Document:

Exhibit 10.13

 

 

THE READER’S DIGEST ASSOCIATION, INC.

READER’S DIGEST ROAD

PLEASANTVILLE, NY  10570-7000

 

	
  Brad
  Thomas

  	
   

  	
  TELEPHONE: (914) 244-5175

  	
   

  
	
  Senior Vice President

  	
   

  	
  FAX: (914) 244-5449

  	
   

  
	
  Global Human Resources

  	
   

  	
  brad_thomas@rd.com

  	
   

  

 

May 26,
2010

 

Mr. Tom
Williams

The Reader’s Digest Association, Inc.

Pleasantville, NY  10570

 

Dear
Tom:

 

I
am pleased to confirm this new offer of continued employment in the position of
Senior Vice President, Chief Financial Officer of The Reader’s Digest
Association, Inc., reporting to Mary Berner, Chief Executive Officer of
The Reader’s Digest Association, Inc. (“Reader’s Digest” or the “Company”),
the details of which are outlined below. This position is currently based in
Pleasantville, New York and expected to relocate to New York City within a few
months.

 

1.               Base Salary. As previously
discussed, commencing upon the date of this letter agreement, your annual base
salary will be $600,000 payable in biweekly installments in accordance with the
Company’s payroll practices and subject to periodic adjustments based upon
performance reviews administered within timeframes consistent with other senior
level executives.

 

2.               Benefits.  You will be eligible to participate in the
benefit programs that are made generally available to Reader’s Digest employees
in accordance with their terms, as from time to time in effect, including The
Reader’s Digest Association, Inc. Retirement Plan (cash balance account),
which currently provides an annual age-based contribution of 5% of eligible
compensation, The 401(k) Partnership of The Reader’s Digest Association, Inc.,
and medical, dental, life insurance, short- and long-term disability plans.
Details of these benefit plans have previously been provided to you.

 

3.               Bonus Opportunities.  For the performance period ending June 30,
2010, you will be eligible to participate in the Company’s “Variable
Compensation Plan” and “Enterprise Value Maximization Plan,” as previously
communicated to you, consistent with the Restructuring 

 

1

 

Support Agreement dated August 17, 2009.  For performance periods beginning after June 30,
2010, you shall be eligible to participate in the Company’s annual cash bonus
plan as the Company shall implement with a cash annual bonus target equal to
$600,000.

 

4.               Equity Compensation.  You will be granted 81,400 Restricted Stock
Units and 203,137 Stock Options, on terms and conditions to be specified in the
applicable Award Agreements to be provided to you in connection with such
grants, as approved by the Compensation Committee.

 

5.               You will be eligible for
four (4) weeks of vacation annually.

 

6.               You will be eligible for the
following executive level perquisites: financial planning benefits provided
through Ayco, the Company’s service provider and a calendar year flexible
perquisite allowance (under the “Flexnet Program”) of $25,500.

 

7.               Severance.  You will be eligible for a severance payment
equal to $1,200,000 if your employment is terminated involuntarily by the
Company for reasons other than “Cause” (as defined in the attached) or
by you for “Good Reason” (as defined in the attached) which amount shall
be paid, subject to the provisions of Section 11 hereof, over the
twelve-month period following the termination; provided that such payments
shall not commence unless and until you shall have signed a Release of Claims
in a form reasonably satisfactory to the Company and such Release of Claims has
become effective in accordance with its terms. 
You shall have 45 days to sign and return the Release.  Notwithstanding anything in this letter
agreement to the contrary, payment of this severance amount is expressly
contingent upon your continued substantial compliance with the terms and conditions
of Sections 8, 9 and 10 of this letter agreement; provided you have
received notice thereof and failed promptly to cure any such breach to the
extent curable.  You recognize that,
except as expressly provided in this Section 7 or pursuant to the terms of
your equity grant agreements, no compensation is owed to you after termination
of your employment.

 

8.               Nonsolicitation.  By virtue of accepting these terms of
employment with Reader’s Digest, you also agree that for the 24 month period
following your termination for any reason at any time, you will not, directly
or indirectly, solicit, recruit or hire (or have a third party solicit, recruit
or hire on your behalf) any employees of or persons who have worked for Reader’s
Digest (or its affiliates or subsidiaries) during the 12 month period prior to
the termination of your employment, or solicit or encourage (or have a third
party solicit or encourage on your behalf) any such employee to cease
employment with those entities or seek employment elsewhere.

 

9.               Nondisclosure of
Confidential Information.  You
acknowledge that the Confidential Information obtained by you while employed by
the Company and its subsidiaries and affiliates is the property of the Company
or its subsidiaries and affiliates, as applicable. Therefore, you agree that
other than in connection with the good faith performance of your duties (and
the Company acknowledges that in connection with your duties you communicate
with third parties such as investors and analysts about the Company, and, so
long as you act in good faith in performing such duties and are not grossly
negligent or reckless, actions taken in connection with your job duties shall
not be deemed a violation of this section), you 

 

2

 

shall not disclose to any unauthorized person or use for your own
purposes any Confidential Information without the prior written consent of the
Company, unless and to the extent that the aforementioned matters (i) become
generally known in the relevant trade or industry or the public domain other
than as a result of your acts or omissions in violation of this letter
agreement, (ii) become available to you on a non-confidential basis or (iii) were
within your possession prior to its being obtained by you in the course of your
employment with the Company; provided, however, that if you receive a
request to disclose Confidential Information pursuant to a deposition,
interrogation, request for information or documents in legal proceedings,
subpoena, civil investigative demand, governmental or regulatory process or
similar process, (A) you shall promptly notify in writing the Company, and
reasonably consult with and reasonably assist the Company in seeking a
protective order or request for other appropriate remedy, (B) in the event
that such protective order or remedy is not obtained, or if the Company waives
compliance with the terms hereof, you shall disclose only that portion of the
Confidential Information that, according to your counsel, is legally required
to be disclosed and (C) to the extent possible, the Company shall be given
an opportunity to review the Confidential Information prior to disclosure
thereof.

 

(a)           For purposes of this letter
agreement, “Confidential Information” means information and data
concerning the business or affairs of the Company and its subsidiaries and
Affiliates, including, without limitation, all business information (whether or
not in written form) which relates to the Company, its subsidiaries or
affiliates, or their customers, suppliers or contractors or any other third
parties in respect of which the Company or its subsidiaries or affiliates has a
business relationship or owes a duty of confidentiality, or their respective
businesses or products, and which is not known to the public generally or
within the industry other than as a result of Executive’s breach of this letter
agreement, including but not limited to: technical information or reports;
trade secrets; unwritten knowledge and “know-how”; operating instructions;
training manuals; customer lists; customer buying records and habits; product
sales records and documents, and product development, marketing and sales
strategies; market surveys; marketing plans; profitability analyses; product
cost; long-range plans; information relating to pricing, competitive strategies
and new product development; information relating to any forms of compensation
or other personnel-related information; contracts; and supplier lists.
Confidential Information will not include such information known to you prior
to your involvement with the Company or its subsidiaries or Affiliates or
information rightfully obtained from a third party (other than pursuant to a
breach by you of this letter agreement). Without limiting the foregoing, you
and the Company agree to keep confidential the existence of, and any
information concerning, any dispute between you and the Company or its
subsidiaries and affiliates, except that you and the Company may disclose
information concerning such dispute to the court that is considering such
dispute or to your or the Company’s legal counsel or related advisors and
experts (provided that such persons may not disclose any such
information other than as necessary to the prosecution or defense of such
dispute).

 

(b)           Except as expressly set forth
otherwise in this letter agreement or to the extent previously disclosed by the
Company, you agree that you shall not disclose the terms of this letter
agreement, except (i) to your family and your financial and legal
advisors, (ii) as may be required by law or ordered by a court or other
governmental 

 

3

 

entity
with subpoena power or (iii) as may be reasonably necessary for the
Company to implement the terms of this letter agreement. You further agree that
any disclosure to your financial and legal advisors will only be made after
such advisors acknowledge and agree to maintain the confidentiality of this
letter agreement and its terms to the extent such advisors are not otherwise
bound by a duty of non-disclosure; provided that if you have obtained
such agreement and acknowledgement or to the extent the advisor is otherwise so
bound, you shall have no liability for disclosure of such information by your
financial and legal advisors that is made without your knowledge or involvement.

 

(c)           You further agree that you will not
improperly use or disclose any confidential information or trade secrets, if
any, of any former employers or any other person to whom you have an obligation
of confidentiality, and will not bring onto the premises of the Company, its
subsidiaries or affiliates any unpublished documents or any property belonging
to any former employer or any other person to whom you have an obligation of
confidentiality unless consented to in writing by the former employer or other
person.

 

10.         Nondisparagement.  You shall not, whether in writing or orally,
directly or indirectly, criticize, denigrate or disparage the Company, its
subsidiaries or affiliates or their respective predecessors and successors, or
any of the current or former directors, officers, employees, or, in their
capacity as such, any of the current or former shareholders, partners, members,
agents or representatives of any of the foregoing, with respect to any of their
respective past or present activities, or otherwise publish (whether in writing
or orally) statements that tend to portray any of the aforementioned parties in
an unfavorable light; provided that the foregoing shall only apply with
respect to persons that you know or reasonably should know are covered thereby
and shall not apply to statements made by you in the reasonable good faith
performance of your duties while employed by the Company; provided
further than nothing herein shall create any right or cause of action with
respect to any third party.  The Company’s
directors, its chief executive officer and his or her direct reports shall not,
and the Company shall take all reasonable measures to ensure that the
directors, officers and employees of the Company and its subsidiaries and
affiliates shall not, whether in writing or orally, directly or indirectly,
criticize, denigrate or disparage you with respect to your respective past or
present activities, or otherwise publish (whether in writing or orally)
statements that tend to portray you in an unfavorable light; provided
that the foregoing shall not apply to statements made by the foregoing persons
in the reasonable good faith performance of their duties while rendering
services with respect to the Company while you are in the employ of the Company.  The foregoing provisions of this Section 10
shall cease to apply 2 years after the end of your employment with the Company
and shall not apply to truthful testimony, normal competitive-type statements,
statements not made with an intent to damage the other party or statements made
in rebuttal of statements made by the other party.

 

11.         To the extent that any of
the payments or benefits provided under this agreement are determined to be
subject to Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”)
it is the intention of the parties hereto that such payments or benefits shall
comply in all respects with Section 409A and the final regulations issued
thereunder and that this agreement shall, to the fullest extent possible, be construed
consistently with such intention.

 

4

 

(a)           For purposes of applying the
exemption to Section 409A for short-term deferrals, each installment
payment under this agreement shall be treated as a separate payment for
purposes of Section 409A. Accordingly, any payments paid within 2-1/2
months of the end of the Company’s taxable year containing your termination
date or within 2-1/2 months of the end of the calendar year containing your
termination date (the “Short-Term Deferral Period”) shall be exempt from
Section 409A and the delayed payment provisions below and shall be paid in
the normal course according to this letter agreement.

 

(b)           In addition, any severance payments
payable to you after the Short-Term Deferral Period which are equal to or less
than the lesser of the amounts described in Treasury Regulation Section 1.409A-1
(b)(9)(iii)(A)(1) and (2) shall also be exempt from Section 409A
and the delayed payment provision below and shall be paid in the normal course
according to this letter agreement.

 

(c)           If you are a “specified employee” (as
defined in Section 409A and the regulations thereunder) upon your “separation
from service” (as defined in Section 409A and the regulations thereunder),
to the extent any portion of your severance pay benefit is not exempt under
either subsections (i) or (ii) above, then the remaining portion of
the severance pay benefit that would otherwise be payable in the first 6 months
following your termination date (the “Deferred Severance Payment”) will not be
paid to you until the first payroll date of the 7th month following your
termination of employment.  The Deferred
Severance Payment will be paid in a lump sum and will be adjusted for
interested calculated at the prime rate as reported in the Wall Street
Journal.  Thereafter, the remainder of
your severance pay benefit shall be paid in the normal course according to this
letter agreement.

 

(d)           If any action on the part of the
Board relating to an award of compensation, including equity compensation or
benefits, causes you to incur any additional tax or interest under Section 409A,
the Company shall indemnify and hold you harmless, on an after-tax basis, from
and against any accelerated or additional tax (including interest and penalties
with respect thereto) that may be imposed on you by reason thereof; provided
that you shall not compromise or settle any claim relating to Section 409A
without the Company’s written consent. 
Any payment or reimbursement for taxes made pursuant to this Section 11(d) shall
be paid to you no later than the end of the calendar year next following the
calendar year in which you pay the applicable tax.

 

12.         Withholding. The Company
may deduct and withhold from any amounts payable under this letter agreement
such Federal, state, local, foreign or other taxes as are required or permitted
to be withheld pursuant to any applicable law or regulation.

 

13.         In all instances mentioned
above, the specific terms of the applicable plans and awards govern, and Reader’s
Digest reserves the right to amend or terminate those plans or policies in
accordance with their terms, other than as explicitly set forth in this
letter.  Additionally, our policy is that
“all employment by the Company is at will and the Company reserves the right to
terminate any employee at any time with or without cause” and neither this
letter nor 

 

5

 

any conversation is intended to create an employment contract.  Any dispute will be governed by the laws of
New York.

 

14.         Entire Agreement. This letter
agreement (including the exhibits hereto and any other agreements or side
letters entered into simultaneously with or following the date hereof that
specifically provide that they are intended to modify or supplement this letter
agreement) constitutes the entire agreement and understanding between the
Company and you with respect to the subject matter hereof and supersedes all
prior agreements and understandings (whether written or oral), between you and
the Company, relating to such subject matter (including, but not limited to
your offer of employment letter dated November 19, 2008, as amended, and
the letter agreement dated as of August 17, 2009, as amended). None of the
parties shall be liable or bound to any other party in any manner by any
representations and warranties or covenants relating to such subject matter
except as specifically set forth herein.

 

 

	
   

  	
   

  	
  Sincerely,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/
  Brad Thomas

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Brad
  Thomas

  
	
   

  	
   

  	
  Senior
  Vice President Global Human Resources

  
	
   

  	
   

  	
   

  
	
  Please
  sign below to indicate your acceptance:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Tom Williams

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Tom
  Williams

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  cc:
  Mary Berner

  	
   

  	
   

  

 

6

 

Definition
of “Cause” for purposes of the letter agreement between Reader’s Digest
and Mr. Tom Williams:

 

“Cause”
means: (A) your willful failure to substantially perform your duties
(other than due to physical or mental illness) that, to the extent curable, is
uncured by you promptly following receipt of written notice given by the
Company of such failure, (B) your conviction of, or plea of guilty or nolo
contendere to a felony (or the equivalent of a felony in a jurisdiction other
than the United States) other than, in any case, vicarious liability or traffic
violations, (C) your willful improper communication of confidential
information regarding the Company obtained in the course of your employment, (D) your
willful violation of the Company’s written policies that has a detrimental
impact on the Company and that, to the extent curable, is uncured by you
promptly following receipt of written notice given by the Company of such
breach; (E) your fraud or embezzlement with respect to the Company; (F) your
personal misappropriation or misuse of funds or property belonging to the
Company; (F) your use of illegal drugs that interferes with the
performance of your duties hereunder; or (G) your gross misconduct,
whether or not done in connection with employment, other than an action done in
the good faith belief that it was in the best interests of the Company, that
materially adversely affects the business or reputation of the Company, its
subsidiaries or affiliates.

 

The
determination of whether Cause has occurred shall be made in the reasonable
discretion of the Company’s Chief Executive Officer, with the advice of the
Company’s Senior Vice President, Global Human Resources, and the Company’s
General Counsel.

 

Definition
of “Good Reason” for purposes of employment offer letter between Reader’s
Digest and Mr. Tom Williams:

 

“Good
Reason” shall mean the occurrence of any of the following without your
express written consent, provided that you expressly acknowledge and agree that
no event that occurred prior to the date of this letter agreement shall provide
you with Good Reason to terminate:

 

(i)            a reduction by the Company in your
annual base salary or your annual bonus opportunity described in Section 3
above;

 

(ii)           any failure by the Company to permit
you to participate in any new or additional compensation, incentive, employee
benefit or fringe benefit plan or program that is made generally available to
senior management of the Company or its successor, if such plan or program
would be material to your total compensation and benefits; or

 

(iii)          a relocation to an office located
anywhere other than within seventy-five (75) miles of your current primary
office.

 

Any
termination of your employment by you for Good Reason shall be made within
ninety (90) days after your knowledge of the occurrence of the event
constituting Good Reason; provided, that a termination of employment shall not
be for Good Reason unless you provide notice to the Company stating that in
your opinion an event constituting Good Reason has occurred and setting forth
in reasonable detail the relevant facts and circumstances.  The notice must be provided within 60 days
following the occurrence of an event constituting Good Reason.  Upon receiving the notice, the Company shall
have 30 days during which it may remedy or otherwise 

 

7

 

cure
the situation.  If the Company shall,
within such 30-day cure period, remedy or otherwise cure the situation, a
recurrence thereof or another occurrence constituting Good Reason shall
constitute a new event for purposes of this letter agreement.

 

8Exhibit 10.14

 

EXECUTION VERSION

 

 

REGISTRATION RIGHTS AGREEMENT

 

by and among

 

RDA HOLDING CO.

 

and

 

THE HOLDERS NAMED HEREIN

 

 

Dated
as of February 19, 2010

 

 

 

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  1.

  	
  Definitions

  	
  1

  
	
   

  	
   

  	
   

  
	
  2.

  	
  Securities Act Shelf
  Registration on Request

  	
  5

  
	
   

  	
   

  	
   

  
	
   

  	
  (a)

  	
  Shelf Registration

  	
  5

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Effective Registration
  Statement

  	
  6

  
	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  Securities Act
  Registration on Request

  	
  7

  
	
   

  	
   

  	
   

  
	
   

  	
  (a)

  	
  Request

  	
  7

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Registration of Other
  Securities

  	
  8

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
  Registration Statement
  Form

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (d)

  	
  Effective Registration
  Statement

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (e)

  	
  Selection of Underwriters

  	
  10

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (f)

  	
  Priority in Requested
  Registration

  	
  10

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (g)

  	
  Shelf Registrations

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  Piggyback Registration

  	
  12

  
	
   

  	
   

  	
   

  
	
  5.

  	
  Expenses

  	
  13

  
	
   

  	
   

  	
   

  
	
  6.

  	
  Registration Procedures

  	
  13

  
	
   

  	
   

  	
   

  
	
  7.

  	
  Underwritten Offerings

  	
  18

  
	
   

  	
   

  	
   

  
	
   

  	
  (a)

  	
  Requested Underwritten
  Offerings

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Piggyback Underwritten
  Offerings: Priority

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
  Holders of Registrable
  Common Stock to be Parties to Underwriting Agreement

  	
  19

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (d)

  	
  Holdback Agreements

  	
  20

  
	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
  Preparation: Reasonable
  Investigation

  	
  21

  
	
   

  	
   

  	
   

  
	
   

  	
  (a)

  	
  Registration Statements

  	
  21

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Confidentiality

  	
  21

  

 

i

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  9.

  	
  Postponements

  	
  21

  
	
   

  	
   

  	
   

  
	
  10.

  	
  Indemnification

  	
  23

  
	
   

  	
   

  	
   

  
	
   

  	
  (a)

  	
  Indemnification by the
  Company

  	
  23

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Indemnification by the
  Offerors and Sellers

  	
  24

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
  Notices of Losses, etc

  	
  24

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (d)

  	
  Contribution

  	
  25

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (e)

  	
  Indemnification Payments

  	
  25

  
	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
  Registration Rights to
  Others

  	
  25

  
	
   

  	
   

  	
   

  
	
  12.

  	
  Adjustments Affecting
  Registrable Common Stock

  	
  25

  
	
   

  	
   

  	
   

  
	
  13.

  	
  Exchange Act Reports

  	
  26

  
	
   

  	
   

  	
   

  
	
  14.

  	
  Rule 144 and
  Rule 144 A

  	
  26

  
	
   

  	
   

  	
   

  
	
  15.

  	
  Amendments and Waivers

  	
  26

  
	
   

  	
   

  	
   

  
	
  16.

  	
  Nominees for Beneficial
  Owners

  	
  27

  
	
   

  	
   

  	
   

  
	
  17.

  	
  Assignment

  	
  27

  
	
   

  	
   

  	
   

  
	
  18.

  	
  Calculation of Percentage
  or Number of Shares of Registrable Common Stock

  	
  27

  
	
   

  	
   

  	
   

  
	
  19.

  	
  Termination of
  Registration Rights

  	
  28

  
	
   

  	
   

  	
   

  
	
  20.

  	
  Miscellaneous

  	
  28

  
	
   

  	
   

  	
   

  
	
   

  	
  (a)

  	
  Further Assurances

  	
  28

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Headings

  	
  28

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
  Conflicting Instructions

  	
  28

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (d)

  	
  Remedies

  	
  28

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (e)

  	
  Entire Agreement

  	
  28

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (f)

  	
  Notices

  	
  28

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (g)

  	
  Governing Law

  	
  29

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (h)

  	
  Severability

  	
  29

  

 

ii

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
   

  	
  (i)

  	
  Counterparts

  	
  29

  
	
   

  	
   

  	
   

  	
   

  
	
  21.

  	
  Director Holders

  	
  29

  
	
   

  	
   

  	
   

  
	
  22.

  	
  Management Holders

  	
  29

  
	
   

  	
   

  	
   

  
	
  23.

  	
  Transfer Agent

  	
  29

  

 

SCHEDULES:

 

SCHEDULE A – CREDITOR
HOLDERS

SCHEDULE B – NOTICES

 

EXHIBIT:

 

EXHIBIT A –
FORM OF SELLING STOCKHOLDER QUESTIONNAIRE

 

iii

 

REGISTRATION
RIGHTS AGREEMENT

 

This REGISTRATION RIGHTS
AGREEMENT, dated as of February 19, 2010 (this “Agreement”), is
entered into by and among RDA Holding Co., a Delaware corporation (the “Company”),
the holders of Registrable Common Stock (as hereinafter defined) who are
signatories to this Agreement or who agree to be or otherwise are bound by the
terms hereof (the “Holders”), and the Warrantholders (as hereinafter
defined).

 

This Agreement is being
entered into in connection with the acquisition of Common Stock (as hereinafter
defined) on the date hereof by the creditors of the Company identified on
Schedule A hereto (the “Creditor Holders”) pursuant to the Plan (as
hereinafter defined).

 

To induce the Creditor
Holders to vote in favor of the Plan and to accept the issuance of the Common
Stock by the Company under the Plan, the Company has undertaken to register
Registrable Common Stock under the Securities Act (as hereinafter defined) and
to take certain other actions with respect to the Registrable Common Stock.
This Agreement sets forth the terms and conditions of such undertaking.

 

In consideration of the
premises and the mutual agreements set forth herein, the parties hereto hereby
agree as follows:

 

1. Definitions.
Unless otherwise defined herein, capitalized terms used herein and in the
recitals above shall have the following meanings:

 

“Affiliate”
(a) shall mean, with respect to any Person, any Person that directly or
indirectly controls, is controlled by or is under common control with, such
Person or any Immediate Family Member of such Person; and (b) shall also
include, with respect to any Person who is an individual, a trust, the
beneficiaries of which, or a corporation or partnership, the stockholders or
partners of which, include only such individual and/or such individual’s
Immediate Family Members. For purposes of this definition, the term “control”
(including the correlative terms “controlling”, “controlled by” and “under
common control with”) means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.

 

“Agreement” has the
meaning set forth in the preamble hereto.

 

“beneficial ownership”
(and related terms such as “beneficially owned” or “beneficial owner”) has the
meaning set forth in Rule 13d-3 under the Exchange Act.

 

“Board of Directors”
means the board of directors of the Company.

 

“Business Day” means
any day except a Saturday, Sunday or other day on which commercial banks in New
York City are authorized or required by law to be closed.

 

“Commission” means
the U.S. Securities and Exchange Commission.

 

 

“Common Stock” means
the collective reference to Voting Common Stock and Limited Voting Common
Stock.

 

“Company” has the
meaning set forth in the preamble hereto.

 

“Company Indemnitee”
has the meaning set forth in Section 10(a) hereof.

 

“Creditor Holders”
has the meaning set forth in the preamble hereto.

 

“Director Holders”
means Holders who are directors of the Company and are not employees of the
Company or a Subsidiary of the Company or any Affiliate thereof.

 

“Effective Date”
means the effective date of the Plan pursuant to the terms thereof.

 

“Exchange Act” means
the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder, or any similar or successor statute.

 

“Expenses” means all
expenses incident to the Company’s performance of or compliance with its
obligations under this Agreement, including, without limitation, all
registration, filing, listing, stock exchange and FINRA fees (including,
without limitation, all fees and expenses of any “qualified independent
underwriter” required by the rules of FINRA), all fees and expenses of
complying with state securities or blue sky laws (including, without
limitation, the reasonable fees, disbursements and other charges of counsel for
the underwriters in connection with blue sky filings), all word processing,
duplicating and printing expenses, messenger, telephone and delivery expenses,
all rating agency fees, the fees, disbursements and other charges of counsel
for the Company and of its independent public accountants, including, without
limitation, the expenses incurred in connection with “cold comfort” letters
required by or incident to such performance and compliance, the fees and
expenses incurred in connection with the listing of the securities to be
registered on each securities exchange or national market system on which
similar securities issued by the Company are then listed, any fees and
disbursements of underwriters customarily paid by issuers or sellers of
securities, the reasonable fees, disbursements and other charges of one firm of
counsel in each applicable jurisdiction (per registration statement prepared)
to the Holders making a request pursuant to Section 2(a), Section 3(a) or
Section 4 hereof (selected by the Holders beneficially owning a majority
of the shares of Registrable Common Stock covered by such registration), the
fees and expenses of any special experts retained by the Company in connection
with such registration, and the fees and expenses of other Persons retained by
the Company, but excluding underwriting discounts and commissions and
applicable transfer taxes, if any, in each case relating to the shares of
Registrable Common Stock sold by the Selling Holders, which discounts,
commissions and transfer taxes shall be borne by the seller or Selling Holders;
provided, that, if the Company shall, in accordance with
Section 4 or Section 9 hereof, not register any securities with
respect to which it had given written notice of its intention to register to
Holders, notwithstanding anything to the contrary in the foregoing, all
reasonable out-of-pocket expenses incurred by such requesting Holders in
connection with such registration (other than the reasonable fees, disbursements
and other charges of counsel other than the one firm of counsel referred to
above) shall be deemed to be Expenses.

 

2

 

“FINRA” shall mean
the Financial Industry Regulatory Authority.

 

“Holder Indemnitee” has
the meaning set forth in Section 10(b) hereof.

 

“Holders” has the
meaning set forth in the preamble hereto.

 

“Immediate Family Member”
shall mean, with respect to any Person, a spouse, parent, child, grandchild or
sibling of such Person.

 

“Initial Shelf” has
the meaning set forth in Section 3(a) hereof.

 

“Initiating Holders”
has the meaning set forth in Section 3(a) hereof.

 

“Initiating Request”
has the meaning set forth in Section 3(a) hereof.

 

“Limited Voting Common
Stock” means the class B common stock, par value $0.001 per share, of the
Company.

 

“Loss” and “Losses”
have the meanings set forth in Section 10(a) hereof.

 

“Management Holders”
means Holders who are (i) employees or former employees of any of the
Company or its Subsidiaries or (ii) Affiliates of employees or former
employees of any of the Company or its Subsidiaries.

 

“Offering Documents”
has the meaning set forth in Section 10(a) hereof.

 

“Person” means any
individual, corporation, partnership, limited liability company, firm, joint
venture, association, joint stock company, trust, unincorporated organization,
governmental or regulatory body or subdivision thereof or other entity.

 

“Piggyback Requesting
Holder” has the meaning set forth in Section 4 hereof.

 

“Plan” means the Plan
of Reorganization confirmed by order dated January 19, 2010 of the United
States Bankruptcy Court for the Southern District of New York in the chapter 11
case commenced by the Company and certain of its Subsidiaries.

 

“Public Offering”
means a public offering and sale of Voting Common Stock pursuant to an
effective registration statement under the Securities Act.

 

“Questionnaire” has
the meaning set forth in Section 2(a) hereof.

 

“Registrable Common Stock”
means any share of Voting Common Stock, including any share of Voting Common
Stock issued upon the conversion of Limited Voting Common Stock or exercise of
Warrants, beneficially owned by the Holders or their respective Affiliates from
time to time, provided, however, that a share of Voting Common
Stock will cease to be Registrable Common Stock after it has been sold under a
registration statement effected pursuant hereto (or, in the case of a
Management Holder, the issuance to the Management Holder of Voting Common Stock
that was registered under a registration statement on Form S-8 which
includes a resale prospectus on Form S-3) or pursuant to Rule 144
promulgated under the

 

3

 

Securities Act after a
Public Offering. For the avoidance of doubt, Limited Voting Common Stock or
Warrants shall not be deemed to be Registrable Common Stock.

 

“Securities Act”
means the Securities Act of 1933, as amended, and the rules and
regulations thereunder, or any similar or successor statute.

 

“Selling Holders”
means the Holders requesting to be registered pursuant hereto.

 

“Shelf Filing Date”
has the meaning set forth in Section 2(a) hereof.

 

“Shelf Registration”
has the meaning set forth in Section 2(a) hereof.

 

“Shelf Registration
Statement” has the meaning set forth in Section 2(a) hereof.

 

“Shelf Requesting Holders”
means (i) after the initial Public Offering of the Company (or a successor
entity), one (1) or more Holders (other than Management Holders, who shall
have no request rights under Section 2(a)), which, together with their Affiliates,
beneficially own at least twenty percent (20%) of the shares of Registrable
Common Stock outstanding on the Shelf Request Date (excluding shares held by
Management Holders) or (ii) on or after the second anniversary of the
Effective Date (but prior to the initial Public Offering of the Company (or a
successor entity)), one (1) or more Holders (other than Management
Holders, who shall have no request rights under Section 2(a)), which,
together with their Affiliates, beneficially own at least a majority of the
shares of Registrable Common Stock outstanding on the Shelf Request Date
(excluding shares held by Management Holders).

 

“Shelf Request Date”
has the meaning set forth in Section 2(a) hereof.

 

“Subsidiary” shall
mean, with respect to any Person, any corporation, limited liability company,
partnership, association or other business entity of which fifty percent (50%)
or more of the total voting power of shares of capital stock entitled (without
regard to the occurrence of any contingency) to vote generally in the election
of directors, managers or trustees thereof, or fifty percent (50%) or more of
the equity interest therein, is at the time owned or controlled, directly or
indirectly, by any Person or one or more of the other Subsidiaries of such
Person or a combination thereof.

 

“Transfer” means any
direct or indirect transfer, sale, offer, assignment, exchange, distribution,
mortgage, pledge, hypothecation or other disposition. “Transferor” and “Transferee”
have correlative meanings.

 

“Voting Common Stock”
means the class A common stock, par value $0.001 per share, of the Company.

 

“Warrant Agreement”
means the Warrant Agreement, dated as of the date hereof, between the Company
and American Stock Transfer & Trust Company, LLC, as warrant agent.

 

“Warrantholders”
shall mean the holders of the Warrants.

 

4

 

“Warrants” means
warrants, issued pursuant to the Plan and governed by the Warrant Agreement,
that are exercisable for Voting Common Stock.

 

2.     Securities Act Shelf Registration on
Request.

 

(a) Shelf
Registration. Shelf Requesting Holders may request that the Company file
one shelf registration statement (as may be amended or supplemented from time
to time, a “Shelf Registration Statement”) under this
Section 2(a) pursuant to Rule 415 promulgated under the
Securities Act (a “Shelf Registration”) providing for the sale by the
Shelf Requesting Holders of any or all of the Registrable Common Stock
beneficially owned by such Shelf Requesting Holders (the date of such request,
the “Shelf Request Date”) and any or all of the Registrable Common Stock
beneficially owned by other Holders who comply with the requirements of this
Section 2(a). Shelf Requesting Holders may make such request at any time
after the earlier to occur of (i) the completion of an initial Public
Offering of the Company (or a successor entity) or (ii) the second
anniversary of the Effective Date. The Company shall (i) use its
reasonable best efforts to file, at the earliest practicable date, such Shelf
Registration Statement under the Securities Act (the “Shelf Filing Date”)
and (ii) use its reasonable best efforts to have such Shelf Registration
Statement thereafter declared effective by the Commission at the earliest
practicable date, but in any event not later than sixty (60) days after the
Shelf Filing Date or, if a Shelf Registration Statement is reviewed by the
staff of the Commission, not later than ninety (90) days after the Shelf Filing
Date; provided, that following the closing date of an initial Public
Offering, the Company shall not be required to file a Shelf Registration
Statement pursuant to this Section 2 (a) until a period of one
hundred eighty (180) days shall have elapsed from such closing date. Subject to
Section 9(b), the Company agrees to use its reasonable best efforts to
keep the Shelf Registration Statement continuously effective under
Rule 415 of the Securities Act until the earliest to occur of (i) the
second anniversary of the date such Shelf Registration Statement initially is
declared effective by the Commission (plus a number of Business Days equal to
the number of Business Days, if any, that the Shelf Registration Statement is
not kept effective (including any days for which the use of the prospectus is
suspended pursuant to Section 9(b)) after the initial date of its
effectiveness and prior to the second anniversary thereof), (ii) the day
after the date on which all of the Registrable Common Stock covered by the
Shelf Registration Statement has been sold pursuant to the Shelf Registration
Statement or (iii) the first date on which there shall cease to be any
Registrable Common Stock covered by such Shelf Registration Statement. The
Company further agrees, if necessary, to supplement or amend the Shelf Registration
Statement, if required by the rules, regulations or instructions applicable to
the registration form used by the Company for such Shelf Registration or by the
Securities Act or by any other rules and regulations thereunder for shelf
registration, and the Company agrees to furnish to the Holders whose
Registrable Common Stock is included in such Shelf Registration Statement
copies of any such supplement or amendment promptly after its being issued or
filed with the Commission.

 

Notwithstanding any other provision
hereof, no Holder’s Registrable Common Stock shall be included in the Shelf
Registration Statement unless and until such Holder furnishes to the Company a
fully completed notice and questionnaire substantially in the form attached
hereto as Exhibit A (the “Questionnaire”) and such other
information in writing as the Company may reasonably request in writing for use
in connection with the Shelf Registration Statement and any related application
to be filed with or under state securities laws. At least

 

5

 

thirty (30) days prior to
the filing of the Shelf Registration Statement, the Company will provide to the
Holders (including Management Holders) notice of its intention to file the
Shelf Registration Statement, the form of Questionnaire and such other
information the Company may reasonably request to be provided by the Holders.
In order to be named as a selling stockholder in the Shelf Registration
Statement at the time of effectiveness of the Shelf Registration Statement and
to include in the Shelf Registration Statement all Registrable Common Stock
requested to be included for sale by the Holder, each Holder must no later than
twenty (20) days following receipt of notice sent by the Company as set forth
in the previous sentence, furnish to the Company in writing the completed
Questionnaire and such other information reasonably requested by the Company
and the Company will include information in the completed Questionnaire and
such other information, if any, in the Shelf Registration Statement, as
necessary and in a manner so that upon effectiveness of the Shelf Registration
Statement, the Holder will be permitted to deliver the Shelf Registration
Statement to purchasers of the Holder’s Registrable Common Stock. From and
after the date that the Shelf Registration Statement becomes effective, upon
receipt of a completed Questionnaire and such other information that the
Company may reasonably request in writing, if any, the Company shall
(i) as promptly as practicable after the date on which the Questionnaire
is delivered, and in any event within the later of (x) fifteen (15)
Business Days after receipt of such Questionnaire or (y) fifteen (15)
Business Days after the expiration of any suspension pursuant to Section 9(b) in
effect when the Questionnaire is delivered, file any amendments or supplements
to the Shelf Registration Statement necessary for such Holder to be named as a
selling stockholder and to include in the Shelf Registration Statement all
Registrable Common Stock requested to be included for sale by such Holder or,
if not permitted to name such Holder as a selling stockholder by supplement,
file any necessary post-effective amendment to the Shelf Registration Statement
or prepare and, if required by applicable law, file any amendment or supplement
to any document so that such Holder is named as a selling stockholder, and use
its reasonable best efforts to cause such post-effective amendment to be
declared effective as promptly as practicable; provided that the Company
shall not be obligated to file more than one (1) post-effective amendment
in any ninety (90) day period.

 

(b) Effective
Registration Statement. A Shelf Registration pursuant to
Section 2(a) hereof shall not be deemed to have been effected

 

(i)            unless a registration statement with
respect thereto has been declared effective by the Commission and remains
effective in compliance with the provisions of the Securities Act and the laws
of any state or other jurisdiction applicable to the disposition of Registrable
Common Stock covered by such registration statement until such time as all of
such Registrable Common Stock have been disposed of in accordance with such
registration statement or there shall cease to be any Registrable Common Stock
covered by such registration statement (provided that such period need not
exceed the applicable period provided for in Section 2 (a)), or

 

(ii)           if, after it has become effective,
such registration statement is subject to any stop order, injunction or other
order or requirement of the Commission or other governmental or regulatory
agency or court preventing the sale of securities under such registration
statement for any reason (other than a violation of applicable law solely by
any Holder) and has not thereafter become effective.

 

6

 

3.             Securities Act Registration on Request.

 

(a) Request. At
any time and from time to time (i) after the expiration (in accordance
with Section 2(a) above) or cessation of effectiveness of the initial
Shelf Registration Statement, if any, filed by the Company pursuant to
Section 2(a) hereof (the “Initial Shelf”) or (ii) at any
time after the earlier to occur of (x) if the Initial Shelf has not been
filed, the completion of an initial Public Offering of the Company (or a
successor entity) and (y) if the Initial Shelf has not been filed and the
Company has not yet completed an initial Public Offering, the second
anniversary of the Effective Date and, in each case, prior to the termination
of the Company’s obligations hereunder pursuant to and in accordance with the
terms of Section 19 hereof, one (1) or more Holders (other than
Management Holders, who shall have no request rights under this
Section 3(a)) (the “Initiating Holders”) may make a written request
(the “Initiating Request”) to the Company for the registration with the
Commission under the Securities Act (on Form S-3, or, if Form S-3 is
not then available to the Company, Form S-1 or any other applicable form)
of all or part of such Initiating Holders’ Registrable Common Stock; provided,
however, that (a) in the case of clause (i) above, such
request shall be made by one (1) or more Holders (other than Management
Holders), together with their Affiliates, beneficially owning at least fifteen
percent (15%) of the then outstanding shares of Registrable Common Stock
(excluding shares held by Management Holders), (b) in the case of clause
(ii)(x) above, such request shall be made by one (1) or more Holders
(other than Management Holders), together with their Affiliates, beneficially
owning at least twenty percent (20%) of the then outstanding shares of
Registrable Common Stock (excluding shares held by Management Holders) and
(c) in the case of clause (ii)(y) above, such request shall be made
by one (1) or more Holders (other than Management Holders), together with
the Affiliates, beneficially owning at least a majority of the then outstanding
shares of Registrable Common Stock (excluding shares held by Management
Holders) (provided that subsequent Initiating Requests pursuant to this
Section 3(a) shall be made by one (1) or more Holders (other
than Management Holders), together with their Affiliates, beneficially owning
at least fifteen percent (15%) of the then outstanding shares of Registrable
Common Stock (excluding shares held by Management Holders)), which request, in
each case in this Section 3(a), shall specify the number of shares of
Registrable Common Stock to be disposed of by such Holders and the proposed
plan of distribution therefor. Upon the receipt of any Initiating Request for
registration pursuant to this Section 3(a), the Company promptly shall
notify in writing all other Holders (including Management Holders) of the
receipt of such request and will use its reasonable best efforts to effect, at
the earliest practicable date, such registration under the Securities Act,
including a Shelf Registration, if applicable, of

 

(i)            the Registrable Common Stock which
the Company has been so requested to register by such Initiating Holder or
Holders, and

 

(ii)           all other Registrable Common Stock
which the Company has been requested to register by any other Holders by
written request given to the Company within twenty (20) days after the giving
of written notice by the Company to such other Holders of the Initiating
Request (or ten (10) days if the Company states in such written notice or
gives telephonic notice to the relevant Holders, with written confirmation to
follow promptly thereafter, stating that (1) such registration will be on
Form S-3(or, if

 

7

 

Form S-3 is not then
available to the Company, Form S-1 or any other applicable form) and
(2) such shorter period of time is required because of a planned filing
date),

 

all to the extent necessary
to permit the disposition (in accordance with Section 3(c) hereof) of
the Registrable Common Stock to be so registered; provided, that,

 

(A)          the Company shall not be required to
effect more than a total of an aggregate of six (6) registrations pursuant
to Section 2(a) or this Section 3(a) for all Holders (other
than the Initial Shelf and other than the initial registration statement filed
in accordance with Section 3(a)(ii)),

 

(B)           if the intended method of
distribution is an underwritten Public Offering, the Company shall not be
required to effect such registration pursuant to this
Section 3(a) unless such underwriting shall be conducted on a “firm
commitment” basis,

 

(C)           if the Company shall have previously
effected a registration pursuant to Section 2 or this Section 3(a),
the Company shall not be required to effect any registration pursuant to this
Section 3(a) until a period of one hundred eighty (180) days shall
have elapsed from the date on which the previous such registration ceased to be
effective,

 

(D)          any Holder whose Registrable Common
Stock was to be included in any such registration pursuant to this
Section 3(a), by written notice to the Company, may withdraw such request,
and the Company shall not effect such registration in the event that the
Holders (excluding Management Holders) that have not elected to withdraw
beneficially own, in the aggregate, less than the percentage of the shares of
Registrable Common Stock required to initiate a request under this
Section 3(a) (provided, that if such registration is not effected for
such reason, it shall still count as one of the six registrations under clause
(A) above unless the withdrawing Holders reimburse the Company for all
Expenses incurred),

 

(E)           the Company shall not be required to
effect any registration to be effected pursuant to this
Section 3(a) unless (1) the expected sale price of the shares of
Registrable Common Stock to be included thereunder is at least $15,000,000 (or,
if such registration is for the initial Public Offering, then $50,000,000) and
(2) at least fifteen percent (15%) of the shares of Registrable Common
Stock outstanding at the time of such request are to be included in such
registration, and

 

(F)           a Shelf Registration effected under
this Section 3(a) shall comply with the procedures set forth in the
second paragraph of Section 2(a).

 

(b) Registration of
Other Securities. Whenever the Company shall effect a registration pursuant
to Section 3(a) hereof, no securities other than (i) Registrable
Common Stock and (ii) subject to Section 3(f), Voting Common Stock to
be sold by the Company for its own account, shall be included among the
securities covered by such registration unless the

 

8

 

Selling Holders (excluding
Management Holders) beneficially owning not less than a majority of the shares
of Registrable Common Stock to be covered by such registration (excluding
shares of Registrable Common Stock held by Management Holders) shall have
consented in writing to the inclusion of such other securities.

 

(c) Registration
Statement Form. Except as provided in Section 3(a), registrations
under Section 3(a) hereof shall be on such appropriate registration
statement form prescribed by the Commission under the Securities Act as shall
be selected by the Company and as shall permit the disposition of the Registrable
Common Stock pursuant to an underwritten offering unless the Selling Holders
(excluding Management Holders) beneficially owning at least a majority of the
shares of Registrable Common Stock requested to be included in such
registration statement (excluding shares of Registrable Common Stock held by
Management Holders) determine otherwise, in which case pursuant to the method
of distribution determined by such Selling Holders. The Company agrees to
include in any such registration statement filed pursuant to
Section 3(a) hereof all information with respect to the Selling
Holders or the distributions of securities thereunder which the Selling Holders
(excluding Management Holders) beneficially owning at least a majority of
shares of the Registrable Common Stock covered by such registration statement
(excluding shares of Registrable Common Stock held by Management Holders)
effected pursuant hereto, upon advice of counsel, shall reasonably request.

 

(d) Effective
Registration Statement. A registration requested pursuant to
Section 3(a) hereof shall not be deemed to have been effected

 

(i)            unless a registration statement with
respect thereto has been declared effective by the Commission and remains
effective in compliance with the provisions of the Securities Act and the laws
of any state or other jurisdiction applicable to the disposition of Registrable
Common Stock covered by such registration statement until such time as all of
such Registrable Common Stock have been disposed of in accordance with such registration
statement or there shall cease to be any Registrable Common Stock covered by
such registration statement, provided, that, except with respect
to any Shelf Registration, such period need not exceed ninety (90) days (plus a
number of Business Days equal to the number of Business Days, if any, that the
registration statement is not kept effective (including any days for which the
use of the prospectus is suspended pursuant to Section 9(b)) after the
initial date of its effectiveness and prior to the expiration of such ninety
(90) day period), and, provided, further, that with respect to
any Shelf Registration, such period need not extend beyond the period provided
for in Section 3(g) hereof,

 

(ii)           if, after it has become effective,
such registration is subject to any stop order, injunction or other order or
requirement of the Commission or other governmental or regulatory agency or
court for any reason other than a violation of applicable law solely by any
Selling Holder (excluding Management Holders) and has not thereafter become
effective, or

 

(iii)          if, in the case of an underwritten
offering, the conditions to closing specified in an underwriting agreement to
which the Company is a party are not satisfied

 

9

 

or waived other than by
reason of any breach or failure by any Selling Holder (excluding Management
Holders).

 

The Holders to be included
in a registration statement pursuant to Section 3(a) (excluding
Management Holders) may at any time withdraw such request for registration in
accordance with Section 3(a)(ii)(D); provided that any Initiating
Holder who withdraws such request shall not be permitted to be an Initiating
Holder during the twelve-month period following such withdrawal.

 

(e) Selection of
Underwriters. The underwriter or underwriters of each underwritten
offering, if any, of the Registrable Common Stock to be registered pursuant to
Section 2(a) or Section 3(a) hereof shall be mutually
selected by the Selling Holders (excluding Management Holders) beneficially
owning at least a majority of the shares of Registrable Common Stock to be
registered (excluding shares held by Management Holders) and the Company. In
the case of any offering or registration initiated by the Company for its own account
or any other offering not effected pursuant to Section 2(a) or
Section 3(a) hereof, including any offering pursuant to which the
Holders shall have piggyback rights pursuant to Section 4 hereof, the
Company shall select a nationally recognized underwriter (or underwriters) for
such offering in its sole discretion; provided that, the Company shall
not identify any Holder or subsequent purchaser of Registrable Common Stock as
an underwriter in any public disclosure with the Commission or any trading market
without the prior written consent of such Holder or subsequent purchaser. If
the Company is required by law to identify any such party as an underwriter in
any public disclosure or filing with the Commission or any trading market, it
must notify such party in advance and such party shall have the option, in its
sole discretion, to consent to such identification as an underwriter within
five (5) Business Days or such party shall be deemed to have consented to
have its Registrable Common Stock removed from the applicable registration
statement.

 

(f) Priority in
Requested Registration. If a registration requested pursuant to
Section 2(a) or Section 3(a) hereof involves an
underwritten Public Offering, and the managing underwriter of such underwritten
offering shall advise the Company in writing (with a copy to each Selling
Holder requesting that Registrable Common Stock be included in such
registration statement) that, in its opinion, the number of shares of
Registrable Common Stock requested to be included in such registration exceeds
the number of such securities that can be sold in such offering within a price
range stated to such managing underwriter by Selling Holders (excluding
Management Holders) beneficially owning at least a majority of the shares of Registrable
Common Stock requested to be included in such registration (excluding shares
held by Management Holders) to be acceptable to such Selling Holders (such
writing to state the basis of such opinion and the approximate number of
securities which the managing underwriter believes may be included in such
offering without such effect), then the Company shall include in such
registration, to the extent of the number of shares which the Company is so
advised the managing underwriter believes can be sold in such offering,
(i) first, all Registrable Common Stock requested to be registered
pursuant to Section 2(a) or Section 3(a), pro  rata
among the Selling Holders on the basis of the number of shares of Registrable
Common Stock requested to be registered by all such Selling Holders,
(ii) second, if additional shares may be sold based on the opinion of the
managing underwriter, then securities that the Company proposed to issue and
sell for its own account and (iii) third, other securities, if any; provided,
however, that if such

 

10

 

registration is in
connection with the initial Public Offering, the allocation shall be as
follows: (i) first, all Registrable Common Stock (excluding shares held by
Management Holders) requested to be registered pursuant to
Section 2(a) or Section 3(a), pro  rata among the
Selling Holders (excluding Management Holders) on the basis of the number of
shares of Registrable Common Stock requested to be registered by all such
Selling Holders, (ii) second, if additional shares may be sold based on
the opinion of the managing underwriter, shares of Registrable Common Stock
beneficially owned by Management Holders, pro rata among the Management
Holders on the basis of the number of shares of Registrable Common Stock
requested to be registered by all such Management Holders, (iii) third,
securities that the Company proposed to issue and sell for its own account and
(iv) fourth, other securities, if any.

 

(g) Shelf
Registrations. If one or more demands made pursuant to
Section 3(a) hereof are for a Shelf Registration, the period for
which the Shelf Registration Statement in connection with the first Shelf
Registration requested pursuant to Section 3(a) must remain effective need
not extend beyond one (1) year from the date on which such Shelf
Registration Statement initially was declared effective by the Commission and
the period for which any subsequent Shelf Registration Statement in connection
with the subsequent Shelf Registration requested pursuant to
Section 3(a) must remain effective need not extend beyond nine
(9) months from the date on which such Shelf Registration Statement
initially was declared effective by the Commission (plus, in each case, a
number of Business Days equal to the number of Business Days, if any, that the
Shelf Registration Statement is not kept effective (including any days for
which the use of the prospectus is suspended pursuant to Section 9(b))
after the initial date of its effectiveness and prior to such first-year or
nine-month, as the case may be, anniversary thereof).

 

11

 

4. Piggyback Registration.
If the Company, at any time after the initial Public Offering and when a Shelf
Registration Statement covering all outstanding shares of Registrable Common
Stock is not effective, proposes to register Voting Common Stock under the
Securities Act by registration on any forms (other than Form S-4 or S-8 or
any successor or similar form(s)), whether or not pursuant to registration
rights granted to other holders of its securities and whether or not for sale
for its own account, it shall give prompt written notice to all of the Holders
(including Management Holders) of its intention to do so and of such Holders’
rights under this Section 4, which notice, in any event, shall be given at
least thirty (30) days prior to such proposed registration. Upon the written
request of any Holder receiving notice of such proposed registration (a “Piggyback
Requesting Holder”) made within twenty (20) days after the receipt of any
such notice (or ten (10) days if the Company states in such written notice
or gives telephonic notice to the relevant Holders, with written confirmation
to follow promptly thereafter, stating that (i) such registration will be
on Form S-3 (or, if Form S-3 is not then available to the Company,
Form S-1 or any other applicable form) and (ii) such shorter period
of time is required because of a planned filing date), which request shall
specify the Registrable Common Stock intended to be disposed of by such
Piggyback Requesting Holder and the minimum offering price per share at which
the Holder is willing to sell its Registrable Common Stock, the Company shall,
subject to Section 7(b) hereof, effect the registration under the
Securities Act of all Registrable Common Stock which the Company has been so
requested to register by the Piggyback Requesting Holders thereof; provided
that,

 

(A)          prior to the effective date of the
registration statement filed in connection with such registration or, in the
case of a Shelf Registration Statement, prior to the delivery of a preliminary
prospectus related to such offering, and, in any event, promptly following
receipt of notification by the Company from the managing underwriter (if an underwritten
offering) of a range of prices at which such securities are likely to be sold,
the Company shall so advise each Piggyback Requesting Holder of such price, and
if such price is below the minimum price which shall be acceptable to such
Piggyback Requesting Holder, such Piggyback Requesting Holder shall then have
the right irrevocably to withdraw its request to have its Registrable Common
Stock included in such registration statement, by delivery of written notice of
such withdrawal to the Company within five (5) Business Days of its being
advised of such price, without prejudice to the rights of any such Holder or
Holders to include Registrable Common Stock in any future registration (or
registrations) pursuant to this Section 4 or to cause such registration to
be effected as a registration under Section 3(a) hereof, as the case
may be;

 

(B)           if at any time after giving written
notice of its intention to register the offer for sale of any securities and
prior to the effective date of the registration statement filed in connection
with such registration or, in the case of a Shelf Registration Statement, prior
to the consummation of such offering, the Company shall determine for any
reason not to register or to delay registration of such securities, the Company
may, at its election, give written notice of such determination to each
Piggyback Requesting Holder and (i) in the case of a determination not to
register, the Company shall be relieved of its obligation to register any
Registrable Common Stock in connection with such registration (but

 

12

 

not from any obligation of
the Company to pay the Expenses in connection therewith), without prejudice,
however, to the rights of any Holder to include Registrable Common Stock in any
future registration (or registrations) pursuant to this Section 4 or, if
applicable, to cause such registration to be effected as a registration under
Section 3(a) hereof, as the case may be, and (ii) in the case of a
determination to delay registering, shall be permitted to delay registering any
Registrable Common Stock, for the same period as the delay in registering such
other securities; and

 

(C)           if such registration was initiated by
the Company for its own account and involves an underwritten offering, each
Piggyback Requesting Holder shall sell its Registrable Common Stock on the same
terms and conditions as those that apply to the Company, and the underwriters
of each such underwritten offering shall be a nationally recognized underwriter
(or underwriters) selected by the Company in its sole discretion.

 

No registration effected
under this Section 4 shall relieve the Company of its obligation to effect
any registration upon request under Section 3(a) hereof and no
registration effected pursuant to this Section 4 shall be deemed to have
been effected pursuant to Section 3(a) hereof.

 

5. Expenses. Except
as provided in the last paragraph of Section 6, the Company shall pay all
Expenses in connection with any registration initiated pursuant to Sections
2(a), 3(a) or 4 hereof, whether or not such registration shall become
effective and whether or not all or any portion of the Registrable Common Stock
originally requested to be included in such registration are ultimately
included in such registration.

 

6. Registration
Procedures. If and whenever the Company is required to effect any
registration under the Securities Act as provided in Sections 2(a),
3(a) and 4 hereof, the Company shall, as expeditiously as possible:

 

(a)           prepare and file with the Commission
(promptly and, in the case of any registration pursuant to Section 3(a),
in any event on or before the date that is (i) ninety (90) days after the
date of any Initiating Request or (ii) if, as of such ninetieth (90th) day, the Company does not
have the audited financial statements required to be included in the
registration statement, thirty (30) days after the receipt by the Company from
its independent public accountants of such audited financial statements, which
the Company shall use its reasonable best efforts to obtain as promptly as
practicable) the requisite registration statement to effect such registration
and thereafter use its reasonable best efforts to cause such registration
statement to become and remain effective; provided, however, that
the Company may discontinue any registration of its securities that are not
shares of Registrable Common Stock (and, pursuant to, and under the
circumstances specified in, Sections 4 and 9(b) hereof, its securities
that are shares of Registrable Common Stock) at any time prior to the effective
date of the registration statement relating thereto;

 

13

 

(b)           prepare and file with the Commission
such amendments and supplements to such registration statement and the
prospectus used in connection therewith as may be necessary to keep such
registration statement effective and to comply with the provisions of the
Securities Act and the Exchange Act with respect to the disposition of all
Registrable Common Stock covered by such registration statement until such time
as all of such Registrable Common Stock has been disposed of in accordance with
the method of disposition set forth in such registration statement; provided,
that, except with respect to any Shelf Registration, such period need
not extend beyond ninety (90) days after the effective date of the registration
statement (plus a number of Business Days equal to the number of Business Days,
if any, that the registration statement is not kept effective (including any
days for which the use of the prospectus is suspended pursuant to
Section 9(b)) after the initial date of its effectiveness and prior to the
expiration of such 90-day period); and provided, further, that
with respect to the Initial Shelf, such period need not extend beyond the
applicable period provided for in Section 2(a) hereof and, with
respect to any Shelf Registration other than the Initial Shelf, such period
need not exceed the applicable period provided for in Section 3(g) hereof;

 

(c)           furnish to each seller of Registrable
Common Stock covered by such registration statement and their representatives
designated pursuant to Section 8(a), if any, and each underwriter, if any,
such number of copies of such drafts and final conformed versions of such
registration statement and of each such amendment and supplement thereto (in
each case including all exhibits and any documents incorporated by reference),
such number of copies of such drafts and final versions of the prospectus
contained in such registration statement (including each preliminary prospectus
and any summary prospectus) and any other prospectus filed under Rule 424
under the Securities Act, in conformity with the requirements of the Securities
Act, and such other documents, including without limitation notification of
whether such registration statement or amendment or supplement thereto will be
reviewed by the Commission or any other regulatory authority, as the sellers of
a majority of the Registrable Common Stock covered by such registration
statement or any underwriter may reasonably request in writing; provided,
that all drafts of such registration statement or amendment or supplement
thereto shall be furnished to each seller of Registrable Common Stock covered
by such registration statement and their representatives designated pursuant to
Section 8(a) whether or not so requested;

 

(d)           use its reasonable best efforts
(i) to register or qualify all Registrable Common Stock and other
securities, if any, covered by such registration statement under such other
securities or blue sky laws of such states or other jurisdictions of the United
States of America as the Selling Holders covered by such registration statement
shall reasonably request in writing, (ii) to keep such registration or
qualification in effect for so long as such registration statement remains in
effect and (iii) to take any other action that may be necessary or
reasonably advisable to enable such sellers to consummate the disposition in
such jurisdictions of the securities to be sold by such sellers, except that
the Company shall not for any such purpose be required to qualify generally to
do business as a foreign corporation in any jurisdiction wherein it would not
but for the requirements of this subsection (d) be obligated to be so
qualified, to subject itself to taxation in such jurisdiction or to consent to
general service of process in any such jurisdiction;

 

14

 

(e)           use its reasonable best efforts to
cause all Registrable Common Stock covered by such registration statement to be
registered with or approved by such other federal or state governmental
agencies or authorities as may be necessary upon the advice of counsel to the
Company or counsel to the seller of Registrable Common Stock or Selling Holders
to enable the seller or sellers thereof to consummate the disposition of such
Registrable Common Stock;

 

(f)            use its reasonable best efforts to
obtain and, if obtained, furnish to each seller of Registrable Common Stock,
and each such seller’s underwriters, if any, a signed

 

(i)            opinion of counsel for the Company,
dated the effective date of such registration statement (and, if such
registration involves an underwritten offering, dated the date of the closing
under the underwriting agreement and addressed to the underwriters), reasonably
satisfactory (based on the customary form and substance of opinions of issuers’
counsel customarily given in such an offering) in form and substance to such
seller, and

 

(ii)           “cold comfort” letter, dated the
effective date of such registration statement (and, if such registration
involves an underwritten offering, dated the date of the closing under the
underwriting agreement and addressed to the underwriters) and signed by the
independent public accountants who have certified the Company’s financial
statements included or incorporated by reference in such registration
statement, reasonably satisfactory (based on the customary form and substance
of “cold comfort” letters of issuers’ independent public accountant customarily
given in such an offering) in form and substance to such seller, in each case,
covering substantially the same matters with respect to such registration
statement (and the prospectus included therein) and, in the case of the
accountants’ comfort letter, with respect to events subsequent to the date of
such financial statements, as are customarily covered in opinions of issuer’s
counsel and in accountants’ comfort letters delivered to underwriters in such
types of offerings of securities;

 

(g)           notify each seller of Registrable
Common Stock and other securities covered by such registration statement, if
any, at any time when a prospectus relating thereto is required to be delivered
under the Securities Act, upon discovery that, or upon the happening of any
event as a result of which, the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material fact
or omits to state any material fact required to be stated therein or necessary
to make the statements therein not misleading in the light of the circumstances
under which they were made and for which the Company chooses to suspend the use
of the registration statement and prospectus pursuant to Section 9(b),
and, in accordance with Section 9(b), at the written request of any such
seller of Registrable Common Stock, promptly prepare and furnish to it a
reasonable number of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such securities, such prospectus, as supplemented or amended,
shall not include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or

 

15

 

necessary to make the
statements therein not misleading in the light of the circumstances under which
they were made;

 

(h)           use its reasonable best efforts to
obtain the withdrawal of any order suspending the effectiveness of a
registration statement relating to the Registrable Common Stock at the earliest
possible moment;

 

(i)            otherwise comply with all applicable
rules and regulations of the Commission and any other governmental agency
or authority having jurisdiction over the offering, and make available to its
stockholders, as soon as reasonably practicable, an earnings statement covering
the period of at least twelve (12) months, but not more than eighteen (18)
months, beginning with the first full calendar month after the effective date
of such registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158
promulgated thereunder, and furnish to each seller of Registrable Common Stock
and to the managing underwriter, if any, at least ten (10) days prior to
the filing thereof (or such shorter time period reasonably necessary in light
of applicable legal requirements) a copy of any amendment or supplement to such
registration statement or prospectus;

 

(j)            use its reasonable best efforts to
cause all Registrable Common Stock covered by a registration statement
(i) to be listed on a national securities exchange on which similar
securities issued by the Company are then listed, if the listing of such
Registrable Common Stock is then permitted under the rules of such
exchange, or (ii) if the Company is not required pursuant to clause
(i) above to list Registrable Common Stock on a specific national
securities exchange, use its reasonable best efforts to list the Registrable
Common Stock on a national securities exchange and, without limiting the
generality of the foregoing, use its reasonable best efforts to arrange for at
least two (2) market makers to register with FINRA as such with respect to
such Registrable Common Stock;

 

(k)           provide a transfer agent and
registrar for the Registrable Common Stock covered by a registration statement
no later than the effective date thereof;

 

(l)            enter into such agreements
(including an underwriting agreement in customary form) and take such other
actions as the Holders beneficially owning a majority of the shares of
Registrable Common Stock covered by such registration statement shall
reasonably request in order to expedite or facilitate the disposition of such
Registrable Common Stock, including customary indemnification;

 

(m)          if requested by the managing
underwriter(s) or the Holders beneficially owning a majority of the shares
of Registrable Common Stock being sold in connection with an underwritten
offering, promptly incorporate in a prospectus supplement or post-effective
amendment such information provided to the Company in writing as the managing
underwriter(s) and the Holders of a majority of the Registrable Common Stock
being sold agree should be included therein relating to the plan of distribution
with respect to such Registrable Common Stock, including without limitation,
information with respect to the number of shares of Registrable Common Stock
being sold to such

 

16

 

underwriters, the purchase
price being paid therefor by such underwriters and with respect to any other
terms of the underwritten offering of the Registrable Common Stock to be sold
in such offering, and make all required filings of such prospectus supplement
or post-effective amendment as soon as notified of the matters to be
incorporated in such prospectus supplement or post-effective amendment; and

 

(n)           cooperate with the Selling Holders
and the managing underwriter(s), if any, to facilitate the timely preparation
and delivery of certificates representing Registrable Common Stock to be sold
and not bearing any restrictive legends, and enable such Registrable Common
Stock to be in such share amounts and registered in such names as the managing
underwriter(s) or, if none, the Selling Holders beneficially owning a
majority of the shares of Registrable Common Stock being offered for sale, may
request at least three (3) Business Days prior to any sale of Registrable
Common Stock to the underwriters.

 

As a condition to the
obligations of the Company to complete any registration pursuant to this
Agreement with respect to the Registrable Common Stock of a Holder, such Holder
must furnish to the Company in writing such information regarding itself, the
Registrable Common Stock held by it and the intended methods of disposition of
the Registrable Common Stock held by it as is necessary to effect the
registration of such Holders’ Registrable Common Stock and is requested in
writing by the Company. Except as otherwise required by Section 2(a), at
least thirty (30) days prior to the first anticipated filing date of a
registration statement for any registration under this Agreement, the Company
will notify in writing each Holder of the information referred to in the preceding
sentence which the Company is requesting from that Holder whether or not such
Holder has elected to have any of its Registrable Common Stock included in the
registration statement. If, within ten (10) days prior to the anticipated
filing date, the Company has not received the requested information from a
Holder, then the Company may file the registration statement without including
Registrable Common Stock of that Holder, if, in the opinion of the Company’s
counsel, such information is required to be included in such registration
statement.

 

Each Holder agrees that as
of the date that a final prospectus is made available to it for distribution to
prospective purchasers of Registrable Common Stock it shall cease to distribute
copies of any preliminary prospectus prepared in connection with the offer and
sale of such Registrable Common Stock. Each Holder further agrees that, upon
receipt of any notice from the Company of the happening of any event of the
kind described in subsection (g) of this Section 6 and a suspension
of the use of the registration statement and prospectus pursuant to
Section 9(b), such Holder shall forthwith discontinue such Holder’s
disposition of Registrable Common Stock pursuant to the registration statement
and prospectus relating to such Registrable Common Stock until such Holder’s
receipt of the copies of the supplemented or amended prospectus contemplated by
subsection (g) of this Section 6 and, if so directed by the Company,
shall deliver to the Company (at the Company’s expense) all copies, other than
permanent file copies, then in such Holder’s possession of the prospectus
relating to such Registrable Common Stock at the time of receipt of such
notice. If any event of the kind described in subsection (g) of this
Section 6 occurs and such event is the fault solely of a Holder (or
Holders), such Holder (or Holders) shall pay all Expenses attributable to the
preparation, filing and delivery of any supplemented or amended prospectus
contemplated by subsection (g) of this Section 6.

 

17

 

7. Underwritten Offerings.

 

(a) Requested
Underwritten Offerings. If requested by the underwriters in connection with
a request for a registration (that is not a Shelf Registration) under
Section 3 hereof or any underwritten “takedown” of securities under a
Shelf Registration Statement filed pursuant to Section 2(a) or
Section 3, the Company shall enter into a firm commitment underwriting
agreement with such underwriters for such offering, such agreement to be
reasonably satisfactory in substance and form to the Company, a majority of the
Selling Holders whose Registrable Common Stock is to be included in such
registration and the underwriters and to contain such representations and
warranties by the Company and the Selling Holders and such other terms as are
customary in agreements of that type, including, without limitation,
indemnification and contribution to the effect and to the extent provided in
Section 10 hereof.

 

(b) Piggyback
Underwritten Offerings: Priority.

 

(i) If
the Company proposes to register any of its securities under the Securities Act
for its own account as contemplated by Section 4 hereof and such
securities are to be distributed by or through one or more underwriters, and if
the managing underwriter of such underwritten offering shall advise the Company
in writing (with a copy to the Piggyback Requesting Holders) that if all the
Registrable Common Stock requested to be included in such registration were so
included, in its opinion, the number and type of securities proposed to be
included in such registration would exceed the number and type of securities
which the managing underwriter believes could be sold in such offering within a
price range acceptable to the Company (such writing to state the basis of such
opinion and the approximate number and type of securities which the managing
underwriter believes may be included in such offering without such effect),
then the Company shall include in such registration pursuant to Section 4,
to the extent of the number of securities which the Company is so advised the
managing underwriter believes can be sold in such offering, (i) first,
securities that the Company proposes to issue and sell for its own account,
(ii) second, Registrable Common Stock requested to be registered by
Piggyback Requesting Holders pursuant to Section 4 hereof, pro rata among
the Piggyback Requesting Holders on the basis of the number of shares of
Registrable Common Stock requested to be registered by all such Piggyback
Requesting Holders and (iii) third, other securities, if any; provided,
however, that if such registration is in connection with the initial
Public Offering, the allocation shall be as follows: (i) first, securities
that the Company proposes to issue and sell for its own account,
(ii) second, Registrable Common Stock (excluding shares held by Management
Holders) requested to be registered by Piggyback Requesting Holders (excluding
Management Holders) pursuant to Section 4 hereof, pro rata among
the Piggyback Requesting Holders (excluding Management Holders) on the basis of
the number of shares of Registrable Common Stock requested to be registered by
all such Piggyback Requesting Holders (excluding Management Holders),
(iii) third, shares of Registrable Common Stock beneficially owned by
Management Holders requested to be registered by such Management Holders, pro
rata among the Management Holders on the basis of the number of shares of
Registrable Common Stock requested to be registered by all such Management
Holders, and (iv) fourth, other securities, if any.

 

18

 

(ii) In
the case of any other registration contemplated by Section 4 involving an
underwritten Public Offering, if the managing underwriter of such underwritten
offering shall advise the Company in writing (with a copy to the Piggyback
Requesting Holders) that if all Registrable Common Stock requested to be
included in such registration were so included, in its opinion, the number and
type of securities proposed to be included in such registration would exceed
the number and type of securities which the managing underwriter believes could
be sold in such offering within a price range stated to such managing
underwriter by Selling Holders beneficially owning at least a majority of the
shares of Registrable Common Stock requested to be included in such
registration to be acceptable to such Selling Holders (such writing to state
the basis of such opinion and the approximate number and type of securities which
the managing underwriter believes may be included in such offering without such
effect), then the Company shall include in such registration pursuant to
Section 4, to the extent of the number of securities which the Company is
so advised the managing underwriter believes can be sold in such offering,
(i) first, Registrable Common Stock requested to be registered by
Piggyback Requesting Holders pursuant to Section 4 hereof, pro rata among
the Piggyback Requesting Holders on the basis of the number of shares of
Registrable Common Stock requested to be registered by all such Piggyback
Requesting Holders, (ii) second, securities that the Company proposed to
issue and sell for its own account and (iii) third, other securities, if
any; provided, however, that if such registration is in
connection with the initial Public Offering, the allocation shall be as
follows: (i) first, Registrable Common Stock (excluding shares held by
Management Holders) requested to be registered by Piggyback Requesting Holders
(excluding Management Holders) pursuant to Section 4 hereof, pro rata among
the Piggyback Requesting Holders (excluding Management Holders) on the basis of
the number of shares of Registrable Common Stock requested to be registered by
all such Piggyback Requesting Holders (excluding Management Holders),
(ii) second, shares of Registrable Common Stock beneficially owned by
Management Holders requested to be registered by such Management Holders, pro
rata among the Management Holders on the basis of the number of shares of
Registrable Common Stock requested to be registered by all such Management
Holders, (iii) third, securities that the Company proposed to issue and
sell for its own account and (iv) fourth, other securities, if any.

 

Any Selling Holder may
withdraw its request to have all or any portion of its Registrable Common Stock
included in any such offering by notice to the Company within ten
(10) Business Days after receipt of a copy of a notice from the managing
underwriter pursuant to this Section 7(b).

 

(c) Holders of
Registrable Common Stock to be Parties to Underwriting Agreement. The
Holders of Registrable Common Stock to be distributed by underwriters in an
underwritten offering contemplated by subsections (a) or (b) of this
Section 7 shall be parties to the underwriting agreement between the
Company and such underwriters and any such Holder, at its option, may
reasonably require that any or all of the representations and warranties by,
and the other agreements on the part of, the Company to and for the benefit of
such underwriters shall also be made to and for the benefit of such Holders
(except to the extent any such provision contradicts the terms of this
Agreement) and that any or all of the conditions precedent to the obligations
of such underwriters under such underwriting agreement be conditions precedent
to

 

19

 

the obligations of such
Holders. No such Holder shall be required to make any representations or
warranties to or agreements with the Company or the underwriters other than
representations, warranties or agreements regarding such Holder, such Holder’s
Registrable Common Stock and such Holder’s intended method of distribution.

 

(d) Holdback
Agreements. Each Holder agrees, unless otherwise agreed to by the managing
underwriter for any underwritten offering pursuant to this Agreement, not to
effect any sale or distribution of any equity securities of the Company or
securities convertible into or exchangeable or exercisable for equity
securities of the Company, including any sale under Rule 144 under the
Securities Act, (i) during the ten (10) days prior to the initial
Public Offering and for one hundred eighty (180) days after the initial Public
Offering or such shorter period of time acceptable to the managing underwriter
of the initial Public Offering, if any, except as part of the initial Public
Offering or to the extent that such Holder is prohibited by applicable law from
agreeing to withhold securities from sale or is acting in its capacity as a
fiduciary or an investment advisor or (ii) following the initial Public
Offering, during the ten (10) days prior to the date on which an
underwritten registration of Registrable Common Stocks pursuant to
Section 2(a), 3 or 4 hereof has become effective and until the earlier of
(a) the date on which all shares of Registrable Common Stock to be sold
pursuant to such underwritten registration has been sold by the underwriters
and (b) ninety (90) days after the effective date of such underwritten
registration or such shorter period of time acceptable to the managing
underwriter of such underwritten offering, if any, except as part of such
underwritten registration or to the extent that such Holder is prohibited by
applicable law from agreeing to withhold securities from sale or is acting in
its capacity as a fiduciary or an investment adviser. Without limiting the
scope of the term “fiduciary,” a Holder shall be deemed to be acting as a
fiduciary or an investment adviser if its actions or the securities proposed to
be sold are subject to the Employee Retirement Income Security Act of 1974, as
amended, the Investment Company Act of 1940, as amended, or the Investment
Advisers Act of 1940, as amended, or if such securities are held in a separate
account under applicable insurance law or regulation.

 

The Company agrees
(i) not to effect any sale or distribution of any equity securities of the
Company, or securities convertible into or exchangeable or exercisable for
equity securities of the Company (except pursuant to registrations on
Form S-4 or Form S-8 or any successor thereto), (a) during the
ten (10) days prior to the initial Public Offering and for one hundred
eighty (180) days after the initial Public Offering or such shorter period of time
acceptable to the managing underwriter of the initial Public Offering, if any,
except as part of the initial Public Offering or (b) following the initial
Public Offering, during the ten (10) days prior to the date on which an
underwritten registration of Registrable Common Stock pursuant to
Section 2(a), 3 or 4 hereof has become effective and until the earlier of
(1) the date on which all shares of Registrable Common Stock to be sold
pursuant to such underwritten registration has been sold by the underwriters
and (2) ninety (90) days after the effective date of such underwritten
registration or such shorter period of time approved in writing by the managing
underwriter of such underwritten offering, if any, except as part of such
underwritten registration, and (ii) to cause each holder of any equity
securities, or securities convertible into or exchangeable or exercisable for
equity securities, in each case, acquired from the Company at any time on or
after the date of this Agreement (other than in a Public Offering or sale under
Rule 144 promulgated under the Securities Act), to agree not to effect any
sale or distribution of

 

20

 

such securities during the
applicable period (or such shorter period of time approved in writing by the
managing underwriter of such underwritten offering, if any).

 

8. Preparation:
Reasonable Investigation.

 

(a) Registration
Statements. In connection with the preparation and filing of each
registration statement under the Securities Act pursuant to this Agreement, the
Company shall (i) give representatives (designated to the Company in
writing) of each Holder or group of Holders beneficially owning at least
fifteen percent (15%) of the shares of Registrable Common Stock registered
under such registration statement, the underwriters, if any, and one firm of
counsel, one firm of accountants and one firm of other agents retained on
behalf of all underwriters and one firm of counsel, one firm of accountants and
one firm of other agents retained by Holders (excluding Management Holders)
beneficially owning a majority of the shares of Registrable Common Stock
covered by such registration statement (excluding shares held by Management
Holders) on behalf of all Holders of Registrable Common Stock registered under such
registration statement, the reasonable opportunity to participate in the
preparation of such registration statement, each prospectus included therein or
filed with the Commission, and each amendment thereof or supplement thereto,
(ii) upon reasonable advance notice to the Company, give each of them such
reasonable access to all financial and other records, corporate documents and
properties of the Company and its Subsidiaries, as shall be necessary, in the
reasonable opinion of such Holders’ and such underwriters’ counsel, to conduct
a reasonable due diligence investigation for purposes of the Securities Act,
and (iii) upon reasonable advance notice to the Company, provide such
reasonable opportunities to discuss the business of the Company with its officers,
directors, employees and the independent public accountants who have certified
its financial statements as shall be necessary, in the reasonable opinion of
such Holders’ and such underwriters’ counsel, to conduct a reasonable due
diligence investigation for purposes of the Securities Act.

 

(b) Confidentiality.
Each Holder shall maintain the confidentiality of any confidential information
received from or otherwise made available by the Company to such Holder in its
capacity as such. Information that (i) is or becomes available to a Holder
from a public source other than as a result of a disclosure by such Holder or
any of its Affiliates, (ii) is disclosed to a Holder by a third-party
source who the Holder reasonably believes is not bound by an obligation of
confidentiality to the Company or (iii) is or becomes required to be
disclosed by a Holder by law, including by court order, shall not be deemed to
be confidential information for purposes of this Agreement. The Holders shall
not grant access, and the Company shall not be required to grant access, to
information under this Section 8 to any Person who will not agree to
maintain the confidentiality (to the same extent a Holder is required to
maintain confidentiality) of any confidential information received from or
otherwise made available to it by the Company or the Holders under this
Agreement.

 

9. Postponements.

 

(a) Without limiting
any other rights of the Holders under this Agreement, if the Company shall fail
to file any registration statement to be filed pursuant to a request for
registration under Section 2(a) or under Section 3(a) hereof,
(i) any Holder whose Registrable Common Stock was to be included in such
registration shall have the right to withdraw such

 

21

 

request and (ii) the
Holders requesting registration shall have the right to withdraw such request
to file a registration statement if and only if the Holders (excluding
Management Holders) that have not elected to withdraw beneficially own, in the
aggregate, less than the percentage of shares of Registrable Common Stock
required to initiate a request under Section 2(a) or under
Section 3(a), as the case may be. Any withdrawal shall be made by giving
written notice to the Company within twenty (20) days after the Shelf Filing
Date, or, in the case of a request pursuant to Section 3(a) hereof,
the date on which a registration statement would otherwise have been required
to have been filed with the Commission under clause (i) of Section 6(a) hereof
(i.e., twenty (20) days after the date that is ninety (90) days after the date
of the relevant Initiating Request, or, if, as of such ninetieth day, the
Company does not have the audited financial statements required to be included
in the registration statement, thirty (30) days after the receipt by the
Company from its independent public accountants of such audited financial
statements). In the event of a withdrawal described in clause (ii) of this
Section 9(a), the request for registration shall not be counted for
purposes of determining the number of registrations to which Holders are
entitled pursuant to Section 2(a) or 3(a) hereof, as the case
may be. The Company shall pay all Expenses incurred in connection with any
withdrawal described in clauses (i) and (ii) of this Section 9(a).

 

(b) The Company shall
not be obligated to file any registration statement, or file any amendment or
supplement to any registration statement, and may suspend the registration
process and/or any Selling Holder’s ability to use a prospectus, at any time
(but not to exceed one time in any twelve- (12) month period) when the Company,
in the good faith judgment of its Board of Directors, reasonably believes that
(i) the continuation of the registration process thereof at the time
requested would adversely affect a pending or proposed material financing or a
material acquisition, merger, recapitalization, consolidation, reorganization
or similar transaction, or negotiations, discussions or pending proposals with
respect thereto or (ii) the registration statement and any prospectus
would, in the Company’s judgment, contain a material misstatement of fact or
omission as a result of an event that has occurred or is continuing. The filing
of a registration statement, or any amendment or supplement thereto, by the
Company cannot be deferred, and the Selling Holders’ rights to make sales
pursuant to an effective registration statement cannot be suspended, pursuant
to the provisions of the preceding sentence, (x) in the case of clause
(i) above, for more than ten days after the abandonment or consummation of
any of the proposals or transactions set forth in such clause (i), (y) in
the case of clause (ii) above, following such time as the Company no
longer believes, in its judgment, that the registration statement and any
prospectus would contain a material misstatement of fact or omission as a
result of an event that has occurred or is continuing; provided that the
Company will use its reasonable best efforts to update the disclosure in such
registration statement and prospectus (whether by amendment or by incorporation
by reference) as soon as practicable such that the registration statement and
prospectus will not contain a material misstatement of fact or omission, or
(z) in any event, in the case of either clause (i) or clause
(ii) above, for more than one hundred twenty (120) days after the date of
the Board of Directors’ determination; provided that the Company may not
suspend any Selling Holder’s ability to use a prospectus pursuant to this
Section 9(b) (including but not limited to as set forth in
Section 6(g)) for more than an aggregate of one hundred twenty (120) days
in any three hundred sixty five- (365) day period. The Company shall give
notice to the Selling Holders that the registration process has been suspended
and upon notice duly given pursuant to Section 20(f) hereof, each
Selling Holder agrees not to sell any Registrable Common Stock pursuant to any
registration statement until

 

22

 

such Selling Holder’s
receipt of copies of the supplemented or amended prospectus, or until it is
advised in writing by the Company that the prospectus may be used, and has
received copies of any additional or supplemental filings that are incorporated
or deemed incorporated by reference in such prospectus. The Company shall not
specify the nature of the event giving rise to a suspension in any notice to
the Selling Holders of the existence of such a suspension. If the Company
suspends the Selling Holders’ rights to make sales pursuant hereto, the
applicable registration period shall be extended by the number of days of such
suspension.

 

10. Indemnification.

 

(a) Indemnification
by the Company. In connection with any registration statement filed by the
Company pursuant to Section 2(a), 3(a) or 4 hereof, to the fullest
extent permitted by law the Company shall, and hereby agrees to, indemnify and
hold harmless, each Holder and seller of any Registrable Common Stock covered
by such registration statement and each other Person who participates as an
underwriter in the offering or sale of such securities and each other Person,
if any, who controls (within the meaning of the Exchange Act) such Holder or
seller or any such underwriter, and their respective stockholders, directors,
officers, employees, partners, agents and Affiliates (each, a “Company
Indemnitee” for purposes of this Section 10(a)), against any losses,
claims, damages, liabilities (or actions or proceedings, whether commenced or
threatened, in respect thereof and whether or not such indemnified party is a
party thereto), joint or several, and expenses, including, without limitation,
the reasonable fees, disbursements and other charges of legal counsel and
reasonable costs of investigation, to which such Company Indemnitee may become
subject under the Securities Act or otherwise (collectively, a “Loss” or
“Losses”), insofar as such Losses arise out of, are based upon or relate
to (i) any breach of any representation or warranty made by the Company in
this Agreement or any other certificate, instrument or document contemplated
hereby, (ii) any breach of any covenant, agreement or obligation of the
Company contained in this Agreement or any other certificate, instrument or
document contemplated hereby, or (iii) any untrue statement or alleged
untrue statement of any material fact contained in any registration statement
under which such securities were registered or otherwise offered or sold under
the Securities Act or otherwise, any preliminary prospectus, final prospectus
or summary prospectus related thereto, or any amendment or supplement thereto
(or in any document incorporated by reference in any of the foregoing)
(collectively, “Offering Documents”), or any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein in the light of the circumstances in
which they were made not misleading or any violation by the Company of any
federal or state law, rule or regulation applicable to the Company and
relating to action required of or inaction by the Company in connection with
any such registration; provided that, the Company shall not be liable to
any Company Indemnitee in any such case to the extent that any such Loss arises
out of or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in such Offering Documents in reliance upon
and in conformity with information furnished to the Company in a writing duly
executed by such Company Indemnitee specifically stating that it is expressly
for use therein. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of such Company Indemnitee
and shall survive the transfer of such securities by such Company Indemnitee.

 

23

 

(b) Indemnification
by the Offerors and Sellers. In connection with any registration statement
filed by the Company pursuant to Section 2(a), 3(a) or 4 hereof in
which a Holder has registered for sale Registrable Common Stock, each such
Holder or seller of Registrable Common Stock shall, and hereby agrees to, on a
several and not joint basis, indemnify and hold harmless to the fullest extent
permitted by law the Company and each of its directors, officers, employees,
agents, partners, stockholders, Affiliates and each other Person, if any, who
controls (within the meaning of the Exchange Act) the Company and each other
seller and such seller’s employees, directors, officers, stockholders,
partners, agents and Affiliates (each, a “Holder Indemnitee” for
purposes of this Section 10(b)), against all Losses insofar as such Losses
arise out of, are based upon or relate to any untrue statement or alleged
untrue statement of a material fact contained in any Offering Documents or any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein in the light of
circumstances in which they were made not misleading, but only to the extent
that such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with information furnished
to the Company in a writing duly executed by such Holder or seller of Registrable
Common Stock expressly for use therein; provided, however, that
the liability of such indemnifying party under this
Section 10(b) shall be limited to the amount of the net proceeds
received by such indemnifying party in the sale of Registrable Common Stock
giving rise to such liability. Such indemnity shall remain in full force and
effect, regardless of any investigation made by or on behalf of the Holder
Indemnitee and shall survive the transfer of such securities by such
indemnifying party.

 

(c) Notices of
Losses, etc. Promptly after receipt by an indemnified party of written
notice of the commencement of any action or proceeding involving a Loss
referred to in the preceding subsections of this Section 10, such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party, give written notice to the latter of the commencement of
such action; provided, however, that the failure of any
indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its obligations under the preceding subsections of this
Section 10, except to the extent that the indemnifying party is materially
and actually prejudiced by such failure to give notice. In case any such action
is brought against an indemnified party, the indemnifying party shall be
entitled to participate in and, unless in such indemnified party’s reasonable
judgment a conflict of interest between such indemnified and indemnifying
parties may exist in respect of such Loss, to assume and control the defense
thereof, in each case at its own expense, jointly with any other indemnifying
party similarly notified, to the extent that it may wish, with counsel
reasonably satisfactory to such indemnified party, and after its assumption of
the defense thereof, the indemnifying party shall not be liable to such
indemnified party for any legal or other expenses subsequently incurred by the
latter in connection with the defense thereof other than reasonable costs of
investigation, unless in such indemnified party’s reasonable judgment a
conflict of interest between such indemnified and indemnifying parties arises
in respect of such claim after the assumption of the defense thereof. No
indemnifying party shall be liable for any settlement of any such action or proceeding
effected without its written consent, which shall not be unreasonably withheld.
No indemnifying party shall, without the consent of the indemnified party,
consent to entry of any judgment or enter into any settlement which does not
include as an unconditional term thereof the giving by the claimant or
plaintiff to such indemnified party of a release from all liability in respect
of such Loss or which requires action on the part of such indemnified party or
otherwise

 

24

 

subjects the indemnified
party to any obligation or restriction to which it would not otherwise be
subject.

 

(d) Contribution.
If the indemnification provided for in this Section 10 shall for any
reason be unavailable to an indemnified party under subsection (a) or
(b) of this Section 10 in respect of any Loss, then, in lieu of the
amount paid or payable under subsection (a) or (b) of this
Section 10, the indemnified party and the indemnifying party under
subsection (a) or (b) of this Section 10 shall contribute to the
aggregate Losses (including legal or other expenses reasonably incurred in
connection with investigating the same) (i) in such proportion as is
appropriate to reflect the relative fault of the Company and the prospective Selling
Holders covered by the registration statement which resulted in such Loss or
action in respect thereof, with respect to the statements, omissions or action
which resulted in such Loss or action in respect thereof, as well as any other
relevant equitable considerations, or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as
shall be appropriate to reflect the relative benefits received by the Company,
on the one hand, and such prospective sellers, on the other hand, from their
sale of Registrable Common Stock; provided that, for purposes of this
clause (ii), the relative benefits received by the prospective sellers shall be
deemed not to exceed the amount received by such sellers. No Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation. The obligations, if any, of
the Selling Holders to contribute as provided in this subsection (d) are
several in proportion to the relative value of their respective Registrable
Common Stock covered by such registration statement and not joint. In addition,
no Person shall be obligated to contribute hereunder any amounts in payment for
any settlement of any action or Loss effected without such Person’s consent,
which shall not be unreasonably withheld.

 

(e) Indemnification
Payments. The indemnification and contribution required by this
Section 10 shall be made by periodic payments of the amount thereof during
the course of any investigation or defense, as and when any Loss is incurred
and is due and payable.

 

11. Registration Rights
to Others.

 

If the Company shall at any
time hereafter provide to any holder of any securities of the Company rights
with respect to the registration of such securities under the Securities Act or
the Exchange Act, such rights shall not be in conflict with or adversely affect
any of the rights provided to the Holders in, or conflict (in a manner that
adversely affects Holders) with any other provisions included in, this
Agreement.

 

12. Adjustments Affecting
Registrable Common Stock.

 

Without the written consent
of Holders (excluding Management Holders) of a majority of the outstanding
shares of Registrable Common Stock (excluding shares held by Management
Holders), the Company shall not effect or permit to occur any combination,
subdivision or reclassification of Registrable Common Stock that would
materially adversely affect the ability of the Holders to include such
Registrable Common Stock in any registration of its securities under the
Securities Act contemplated by this Agreement or the marketability of such
Registrable Common Stock under any such registration or other offering.

 

25

 

13. Exchange Act Reports.

 

So long as any Holder
beneficially owns Registrable Common Stock, the Company shall timely file (or
obtain extensions in respect thereof and file within the applicable grace period)
all reports required to be filed by the Company after the date of the first
registration statement filed pursuant to this Agreement pursuant to
Section 13(a) or Section 15(d) of the Exchange Act. After
the initial Public Offering, so long as any Holder beneficially owns
Registrable Common Stock, if the Company is not required to file reports
pursuant to Section 13(a) or Section 15(d) of the Exchange
Act, it will prepare and make publicly available in accordance with
Rule 144(c) promulgated under the Securities Act annual and quarterly
financial statements, together with a discussion and analysis of such financial
statements in form and substance similar to those that would otherwise be
required to be included in reports required by Section 13(a) or Section 15(d) of
the Exchange Act, as well as any other information required thereby, in the
time period that such filings would have been required to have been made under
the Exchange Act.

 

14. Rule 144 and
Rule 144 A.

 

If the Company has a class
of equity securities registered under the Exchange Act, the Company shall take
all actions reasonably necessary to enable Holders to sell Registrable Common
Stock without registration under the Securities Act to the maximum extent
permitted by the exemptions provided by (a) Rule 144 under the
Securities Act, as such Rule may be amended from time to time,
(b) Rule 144 A under the Securities Act, as such Rule may be
amended from time to time, or (c) any similar rules or regulations
hereafter adopted by the Commission, including, without limiting the generality
of the foregoing, filing on a timely basis all reports required to be filed
under the Exchange Act. Upon the written request of any Holder, the Company
shall deliver to such Holder a written statement as to whether it has complied
with such requirements.

 

15. Amendments and
Waivers.

 

Any provision of this
Agreement may be amended, modified or waived if, but only if, the written
consent to such amendment, modification or waiver has been obtained from the
Company and (i) except as provided in clause (ii) below, from the
Holder or Holders (excluding Management Holders) of at least two-thirds of the
shares of Registrable Common Stock (excluding shares held by Management
Holders) affected by such amendment, modification or waiver, (ii) in the
case of any amendment, modification or waiver of any provision of
Section 5, 9 or 10 hereof which is adverse to the Holders or this
Section 15 or reducing the number of requests for registration to which
Holders are entitled under Section 3 or 4 hereof, from each Holder
adversely affected, and (iii) in the case of any other amendment,
modification or waiver of any provision of this Agreement which adversely
affects any right and/or obligation under this Agreement of any Holder, from
each Holder so affected. Notwithstanding the foregoing, the Company may from
time to time add additional Holders as parties to this Agreement. In order to
become a party to this Agreement, such additional party must execute a joinder
agreement, in form and substance satisfactory to the Company, evidencing such
party’s agreement to be bound hereby as a Holder, and upon the Company’s

 

26

 

receipt of any such
additional Holder’s executed joinder agreement, such additional Holder shall be
deemed to be a party hereto and bound hereby.

 

16. Nominees for
Beneficial Owners.

 

In the event that any
Registrable Common Stock is held by a nominee for the beneficial owner thereof,
the beneficial owner thereof may, at its election in writing delivered to the
Company, be treated as the Holder of such Registrable Common Stock for purposes
of any request or other action by any Holder or Holders pursuant to this
Agreement or any determination of the number or percentage of shares of
Registrable Common Stock held by any Holder or Holders contemplated by this
Agreement. If the beneficial owner of any Registrable Common Stock so elects,
the Company may require assurances reasonably satisfactory to it of such
owner’s beneficial ownership of such Registrable Common Stock.

 

17. Assignment.

 

The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective heirs, successors and permitted assigns. Any Holder or
Warrantholder may assign its rights and obligations under this Agreement to any
Transferee of its Registrable Common Stock or Warrants, respectively (so long
as the Transfer complies with under applicable law, the Stockholders Agreement,
dated as of even date herewith (the “Stockholders Agreement”), by and
among the Company and the holders named therein or bound thereby, and the
Warrant Agreement, as applicable), provided that such Transferee shall
agree in writing prior to the assignment to be bound by this Agreement as if it
were an original party hereto, whereupon such Transferee shall for all purposes
be deemed to be a Holder (and, in the case of a Transferee of a Management
Holder, or a Transferee thereof, a Management Holder) under this Agreement.
Except as provided above or otherwise permitted by this Agreement, neither this
Agreement nor any right, remedy, obligation or liability arising hereunder or
by reason hereof shall be assignable by any Holder without the prior written
consent of the other parties hereto. The Company may not assign this Agreement
or any right, remedy, obligation or liability arising hereunder or by reason
hereof without the consent of the Holders (excluding Management Holders) beneficially
owning a majority of the outstanding shares of Registrable Common Stock.

 

18. Calculation of
Percentage or Number of Shares of Registrable Common Stock.

 

For purposes of this
Agreement, all references to a percentage or number of shares of Registrable
Common Stock or Common Stock shall be calculated based upon the number of
shares of Registrable Common Stock or Common Stock, as the case may be,
outstanding at the time such calculation is made and shall exclude any
Registrable Common Stock or Common Stock, as the case may be, beneficially
owned by the Company or any Subsidiary of the Company. For the purposes of
calculating any percentage or number of shares of Registrable Common Stock or
Common Stock as contemplated by the previous sentence, the terms “Holder”,
“Initiating Holder”, “Management Holder”, “Director Holder” and “Creditor
Holder” shall include all Affiliates thereof (other than the Company and its
Subsidiaries) beneficially owning any shares of Registrable Common Stock or
Common Stock.

 

27

 

19. Termination of
Registration Rights. This Agreement, including, without limitation, the
Company’s obligations under Sections 2(a), 3(a) and 4 hereof to register
Voting Common Stock for sale under the Securities Act shall terminate on the
earlier of (i) the first date on which no shares of Registrable Common
Stock are outstanding or (ii) the first date on which less than ten
percent (10%) of the aggregate number of shares of Common Stock issued pursuant
to the Plan are collectively held by the Creditor Holders and their Affiliates.
Notwithstanding any termination of this Agreement pursuant to this
Section 19, the parties’ rights and obligations under Section 5 and
Section 10 hereof shall continue in full force and effect.

 

20. Miscellaneous.

 

(a) Further
Assurances. The Company shall execute such documents and other papers and
perform such further acts as may be reasonably required or advisable to carry
out the provisions of this Agreement and the transactions contemplated hereby.

 

(b) Headings.
The headings in this Agreement are for convenience of reference only and shall
not control or affect the meaning or construction of any provisions hereof.

 

(c) Conflicting
Instructions. A Person is deemed to be a Holder whenever such Person owns
of record Registrable Common Stock. If the Company receives conflicting
instructions, notices or elections from two or more Persons with respect to the
same Registrable Common Stock, the Company will act upon the basis of
instructions, notice or election received from the registered owner of such
Registrable Common Stock.

 

(d) Remedies.
Each Holder, in addition to being entitled to exercise all rights granted by
law, including recovery of damages, will be entitled to specific performance of
its rights under this Agreement. The Company agrees that monetary damages would
not be adequate compensation for any loss incurred by reason of a breach by it
of the provisions of this Agreement and the Company hereby agrees to waive the
defense in any action for specific performance that a remedy at law would be
adequate.

 

(e) Entire Agreement.
This Agreement, the Stockholders Agreement and the Warrant Agreement constitute
the entire agreement and understanding of the parties hereto in respect of the
subject matter contained herein, and there are no restrictions, promises,
representations, warranties, covenants, or undertakings with respect to the
subject matter hereof, other than those expressly set forth or referred to
herein. This Agreement supersedes all prior agreements and understandings
between the parties hereto with respect to the subject matter hereof.

 

(f) Notices. All
notices, requests and demands to or upon the respective parties hereto to be
effective shall be in writing (including by telecopy), and, unless otherwise
expressly provided herein, shall be deemed to have been duly given or made when
delivered by hand, or two (2) Business Days after being delivered to a
recognized courier (whose stated terms of delivery are two (2) Business
Days or less to the destination of such notice), or five (5) calendar days
after being deposited in the mail, postage prepaid, or, in the case of telecopy
notice, when received, addressed as set forth on Schedule B hereto to the parties
hereto, or to such other address as may be hereafter notified by the respective
parties hereto.

 

28

 

(g) Governing
Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.

 

(h) Severability.
Notwithstanding any provision of this Agreement, neither the Company nor any
other party hereto shall be required to take any action which would be in
violation of any applicable federal or state securities law. The invalidity or
unenforceability of any provision of this Agreement in any jurisdiction shall
not affect the validity, legality or enforceability of any other provision of
this Agreement in such jurisdiction or the validity, legality or enforceability
of this Agreement, including any such provision, in any other jurisdiction, it
being intended that all rights and obligations of the parties hereunder shall
be enforceable to the fullest extent permitted by law.

 

(i) Counterparts.
This Agreement may be executed in two or more counterparts, each of which shall
be deemed an original but all of which shall constitute one and the same
Agreement.

 

21. Director Holders.
Each Director Holder has executed this Agreement and is bound hereby. After the
date hereof, the Company shall not issue any Registrable Common Stock to any
person who is, or who would thereupon become, a Director Holder, or to any
Affiliate thereof, unless he or she first delivers to the Company a joinder
agreement, in form and substance satisfactory to the Company, acknowledging
that he or she is bound by the terms hereof as a Director Holder.

 

22. Management Holders.
Each Management Holder has executed this Agreement and is bound hereby. After
the date hereof, the Company shall not issue any Registrable Common Stock to
any person who is, or who would thereupon become, a Management Holder, or to
any Affiliate thereof, unless he or she first delivers to the Company a joinder
agreement, in form and substance satisfactory to the Company, acknowledging
that he or she is bound by the terms hereof as a Management Holder.

 

23. Transfer Agent.
The Company shall serve as transfer agent with respect to transfers of shares
of Common Stock until such time as it retains a third party transfer agent to
manage such responsibilities.

 

[Remainder
of this page intentionally left blank.]

 

29

 

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

 

	
   

  	
  RDA HOLDING CO.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas A. Williams

  
	
   

  	
   

  	
  Name: Thomas A. Williams

  
	
   

  	
   

  	
  Title: Chief Financial
  Officer

  

 

[SIGNATURE
PAGE TO REGISTRATION RIGHTS AGREEMENT]

 

 

	
   

  	
  CREDITOR HOLDERS
  IDENTIFIED ON

  
	
   

  	
  SCHEDULE A AND
  WARRANTHOLDERS ARE

  
	
   

  	
  DEEMED TO BE PARTIES TO
  THIS

  
	
   

  	
  AGREEMENT PURSUANT TO THE
  PLAN

  

 

 

SCHEDULE A

 

	
  Creditor Holders

  
	
  Ares IIR CLO Ltd

  
	
  Ares IIIR IVR CLO Ltd

  
	
  Ares VR CLO Ltd

  
	
  Ares VIR CLO Ltd

  
	
  Ares VII CLO Ltd

  
	
  Ares VIII CLO Ltd

  
	
  Ares IX CLO Ltd

  
	
  Ares X CLO Ltd

  
	
  Ares XI CLO Ltd

  
	
  Ares XII CLO Ltd

  
	
  Ares Enhanced Loan
  Investment Strategy II Ltd

  
	
  Ares Enhanced Loan
  Investment Strategy III Ltd

  
	
  Atrium V

  
	
  Atrium VI

  
	
  Banc of America Securities
  LLC

  
	
  Cadogan
  Square CLO III B.V

  
	
  Cadogan
  Square CLO IV B.V

  
	
  Canyon Capital CLO 2004-1
  LTD

  
	
  Canyon Capital CLO 2006-1
  LTD

  
	
  Canyon Capital CLO 2007-1
  LTD

  
	
  Canyon Capital Finance
  SarL

  
	
  Carlyle High Yield
  Partners IV, Ltd.

  
	
  Carlyle High Yield
  Partners VI, Ltd.

  
	
  Carlyle High Yield
  Partners VII, Ltd.

  
	
  Carlyle High Yield
  Partners VIII Ltd.

  
	
  CCP Financing I, Ltd

  
	
  Carlyle High Yield
  Partners X, Ltd.

  
	
  Carlyle High Yield
  Partners IX, Ltd.

  
	
  Castle Garden Funding

  
	
  Citigroup Global Markets
  Inc.

  
	
  Credit Suisse Syndicated
  Loan Fund

  
	
  CSAM Funding III

  
	
  CSAM Funding IV

  
	
  Deutsche Bank AG

  
	
  Deutsche
  Bank Cayman Islands Branch

  
	
  Big Sky III Senior Loan
  Trust

  
	
  Eaton Vance CDO VII PLC

  
	
  Eaton Vance CDO VIII Ltd.

  
	
  Eaton Vance CDO IX Ltd.

  
	
  Eaton Vance CDO X PLC

  
	
  Eaton Vance Senior
  Floating-Rate Trust

  

 

 

	
  Eaton Vance Floating-Rate
  Income Trust

  
	
  Eaton Vance Credit
  Opportunities Fund

  
	
  Eaton Vance Senior Income
  Trust

  
	
  Eaton Vance Short Duration
  Diversified Income Fund

  
	
  Eaton Vance Institutional
  Senior Loan Fund

  
	
  Eaton Vance Limited
  Duration Income Fund

  
	
  Grayson & Co

  
	
  Senior Debt Portfolio

  
	
  Eaton Vance VT
  Floating-Rate Income Fund

  
	
  Eaton Vance Loan
  Opportunities Fund

  
	
  Eaton Vance Medallion
  Floating-Rate Income Portfolio

  
	
  Fidelity Summer Street
  Trust: Fidelity Capital & Income Fund

  
	
  Fidelity Advisor
  Series I : Fidelity Advisor Floating Rate High Income Fund

  
	
  Fidelity Advisor
  Series I : Fidelity Advisor High Income Advantage Fund

  
	
  Fidelity Central Inv.
  Portfolios LLC: Fidelity Floating Rate Central Fund

  
	
  Fidelity Puritan Trust :
  Fidelity Puritan Fund

  
	
  Variable Insurance
  Products Fund V : Strategic Income Portfolio

  
	
  Fidelity School Street
  Trust : Fidelity Strategic Income Fund

  
	
  Fidelity Advisor
  Series II : Fidelity Advisor Strategic Income Fund

  
	
  Ballyrock CLO II Limited

  
	
  Ballyrock CLO III Limited

  
	
  Ballyrock CLO 2006-1 LTD

  
	
  Ballyrock CLO 2006-2 LTD

  
	
  Illinois Municipal
  Retirement Fund

  
	
  Pyramis Floating Rate High
  Income Commingled Pool

  
	
  IG Investment Management
  Ltd., trustee for IG FI Canadian Allocation Fund

  
	
  Fidelity Canadian Asset
  Allocation Fund

  
	
  Fidelity American High
  Yield Fund

  
	
  Fidelity Canadian Balanced
  Fund

  
	
  COA CLO FINANCING LTD

  
	
  Fraser
  Sullivan CLO I Ltd.

  
	
  Fraser
  Sulllivan CLO II Ltd.

  
	
  NCM
  FSIM 2008-1 LLC

  
	
  Foothill
  CLO I, Ltd.

  
	
  The Foothill
  Group, Inc.

  
	
  Gallatin CLO II 2005-1
  Ltd.

  
	
  Gallatin CLO III 2007-1
  Ltd.

  
	
  Grayston CLO II 2004-1
  Ltd.

  
	
  Goldman Sachs Asset
  Management CLO PLC

  
	
  HillMark Funding Ltd.

  
	
  Stoney Lane Funding I Ltd.

  
	
  Madison Park Funding
  I, Ltd.

  
	
  Madison Park Funding
  II, Ltd.

  
	
  Madison Park Funding
  III, Ltd.

  
	
  Madison Park Funding
  IV, Ltd.

  

 

 

	
  Madison Park Funding
  V, Ltd.

  
	
  Madison
  Park Funding VI, Ltd.

  
	
  Malibu CFPI Loan Funding
  LLC

  
	
  McDonnell Bank Loan Select
  Master Fund Bank Loan Select Series Trust I

  
	
  McDonnell Loan Opportunity
  Ltd.

  
	
  Wind River CLO I Ltd.

  
	
  Wind River CLO II - Tate
  Investors, Ltd.

  
	
  Gannett Peak CLO
  I, Ltd.

  
	
  GE Capital Equity
  Investments, Inc

  
	
  Genesis CLO 2007-1 Ltd.

  
	
  Genesis CLO 2007-2 Ltd.

  
	
  GoldenTree Loan Opportunities
  III, Limited

  
	
  GoldenTree Loan
  Opportunities IV, Limited

  
	
  GoldenTree Loan
  Opportunities V, Limited

  
	
  GN3 SIP, Limited

  
	
  GoldenTree Credit
  Opportunities Financing I, Limited

  
	
  GoldenTree Credit
  Opportunities Master Fund, Ltd

  
	
  GoldenTree 2004 Trust

  
	
  NCM GT 2008-2 LLC

  
	
  Laurelin II B.V.

  
	
  GoldenTree Credit
  Opportunities Second Financing, Limited

  
	
  GoldenTree Leverage Loan
  Financing I, Limited

  
	
  GoldenTree Master Fund II,
  Ltd

  
	
  GoldenTree Master Fund,
  Ltd

  
	
  GTAM Fund I, Ltd.

  
	
  Gulf Stream Compass CLO
  2002-I Ltd

  
	
  Gulf Stream Compass CLO
  2003-I Ltd

  
	
  Gulf Stream Compass CLO
  2004-I Ltd

  
	
  Gulf Stream Compass CLO
  2007-I Ltd

  
	
  Gulf Stream Sextant CLO
  2007-I Ltd

  
	
  ING Prime Rate Trust

  
	
  ING Senior Income Fund

  
	
  ING International
  (II) - Senior Bank Loans Euro

  
	
  ING Investment Management
  CLO I, LTD.

  
	
  ING Investment Management
  CLO II, LTD.

  
	
  ING Investment Management
  CLO III, LTD.

  
	
  ING Investment Management
  CLO IV, LTD.

  
	
  ING Investment Management
  CLO V, LTD.

  
	
  JPMorgan Chase Bank, N.A.

  
	
  JPMorgan Chase Bank, N.A.

  
	
  Loyalis Schade NV

  
	
  Commonwealth of
  Pennsylvania State Employees Retirement System

  
	
  San Joaquin County
  Employees’ Retirement Association

  
	
  MARLBOROUGH STREET
  CLO, LTD.

  
	
  JERSEY STREET
  CLO, LTD.

  

 

 

	
  Merrill Lynch Capital
  Corporation

  
	
  MERRILL LYNCH CAPITAL
  SERVICES, INC

  
	
  MetLife Insurance Company
  of Connecticut

  
	
  Midtown Acquisitions L.P.

  
	
  Midtown Acquisitions L.P.

  
	
  Morgan Stanley &
  Co. Incorporated

  
	
  Mountain View CLO III Ltd.

  
	
  Nob Hill CLO II, Limited

  
	
  Nomura Bond and Loan Fund

  
	
  NCRAM Senior Loan Trust
  2005

  
	
  Clydesdale CLO 2006, Ltd.

  
	
  Clydesdale CLO
  2007, Ltd.

  
	
  PACIFICA CDO II LIMITED

  
	
  PACIFICA CDO III LTD

  
	
  PPM GRAYHAWK
  CLO, LTD.

  
	
  SERVES 2006-1 LTD.

  
	
  Primus CLO I, Ltd.

  
	
  Prudential Insurance
  Company of America

  
	
  Confluent 3, Ltd.

  
	
  MSIM Peconic
  Bay, Ltd.

  
	
  Qualcomm Global
  Trading, Inc.

  
	
  RiverSource Bond
  Series, Inc - RiverSource Floating Rate Fund

  
	
  Silverado CLO 2006-II
  Limited

  
	
  Stone Tower CLO VIII Ltd.

  
	
  Structured Enhanced Return
  Vehicle Trust, Series 1998-1

  
	
  Tribeca Park CLO Ltd.

  
	
  Loan Funding VI LLC

  
	
  Monument Park CDO Ltd.

  
	
  Cavalry CLO I

  
	
  President &
  Fellows of Harvard College

  
	
  Regiment Capital LTD

  
	
  Regiment Capital LTD

  
	
  XL Re LTD

  
	
  Greyrock CDO LTD.

  
	
  Landmark IX CDO LTD.

  
	
  AIM FLOATING RATE FUND

  
	
  ALZETTE EUROPEAN CLO

  
	
  ATLANTIS FUNDING LTD

  
	
  AVALON CAPITAL LTD 3

  
	
  BELHURST CLO LTD

  
	
  BLT 2009-1 LTD

  
	
  CELTS CLO 2007-1 LTD

  
	
  CHAMPLAIN CLO LTD

  
	
  DIVERSIFIED CREDIT
  PORTFOLIO LTD

  
	
  HUDSON CANYON FUNDING II
  SUBSIDIARY HOLDING COMPANY II LLC

  

 

 

	
  KATONAH
  V LTD

  
	
  LIMEROCK
  CLO I

  
	
  LOAN FUNDING IX LLC

  
	
  MOSELLE CLO S A

  
	
  NAUTIQUE FUNDING LTD

  
	
  PETRUSSE EUROPEAN CLO SA

  
	
  SAGAMORE CLO LTD

  
	
  SARATOGA
  CLO I LTD

  
	
  WASATCH
  CLO LTD

  
	
  NUVEEN FLOATING RATE
  INCOME FUND

  
	
  NUVEEN FLOATING RATE
  INCOME OPPORTUNITY FUND

  
	
  NUVEEN MULTI-STRATEGY
  INCOME AND GROWTH FUND

  
	
  NUVEEN MULTI-STRATEGY
  INCOME AND GROWTH FUND 2

  
	
  NUVEEN SENIOR INCOME FUND

  
	
  SYMPHONY CLO I LTD

  
	
  SYMPHONY CLO II LTD

  
	
  SYMPHONY CLO III LTD

  
	
  SYMPHONY CLO IV LTD

  
	
  AOZORA BANK LTD

  
	
  CIT GROUP / EQUIPMENT
  FINANCING, INC.

  
	
  Cit Middle Market Loan
  Trust III

  
	
  MJX - VENTURE IV CDO
  LIMITED

  
	
  VEER CASH FLOW CLO LTD

  
	
  VENTURE V CDO LTD

  
	
  VENTURE
  VI CDO LTD

  
	
  VENTURE
  VII CDO LIMITED

  
	
  VENTURE
  VIII CDO LIMITED

  
	
  HALCYON STRUCTURED ASSET
  MANAGEMENT EUROPEAN CLO 2006 II B V

  
	
  HALCYON STRUCTURED ASSET
  MANAGEMENT EUROPEAN CLO 2007-I BV

  
	
  SABERASU
  JAPAN INVESTMENTS II BV

  
	
  APIDOS
  CDO I

  
	
  APIDOS
  CDO V

  
	
  APIDOS
  CINCO CDO

  
	
  YORKVILLE
  CBNA LOAN FUNDING LLC

  
	
  ACA CLO 2007-1 LTD

  
	
  AIG SATURN CLO LTD

  
	
  AMERICAN INTERNATIONAL
  GROUP INCORPORATED

  
	
  GALAXY V CLO LTD

  
	
  GALAXY VI CLO LTD

  
	
  GALAXY VII CLO LTD

  
	
  GALAXY VIII CLO LTD

  
	
  1888 FUND LTD

  
	
  EURO GALAXY CLO II

  

 

 

EURO-GALAXY CLO BV

THE ROYAL BANK OF SCOTLAND
PLC NEW YORK BRANCH

EVENT DRIVEN, A SERIES OF
UNDERLYING FUNDS TRUST

FRONTFOUR MASTER FUND LTD

CENTRAL PARK GROUP
MULTI-EVENT FD

PARA OMNIBUS LLC

SHINNECOCK CLO II LTD

CONTRARIAN FUND

STONE LION PORTFOLIO L.P.

 

 

SCHEDULE B

 

NOTICES

 

If to the Company, to:

 

The Reader’s Digest
Association, Inc.

One Reader’s Digest Road

Pleasantville, New York
10570

Attention: General Counsel

Tel: (914) 244-5262

Fax: (914) 244-5644

 

with a mandatory copy, which
shall not constitute notice, to:

 

Kirkland & Ellis
LLP

601 Lexington Avenue

New York, New York 10022

Attention: Joshua Korff and
Michael Brosse

Tel: (212) 446-4800

Fax: (212) 446-6460

 

If to the Holders, to:

 

such Holder, at such
Holder’s address or to such Holder’s telephone or telecopy number reflected in
the Company’s books and records.

 

With respect to First Lien
Lenders and their Permitted Transferees (as such terms are defined in the
Stockholders Agreement),

with a mandatory copy, which shall not constitute notice, to:

 

Simpson Thacher &
Bartlett LLP

425 Lexington Avenue

New York, New York 10017

Attention:
Brian M. Stadler

Fax:
(212) 455-2502

 

 

EXHIBIT A

 

FORM OF SELLING STOCKHOLDER QUESTIONNAIRE

 

The undersigned beneficial
owner (the “Selling Stockholder”) of shares of class A common stock, par
value $0.001 per share (the “Registrable Common Stock”), of RDA Holding
Co. (the “Company”), hereby gives notice to the Company of its intention
to sell or otherwise dispose of Registrable Common Stock beneficially owned by
it and listed below in Item 3 (unless otherwise specified under Item 3)
pursuant to the Shelf Registration Statement. The undersigned, by signing and
returning this Selling Stockholder Questionnaire, understands that it will be
bound by the terms and conditions of this Selling Stockholder Questionnaire and
the Registration Rights Agreement, dated as of February 19, 2010, among
the Company and the Holders named therein (the “Registration Rights
Agreement”). Capitalized terms used and not defined herein shall have the
meaning ascribed to them in the Registration Rights Agreement.

 

In accordance with the
Registration Rights Agreement, Selling Stockholders that do not complete this
Selling Stockholder Questionnaire and deliver it to the Company as provided
below will not be named selling stockholders in the prospectus and therefore
will not be permitted to sell any Registrable Common Stock pursuant to the
Shelf Registration Statement.

 

Pursuant to the Registration
Rights Agreement, the undersigned has agreed to indemnify and hold harmless the
Company’s directors, the Company’s officers and each person, if any, who
controls the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act from and against certain
losses arising in connection with statements concerning the undersigned made in
the Shelf Registration Statement or the related prospectus in reliance upon the
information provided in this Selling Stockholder Questionnaire. The undersigned
hereby acknowledges its obligations under the Registration Rights Agreement to
indemnify and hold harmless certain persons set forth therein.

 

Certain legal consequences
arise from being named a selling stockholder in the Shelf Registration
Statement and the related prospectus. Accordingly, holders and beneficial
owners are advised to consult their own securities law counsel regarding the
consequences of being named or not named as a selling stockholder in the Shelf
Registration Statement and the related prospectus.

 

The undersigned hereby
provides the following information to the Company and represents and warrants
that such information is accurate and complete:

 

	
  (1)

  	
  (a)

  	
  Full Legal Name of Selling
  Stockholder:

  
	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Full Legal Name of
  Registered Holder (if not the same as (a) above) through which
  Registrable Common Stock listed in (3) below is held:

  
	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
  Full Legal Name of DTC
  Participant (if applicable and if not the same as (b) above) through
  which Registrable Common Stock listed in (3) below is held:

  
	
   

  	
   

  	
   

  
	
  (2)

  	
  Address for Notices to
  Selling Stockholder:

  

 

A-1

 

	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Telephone (including area
  code):

  	
   

  
	
   

  	
  Fax (including area code):

  	
   

  
	
   

  	
  Contact Person:

  	
   

  
	
   

  	
   

  	
   

  
	
  (3)

  	
  Beneficial Ownership of
  Registrable Common Stock:

  
	
   

  	
   

  
	
   

  	
  (a)

  	
  Type and Principal
  Amount/Number of Registrable Common Stock beneficially owned:

  
	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  CUSIP No(s). of such
  Registrable Common Stock beneficially owned:

  
	
   

  	
   

  	
   

  
	
  (4)

  	
  Beneficial Ownership of
  Other Securities of the Company Owned by the Selling Stockholder: Except as set forth below in this Item (4), the
  undersigned is not the beneficial or registered owner of any securities of
  the Company other than the Registrable Common Stock listed above in Item (3).

  
	
   

  	
  (a)

  	
  Type and Amount of Other
  Securities beneficially owned by the Selling Stockholder:

  
	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  CUSIP No(s). of such Other
  Securities beneficially owned:

  
	
   

  	
   

  	
   

  
	
  (5)

  	
  Relationship with the
  Company:

  
	
   

  	
  Except
  as set forth below, neither the undersigned nor any of its affiliates,
  officers, directors or principal equity holders (5% or more) has held any
  position or office or has had any other material relationship with the
  Company (or its predecessors or affiliates) during the past three years.

  
	
   

  	
  State any exceptions here:

  	
   

  
	
  (6)

  	
  Is the Selling Stockholder
  a registered broker-dealer?

  
	
   

  	
  Yes

  	
  o

  
	
   

  	
  No

  	
  o

  
	
   

  	
  If “Yes”, please answer
  subsection (a) and subsection (b):

  
	
   

  	
   

  	
  (a)

  	
  Did the Selling
  Stockholder acquire the Registrable Common Stock as compensation for
  underwriting/broker-dealer activities to the Company?

  
	
   

  	
   

  	
   

  	
  Yes

  	
  o

  
	
   

  	
   

  	
   

  	
  No

  	
  o

  
	
   

  	
   

  	
  (b)

  	
  If you answered “No” to
  question 6(a), please explain your reason for acquiring the Registrable
  Common Stock:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (7)

  	
  Is the Selling Stockholder
  an affiliate of a registered broker-dealer?

  
	
   

  	
  Yes

  	
  o

  
	
   

  	
  No

  	
  o

  
	
   

  	
  If “Yes”, please identify
  the registered broker-dealer(s), describe the nature of the
  affiliation(s) and answer subsection (a) and subsection (b):

  
	
   

  	
   

  
	
   

  	
  (a)

  	
  Did the Selling
  Stockholder purchase the Registrable Common Stock in the ordinary course of
  business (if no, please explain)?

  
	
   

  	
   

  	
  Yes

  	
  o

  	
   

  
	
   

  	
   

  	
  No

  	
  o

  	
  Explain:

  	
   

  
	
   

  	
  (b)

  	
  Did the Selling
  Stockholder have an agreement or understanding, directly or

  
												

 

A-2

 

	
   

  	
   

  	
  indirectly, with any
  person to distribute the Registrable Common Stock at the same time the
  Registrable Common Stock were originally purchased (if yes, please explain)?

  
	
   

  	
   

  	
  Yes

  	
  o

  	
   

  
	
   

  	
   

  	
  No

  	
  o

  	
  Explain:

  	
   

  
	
  (8)

  	
  Is the Selling Stockholder
  a non-public entity?

  
	
   

  	
  Yes

  	
  o

  
	
   

  	
  No

  	
  o

  
	
   

  	
  If “Yes”, please answer
  subsection (a):

  
	
   

  	
   

  	
  (a)

  	
  Identify the natural
  person or persons that have voting or investment control over the Registrable
  Common Stock that the non-public entity owns:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (9)

  	
  Plan of Distribution:

  
	
   

  	
  Except
  as set forth below, the undersigned Selling Stockholder (including its donees
  and pledgees) intends to distribute the Registrable Common Stock listed above
  in Item (3) pursuant to the Shelf Registration Statement only as follows
  (if at all): Such Registrable Common Stock may be sold from time to time
  directly by the undersigned Selling Stockholder or, alternatively, in
  accordance with the Registration Rights Agreement, through underwriters,
  broker-dealers or agents. If the Registrable Common Stock is sold through
  underwriters or broker-dealers, the Selling Stockholders will be responsible
  for underwriting discounts or commissions or agent commissions. Such
  Registrable Common Stock may be sold in one or more transactions at fixed
  prices, at prevailing market prices at the time of sale, at varying prices
  determined at the time of sale, or at negotiated prices. Such sales may be
  effected in transactions (which may involve cross or block transactions)
  (i) on any national securities exchange or quotation service on which
  the Registrable Common Stock may be listed or quoted at the time of sale,
  (ii) in the over-the-counter market, (iii) in transactions
  otherwise than on such exchanges or services or in the over-the-counter
  market, or (iv) through the writing of options. In connection with sales
  of the Registrable Common Stock or otherwise, the undersigned Selling Stockholder
  may enter into hedging transactions with broker-dealers, which may in turn
  engage in short sales of the Registrable Common Stock in the course of
  hedging positions they assume. The undersigned Selling Stockholder may also
  sell Registrable Common Stock short and deliver Registrable Common Stock to
  close out short positions, or loan or pledge Registrable Common Stock to
  broker-dealers that in turn may sell such securities.

  
	
   

  	
  State any exceptions here:

  	
   

  
								

 

The undersigned Selling
Stockholder acknowledges that it understands its obligations to comply with the
provisions of the Exchange Act, and the rules thereunder relating to stock
manipulation, particularly Regulation M thereunder (or any successor
rules or regulations), in connection with any offering of Registrable
Common Stock pursuant to the Shelf Registration Agreement. The undersigned
agrees that neither it nor any person acting on its behalf will engage in any
transaction in violation of such provisions.

 

In the event the undersigned
transfers all or any portion of the Registrable Common Stock listed in Item
(3) above after the date on which such information is provided to the
Company other than pursuant to the Shelf Registration Statement, the
undersigned agrees to notify the transferee(s) at the time of the transfer
of its rights and obligations under this Selling Stockholder Questionnaire and
the Registration Rights Agreement.

 

A-3

 

In accordance with the
undersigned’s obligation under the Registration Rights Agreement to provide
such information as may be required by law or by the staff of the Commission
for inclusion in the Shelf Registration Statement, the undersigned agrees to
promptly notify the Company of any inaccuracies or changes in the information provided
herein that may occur subsequent to the date hereof at any time while the Shelf
Registration Statement remains effective. All notices hereunder and pursuant to
the Registration Rights Agreement shall be made in writing, by hand-delivery,
first-class mail, or air courier guaranteeing overnight delivery to the address
set forth below.

 

By signing below, the
undersigned consents to the disclosure of the information contained herein in
its answers to Items (1) through (9) above and the inclusion of such
information in the Shelf Registration Statement and the related prospectus. The
undersigned understands that such information will be relied upon by the
Company in connection with the preparation or amendment of the Shelf
Registration Statement and the related prospectus.

 

By signing below, the
undersigned agrees that if the Company notifies the undersigned in accordance
with and pursuant to the Registration Rights Agreement that Shelf Registration
Statement is not available, the undersigned will in accordance with and
pursuant to the Registration Rights Agreement suspend use of the prospectus
until notice from the Company that the prospectus is again available.

 

Once this Selling
Stockholder Questionnaire is executed by the undersigned and received by the
Company, the terms of this Selling Stockholder Questionnaire, and the
representations, warranties and agreements contained herein, shall be binding
on, shall inure to the benefit of and shall be enforceable by the respective
successors, heirs, personal representatives and assigns of the Company and the
undersigned with respect to the Registrable Common Stock beneficially owned by
the undersigned and listed in Item (3) above. This Selling Stockholder
Questionnaire shall be governed in all respects by the laws of the State of New
York.

 

IN WITNESS WHEREOF, the
undersigned, by authority duly given, has caused this Selling Stockholder
Questionnaire to be executed and delivered either in person or by its duly
authorized agent.

 

	
  Dated:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Beneficial Owner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

PLEASE
RETURN THE COMPLETED AND EXECUTED

SELLING STOCKHOLDER QUESTIONNAIRE TO THE COMPANY AT:

 

A-4

 

The
Reader’s Digest Association, Inc.

One
Reader’s Digest Road

Pleasantville,
New York 10570

Attention:
General Counsel

Tel:
(914) 244-5262

Fax:
(914) 244-5644

 

A-5

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