties and take all such other reasonable actions in connection
therewith in order to expedite or facilitate the disposition of the Transfer
Restricted Securities pursuant to any applicable Registration Statement
contemplated by this Agreement as may be reasonably requested by any Holder in
connection with any sale or resale pursuant to any applicable Registration
Statement contemplated by this Agreement, which agreements must be in customary
form. In such connection, the Company shall:

     (A) upon request of any selling Holder, furnish (or in the case of
paragraphs (2) and (3), use their commercially reasonable efforts to
cause to be furnished) to each selling Holder, upon Consummation of the
Exchange Offer or upon the effectiveness of the Shelf Registration
Statement, as the case may be:

     (1) a certificate, dated such date, signed on behalf of the Company
and the Guarantors by an appropriate officer of the Company and the
Guarantors confirming, as of the date thereof, the accuracy of the
representations and warranties made by the Company and the Guarantors in
the Purchase Agreement as if made on such date, (ii) the matters set
forth in Sections 5(o), 5(p) and 5(r) of the Purchase Agreement, and such
other similar matters as such Holders may reasonably request;

     (2) an opinion, dated the date of Consummation of the Exchange Offer
or the date of effectiveness of the Shelf Registration Statement, as the
case may be, of counsel for the Company and the Guarantors (which may
include in-house counsel of the Company and the Guarantors) covering
matters customarily covered in such opinions as such parties may
reasonably request, and in any event including a statement to the effect
that such counsel has participated in conferences with officers and other
representatives of the Company and the Guarantors and representatives of
the independent public accountants for the Company and the Guarantors,
and has considered the matters required to be stated therein and the
statements contained therein, although such counsel has not independently
verified the accuracy, completeness or fairness of such statements; and
that such counsel advises that, on the basis of the foregoing, no facts
came to

14

 

such counsel’s attention that caused such counsel to believe that
the applicable Registration Statement, at the time such Registration
Statement or any post-effective amendment thereto became effective and,
in the case of the Exchange Offer Registration Statement, as of the date
of Consummation of the Exchange Offer, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, or
that the Prospectus contained in such Registration Statement as of its
date and, in the case of the opinion dated the date of Consummation of
the Exchange Offer, as of the date of Consummation, contained an untrue
statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. Without
limiting the foregoing, such counsel may state further that such counsel
assumes no responsibility for, and has not independently verified, the
accuracy, completeness or fairness of the financial statements, notes and
schedules and other financial data included in any Registration Statement
contemplated by this Agreement or the related Prospectus; and

     (3) a customary comfort letter, dated the date of Consummation of
the Exchange Offer, or as of the date of effectiveness of the Shelf
Registration Statement, as the case may be, from the independent
accountants for the Company and the Guarantors, in the customary form and
covering matters of the type customarily covered in comfort letters to
underwriters in connection with underwritten offerings;

     (B) deliver such other documents and certificates as may be
reasonably requested by the selling Holders to evidence compliance with
the matters covered in clause (A) above and with any customary conditions
contained in any agreement entered into by the Company or any of the
Guarantors pursuant to this clause (ix);

     (x) prior to any public offering of Transfer Restricted Securities,
cooperate with the selling Holders and their counsel in connection with the
registration and qualification of the Transfer Restricted Securities under the
securities or Blue Sky laws of such jurisdictions as the selling Holders may
reasonably request and do any and all other acts or things reasonably necessary
or advisable to enable the disposition in such jurisdictions of the Transfer
Restricted Securities covered by the applicable Registration Statement;
provided, however, that none of the Company and the Guarantors shall be
required to register or qualify as a foreign corporation where it is not now so
qualified or to take any action that would subject it to the service of process
in suits or to taxation, other than as to matters and transactions relating to
the Registration Statement, in any jurisdiction where it is not now so subject;
and

     (xi) provide promptly to each Holder, upon request, each document filed
with the Commission pursuant to the requirements of Section 13 or Section 15(d)
of the Exchange Act.

15

 

     (e) Restrictions on Holders. Each Holder’s acquisition of a Transfer
Restricted Security constitutes such Holder’s agreement that, upon receipt of
the notice referred to in Section 6(d)(i)(C) or any notice from the Company or
any of the Guarantors of the existence of any fact of the kind described in
Section 6(d)(i)(D) hereof (a “Suspension Notice”), such Holder will forthwith
discontinue disposition of Transfer Restricted Securities pursuant to the
applicable Registration Statement until (i) such Holder has received copies of
the supplemented or amended Prospectus contemplated by Section 6(d)(ii) hereof
or (ii) such Holder is advised in writing by the Company or any of the
Guarantors that the use of the Prospectus may be resumed, and has received
copies of any additional or supplemental filings that are incorporated by
reference in the Prospectus (in each case, the “Recommencement Date”). Each
Holder receiving a Suspension Notice shall be required to either (I) destroy
any Prospectuses, other than permanent file copies, then in such Holder’s
possession which have been replaced by the Company with more recently dated
Prospectus or (II) deliver to the Company (at the Company’s expense) all
copies, other than permanent file copies, then in such Holder’s possession of
the Prospectuses covering such Transfer Restricted Securities that was current
at the time of receipt of the Suspension Notice. The time period regarding the
effectiveness of such Registration Statement set forth in Section 3 or 4
hereof, as applicable, shall be extended by a number of days equal to the
number of days in the period from and including the date of delivery of the
Suspension Notice to the Recommencement Date.

SECTION 7. REGISTRATION EXPENSES

     (a) All expenses incident to the performance of or compliance with this
Agreement by the Company and the Guarantors will be borne by the Company and
the Guarantors jointly and severally, regardless of whether a Registration
Statement becomes effective, including without limitation: (i) all registration
and filing fees and expenses; (ii) all fees and expenses of compliance with
federal securities and state Blue Sky or securities laws; (iii) all expenses of
printing (including certificates for the Exchange Securities to be issued in
the Exchange Offer and printing of Prospectuses), messenger and delivery
services and telephone; (iv) all fees and disbursements of counsel for the
Company and the Guarantors and one counsel for the Holders of Transfer
Restricted Securities (which shall be Paul, Weiss, Rifkind, Wharton & Garrison
LLP or such other counsel as may be selected by the Holders of a majority in
principal amount of the Transfer Restricted Securities for whose benefit such
Registration Statement is being prepared); (v) all application and filing fees
in connection with listing the Exchange Securities on a national securities
exchange or automated quotation system pursuant to the requirements hereof; and
(vi) all fees and disbursements of independent certified public accountants of
the Company and the Guarantors (including the expenses of any special audit and
comfort letters required by or incident to such performance).

     The Company and the Guarantors will, in any event, bear their internal
expenses (including, without limitation, all salaries and expenses of their
officers and employees performing legal or accounting duties), the expenses of
any annual audit and the fees and expenses of any Person, including special
experts, retained by the Company or any of the Guarantors.

16

 

     (b) In connection with any Registration Statement required by this
Agreement (including, without limitation, the Exchange Offer Registration
Statement and the Shelf Registration Statement), the Company and the Guarantors
will jointly and severally reimburse the Initial Purchasers and the Holders of
Transfer Restricted Securities who are tendering Securities into in the
Exchange Offer and/or selling or reselling Securities or Exchange Securities
pursuant to the “Plan of Distribution” contained in the Exchange Offer
Registration Statement or the Shelf Registration Statement, as applicable, for
the reasonable fees and disbursements of not more than one counsel (who shall
be Paul, Weiss, Rifkind, Wharton & Garrison LLP unless another firm shall be
chosen by the Initial Purchasers or the Holders of a majority in principal
amount of the Transfer Restricted Securities for whose benefit such
Registration Statement is being prepared). Each Holder shall pay all expenses
of its counsel except as set forth in this Section, all underwriting discounts
and commissions and transfer taxes, if any, relating to the sale or disposition
of such Holder’s Transfer Restricted Securities pursuant to a Shelf
Registration Statement.

SECTION 8. INDEMNIFICATION

     (a) The Company and each of the Guarantors jointly and severally agree to
indemnify and hold harmless each Holder, its directors, officers and each
Person, if any, who controls such Holder (within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act), from and against any and all
losses, claims, damages, liabilities or judgments (including without
limitation, any legal or other expenses incurred in connection with
investigating or defending any matter, including any action that could give
rise to any such losses, claims, damages, liabilities or judgments) caused by
any untrue statement or alleged untrue statement of a material fact contained
in any Registration Statement, preliminary prospectus or Prospectus (or any
amendment or supplement thereto) provided by the Company or any of the
Guarantors to any Holder or any prospective purchaser of Exchange Securities or
registered Securities, 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 not misleading, except insofar as such losses, claims,
damages, liabilities or judgments are caused by an untrue statement or omission
or alleged untrue statement or omission that is based upon information relating
to any of the Holders furnished in writing to the Company by any of the Holders
expressly for use in any Registration Statement; provided, however, that the
Company and the Guarantors shall not be liable to any indemnified party (as
defined below) under this Section 8 to the extent, but only to the extent, that
(i) such loss, claim, damage or liability of such indemnified party results in
connection with an initial resale by such indemnified party, (ii) such loss,
claim, damage or liability of such indemnified party results from an untrue
statement of a material fact or an omission of a material fact contained in the
preliminary prospectus, which untrue statement or omission was completely
corrected in the Prospectus, (iii) the Company and the Guarantors had
previously furnished sufficient quantities of the Prospectus to such
indemnified party within a reasonable amount of time prior to such sale, (iv)
such indemnified party failed to deliver the Prospectus in connection with such
initial resale and (v) the Company or any of the Guarantors sustains the burden
of proving that such indemnified party sold the Securities or Exchange
Securities to the person alleging such loss, claim, damage or

17

 

liability without sending or giving, at or prior to written confirmation
of such sale, a copy of the Prospectus.

     (b) By its acquisition of Transfer Restricted Securities, each Holder of
Transfer Restricted Securities agrees, severally and not jointly, to indemnify
and hold harmless the Company and the Guarantors, and their directors and
officers, and each person, if any, who controls (within the meaning of Section
15 of the Act or Section 20 of the Exchange Act) the Company or any of the
Guarantors to the same extent as the foregoing indemnity from the Company and
the Guarantors set forth in Section 8(a) hereof, but only with reference to
information relating to such Holder furnished in writing to the Company by such
Holder expressly for use in any Registration Statement. In no event shall any
Holder, its directors, officers or any Person who controls such Holder be
liable or responsible for any amount in excess of the amount by which the total
amount received by such Holder with respect to its sale of Transfer Restricted
Securities pursuant to a Registration Statement exceeds (i) the amount paid by
such Holder for such Transfer Restricted Securities and (ii) the amount of any
damages that such Holder, its directors, officers or any Person who controls
such Holder has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission.

     (c) In case any action shall be commenced involving any Person in respect
of which indemnity may be sought pursuant to Section 8(a) or (b) hereof (the
"indemnified party”), the indemnified party shall promptly notify the Person
against whom such indemnity may be sought (the “indemnifying party”) in writing
and the indemnifying party shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the indemnified party and
the payment of all fees and expenses of such counsel, as incurred (except that
in the case of any action in respect of which indemnity may be sought pursuant
to both Sections 8(a) and (b) hereof, a Holder shall not be required to assume
the defense of such action pursuant to this Section 8(c), but may employ
separate counsel and participate in the defense thereof, but the fees and
expenses of such counsel, except as provided below, shall be at the expense of
the Holder). Any indemnified party shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of the indemnified party
unless (i) the employment of such counsel shall have been specifically
authorized in writing by the indemnifying party, (ii) the indemnifying party
shall have failed to assume the defense of such action or (iii) the named
parties to any such action (including any impleaded parties) include both the
indemnified party and the indemnifying party, and the indemnified party shall
have been advised by its counsel that there may be one or more legal defenses
available to it which are different from or additional to those available to
the indemnifying party (in which case the indemnifying party shall not have the
right to assume the defense of such action on behalf of the indemnified party).
In any such case, the indemnifying party shall not, in connection any one
action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of attorneys
(in addition to any local counsel) for all indemnified parties and all such
reasonable fees and expenses shall be reimbursed as they are incurred. Such
firm shall be designated in writing by a majority of the Holders, in the case
of the parties indemnified, pursuant to Section 8(a)

18

 

hereof, and by the Company and the Guarantors, in the case of parties
indemnified, pursuant to Section 8(b) hereof. The indemnifying party shall
indemnify and hold harmless the indemnified party from and against any and all
losses, claims, damages, liabilities and judgments by reason of any settlement
of any action (A) effected with its written consent or (B) effected without its
written consent if the settlement is entered into more than 20 Business Days
after the indemnifying party shall have received a request from the indemnified
party for reimbursement for the fees and expenses of counsel (in any case where
such fees and expenses are at the expense of the indemnifying party) and, prior
to the date of such settlement, the indemnifying party shall have failed to
comply with such reimbursement request. No indemnifying party shall, without
the prior written consent of the indemnified party, effect any settlement or
compromise of, or consent to the entry of judgment with respect to, any pending
or threatened action in respect of which the indemnified party is or could have
been a party and indemnity or contribution may be or could have been sought
hereunder by the indemnified party, unless such settlement, compromise or
judgment (I) includes an unconditional release of the indemnified party from
all liability on claims that are or could have been the subject matter of such
action and (II) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of the indemnified party.

     (d) To the extent that the indemnification provided for in this Section 8
is unavailable to an indemnified party in respect of any losses, claims,
damages, liabilities or judgments referred to herein, then each indemnifying
party, in lieu of indemnifying such indemnified party shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages, liabilities or judgments (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Guarantors on the one hand, and the Holders, on the other hand, from their
initial sale of Transfer Restricted Securities (or in the case of Exchange
Securities that are Transfer Restricted Securities, the sale of the Securities
for which such Exchange Securities were exchanged) or (ii) if the allocation
provided by clause 8(d)(i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in such clause 8(d)(i) but also the relative fault of the Company and the
Guarantors, on the one hand, and of the Holder, on the other hand, in
connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or judgments, as well as any other relevant
equitable considerations. The relative fault of the Company and the
Guarantors, on the one hand, and of the Holder, on the other hand, shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Company and the
Guarantors, on the one hand, or by the Holder, on the other hand, and the
parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The amount paid or payable by a
party as a result of the losses, claims, damages, liabilities and judgments
referred to above shall be deemed to include, subject to the limitations set
forth in Section 8(c) hereof, any legal or other fees or expenses reasonably
incurred by such party in connection with investigating or defending any action
or claim.

19

 

     The Company and the Guarantors, on the one hand, and each Holder (by its
acquisition of Transfer Restricted Securities), on the other hand, agree that
it would not be just and equitable if contribution pursuant to this Section
8(d) were determined by pro rata allocation (even if the Holders were treated
as one entity for such purpose) or by any other method of allocation which does
not take account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities or judgments referred to in
the immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any
matter, including any action that could have given rise to such losses, claims,
damages, liabilities or judgments. Notwithstanding the provisions of this
Section 8, no Holder, its directors, its officers or any Person, if any, who
controls such Holder shall be required to contribute, in the aggregate, any
amount in excess of the amount by which the total received by such Holder with
respect to the sale of Transfer Restricted Securities pursuant to a
Registration Statement exceeds (i) the amount paid by such Holder for such
Transfer Restricted Securities and (ii) the amount of any damages which such
Holder has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation. The Holders’ obligations to contribute pursuant
to this Section 8(d) are several in proportion to the respective principal
amount of Transfer Restricted Securities held by each Holder hereunder and not
joint.

SECTION 9. RULE 144A AND RULE 144

     The Company and the Guarantors agree with each Holder, for so long as any
Transfer Restricted Securities remain outstanding and during any period in
which the Company (a) is not subject to Section 13 or 15(d) of the Exchange
Act, to make available, upon request of any Holder of Transfer Restricted
Securities, to such Holder or beneficial owner of Transfer Restricted
Securities in connection with any sale thereof and any prospective purchaser of
such Transfer Restricted Securities designated by such Holder or beneficial
owner, the information required by Rule 144A(d)(4) under the Act in order to
permit resales of such Transfer Restricted Securities pursuant to Rule 144A,
and (b) is subject to Section 13 or 15(d) of the Exchange Act, to make all
filings required thereby in a timely manner in order to permit resales of such
Transfer Restricted Securities pursuant to Rule 144.

SECTION 10. UNDERWRITTEN REGISTRATIONS

     No Holder may participate in any Underwritten Registration unless such
Holder (a) agrees to sell such Holder’s Transfer Restricted Securities proposed
to be included in such Underwritten Registration on the basis provided in
customary underwriting arrangements entered into in connection therewith and
(b) completes and executes all reasonable questionnaires, powers of attorney,
and other documents required under the terms of such underwriting arrangements.

20

 

SECTION 11. SELECTION OF UNDERWRITERS

     For any Underwritten Offering, the investment banker or investment bankers
and manager or managers for any Underwritten Offering that will administer such
offering will be selected by the Holders of a majority in aggregate principal
amount of the Transfer Restricted Securities included in such offering and
consented to by the Company and the Guarantors, which consent shall not be
unreasonably withheld. Such investment bankers and managers are referred to
herein as the “underwriters.”

SECTION 12. MISCELLANEOUS

     (a) Remedies. The Company and the Guarantors acknowledge and agree that
any failure by the Company and the Guarantors to comply with their obligations
under Sections 3 and 4 hereof may result in material irreparable injury to the
Initial Purchasers or the Holders for which there is no adequate remedy at law,
that it will not be possible to measure damages for such injuries precisely and
that, in the event of any such failure, the Initial Purchasers or any Holder
may obtain such relief as may be required to specifically enforce the Company’s
obligations under Sections 3 and 4 hereof. The Company and the Guarantors
further agree to waive the defense in any action for specific performance that
a remedy at law would be adequate.

     (b) No Inconsistent Agreements. The Company and the Guarantors will not,
on or after the date of this Agreement, enter into any agreement with respect
to its securities that is inconsistent with the rights granted to the Holders
in this Agreement or otherwise conflicts with the provisions hereof. The
Company and the Guarantors have not previously entered into any agreement
granting any registration rights with respect to its securities to any Person
that would require such securities to be included in any Registration Statement
filed hereunder. The rights granted to the Holders hereunder do not in any way
conflict with and are not inconsistent with the rights granted to the holders
of the Company’s ‘ securities under any agreement in effect on the date hereof.

     (c) Amendments and Waivers. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to or departures
from the provisions hereof may not be given unless (i) in the case of Section 5
hereof and this Section 10(c)(i), the Company and the Guarantors have obtained
the written consent of Holders of all outstanding Transfer Restricted
Securities and (ii) in the case of all other provisions hereof, the Company and
the Guarantors have obtained the written consent of Holders of a majority of
the outstanding principal amount of Transfer Restricted Securities (excluding
Transfer Restricted Securities held by the Company, the Guarantors or any of
their Affiliates). Notwithstanding the foregoing, a waiver or consent to
departure from the provisions hereof that relates exclusively to the rights of
Holders whose Transfer Restricted Securities are being tendered pursuant to the
Exchange Offer, and that does not affect directly or indirectly the rights of
other Holders whose Transfer Restricted Securities are not being tendered
pursuant to such Exchange Offer, may be given by the Holders of a majority of
the outstanding principal amount of Transfer Restricted Securities subject to
such Exchange Offer.

21

 

     (d) Third Party Beneficiary. The Holders shall be third party
beneficiaries to the agreements made hereunder between the Company and the
Guarantors, on the one hand, and the Initial Purchasers, on the other hand, and
shall have the right to enforce such agreements directly to the extent they may
deem such enforcement necessary or advisable to protect their rights hereunder.

     (e) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telecopier, or air courier
guaranteeing overnight delivery:

	 	(i)	 	if to a Holder, at the address set forth on the records of the
Registrar under the Indenture, with a copy to the Registrar under the
Indenture; and
	 
	 	(ii)	 	if to the Company or any Guarantor:
	 
	 	 	 	Rural Cellular Corporation

P.O. Box 2000

3905 Dakota Street, S.W.

Alexandria, Minnesota 56308

Telecopier No.: 320-808-2102

Attention: President

	 
	 	 	 	With a copy to:

	 
	 	 	 	Moss & Barnett, P.C.

4800 Wells Fargo Center

90 South Seventh Street

Minneapolis, Minnesota 55402

Telecopier No.: 612-339-6686

Attention: Richard J. Kelber

 
	 	 	 	And

 
	 	 	 	Skadden, Arps, Slate, Meagher & Flom (Illinois)

333 West Wacker Drive

Chicago, IL 60606

Telecopier No.: 312-407-0411

Attention: Gary P. Cullen

     All such notices and communications shall be deemed to have been duly
given at the time delivered by hand, when receipt acknowledged, if telecopied;
and on the next Business Day, if timely delivered to an air courier
guaranteeing overnight delivery.

     Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.

22

 

     (f) Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the parties,
including without limitation and without the need for an express assignment,
subsequent Holders; provided, however, that this Agreement shall not inure to
the benefit of or be binding upon a successor or assign of a Holder unless and
to the extent such successor or assign acquired Transfer Restricted Securities;
provided, that nothing herein shall be deemed to permit any assignment,
transfer or other disposition of Transfer Restricted Securities in violation of
the terms hereof or of the Purchase Agreement or the Indenture. If any
transferee of any Holder shall acquire Transfer Restricted Securities in any
manner, whether by operation of law or otherwise, such Transfer Restricted
Securities shall be held subject to all of the terms of this Agreement, and by
taking and holding such Transfer Restricted Securities such Person shall be
conclusively deemed to have agreed to be bound by and to perform all of the
terms and provisions of this Agreement, including the restrictions on resale
set forth in this Agreement and, if applicable, the Purchase Agreement, and
such Person shall be entitled to receive the benefits hereof.

     (g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

     (h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

     (i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE RULES
OF CONFLICT OF LAWS OF THE STATE OF NEW YORK OR ANY OTHER STATE THAT WOULD
INDICATE THE APPLICABILITY OF THE LAWS OF ANY OTHER JURISDICTION.

     (i) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.

     (j) Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect
of the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted with respect to the Transfer
Restricted Securities. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.

23

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.

	 	 	 	 	 
	 	RURAL CELLULAR CORPORATION

 	 
	 	By:  	 	 
	 	 	Name:  	Wesley E. Schultz 	 
	 	 	Title:  	Executive Vice President
and Chief Financial Officer 	 
	 

	 	 	 	 	 
	 	RCC PAGING, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	Wesley E. Schultz 	 
	 	 	Title:  	Executive Vice President
and Chief Financial Officer 	 
	 

	 	 	 	 	 
	 	RCC ATLANTIC, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	Wesley E. Schultz 	 
	 	 	Title:  	Executive Vice President
and Chief Financial Officer 	 
	 

	 	 	 	 	 
	 	RCC ATLANTIC LONG DISTANCE, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	Wesley E. Schultz 	 
	 	 	Title:  	Executive Vice President
and Chief Financial Officer 	 

24

 

	 	 	 	 	 

	 	 	 	 	 
	 	RCC HOLDINGS, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	Wesley E. Schultz 	 
	 	 	Title:  	Executive Vice President
and Chief Financial Officer 	 
	 

	 	 	 	 	 
	 	RCC MINNESOTA, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	Wesley E. Schultz 	 
	 	 	Title:  	Executive Vice President
and Chief Financial Officer 	 
	 

	 	 	 	 	 
	 	RCC NETWORK, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	Wesley E. Schultz 	 
	 	 	Title:  	Executive Vice President
and Chief Financial Officer 	 
	 

	 	 	 	 	 
	 	TLA SPECTRUM, LLC

 	 
	 	By:  	 	 
	 	 	Name:  	Wesley E. Schultz 	 
	 	 	Title:  	Executive Vice President
and Chief Financial Officer 	 
	 

	 	 	 	 	 
	 	RGI GROUP, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	Wesley E. Schultz 	 
	 	 	Title:  	Executive Vice President
and Chief Financial Officer 	 

25

 

	 	 	 	 	 

	 	 	 	 	 
	 	RCC TRANSPORT, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	Wesley E. Schultz 	 
	 	 	Title:  	Executive Vice President
and Chief Financial Officer 	 
	 

	 	 	 	 	 
	 	BMCT EQUIPMENT COMPANY, L.L.C.

 	 
	 	By:  	 	 
	 	 	Name:  	Wesley E. Schultz 	 
	 	 	Title:  	Executive Vice President
and Chief Financial Officer 	 
	 

	 	 	 	 	 
	 	FERRY EQUIPMENT COMPANY, L.L.C.

 	 
	 	By:  	 	 
	 	 	Name:  	Wesley E. Schultz 	 
	 	 	Title:  	Executive Vice President
and Chief Financial Officer 	 
	 

	 	 	 	 	 
	 	ALEXANDRIA INDEMNITY CORPORATION

 	 
	 	By:  	 	 
	 	 	Name:  	Wesley E. Schultz 	 
	 	 	Title:  	Executive Vice President
and Chief Financial Officer 	 

26

 

	 	 	 	 	 

LEHMAN BROTHERS INC.

BANC OF AMERICA SECURITIES LLC

LAZARD FRÈRES & CO. LLC

Acting severally on behalf of themselves and the several

Initial Purchasers

     By:
    LEHMAN BROTHERS INC., as representative

	 	 	 	 
	By:	 	
 

Name:

Title:

27

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