Document:

Exhibit 10.15

 

Execution Version

 

AMENDED AND RESTATED COLLATERAL AGREEMENT

 

AMENDED AND RESTATED COLLATERAL AGREEMENT dated as of June 16, 2011 (the “Amended and Restated Collateral Agreement”), by and among Walden University, LLC, a Florida limited liability company (“Walden”), each other subsidiary of Laureate Education Inc., a Maryland corporation (the “Parent Borrower”), that becomes a party hereto pursuant to Section 8.13 hereof (each a “Title IV Grantor”, and collectively “Title IV Grantors”) and Goldman Sachs Credit Partners L.P. (“GSCP”), as Collateral Agent (in such capacity, and together with any successor or permitted assign, the “Collateral Agent”) under the Amended and Restated Credit Agreement (as defined below) for the benefit of the Secured Parties (which, for the purposes of this Amended and Restated Collateral Agreement, shall include (a) any Secured Party under and as defined in Credit Agreement and (b) any Credit Card Bank (as defined below)).

 

W  I  T  N  E  S  S  E  T  H :

 

WHEREAS, reference is made to that certain Amended and Restated Credit Agreement, which amends and restates that certain Credit Agreement dated as of August 17, 2007 (as supplemented by that certain Joinder Agreement, dated as of September 25, 2009 and as amended by that certain Amendment to Credit Agreement dated as of December 23, 2009, the “Existing Credit Agreement”) and dated as of June 16, 2011 (as it may be amended, restated, supplemented or otherwise modified from time to time, the “Amended and Restated Credit Agreement”), by and among the Parent Borrower, Iniciativas Culturales de España S.L., a Spanish limited liability company (the “Foreign Subsidiary Borrower” and, together with the Parent Borrower, the “Borrowers” and each a “Borrower”), the lenders or other financial institutions or entities from time to time party thereto (the “Lenders”), GSCP, as Administrative Agent, the Collateral Agent and other Agents party thereto;

 

WHEREAS, Walden and GSCP are party to that certain Collateral Agreement, dated as of August 17, 2007 (the “Existing Collateral Agreement”), entered into by Walden and GSCP, as Collateral Agent (together with its permitted successors and permitted assigns in such capacity) under the Existing Credit Agreement;

 

WHEREAS, pursuant to that certain Second Amendment to Credit Agreement dated as of June 16, 2011 (the “Second Amendment”), by and between the Borrowers, the Credit Parties party thereto, the Administrative Agent and the other Lenders and agents party thereto, the Required Lenders have directed the Title IV Grantors to amend and restate the Existing Collateral Agreement in its entirety in the form of this Amended and Restated Collateral Agreement;

 

WHEREAS, (a) pursuant to the Amended and Restated Credit Agreement, the Lenders have severally agreed to make Loans to the Borrowers and the Letter of Credit Issuer has agreed to issue Letters of Credit for the account of the Parent Borrower and the Restricted Subsidiaries (collectively, the “Extensions of Credit”) upon the terms and subject to the conditions set forth therein and (b) one or more Hedge Banks may from time to time enter into Secured Hedge Agreements with the Parent Borrower and/or its Subsidiaries;

 

 

WHEREAS, each Title IV Grantor is an indirect wholly-owned Subsidiary of the Parent Borrower and each Title IV Grantor has agreed to secure the obligations of the Borrowers;

 

WHEREAS, the proceeds of the Extensions of Credit will be used in part to enable the Parent Borrower to make valuable transfers to each Title IV Grantor in connection with the operation of their respective businesses;

 

WHEREAS, each Title IV Grantor acknowledges that it will derive substantial direct and indirect benefit from the making of the Extensions of Credit; and

 

WHEREAS, it is a condition precedent to the obligation of the Lenders and the Letter of Credit Issuer to make their respective Extensions of Credit to the Borrowers under the Amended and Restated Credit Agreement that each Title IV Grantor shall have executed and delivered this Amended and Restated Collateral Agreement to the Collateral Agent for the ratable benefit of the Secured Parties;

 

NOW, THEREFORE, in consideration of the premises and to induce the Administrative Agent, the Collateral Agent, the Lenders and the Letter of Credit Issuer to enter into the Amended and Restated Credit Agreement and to induce the respective Lenders and the Letter of Credit Issuer to make their respective Extensions of Credit to the Borrowers under the Amended and Restated Credit Agreement and to induce one or more Lenders or Affiliates of Lenders to enter into Secured Hedge Agreements with the Parent Borrower and/or its Subsidiaries, each Title IV Grantor hereby agrees with the Collateral Agent, for the benefit of the Secured Parties, to amend and restate the Existing Collateral Agreement, and the Existing Collateral Agreement is hereby amended and restated in its entirety as follows:

 

1.                                      Defined Terms.

 

(a)                                 Unless otherwise defined herein, terms defined in the Amended and Restated Credit Agreement and used herein shall have the meanings given to them in the Amended and Restated Credit Agreement.

 

(b)                                 The following terms shall have the following meanings:

 

“Account” shall have the meaning assigned to such term in Article 9 of the UCC.

 

“Amended and Restated  Collateral Agreement” shall mean this Collateral Agreement, as the same may be amended, supplemented or otherwise modified from time to time.

 

“Collateral” shall have the meaning provided in Section 2.

 

“Collateral Account” shall mean any collateral account established by the Collateral Agent as provided in Section 5.1 or Section 5.3.

 

“Collateral Agent” shall have the meaning provided in the preamble to this Amended and Restated Collateral Agreement.

 

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“Control” shall mean “control,” as such term is defined in Section 9-104 or 9-106, as applicable, of the UCC.

 

“Credit Card Bank” shall mean any Person (other than the Parent Borrower or any of its Subsidiaries) that, with respect to any Credit Card Program that is in effect on the Restatement Effective Date (or any replacement or renewal thereof), is a Lender or Agent or an Affiliate of a Lender or Agent, in its capacity as a party to such Credit Card Program.

 

“Extensions of Credit” shall have the meaning assigned to such term in the recitals hereto.

 

“Pledged Title IV Grantor Copyrights” means (i) all copyright rights in any work subject to the copyright laws of the United States or any other country or group of countries, owned by each Title IV Grantor, and (ii) all registrations and applications for registration of any such copyright in the United States or any other country or group of countries owned by each Title IV Grantor, including those listed on Schedule 2 and (iii) all rights, priorities and privileges relating to the foregoing, and all rights to sue at law or in equity for any past, present or future infringement, or other impairment thereof, including the right to receive all Proceeds therefrom.

 

“Pledged Title IV Grantor Patents” means (a) all letters patent of the United States or the equivalent thereof in any other country, owned by each Title IV Grantor (b) all registrations and recordings thereof owned by each Title IV Grantor, and all applications for letters patent of the United States or the equivalent thereof owned by each Title IV Grantor in any other country, including registrations, recordings and pending applications in the United States Patent and Trademark Office or any similar offices in any other country, and including those listed on Schedule 3, (c) all reissues, continuations, divisions, continuations-in-part or extensions thereof, and the inventions disclosed or claimed therein, including the right to make, have made, use, import and/or sell the inventions disclosed or claimed therein and (d) all rights, priorities and privileges relating to the foregoing, and all rights to sue at law or in equity for any past, present or future infringement, dilution, or other impairment thereof, including the right to receive all Proceeds therefrom.

 

“Pledged Title IV Grantor Trademarks” means (a) all trademarks, service marks, trade names, corporate names, company names, business names, fictitious business names, logos, other source or business identifiers, designs and general intangibles of like nature, now existing or hereafter adopted or acquired, owned by each Title IV Grantor, (b) all registrations thereof, and all applications filed in connection therewith, in each case owned by each Title IV Grantor, including registrations and applications in the United States Patent and Trademark Office or any similar offices in any State of the United States or any other country or any political subdivision thereof, and all extensions or renewals thereof, including those listed on Schedule 1, (c) all goodwill associated with or symbolized by the foregoing and (d) all rights, priorities and privileges relating to the foregoing, and all rights to sue at law or in equity for any past, present or future infringement, dilution, or other impairment thereof, including the right to receive all Proceeds therefrom.

 

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“Pledged US Receivables” means all the Accounts of each Title IV Grantor (other than Title IV Student Loans).

 

“Proceeds” shall mean all “proceeds” as such term is defined in Article 9 of the UCC.

 

“Secured Obligations” shall mean (i) Obligations and (ii) all advances to, and debts, liabilities, obligations, covenants and duties of, each Title IV Grantor arising under (x) any purchasing card program established to enable headquarters and field staff of each Title IV Grantor to purchase goods and supplies from vendors and (y) any travel and entertainment card program established to enable headquarters and field staff of each Title IV Grantor to make payments for expenses incurred related to travel and entertainment (collectively, “Credit Card Program”) entered into in the ordinary course of business by and between each Title IV Grantor and a Credit Card Bank; provided that the aggregate principal amount of the obligations secured pursuant to clause (ii) shall at no time exceed $2,000,000.

 

“Security Interest” shall have the meaning provided in Section 2.

 

“Title IV Grantor” shall have the meaning assigned to such term in the recitals hereto.

 

“Title IV Student Loans” means student loans made (and guaranteed by the US Department of Education or one or more State guaranty agencies) pursuant to Title IV of the Higher Education Act of 1965 (Pub. L. 89-329) or related accounts receivable or interests therein.

 

“UCC” shall mean the Uniform Commercial Code as from time to time in effect in the State of New York; provided, however, that, in the event that, by reason of mandatory provisions of law, any of the attachment, perfection or priority of the Collateral Agent’s and the Secured Parties’ security interest in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, the term “UCC” shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such attachment, perfection or priority and for purposes of definitions related to such provisions.

 

(c)                                  The words “hereof”, “herein”, “hereto” and “hereunder” and words of similar import when used in this Amended and Restated Collateral Agreement shall refer to this Amended and Restated Collateral Agreement as a whole and not to any particular provision of this Amended and Restated Collateral Agreement, and Section, subsection, clause and Schedule references are to this Amended and Restated Collateral Agreement unless otherwise specified.  The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”.

 

(d)                                 The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.

 

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(e)                                  Where the context requires, terms relating to the Collateral or any part thereof, when used in relation to each Title IV Grantor, shall refer to each Title IV Grantor’s Collateral or the relevant part thereof.

 

(f)                                   References to “Lenders” in this Amended and Restated Collateral Agreement shall be deemed to include Affiliates of any Lender that may from time to time enter into Secured Hedge Agreements with the Parent Borrower and/or its Subsidiaries.

 

2.                                      Grant of Security Interest.

 

(a)                                 Each Title IV Grantor hereby bargains, sells, conveys, assigns, sets over, mortgages, pledges, hypothecates and transfers to the Collateral Agent, for the ratable benefit of the Secured Parties, and grants to the Collateral Agent, for the ratable benefit of the Secured Parties, a lien on and security interest in (the “Security Interest”), all of its right, title and interest in, to and under all of the following property now owned or at any time hereafter acquired by each Title IV Grantor or in which each Title IV Grantor now has or at any time in the future may acquire any right, title or interest (collectively, the “Collateral”), as collateral security for the prompt and complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of the Secured Obligations:

 

(i)                  all Pledged US Receivables;

 

(ii)               all Pledged Title IV Grantor Trademarks;

 

(iii)            all Pledged Title IV Grantor Copyrights;

 

(iv)           all Pledged Title IV Grantor Patents;

 

(v)              all books and records pertaining to the Collateral; and

 

(vi)           to the extent not otherwise included, all Proceeds and products of any and all of the foregoing and all collateral security and guarantees given by any Person with respect to the foregoing.

 

provided, (x) that none of the items included in clauses (i) through (iv) above shall constitute Collateral to the extent (and only to the extent) that the grant of the Security Interest therein would violate any Requirement of Law applicable to such Collateral (other than to the extent that any such Requirement of Law would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the UCC (or any successor provision or provisions) of any relevant jurisdiction or any other applicable law) and (y) the Collateral shall not include any “intent-to-use” Pledged Title IV Grantor Trademark application prior to the filing of and acceptance by the United States Patent and Trademark Office of a “Statement of Use” or “Amendment to Allege Use” with respect thereto, to the extent, if any, that, solely during the period, if any, in which the grant of a security interest therein would impair the validity or enforceability of any registration issuing from such “intent-to-use” Pledged Title IV Grantor Trademark application under applicable federal law.

 

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(b)                                 Each Title IV Grantor hereby irrevocably authorizes the Collateral Agent and its Affiliates, counsel and other representatives, at any time and from time to time, to file or record financing statements, amendments to financing statements and, with notice to the Parent Borrower, and other filing or recording documents or instruments with respect to the Collateral in such form and in such offices as the Collateral Agent reasonably determines appropriate to perfect the Security Interests of the Collateral Agent under this Amended and Restated Collateral Agreement.  Each Title IV Grantor hereby also authorizes the Collateral Agent and its Affiliates, counsel and other representatives, at any time and from time to time, to file continuation statements with respect to previously filed financing statements.  A photographic or other reproduction of this Amended and Restated Collateral Agreement shall be sufficient as a financing statement or other filing or recording document or instrument for filing or recording in any jurisdiction to the Collateral Agent.

 

Each Title IV Grantor hereby agrees to provide to the Collateral Agent, promptly upon request, any information reasonably necessary to effectuate the filings or recordings authorized by this Section 2(b), including the filings in the United States Patent and Trademark Office and United States Copyright Office referred to below.

 

The Collateral Agent is further authorized to file with the United States Patent and Trademark Office or United States Copyright Office (or any successor office or any similar office in any other country) such documents as may be necessary or advisable for the purpose of perfecting, confirming, continuing, enforcing or protecting the Security Interest granted hereunder by each Title IV Grantor and naming each Title IV Grantor as debtor and the Collateral Agent as secured party, provided that, at the reasonable request of the Collateral Agent, each Title IV Grantor agrees to execute any such documents to be so filed.

 

The Security Interests are granted as security only and shall not subject the Collateral Agent or any other Secured Party to, or in any way alter or modify, any obligation or liability of each Title IV Grantor with respect to or arising out of the Collateral.

 

3.                                      Representations and Warranties.  Each Title IV Grantor hereby represents and warrants to the Collateral Agent and each Secured Party on the date hereof that:

 

3.1                              Title; No Other Liens.  Except for (a) the Security Interest granted to the Collateral Agent for the benefit of the Secured Parties pursuant to this Amended and Restated Collateral Agreement, (b) the Liens permitted by the Amended and Restated Credit Agreement and (c) any Liens securing Indebtedness which is no longer outstanding or any Liens with respect to commitments to lend which have been terminated, each Title IV Grantor owns each item of the Collateral free and clear of any and all Liens or claims of others.  No security agreement, financing statement or other public notice with respect to all or any part of the Collateral that evidences a Lien securing any material Indebtedness is on file or of record in any public office, except such as (i) have been filed in favor of the Collateral Agent for the ratable benefit of the Secured Parties pursuant to this Amended and Restated Collateral Agreement or (ii) are permitted by the Amended and Restated Credit Agreement.

 

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3.2                              Perfected First Priority Liens.

 

(a)                                 This Amended and Restated Collateral Agreement is effective to create in favor of the Collateral Agent, for its benefit and for the benefit of the Secured Parties, legal, valid and enforceable Security Interests in the Collateral, subject to the effects of bankruptcy, insolvency or similar laws affecting creditors’ rights generally and general equitable principles.

 

(b)                                 Subject to the limitations set forth in clause (c) of this Section 3.2, the Security Interests granted pursuant to this Amended and Restated Collateral Agreement (i) will constitute valid and perfected Security Interests in the Collateral (as to which perfection may be obtained by the filings or other actions described in clause (A), or (B) of this paragraph) in favor of the Collateral Agent, for the ratable benefit of the Secured Parties, as collateral security for the Secured Obligations, upon (A) the filing in the applicable filing offices listed on Schedule I hereto of all financing statements, in each case, naming each Title IV Grantor as “debtor” and the Collateral Agent as “secured party” and describing the Collateral and (B) completion of the filing, registration and recording of a fully executed agreement in the form hereof (or a supplement hereto) and containing a description of all Collateral constituting (1) Pledged Title IV Grantor Patents and Pledged Title IV Grantor Trademark registrations and applications in the United States Patent and Trademark Office (or any successor office) within the three month period (commencing as of the date hereof) or, in the case of Collateral constituting Pledged Title IV Grantor Patents and Pledged Title IV Grantor Trademark registrations and applications acquired after the date hereof, thereafter pursuant to 35 USC § 261 and 15 USC § 1060 and the regulations thereunder, and (2) Pledged Title IV Grantor Copyright registrations in the United States Copyright Office (or any successor office) within the one month period (commencing as of the date hereof) or, in the case of Collateral constituting Pledged Title IV Grantor Copyright registrations acquired after the date hereof, thereafter pursuant to 17 USC § 205 and the regulations thereunder, and otherwise as may be required pursuant to the laws of any other necessary jurisdiction to the extent that a security interest may be perfected by such filings, registrations and recordings, and (ii) are prior to all other Liens on the Collateral other than Liens permitted pursuant to Section 10.2 of the Amended and Restated Credit Agreement.

 

(c)                                  Notwithstanding anything to the contrary herein, no Title IV Grantor shall be required to perfect the Security Interests granted by this Amended and Restated Collateral Agreement by any means other than by (i) filings pursuant to the Uniform Commercial Code of the relevant State(s) and (ii) filings in the United States Patent and Trademark Office, United States Copyright Office, or successor offices, that are necessary or advisable for the purpose of perfecting, confirming, enforcing, or protecting the Security Interests granted in the Pledged Title IV Grantor Patents, Pledged Title IV Grantor Trademark registrations and applications and Pledged Title IV Grantor Copyright registrations.

 

3.3                              Title IV Grantor Information.

 

Schedule II hereto sets forth under the appropriate headings as of the Closing Date: (1) the full legal name of each Title IV Grantor, (2) to the knowledge of each Title IV Grantor, all trade names or other names under which each Title IV Grantor currently conducts business, (3) the type of organization of each Title IV Grantor, (4) the jurisdiction of organization

 

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of each Title IV Grantor, (5) its organizational identification number, if any, and (6) the jurisdiction where the chief executive office of each Title IV Grantor is located.

 

3.4                              Pledged Title IV Grantor Patents, Pledged Title IV Grantor Trademark registrations and applications and Pledged Title IV Grantor Copyright registrations.

 

Schedule 1 hereto sets forth, in proper form for filing with the United States Patent and Trademark Office, all United States Trademark registrations and applications owned by each Title IV Grantor.  Schedule 2 hereto sets forth, in proper form for filing with the United States Copyright Office, all United States Copyright registrations owned by each Title IV Grantor.  Schedule 3 sets forth, in proper form for filing with the United States Patent and Trademark Office, all United States issued Patents and Patent applications owned by each Title IV Grantor.

 

4.                                      Covenants.  Each Title IV Grantor hereby covenants and agrees with the Collateral Agent and the Secured Parties that, from and after the date of this Amended and Restated Collateral Agreement until the Secured Obligations (except for contingent indemnification obligations in respect of which a claim has not yet been made) are paid in full, the Commitments are terminated and no Letter of Credit remains outstanding:

 

4.1                              Maintenance of Perfected Security Interest; Further Documentation.

 

(a)                                 Each Title IV Grantor shall maintain the Security Interest created by this Amended and Restated Collateral Agreement as a perfected Security Interest having at least the priority described in Section 3.1 and shall defend such Security Interest against the claims and demands of all Persons whomsoever, in each case subject to Section 3.2(c).

 

(b)                                 Each Title IV Grantor will furnish to the Collateral Agent and the Lenders from time to time statements and schedules further identifying and describing the assets and property of each Title IV Grantor and such other reports in connection therewith as the Collateral Agent may reasonably request.

 

(c)                                  Subject to clause (d) below and Section 3.2(c), each Title IV Grantor agrees that at anytime and from time to time, at the expense of each Title IV Grantor, it will execute any and all further documents, financing statements, agreements and instruments, and take all such further actions (including the filing and recording of financing statements and other documents, including all applicable documents described in Section 3.2(b)(i)(B)), which may be required under any applicable law, or which the Collateral Agent or the Required Lenders may reasonably request, in order (i) to grant, preserve, protect and perfect the validity and priority of the Security Interests created or intended to be created hereby or (ii) to enable the Collateral Agent to exercise and enforce its rights and remedies hereunder with respect to any Collateral, including the filing of any financing or continuation statements under the Uniform Commercial Code in effect in any jurisdiction with respect to the Security Interests created hereby and all applicable documents described in Section 3.2(b)(i)(B), all at the expense of each Title IV Grantor.

 

(d)                                 Notwithstanding anything in this Section 4.1 to the contrary, (i) with respect to any assets created or acquired by each Title IV Grantor after the date hereof that are 

 

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required by the Amended and Restated Credit Agreement to be subject to the Lien created hereby or (ii) with respect to any Person that, subsequent to the date hereof, becomes a Subsidiary that is required by the Amended and Restated Credit Agreement to become a party hereto, the relevant Title IV Grantor after the acquisition or creation thereof shall promptly take all actions required by the Amended and Restated Credit Agreement, this Section 4.1 or Section 4.5 below.

 

4.2                              Damage or Destruction of Collateral.    Each Title IV Grantor agrees promptly to notify the Collateral Agent if any material portion of the Collateral is damaged or destroyed.

 

4.3                              Notices.  Each Title IV Grantor will advise the Collateral Agent and the Lenders promptly, in reasonable detail, of any Lien of which it has knowledge (other than the Security Interests created hereby or Liens permitted under the Amended and Restated Credit Agreement) on any of the Collateral which would adversely affect, in any material respect, the ability of the Collateral Agent to exercise any of its remedies hereunder.

 

4.4                              Changes in Title IV Grantor Information or Status.  Without limiting any prohibitions or restrictions on mergers or other transactions set forth in the Amended and Restated Credit Agreement, each Title IV Grantor shall not change its name, identity, corporate structure (e.g. by merger, consolidation, change in corporate form or otherwise), type of organization or jurisdiction of organization, unless it shall have (a) notified the Collateral Agent in writing at least ten (10) days prior to any such change (or such later date as is reasonably acceptable to the Collateral Agent) identifying such new proposed name, identity, corporate structure, type of organization or jurisdiction of organization and providing such other information in connection therewith as the Collateral Agent may reasonably request and (b) taken all actions necessary or advisable to maintain the continuous validity, perfection and the same or better priority of the Collateral Agent’s Security Interest in the Collateral granted or intended to be granted and agreed to hereby.

 

4.5                              Acquisition of Additional Issuances of and Applications for Pledged Title IV Grantor Patents, Additional Pledged Title IV Grantor Trademark registrations and applications and Additional Pledged Title IV Grantor Copyright registrations.  Within 30 days after the end of each calendar quarter each Title IV Grantor shall provide a list of any additional (i) applications for or issuances of Pledged Title IV Grantor Patents, (ii) applications for or registrations of Pledged Title IV Grantor Trademarks, and (iii) registrations of Pledged Title IV Grantor Copyrights, in each case owned by each Title IV Grantor and not previously disclosed to the Collateral Agent including such information as is necessary for Title IV Grantor to make appropriate filings in the United States Patent and Trademark Office and the United States Copyright Office.

 

5.                                      Remedial Provisions.

 

5.1                               Certain Matters Relating to Accounts.

 

(a)                                 At any time after the occurrence and during the continuance of an Event of Default and after giving reasonable notice to the Parent Borrower and any other relevant Title IV Grantor, the Administrative Agent shall have the right, but not the obligation, to instruct the 

 

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Collateral Agent to (and upon such instruction, the Collateral Agent shall) make test verifications of the Accounts in any manner and through any medium that the Administrative Agent reasonably considers advisable, and each Title IV Grantor shall furnish all such assistance and information as such Agent may require in connection with such test verifications.  Such Agent shall have the absolute right to share any information it gains from such inspection or verification with any Secured Party.

 

(b)                                 The Collateral Agent hereby authorizes each Title IV Grantor to collect each Title IV Grantor’s Accounts and the Collateral Agent may curtail or terminate said authority at any time after the occurrence and during the continuance of an Event of Default.  If required in writing by the Collateral Agent at any time after the occurrence and during the continuance of an Event of Default, any payments of Accounts, when collected by each Title IV Grantor, (i) shall be forthwith (and, in any event, within two Business Days) deposited by each Title IV Grantor in the exact form received, duly endorsed by each Title IV Grantor to the Collateral Agent if required, in a Collateral Account maintained under the sole dominion and control of and on terms and conditions reasonably satisfactory to the Collateral Agent, subject to withdrawal by the Collateral Agent for the account of the Secured Parties only as provided in Section 5.5, and (ii) until so turned over, shall be held by each Title IV Grantor in trust for the Collateral Agent and the Secured Parties, segregated from other funds of each Title IV Grantor.  Each such deposit of Proceeds of Accounts shall be accompanied by a report identifying in reasonable detail the nature and source of the payments included in the deposit.

 

(c)                                  At the Collateral Agent’s request at any time after the occurrence and during the continuance of an Event of Default, each Title IV Grantor shall deliver to the Collateral Agent all original and other documents evidencing, and relating to, the agreements and transactions which gave rise to the Accounts, including all original orders, invoices and shipping receipts.

 

(d)                                 Upon the occurrence and during the continuance of an Event of Default, each Title IV Grantor shall not grant any extension of the time of payment of any of the Accounts, compromise, compound or settle the same for less than the full amount thereof, release, wholly or partly, any Person liable for the payment thereof, or allow any credit or discount whatsoever thereon if the Collateral Agent shall have instructed each Title IV Grantor not to grant or make any such extension, credit, discount, compromise or settlement under any circumstances during the continuance of such Event of Default.

 

5.2                              Communications with Credit Parties; Title IV Grantor Remains Liable.

 

(a)                                 The Collateral Agent in its own name or in the name of others may at any time after the occurrence and during the continuance of an Event of Default, after giving reasonable notice to the relevant Title IV Grantor of its intent to do so, communicate with obligors under the Accounts to verify with them to the Collateral Agent’s satisfaction the existence, amount and terms of any Accounts.  The Collateral Agent shall have the absolute right to share any information it gains from such inspection or verification with any Secured Party.

 

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(b)                                 Upon the written request of the Collateral Agent at any time after the occurrence and during the continuance of an Event of Default, each Title IV Grantor shall notify obligors on the Accounts that the Accounts have been assigned to the Collateral Agent for the ratable benefit of the Secured Parties and that payments in respect thereof shall be made directly to the Collateral Agent.

 

(c)                                  Anything herein to the contrary notwithstanding, each Title IV Grantor shall remain liable under each of the Accounts to observe and perform all the conditions and obligations to be observed and performed by it thereunder, all in accordance with the terms of any agreement giving rise thereto.  Neither the Collateral Agent nor any Secured Party shall have any obligation or liability under any Account (or any agreement giving rise thereto) by reason of or arising out of this Amended and Restated Collateral Agreement or the receipt by the Collateral Agent or any Secured Party of any payment relating thereto, nor shall the Collateral Agent or any Secured Party be obligated in any manner to perform any of the obligations of each Title IV Grantor under or pursuant to any Account (or any agreement giving rise thereto), to make any payment, to make any inquiry as to the nature or the sufficiency of any payment received by it or as to the sufficiency of any performance by any party thereunder, to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts which may have been assigned to it or to which it may be entitled at any time or times.

 

5.3                                Proceeds to be Turned Over To Collateral Agent.  In addition to the rights of the Collateral Agent and the Secured Parties specified in Section 5.1 with respect to payments of Accounts, if an Event of Default shall occur and be continuing and the Collateral Agent so requires by notice in writing to the relevant Title IV Grantor (it being understood that the exercise of remedies by the Secured Parties in connection with an Event of Default under Section 11.5 of the Amended and Restated Credit Agreement shall be deemed to constitute a request by the Collateral Agent for the purposes of this sentence and in such circumstances, no such written notice shall be required), all Proceeds received by each Title IV Grantor consisting of cash, checks and other near cash items shall be held by each Title IV Grantor in trust for the Collateral Agent and the Secured Parties, segregated from other funds of each Title IV Grantor, and shall, forthwith upon receipt by each Title IV Grantor, be turned over to the Collateral Agent in the exact form received by each Title IV Grantor (duly endorsed by each Title IV Grantor to the Collateral Agent, if required).  All Proceeds received by the Collateral Agent hereunder shall be held by the Collateral Agent in a Collateral Account maintained under its dominion and control and on terms and conditions reasonably satisfactory to the Collateral Agent.  All Proceeds while held by the Collateral Agent in a Collateral Account (or by each Title IV Grantor in trust for the Collateral Agent and the Secured Parties) shall continue to be held as collateral security for all the Secured Obligations and shall not constitute payment thereof until applied as provided in Section 5.4.

 

5.4                                Application of Proceeds.  The Collateral Agent shall apply the proceeds of any collection or sale of the Collateral as well as any Collateral consisting of cash, at any time after receipt in the order specified in Section 11 of the Amended and Restated Credit Agreement.  Upon any sale of the Collateral by the Collateral Agent (including pursuant to a power of sale granted by statute or under a judicial proceeding), the receipt of the Collateral Agent or of the officer making the sale shall be a sufficient discharge to the purchaser or purchasers of the

 

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Collateral so sold and such purchaser or purchasers shall not be obligated to see to the application of any part of the purchase money paid over to the Collateral Agent or such officer or be answerable in any way for the misapplication thereof.

 

5.5                                Code and Other Remedies.  If an Event of Default shall occur and be continuing, the Collateral Agent may exercise in respect of the Collateral, in addition to all other rights and remedies provided for herein or otherwise available to it, all the rights and remedies of a secured party upon default under the UCC or any other applicable law or in equity and also may with notice to the relevant Title IV Grantor, sell the Collateral or any part thereof in one or more parcels at public or private sale or sales, at any exchange, broker’s board or office of the Collateral Agent or any Lender or elsewhere for cash or on credit or for future delivery at such price or prices and upon such other terms as are commercially reasonable irrespective of the impact of any such sales on the market price of the Collateral.  The Collateral Agent shall be authorized at any such sale (if it deems it advisable to do so) to restrict the prospective bidders or purchasers of Collateral to Persons who will represent and agree that they are purchasing the Collateral for their own account for investment and not with a view to the distribution or sale thereof, and, upon consummation of any such sale, the Collateral Agent shall have the right to assign, transfer and deliver to the purchaser or purchasers thereof the Collateral so sold.  Each purchaser at any such sale shall hold the property sold absolutely free from any claim or right on the part of each Title IV Grantor, and each Title IV Grantor hereby waives (to the extent permitted by law) all rights of redemption, stay and/or appraisal that it now has or may at any time in the future have under any rule of law or statute now existing or hereafter enacted.  The Collateral Agent and any Secured Party shall have the right upon any such public sale, and, to the extent permitted by law, upon any such private sale, to purchase the whole or any part of the Collateral so sold, and the Collateral Agent or such Secured Party may pay the purchase price by crediting the amount thereof against the Secured Obligations.  Each Title IV Grantor agrees that, to the extent notice of sale shall be required by law, at least ten days’ notice to each Title IV Grantor of the time and place of any public sale or the time after which any private sale is to be made shall constitute reasonable notification.  The Collateral Agent shall not be obligated to make any sale of Collateral regardless of notice of sale having been given.  The Collateral Agent may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned.  To the extent permitted by law, each Title IV Grantor hereby waives any claim against the Collateral Agent arising by reason of the fact that the price at which any Collateral may have been sold at such a private sale was less than the price that might have been obtained at a public sale, even if the Collateral Agent accepts the first offer received and does not offer such Collateral to more than one offeree.  Each Title IV Grantor further agrees, at the Collateral Agent’s request to assemble the Collateral and make it available to the Collateral Agent, at places which the Collateral Agent shall reasonably select, whether at each Title IV Grantor’s premises or elsewhere.  The Collateral Agent shall apply the net proceeds of any action taken by it pursuant to this Section 5.5 in accordance with the provisions of Section 5.4.

 

5.6                                Amendments, etc. with Respect to the Secured Obligations; Waiver of Rights.  Each Title IV Grantor shall remain obligated hereunder notwithstanding that, without any reservation of rights against each Title IV Grantor and without notice to or further assent by each Title IV Grantor, (a) any demand for payment of any of the Secured Obligations made by

 

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the Collateral Agent or any other Secured Party may be rescinded by such party and any of the Secured Obligations continued, (b) the Secured Obligations, or the liability of any other party upon or for any part thereof, or any collateral security or guarantee therefor or right of offset with respect thereto, may, from time to time, in whole or in part, be renewed, extended, amended, modified, accelerated, compromised, waived, surrendered or released by the Collateral Agent or any other Secured Party, (c) the Amended and Restated Credit Agreement, the other Credit Documents, the Letters of Credit and any other documents executed and delivered in connection therewith and the Secured Hedge Agreements and any other documents executed and delivered in connection therewith may be amended, modified, supplemented or terminated, in whole or in part, as the Administrative Agent (or the Required Lenders, as the case may be, or, in the case of any Secured Hedge Agreement, the Hedge Bank party thereto) may deem advisable from time to time, and (d) any collateral security, guarantee or right of offset at any time held by the Collateral Agent or any other Secured Party for the payment of the Secured Obligations may be sold, exchanged, waived, surrendered or released.  Neither the Collateral Agent nor any other Secured Party shall have any obligation to protect, secure, perfect or insure any Lien at any time held by it as security for the Secured Obligations or for this Amended and Restated Collateral Agreement or any property subject thereto.  When making any demand hereunder against each Title IV Grantor, the Collateral Agent or any other Secured Party may, but shall be under no obligation to, make a similar demand on each Title IV Grantor or any other Person, and any failure by the Collateral Agent or any other Secured Party to make any such demand or to collect any payments from any Parent Borrower or each Title IV Grantor or any other Person or any release of any Parent Borrower or each Title IV Grantor or any other Person shall not relieve each Title IV Grantor in respect of which a demand or collection is not made or each Title IV Grantor not so released of its several obligations or liabilities hereunder, and shall not impair or affect the rights and remedies, express or implied, or as a matter of law, of the Collateral Agent or any other Secured Party against each Title IV Grantor.  For the purposes hereof “demand” shall include the commencement and continuance of any legal proceedings.

 

5.7                                License to Use Pledged Title IV Grantor Patents, Pledged Title IV Grantor Trademarks and Pledged Title IV Grantor Copyrights.   For the purpose of enabling the Collateral Agent, during the continuance of an Event of Default, to exercise rights and remedies hereunder at such time as the Collateral Agent shall be lawfully entitled to exercise such rights and remedies, and for no other purpose, each Title IV Grantor hereby grants to the Collateral Agent, to the extent each Title IV Grantor has the right to do so, an irrevocable, assignable, non-exclusive license to use, license or sublicense any of the Pledged Title IV Grantor Patents, Pledged Title IV Grantor Trademarks and Pledged Title IV Grantor Copyrights now owned or held, or hereafter acquired, by each Title IV Grantor, wherever the same may be located.  To the extent permitted, such license shall include access to all media in which any of the licensed items may be recorded or stored and to all computer programs used for the compilation or printout hereof.

 

6.                                       The Collateral Agent.

 

6.1                                Collateral Agent’s Appointment as Attorney-in-Fact, etc.

 

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(a)                                  Each Title IV Grantor hereby appoints, which appointment is irrevocable and coupled with an interest, effective upon the occurrence and during the continuance of an Event of Default, the Collateral Agent and any officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of each Title IV Grantor and in the name of each Title IV Grantor or otherwise, for the purpose of carrying out the terms of this Amended and Restated Collateral Agreement, to take any and all appropriate action and to execute any and all documents and instruments that may be necessary or desirable to accomplish the purposes of this Amended and Restated Collateral Agreement, and, without limiting the generality of the foregoing, each Title IV Grantor hereby gives the Collateral Agent the power and right, on behalf of each Title IV Grantor, either in the Collateral Agent’s name or in the name of each Title IV Grantor or otherwise, without assent by each Title IV Grantor, to do any or all of the following, in each case after the occurrence and during the continuance of an Event of Default and after written notice by the Collateral Agent of its intent to do so:

 

(i)                  take possession of and endorse and collect any checks, drafts, notes, acceptances or other instruments for the payment of moneys due under any Account or with respect to any other Collateral and file any claim or take any other action or proceeding in any court of law or equity or otherwise deemed appropriate by the Collateral Agent for the purpose of collecting any and all such moneys due under any Account or with respect to any other Collateral whenever payable;

 

(ii)               in the case of any Pledged Title IV Grantor Patents, Pledged Title IV Grantor Trademarks or Pledged Title IV Grantor Copyrights, execute and deliver, and have recorded, any and all agreements, instruments, documents and papers as the Collateral Agent may reasonably request to evidence the Collateral Agent’s and the Secured Parties’ Security Interest in such Pledged Title IV Grantor Patents, Pledged Title IV Grantor Trademarks or Pledged Title IV Grantor Copyrights;

 

(iii)            pay or discharge taxes and Liens levied or placed on or threatened against the Collateral;

 

(iv)           execute, in connection with any sale provided for in Section 5.5, any endorsements, assignments or other instruments of conveyance or transfer with respect to the Collateral;

 

(v)              obtain and adjust insurance required to be maintained by each Title IV Grantor pursuant to Section 9.3 of the Amended and Restated Credit Agreement;

 

(vi)           direct any party liable for any payment under any of the Collateral to make payment of any and all moneys due or to become due thereunder directly to the Collateral Agent or as the Collateral Agent shall direct;

 

(vii)        ask or demand for, collect and receive payment of and receipt for, any and all moneys, claims and other amounts due or to become due at any time in respect of or arising out of any Collateral;

 

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(viii)     sign and endorse any invoices, freight or express bills, bills of lading, storage or warehouse receipts, drafts against debtors, assignments, verifications, notices and other documents in connection with any of the Collateral;

 

(ix)             commence and prosecute any suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect the Collateral or any portion thereof and to enforce any other right in respect of any Collateral;

 

(x)                defend any suit, action or proceeding brought against each Title IV Grantor with respect to any Collateral (with each Title IV Grantor’s consent to the extent such action or its resolution could materially affect each Title IV Grantor or any of its Affiliates in any manner other than with respect to its continuing rights in such Collateral);

 

(xi)             settle, compromise or adjust any such suit, action or proceeding and, in connection therewith, give such discharges or releases as the Collateral Agent may deem appropriate (with each Title IV Grantor’s consent to the extent such action or its resolution could materially affect each Title IV Grantor or any of its Affiliates in any manner other than with respect to its continuing rights in such Collateral);

 

(xii)          assign any Pledged Title IV Grantor Patents, Pledged Title IV Grantor Trademarks or Pledged Title IV Grantor Copyrights, throughout the world for such term or terms, on such conditions, and in such manner, as the Collateral Agent shall in its sole discretion determine; and

 

(xiii)       generally, sell, transfer, pledge and make any agreement with respect to or otherwise deal with any of the Collateral as fully and completely as though the Collateral Agent were the absolute owner thereof for all purposes, and do, at the Collateral Agent’s option and each Title IV Grantor’s expense, at any time, or from time to time, all acts and things that the Collateral Agent deems necessary to protect, preserve or realize upon the Collateral and the Collateral Agent’s and the Secured Parties’ Security Interests therein and to effect the intent of this Amended and Restated Collateral Agreement, all as fully and effectively as each Title IV Grantor might do.

 

Anything in this Section 6.1(a) to the contrary notwithstanding, the Collateral Agent agrees that (i) it will not exercise any rights under the power of attorney provided for in this Section 6.1(a) unless an Event of Default shall have occurred and be continuing; and (ii) no United States “intent-to-use” trademark or servicemark applications shall be assigned to the Collateral Agent or any third party until an amendment to allege use or a statement of use has been filed under 15 U.S.C. § 1501(d) and accepted by the United States Patent and Trademark Office, except to a successor to the business (or the portion of the business) to which the mark pertains, if that business is ongoing and existing.

 

(b)                                 If each Title IV Grantor fails to perform or comply with any of its agreements contained herein, the Collateral Agent, at its option, but without any obligation so to do, may perform or comply, or otherwise cause performance or compliance, with such agreement.

 

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(c)                                  The expenses of the Collateral Agent incurred in connection with actions undertaken as provided in this Section 6.1, together with interest thereon at a rate per annum equal to the highest rate per annum at which interest would then be payable on any category of past due ABR Loans under the Amended and Restated Credit Agreement, from the date of payment by the Collateral Agent to the date reimbursed by the relevant Title IV Grantor, shall be payable by each Title IV Grantor to the Collateral Agent on demand.

 

(d)                                 Each Title IV Grantor hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue hereof.  All powers, authorizations and agencies contained in this Amended and Restated Collateral Agreement are coupled with an interest and are irrevocable until this Amended and Restated Collateral Agreement is terminated and the Security Interests created hereby are released.

 

6.2                                Duty of Collateral Agent.  The Collateral Agent’s sole duty with respect to the custody, safekeeping and physical preservation of the Collateral in its possession, under Section 9-207 of the UCC or otherwise, shall be to deal with it in the same manner as the Collateral Agent deals with similar property for its own account.  The Collateral Agent shall be deemed to have exercised reasonable care in the custody and preservation of any Collateral in its possession if such Collateral is accorded treatment substantially equal to that which the Collateral Agent accords its own property.  Neither the Collateral Agent, any Secured Party nor any of their respective officers, directors, employees or agents shall be liable for failure to demand, collect or realize upon any of the Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of each Title IV Grantor or any other Person or to take any other action whatsoever with regard to the Collateral or any part thereof.  The powers conferred on the Collateral Agent and the Secured Parties hereunder are solely to protect the Collateral Agent’s and the Secured Parties’ interests in the Collateral and shall not impose any duty upon the Collateral Agent or any Secured Party to exercise any such powers.  The Collateral Agent and the Secured Parties shall be accountable only for amounts that they actually receive as a result of the exercise of such powers, and neither they nor any of their officers, directors, employees or agents shall be responsible to each Title IV Grantor for any act or failure to act hereunder, except for their own gross negligence or willful misconduct.

 

6.3                                Authority of Collateral Agent.  Each Title IV Grantor acknowledges that the rights and responsibilities of the Collateral Agent under this Amended and Restated Collateral Agreement with respect to any action taken by the Collateral Agent or the exercise or non-exercise by the Collateral Agent of any option, voting right, request, judgment or other right or remedy provided for herein or resulting or arising out of this Amended and Restated Collateral Agreement shall, as between the Collateral Agent and the Secured Parties, be governed by the Amended and Restated Credit Agreement, and by such other agreements with respect thereto as may exist from time to time among them, but, as between the Collateral Agent and each Title IV Grantor, the Collateral Agent shall be conclusively presumed to be acting as agent for the applicable Secured Parties with full and valid authority so to act or refrain from acting, and no Title IV Grantor shall be under any obligation, or entitlement, to make any inquiry respecting such authority.

 

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6.4                                Security Interest Absolute.  All rights of the Collateral Agent hereunder, the Security Interest and all obligations of each Title IV Grantor hereunder shall be absolute and unconditional.

 

6.5                                Continuing Security Interest; Assignments Under the Amended and Restated Credit Agreement; Release.

 

(a)                                  This Amended and Restated Collateral Agreement shall remain in full force and effect and be binding in accordance with and to the extent of its terms upon each Title IV Grantor and the successors and assigns thereof and shall inure to the benefit of the Collateral Agent and the other Secured Parties and their respective successors, indorsees, transferees and assigns until all Secured Obligations under the Credit Documents (other than any contingent indemnity obligations not then due) and the obligations of each Title IV Grantor under this Amended and Restated Collateral Agreement shall have been satisfied by payment in full, the Commitments shall be terminated and no Letters of Credit shall be outstanding (or all such Letters of Credit shall have been Cash Collateralized), notwithstanding that from time to time during the term of the Amended and Restated Credit Agreement and any Secured Hedge Agreement the Credit Parties may be free from any Secured Obligations.

 

(b)                                 Each Title IV Grantor shall automatically be released from its obligations hereunder if it ceases to be a Credit Party in accordance with Section 14.1 of the Amended and Restated Credit Agreement.

 

(c)                                  The Security Interest granted hereby in any Collateral shall automatically be released (i) to the extent provided in Section 14.1 of the Amended and Restated Credit Agreement and (ii) upon the effectiveness of any written consent to the release of the Security Interest granted hereby in such Collateral pursuant to Section 14.1 of the Amended and Restated Credit Agreement.  Any such release in connection with any sale, transfer or other disposition of such Collateral shall result in such Collateral being sold, transferred or disposed of, as applicable, free and clear of the Lien and Security Interest created hereby.

 

(d)                                 In connection with any termination or release pursuant to paragraph (a), (b) or (c), the Collateral Agent shall execute and deliver to each Title IV Grantor, at each Title IV Grantor’s expense, all documents that each Title IV Grantor shall reasonably request to evidence such termination or release.  Any execution and delivery of documents pursuant to this Section 6.5 shall be without recourse to or warranty by the Collateral Agent.

 

6.6                                Reinstatement.  Each Title IV Grantor further agrees that, if any payment made by any Credit Party or other Person and applied to the Secured Obligations is at any time annulled, avoided, set aside, rescinded, invalidated, declared to be fraudulent or preferential or otherwise required to be refunded or repaid, or the proceeds of Collateral are required to be returned by any Secured Party to such Credit Party, its estate, trustee, receiver or any other party, including each Title IV Grantor, under any bankruptcy law, state or federal law, common law or equitable cause, then, to the extent of such payment or repayment, any Lien or other Collateral securing such liability shall be and remain in full force and effect, as fully as if such payment had never been made or, if prior thereto the Lien granted hereby or other Collateral securing such

 

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liability hereunder shall have been released or terminated by virtue of such cancellation or surrender), such Lien or other Collateral shall be reinstated in full force and effect, and such prior cancellation or surrender shall not diminish, release, discharge, impair or otherwise affect any Lien or other Collateral securing the obligations of each Title IV Grantor in respect of the amount of such payment.

 

6.7                                Further Assurances.  Subject to Section 3.2(c) hereof, each Title IV Grantor agrees that at any time and from time to time, at the expense of each Title IV Grantor, it will execute or otherwise authorize the filing of any and all further documents, financing statements, agreements and instruments, and take all such further actions (including the filing and recording of financing statements, fixture filings, mortgages, deeds of trust and other documents), which may be required under any applicable law, or which the Collateral Agent or the Administrative Agent may reasonably request, in order (x) to perfect and protect any pledge, assignment of security interest granted or purported to be granted hereby (including the priority thereof) or (y) to enable the Collateral Agent to exercise and enforce its rights and remedies hereunder with respect to any Collateral.

 

7.                                       Collateral Agent As Agent.

 

(a)                                  GSCP has been appointed to act as the Collateral Agent under the Amended and Restated Credit Agreement, by the Lenders under the Amended and Restated Credit Agreement and, by their acceptance of the benefits hereof, the other Secured Parties.  The Collateral Agent shall be obligated, and shall have the right hereunder, to make demands, to give notices, to exercise or refrain from exercising any rights, and to take or refrain from taking any action (including the release or substitution of Collateral), solely in accordance with this Amended and Restated Collateral Agreement and the Amended and Restated Credit Agreement, provided that the Collateral Agent shall exercise, or refrain from exercising, any remedies provided for in Section 5 in accordance with the instructions of Required Lenders.  In furtherance of the foregoing provisions of this Section 7(a), each Secured Party, by its acceptance of the benefits hereof, agrees that it shall have no right individually to realize upon any of the Collateral hereunder, it being understood and agreed by such Secured Party that all rights and remedies hereunder may be exercised solely by the Collateral Agent for the ratable benefit of the applicable Lenders and Secured Parties in accordance with the terms of this Section 7(a).

 

(b)                                 The Collateral Agent shall at all times be the same Person that is the Collateral Agent under the Amended and Restated Credit Agreement.  Written notice of resignation by the Collateral Agent pursuant to Section 13.9 of the Amended and Restated Credit Agreement shall also constitute notice of resignation as Collateral Agent under this Amended and Restated Collateral Agreement; removal of the Collateral Agent shall also constitute removal under this Amended and Restated Collateral Agreement; and appointment of a Collateral Agent pursuant to Section 13.9 of the Amended and Restated Credit Agreement shall also constitute appointment of a successor Collateral Agent under this Amended and Restated Collateral Agreement.  Upon the acceptance of any appointment as Collateral Agent under Section 13.9 of the Amended and Restated Credit Agreement by a successor Collateral Agent, that successor Collateral Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring or removed Collateral Agent under this Amended and Restated Collateral Agreement,

 

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and the retiring or removed Collateral Agent under this Amended and Restated Collateral Agreement shall promptly (i) transfer to such successor Collateral Agent all sums, securities and other items of Collateral held hereunder, together with all records and other documents necessary or appropriate in connection with the performance of the duties of the successor Collateral Agent under this Amended and Restated Collateral Agreement, and (ii) execute and deliver to such successor Collateral Agent or otherwise authorize the filing of such amendments to financing statements and take such other actions, as may be necessary or appropriate in connection with the assignment to such successor Collateral Agent of the Security Interests created hereunder, whereupon such retiring or removed Collateral Agent shall be discharged from its duties and obligations under this Amended and Restated Collateral Agreement.  After any retiring or removed Collateral Agent’s resignation or removal hereunder as Collateral Agent, the provisions of this Amended and Restated Collateral Agreement shall inure to its benefit as to any actions taken or omitted to be taken by it under this Amended and Restated Collateral Agreement while it was Collateral Agent hereunder.

 

(c)                                  The Collateral Agent shall not be deemed to have any duty whatsoever with respect to any Secured Party that is a counterparty to a Secured Hedge Agreement the obligations under which constitute Secured Obligations, unless it shall have received written notice in form and substance satisfactory to the Collateral Agent from each Title IV Grantor or any such Secured Party as to the existence and terms of the applicable Secured Hedge Agreement.

 

8.                                       Miscellaneous.

 

8.1                                Amendments in Writing.  None of the terms or provisions of this Amended and Restated Collateral Agreement may be waived, amended, supplemented or otherwise modified except by a written instrument executed by the affected Title IV Grantor and the Collateral Agent in accordance with Section 14.1 of the Amended and Restated Credit Agreement.

 

8.2                                Notices.  All notices, requests and demands pursuant hereto shall be made in accordance with Section 14.2 of the Amended and Restated Credit Agreement.  All communications and notices hereunder to each Title IV Grantor shall be given to it in care of the Parent Borrower at the Parent Borrower’s address set forth in Section 14.2 of the Amended and Restated Credit Agreement.

 

8.3                                No Waiver by Course of Conduct; Cumulative Remedies.  Neither the Collateral Agent nor any Secured Party shall by any act (except by a written instrument pursuant to Section 8.1), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event of Default or in any breach of any of the terms and conditions hereof.  No failure to exercise, nor any delay in exercising, on the part of the Collateral Agent or any other Secured Party, any right, power or privilege hereunder shall operate as a waiver thereof.  No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege.  A waiver by the Collateral Agent or any other Secured Party of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy that the Collateral Agent or such other Secured Party would otherwise have on any future

 

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occasion.  The rights, remedies, powers and privileges herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any other rights or remedies provided by law.

 

8.4                                Enforcement Expenses; Indemnification.

 

(a)                                  Each Title IV Grantor agrees to pay any and all reasonable out of pocket expenses (including all reasonable fees and disbursements of counsel) that may be paid or incurred by any Secured Party in enforcing, or obtaining advice of counsel in respect of, any rights with respect to, or collecting, any or all of the Secured Obligations and/or enforcing any rights with respect to, or collecting against, each Title IV Grantor under this Amended and Restated Collateral Agreement.

 

(b)                                 Each Title IV Grantor agrees to pay, and to save the Collateral Agent and the Secured Parties harmless from, any and all liabilities with respect to, or resulting from any delay in paying, any and all stamp, excise, sales or other taxes that may be payable or determined to be payable with respect to any of the Collateral or in connection with any of the transactions contemplated by this Amended and Restated Collateral Agreement.

 

(c)                                  Each Title IV Grantor agrees to pay, and to save the Collateral Agent and the Secured Parties harmless from, any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to the execution, delivery, enforcement, performance and administration of this Amended and Restated Collateral Agreement to the extent the Parent Borrower would be required to do so pursuant to Section 14.5 of the Amended and Restated Credit Agreement.

 

(d)                                 The agreements in this Section 8.4 shall survive repayment of the Secured Obligations and all other amounts payable under the Amended and Restated Credit Agreement and the other Credit Documents.

 

8.5                                Successors and Assigns.  The provisions of this Amended and Restated Collateral Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that no Title IV Grantor may assign, transfer or delegate any of its rights or obligations under this Amended and Restated Collateral Agreement without the prior written consent of the Collateral Agent except pursuant to a transaction permitted by the Amended and Restated Credit Agreement.

 

8.6                                Counterparts.  This Amended and Restated Collateral Agreement may be executed by one or more of the parties to this Amended and Restated Collateral Agreement on any number of separate counterparts (including by facsimile or other electronic transmission), and all of said counterparts taken together shall be deemed to constitute one and the same instrument.  A set of the copies of this Amended and Restated Collateral Agreement signed by all the parties shall be lodged with the Collateral Agent and the Parent Borrower.

 

8.7                                Severability.  Any provision of this Amended and Restated Collateral Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be

 

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ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.  The parties hereto shall endeavor in good faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

 

8.8                                Section Headings.  The Section headings used in this Amended and Restated Collateral Agreement are for convenience of reference only and are not to affect the construction hereof or be taken into consideration in the interpretation hereof.

 

8.9                                Integration.  This Amended and Restated Collateral Agreement together with the other Credit Documents represents the agreement of each Title IV Grantor with respect to the subject matter hereof and there are no promises, undertakings, representations or warranties by the Collateral Agent or any other Secured Party relative to the subject matter hereof not expressly set forth or referred to herein or in the other Credit Documents.

 

8.10                          GOVERNING LAW.  THIS AMENDED AND RESTATED COLLATERAL AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

8.11                          Submission To Jurisdiction Waivers.  Each party hereto hereby irrevocably and unconditionally:

 

(a)                                  submits for itself and its property in any legal action or proceeding relating to this Amended and Restated Collateral Agreement and the other Credit Documents to which it is a party, or for recognition and enforcement of any judgment in respect thereof, to the exclusive general jurisdiction of the courts of the State of New York, the courts of the United States of America for the Southern District of New York, and appellate courts from any thereof; provided, that the Collateral Agent and the Secured Parties retain the right to bring proceedings against any Title IV Grantor in the courts of any other jurisdiction in connection with the exercise of any remedies hereunder or the enforcement of any judgment;

 

(b)                                 consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same;

 

(c)                                  agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to such Person at its address referred to in Section 8.2 or at such other address of which such Person shall have been notified pursuant thereto;

 

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(d)                                 agrees that nothing herein shall affect the right of any other party hereto (or any Secured Party) to effect service of process in any other manner permitted by law or shall limit the right of any party hereto (or any Secured Party) to sue in any other jurisdiction; and

 

(e)                                  waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding referred to in this Section 8.11 any special, exemplary, punitive or consequential damages.

 

8.12                       Acknowledgments.  Each party hereto hereby acknowledges that:

 

(a)                                 it has been advised by counsel in the negotiation, execution and delivery of this Amended and Restated Collateral Agreement and the other Credit Documents to which it is a party;

 

(b)                                 neither the Collateral Agent nor any other Agent or Secured Party has any fiduciary relationship with or duty to each Title IV Grantor arising out of or in connection with this Amended and Restated Collateral Agreement or any of the other Credit Documents, and the relationship between each Title IV Grantor, on the one hand, and the Collateral Agent, each other Agent and the other Secured Parties, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and

 

(c)                                  no joint venture is created hereby or by the other Credit Documents or otherwise exists by virtue of the transactions contemplated hereby among the Lenders, the Agents and any other Secured Party or among each Title IV Grantor, and the Lenders, the Agents and any other Secured Party.

 

8.13                        Additional Title IV Grantors.  Each Subsidiary of the Parent Borrower that is required to become a party to this Amended and Restated Collateral Agreement pursuant to Section 9.11 of the Amended and Restated Credit Agreement shall become a Title IV Grantor, with the same force and effect as if originally named as a Title IV Grantor herein, for all purposes of this Amended and Restated Collateral Agreement upon execution and delivery by such Subsidiary of a written supplement substantially in the form of Annex A hereto.  The execution and delivery of any instrument adding an additional Title IV Grantor as a party to this Amended and Restated Collateral Agreement shall not require the consent of any other Title IV Grantor hereunder.  The rights and obligations of each Title IV Grantor hereunder shall remain in full force and effect notwithstanding the addition of any new Title IV Grantor as a party to this Amended and Restated Collateral Agreement.

 

8.14                       WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AMENDED AND RESTATED COLLATERAL AGREEMENT, ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

 

[SIGNATURE PAGES FOLLOW]

 

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Execution Version

 

IN WITNESS WHEREOF, each of the undersigned has caused this Amended and Restated Collateral Agreement to be duly executed and delivered as of the date first above written.

 

	
 
    	
WALDEN   UNIVERSITY, LLC, as Title IV Grantor
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Paula R. Singer
    
	
 
    	
 
    	
Name:   Paula R. Singer
    
	
 
    	
 
    	
Title:   Chairman and Chief Executive Officer
    

 

 

	
 
    	
GOLDMAN   SACHS CREDIT PARTNERS L.P., 
   as Collateral Agent
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Douglas Tansey
    
	
 
    	
 
    	
Authorized   SignatoryExhibit 10.16

 

	
 
    

 

EXCHANGE AND REGISTRATION RIGHTS AGREEMENT

 

Dated as of July 25, 2012

 

Among

 

LAUREATE EDUCATION, INC.

 

and

 

the Guarantors listed on the signature pages hereof

 

and

 

CITIGROUP GLOBAL MARKETS INC.
 J.P. MORGAN SECURITIES LLC

BARCLAYS CAPITAL INC.

CREDIT SUISSE SECURITIES (USA) LLC

GOLDMAN, SACHS & CO.

KKR CAPITAL MARKETS LLC

MORGAN STANLEY & CO. LLC

 

$350,000,000 aggregate principal amount of 9.250% Senior Notes due 2019

 

	
 
    

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
1.
    	
Definitions
    	
1
    
	
 
    	
 
    	
 
    
	
2.
    	
Exchange Offer
    	
4
    
	
 
    	
 
    	
 
    
	
3.
    	
Shelf Registration
    	
8
    
	
 
    	
 
    	
 
    
	
4.
    	
Additional Interest
    	
9
    
	
 
    	
 
    	
 
    
	
5.
    	
Registration Procedures
    	
10
    
	
 
    	
 
    	
 
    
	
6.
    	
Registration Expenses
    	
18
    
	
 
    	
 
    	
 
    
	
7.
    	
Indemnification and Contribution
    	
19
    
	
 
    	
 
    	
 
    
	
8.
    	
Rule 144A
    	
23
    
	
 
    	
 
    	
 
    
	
9.
    	
Underwritten   Registrations
    	
23
    
	
 
    	
 
    	
 
    
	
10.
    	
Miscellaneous
    	
23
    

 

i

 

EXCHANGE AND REGISTRATION RIGHTS AGREEMENT

 

THIS EXCHANGE AND REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into as of July 25, 2012, by and among Laureate Education, Inc., a Maryland corporation (the “Issuer”) and the guarantors listed on the signature pages to this Agreement (the “Guarantors”), on the one hand, and Citigroup Global Markets Inc. and J.P. Morgan Securities LLC, on behalf of themselves and as representatives (the “Representatives”) of the several initial purchasers named in Schedule I hereto (collectively, the “Initial Purchasers”), on the other hand.

 

This Agreement is made pursuant to the Purchase Agreement, dated July 20, 2012 (the “Purchase Agreement”), by and among the Issuer, the Guarantors and the Representatives on behalf of themselves and as representatives of the Initial Purchasers, which provides for the sale by the Issuer to the Initial Purchasers of $350,000,000 in aggregate principal amount of its 9.250% Senior Notes due 2019 (the “Notes”).  The Notes are jointly and severally guaranteed (the “Guarantees” and together with the Notes, the “Securities”) on a senior unsecured basis by the Guarantors.  In order to induce the Initial Purchasers to enter into the Purchase Agreement, the Issuer and the Guarantors have agreed to provide the registration rights set forth in this Agreement to the Initial Purchasers and their direct and indirect transferees.  The execution of this Agreement is a condition to the closing under the Purchase Agreement.

 

The parties hereby agree as follows:

 

1.                                      Definitions

 

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

 

Additional Guarantor:  Shall mean any Person that issues a Guarantee under the Indenture after the date of this Agreement.

 

Additional Interest:  See Section 4(a) hereof.

 

Advice:  See the last paragraph of Section 5 hereof.

 

Agreement:  See the introductory paragraphs hereto.

 

Applicable Period:  See Section 2(b) hereof.

 

Board of Directors:  See Section 3(a) hereof.

 

Business Day:  Shall have the meaning ascribed to such term in Rule 14d-1 under the Exchange Act.

 

Effectiveness Period:  See Section 3(a) hereof.

 

Event Date:  See Section 4(b) hereof.

 

 

Exchange Act:  The Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.

 

Exchange Notes:  See Section 2(a) hereof.

 

Exchange Offer:  See Section 2(a) hereof.

 

Exchange Offer Registration Statement:  See Section 2(a) hereof.

 

Exchange Securities:  See Section 2(a) hereof.

 

FINRA:  See Section 5(r) hereof.

 

Guarantees:  See the introductory paragraphs hereto.

 

Guarantors:  See the introductory paragraphs hereto and shall also include any Additional Guarantors and any of the Guarantors’ successors.

 

Holder:  Any holder of a Registrable Security.

 

Indenture:  The indenture relating to the Notes dated as of July 25, 2012 by and between the Issuer, the Guarantors and Wells Fargo Bank, National Association, as trustee, as the same may be further amended or supplemented from time to time in accordance with the terms thereof.

 

Information:  See Section 5(n) hereof.

 

Initial Purchasers:  See the introductory paragraphs hereto.

 

Initial Shelf Registration:  See Section 3(a) hereof.

 

Inspectors:  See Section 5(n) hereof.

 

Issue Date:  July 25, 2012, the date of original issuance of the Notes.

 

Issuer:  See the introductory paragraphs hereto.

 

Notes:  See the introductory paragraphs hereto.

 

Participant:  See Section 7(a) hereof.

 

Participating Broker-Dealer:  See Section 2(b) hereof.

 

Person:  An individual, trustee, corporation, partnership, limited liability company, joint stock company, trust, unincorporated association, union, business association, firm or other legal entity.

 

Private Exchange:  See Section 2(b) hereof.

 

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Private Exchange Notes:  See Section 2(b) hereof.

 

Prospectus:  The prospectus included in any Registration Statement (including, without limitation, any prospectus subject to completion and a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A under the Securities Act and any term sheet filed pursuant to Rule 433 under the Securities Act), as amended or supplemented by any prospectus supplement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all materials incorporated by reference or deemed to be incorporated by reference in such Prospectus.

 

Purchase Agreement:  See the introductory paragraphs hereof.

 

Records:  See Section 5(n) hereof.

 

Registrable Securities:  Each Security upon its original issuance and at all times subsequent thereto, each Exchange Security as to which Section 2(c)(iv) hereof is applicable upon original issuance and at all times subsequent thereto and each Private Exchange Note (and the related Guarantees) upon original issuance thereof and at all times subsequent thereto, until, in each case, the earliest to occur of (i) a Registration Statement (other than, with respect to any Exchange Securities as to which Section 2(c)(iv) hereof is applicable, the Exchange Offer Registration Statement) covering such Security, Exchange Security or Private Exchange Note (and the related Guarantees) has been declared effective by the SEC and such Security, Exchange Security or such Private Exchange Note (and the related Guarantees), as the case may be, has been disposed of in accordance with such effective Registration Statement, (ii) such Security has been exchanged pursuant to the Exchange Offer for an Exchange Security or Exchange Securities that may be resold without restriction under state and federal securities laws or (iii) such Security, Exchange Security or Private Exchange Note (and the related Guarantees), as the case may be, ceases to be outstanding for purposes of the Indenture.

 

Registration Statement:  Any registration statement of the Issuer that covers any of the Securities, the Exchange Securities or the Private Exchange Notes (and the related Guarantees) filed with the SEC under the Securities Act, including, in each case, the Prospectus, amendments and supplements to such registration statement, including post-effective amendments, all exhibits, and all material incorporated by reference or deemed to be incorporated by reference in such registration statement.

 

Representatives:  See the introductory paragraphs hereof.

 

Rule 144:  Rule 144 (as amended or replaced) under the Securities Act.

 

Rule 144A:  Rule 144A (as amended or replaced) under the Securities Act.

 

Rule 405:  Rule 405 (as amended or replaced) under the Securities Act.

 

Rule 415:  Rule 415 (as amended or replaced) under the Securities Act.

 

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Rule 424:  Rule 424 (as amended or replaced) under the Securities Act.

 

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

 

Securities:  See the introductory paragraphs hereto.

 

Securities Act:  The Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.

 

Shelf Notice:  See Section 2(c) hereof.

 

Shelf Registration:  See Section 3(b) hereof.

 

Shelf Registration Statement:  Any Registration Statement relating to a Shelf Registration.

 

Shelf Suspension Period:  See Section 3(a) hereof.

 

Subsequent Shelf Registration:  See Section 3(b) hereof.

 

TIA:  The Trust Indenture Act of 1939, as amended.

 

Trustee:  The trustee under the Indenture and the trustee under any indenture (if different) governing the Exchange Securities and Private Exchange Notes (and the related Guarantees).

 

Underwritten registration or underwritten offering:  A registration in which securities of the Issuer are sold to an underwriter for reoffering to the public.

 

Except as otherwise specifically provided, all references in this Agreement to acts, laws, statutes, rules, regulations, releases, forms, no-action letters and other regulatory requirements (collectively, “Regulatory Requirements”) shall be deemed to refer also to any amendments thereto and all subsequent Regulatory Requirements adopted as a replacement thereto having substantially the same effect therewith; provided that Rule 144 shall not be deemed to amend or replace Rule 144A.

 

2.                                      Exchange Offer

 

(a)                                 Unless the Exchange Offer would violate applicable law or any applicable interpretation of the staff of the SEC, the Issuer shall use its commercially reasonable efforts to file with the SEC a Registration Statement (the “Exchange Offer Registration Statement”) on an appropriate registration form with respect to a registered offer (the “Exchange Offer”) to exchange any and all of the Registrable Securities for a like aggregate principal amount of debt securities of the Issuer (the “Exchange Notes”), guaranteed, to the extent applicable, on a senior unsecured basis by the Guarantors (the “New Guarantees” and, together with the Exchange Notes, the “Exchange Securities”) that are identical in all material respects to the Notes, except that (i) the Exchange Notes shall contain no restrictive legend thereon, (ii) interest thereon shall accrue (A) from the later of (a) the last date on which interest was paid on such Note or (b) if the

 

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Note is surrendered for exchange on a date in a period that includes the record date for an interest payment date to occur on or after the date of such exchange and as to which interest will be paid, the date of such interest payment date or (B) if no such interest has been paid, from the Issue Date and (iii) the Exchange Securities shall be entitled to the benefits of the Indenture or a trust indenture which is identical in all material respects to the Indenture (other than such changes to the Indenture or any such identical trust indenture as are necessary to comply with the TIA) and which, in either case, has been qualified under the TIA.  The Exchange Offer shall comply with all applicable tender offer rules and regulations under the Exchange Act and other applicable laws.  The Issuer shall use its commercially reasonable efforts to (x) prepare and file with the SEC the Exchange Offer Registration Statement with respect to the Exchange Offer; (y) keep the Exchange Offer open for at least 20 Business Days (or longer if required by applicable law) after the date that notice of the Exchange Offer is mailed to Holders; and (z) cause the Exchange Offer Registration Statement to be declared effective under the Securities Act on or prior to July 25, 2014 (or if such day is not a Business Day, the next succeeding Business Day).

 

Each Holder (including, without limitation, each Participating Broker-Dealer) that participates in the Exchange Offer, as a condition to participation in the Exchange Offer, will be required to represent to the Issuer in writing (which may be contained in the applicable letter of transmittal) that:  (i) any Exchange Securities acquired in exchange for Registrable Securities tendered are being acquired in the ordinary course of business of the Person receiving such Exchange Securities, whether or not such recipient is such Holder itself; (ii) at the time of the commencement or consummation of the Exchange Offer neither such Holder nor, to the actual knowledge of such Holder, any other Person receiving Exchange Securities from such Holder has an arrangement or understanding with any Person to participate in the distribution (within the meaning of the Securities Act) of the Exchange Securities in violation of the Securities Act; (iii)  neither the Holder nor, to the actual knowledge of such Holder, any other Person receiving Exchange Securities from such Holder is an “affiliate” (as defined in Rule 405) of the Issuer or, if it is an affiliate of the Issuer, it will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable and will provide information to be included in the Shelf Registration Statement in accordance with Section 5 hereof in order to have their Securities included in the Shelf Registration Statement and benefit from the provisions regarding Additional Interest in Section 4 hereof; (iv) if such Holder is not a broker-dealer, neither such Holder nor, to the actual knowledge of such Holder, any other Person receiving Exchange Securities from such Holder is engaging or intends to engage in a distribution of the Exchange Securities; and (v) if such Holder is a Participating Broker-Dealer, such Holder has acquired the Registrable Securities for its own account in exchange for Securities that were acquired as a result of market-making activities or other trading activities and that it will comply with the applicable provisions of the Securities Act (including, but not limited to, the prospectus delivery requirements thereunder).

 

Upon consummation of the Exchange Offer in accordance with this Section 2, the provisions of this Agreement shall continue to apply, mutatis mutandis, solely with respect to Registrable Securities that are Private Exchange Notes (and the related Guarantees), any Exchange Securities as to which Section 2(c)(iv) is applicable and Exchange Securities held by the Participating Broker-Dealers, and the Issuer shall have no further obligation to register

 

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Registrable Securities (other than Private Exchange Notes (and the related Guarantees) and Exchange Securities as to which clause 2(c)(iv) hereof applies) pursuant to Section 3 hereof.

 

(b)                                 The Issuer shall include within the Prospectus contained in the Exchange Offer Registration Statement a section entitled “Plan of Distribution,” which shall contain a summary statement of the positions taken or policies made by the staff of the SEC with respect to the potential “underwriter” status of any broker-dealer that is the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act) of Exchange Notes received by such broker-dealer in the Exchange Offer (a “Participating Broker-Dealer”), whether such positions or policies have been publicly disseminated by the staff of the SEC or such positions or policies represent the prevailing views of the staff of the SEC.  Such “Plan of Distribution” section shall also expressly permit, to the extent permitted by applicable policies and regulations of the SEC, the use of the Prospectus by all Participating Broker-Dealers, and include a statement describing the means by which Participating Broker-Dealers may resell the Exchange Securities in compliance with the Securities Act.

 

The Issuer shall use its commercially reasonable efforts to keep the Exchange Offer Registration Statement effective and to amend and supplement the Prospectus contained therein in order to permit such Prospectus to be lawfully delivered by all Holders (including Participating Broker-Dealers) subject to the prospectus delivery requirements of the Securities Act for such period of time as is necessary to comply with applicable law in connection with any resale of the Exchange Securities; provided, however, that in no event shall the Issuer be required to keep the Exchange Offer Registration Statement effective and available for more than 180 days after consummation of the Exchange Offer, or such longer period if extended pursuant to the last paragraph of Section 5 hereof (the “Applicable Period”).

 

If, immediately prior to consummation of the Exchange Offer, the Initial Purchasers hold any Notes acquired by them that have the status of an unsold allotment in the initial distribution, the Issuer, upon the written request of the Initial Purchasers, shall simultaneously with the delivery of the Exchange Notes issue and deliver to the Initial Purchasers, in exchange (the “Private Exchange”) for such Notes held by any such Initial Purchaser, a like principal amount of notes (including the guarantees with respect thereto, the “Private Exchange Notes”) of the Issuer, guaranteed by the Guarantors, that are identical in all material respects to the Exchange Notes except for the placement of a restrictive legend on such Private Exchange Notes.  The Private Exchange Notes shall be issued pursuant to the same indenture as the Exchange Notes and bear the same CUSIP number as the Exchange Notes if permitted by the CUSIP Service Bureau.

 

In connection with the Exchange Offer, the Issuer shall:

 

(1)                                 mail, or cause to be mailed, to each Holder of record entitled to participate in the Exchange Offer a copy of the Prospectus forming part of the Exchange Offer Registration Statement, together with an appropriate letter of transmittal and related documents;

 

6

 

(2)                                 use commercially reasonable efforts to keep the Exchange Offer open for not less than 20 Business Days from the date that notice of the Exchange Offer is mailed to Holders (or longer if required by applicable law);

 

(3)                                 utilize the services of a depositary for the Exchange Offer with an address in the Borough of Manhattan, The City of New York;

 

(4)                                 permit Holders to withdraw tendered Notes at any time prior to the close of business, New York time, on the last Business Day on which the Exchange Offer remains open; and

 

(5)                                 otherwise comply in all material respects with all laws, rules and regulations applicable to the Exchange Offer.

 

As soon as practicable after the close of the Exchange Offer and any Private Exchange, the Issuer shall:

 

(1)                                 accept for exchange all Registrable Securities validly tendered and not validly withdrawn pursuant to the Exchange Offer and any Private Exchange;

 

(2)                                 deliver to the Trustee for cancellation all Registrable Securities so accepted for exchange; and

 

(3)                                 cause the Trustee to authenticate and deliver promptly to each Holder of Notes, Exchange Notes or Private Exchange Notes, as the case may be, equal in principal amount to the Notes of such Holder so accepted for exchange; provided that, in the case of any Notes held in global form by a depositary, authentication and delivery to such depositary of one or more replacement Notes in global form in an equivalent principal amount thereto for the account of such Holders in accordance with the Indenture shall satisfy such authentication and delivery requirement.

 

The Exchange Offer and the Private Exchange shall not be subject to any conditions, other than that (i) the Exchange Offer or Private Exchange, as the case may be, does not violate applicable law or any applicable interpretation of the staff of the SEC; (ii) no action or proceeding shall have been instituted or threatened in any court or by any governmental agency which might materially impair the ability of the Issuer to proceed with the Exchange Offer or the Private Exchange, and no material adverse development shall have occurred in any existing action or proceeding with respect to the Issuer; and (iii) all governmental approvals shall have been obtained, which approvals the Issuer deems necessary for the consummation of the Exchange Offer or Private Exchange.

 

The Exchange Securities and the Private Exchange Notes (and related guarantees) shall be issued under (i) the Indenture or (ii) an indenture identical in all material respects to the Indenture and which, in either case, has been qualified under the TIA or is exempt from such qualification and shall provide that the Exchange Securities shall not be subject to the transfer restrictions set forth in the Indenture.  The Indenture or such indenture shall provide that the Exchange Notes, the Private Exchange Notes and the Notes shall vote and consent together on all

 

7

 

matters as one class and that none of the Exchange Notes, the Private Exchange Notes or the Notes will have the right to vote or consent as a separate class on any matter.

 

(c)                                  If, (i) because of any change in law or in currently prevailing interpretations of the staff of the SEC, the Issuer is not permitted to effect the Exchange Offer, (ii) the Exchange Offer Registration Statement is not declared effective on or prior to July 25, 2014, (iii) any holder of Private Exchange Notes so requests in writing to the Issuer at any time within 30 days after the consummation of the Exchange Offer, or (iv) in the case of any Holder that participates in the Exchange Offer, such Holder does not receive Exchange Securities on the date of the exchange that may be sold without restriction under state and federal securities laws (other than due solely to the status of such Holder as an affiliate of the Issuer within the meaning of the Securities Act) and so notifies the Issuer in writing within 30 days after such Holder first becomes aware of such restrictions, then, in the case of each of clauses (i) through (iv) of this sentence, the Issuer shall promptly deliver to the Trustee with a copy to the registrar (to deliver to the Holders) written notice thereof (the “Shelf Notice”) and shall file a Shelf Registration pursuant to Section 3 hereof.

 

3.                                      Shelf Registration

 

If at any time after May 25, 2014 a Shelf Notice is delivered as contemplated by Section 2(c) hereof, then:

 

(a)                                 Shelf Registration.  The Issuer shall promptly file with the SEC a Registration Statement for an offering to be made on a continuous basis pursuant to Rule 415 covering the Registrable Securities that are subject to the Shelf Notice (the “Initial Shelf Registration”).  The Initial Shelf Registration shall be on Form S-1 or another appropriate form permitting registration of such Registrable Securities for resale by Holders in the manner or manners designated by them (including, without limitation, one or more underwritten offerings).

 

The Issuer shall use commercially reasonable efforts to cause the Shelf Registration to be declared effective under the Securities Act and to keep the Initial Shelf Registration continuously effective under the Securities Act until the earliest of (i) two years after the effectiveness of the Initial Shelf Registration, (ii) the time when all Registrable Securities covered by the Initial Shelf Registration have been sold in the manner set forth and as contemplated in the Initial Shelf Registration or, if applicable, a Subsequent Shelf Registration, (iii) the date upon which all Registrable Securities covered by such Shelf Registration become eligible to be sold pursuant to Rule 144, and the Company and the Holders of such Registrable Securities agree, in accordance with the amendment provisions of this Agreement, that such Registrable Securities will no longer be considered Registrable Securities and (iv) the Registrable Securities cease to be outstanding (the “Effectiveness Period”); provided, however, that the Effectiveness Period in respect of the Initial Shelf Registration shall be extended to the extent required to permit dealers to comply with the applicable prospectus delivery requirements of Rule 174 under the Securities Act and as otherwise provided herein. Notwithstanding anything to the contrary in this Agreement, at any time, the Issuer may delay the filing of any Initial Shelf Registration Statement or delay or suspend the effectiveness thereof, for a reasonable period of time, but not in excess of 60 consecutive days or more than three (3) times during any calendar year (each, a “Shelf Suspension Period”), if (i) an event or circumstance occurs and is continuing

 

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as a result of which the Initial Shelf Registration Statement or Subsequent Shelf Registration, the related Prospectus or any document incorporated therein by reference as then amended or supplemented or proposed to be filed would, in the reasonable and good faith judgment of the board of directors (the “Board of Directors”) of the Issuer, contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, and (ii) the Board of Directors of the Issuer determines reasonably and in good faith that the filing of any such Initial Shelf Registration Statement or the continuing effectiveness thereof would require the disclosure of non-public material information that, in the reasonable judgment of the Board of Directors of the Issuer, would be detrimental to the Issuer if so disclosed or would otherwise materially adversely affect a financing, acquisition, disposition, merger or other material transaction or if such action is required by applicable law.

 

(b)                                 Withdrawal of Stop Orders; Subsequent Shelf Registrations.  If the Initial Shelf Registration or any Subsequent Shelf Registration ceases to be effective for any reason at any time during the Effectiveness Period (other than because of the sale of all of the Securities registered thereunder), the Issuer shall use its commercially reasonable efforts to obtain the prompt withdrawal of any order suspending the effectiveness thereof, and in any event shall file an additional Shelf Registration Statement pursuant to Rule 415 covering all of the Registrable Securities covered by and not sold under the Initial Shelf Registration or an earlier Subsequent Shelf Registration (each, a “Subsequent Shelf Registration”).  If a Subsequent Shelf Registration is filed, the Issuer shall use its commercially reasonable efforts to cause the Subsequent Shelf Registration to be declared effective under the Securities Act as soon as practicable after such filing and to keep such Subsequent Shelf Registration continuously effective for a period equal to the number of days in the Effectiveness Period less the aggregate number of days during which the Initial Shelf Registration or any Subsequent Shelf Registration was previously continuously effective.  As used herein the term “Shelf Registration” means the Initial Shelf Registration and any Subsequent Shelf Registration.

 

(c)                                  Supplements and Amendments.  The Issuer shall promptly supplement and amend the Shelf Registration if required by the rules, regulations or instructions applicable to the registration form used for such Shelf Registration, if required by the Securities Act, or if reasonably requested by the Holders of a majority in aggregate principal amount of the Registrable Securities (or their counsel) covered by such Registration Statement with respect to the information included therein with respect to one or more of such Holders, or, if reasonably requested by any underwriter of such Registrable Securities, with respect to the information included therein with respect to such underwriter.

 

4.                                      Additional Interest

 

(a)                                 The Issuer, the Guarantors and the Initial Purchasers agree that the Holders will suffer damages if the Issuer fails to fulfill its obligations under Section 2 or Section 3 hereof and that it would not be feasible to ascertain the extent of such damages with precision.  Accordingly, the Issuer and the Guarantors agree to pay, jointly and severally, as liquidated damages, additional interest to the Holders of the Notes affected thereby (“Additional Interest”) if (A) the Issuer has not had an Exchange Offer Registration Statement or a Shelf

 

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Registration Statement, if required, declared effective, in either case on or prior to July 25, 2014, (B) notwithstanding clause (A), the Issuer is required to file a Shelf Registration Statement and such Shelf Registration Statement is not declared effective on or prior to July 25, 2014 or (C), if applicable, a Shelf Registration has been declared effective and such Shelf Registration ceases to be effective at any time during the Effectiveness Period (other than as a result of a Suspension Period or because of the sale of all of the Securities registered thereunder) (each, a “Registration Default”), then Additional Interest shall accrue on the principal amount of the Notes affected thereby at a rate of 0.25% per annum (which rate will be increased by an additional 0.25% per annum for each subsequent 90 day period that such Additional Interest continues to accrue; provided that the rate at which such Additional Interest accrues may in no event exceed 0.75% per annum) (such Additional Interest to be calculated by the Issuer) commencing on (x) July 26, 2014, in the case of (A) and (B) above; or (y) the day such Shelf Registration ceases to be effective in the case of (C) above; provided, however, that upon the exchange of the Exchange Securities for all Securities tendered (in the case of clause (A) of this Section 4(a)), upon the effectiveness of the applicable Shelf Registration Statement (in the case of clause (B) of this Section 4(a)), or upon the effectiveness of the applicable Shelf Registration Statement which had ceased to remain effective (in the case of clause (C) of this Section 4(a)), Additional Interest on the Notes in respect of which such events relate as a result of such clause (or the relevant subclause thereof), as the case may be, shall cease to accrue.  Notwithstanding any other provisions of this Section 4, the Issuer shall in no event be required to pay Additional Interest for more than one Registration Default at any given time.

 

(b)                                 The Issuer shall notify the Trustee and the paying agent within five Business Days after each and every date on which an event occurs in respect of which Additional Interest is required to be paid (an “Event Date”).  Any amounts of Additional Interest due pursuant to Section 4(a) will be payable in cash semiannually on each September 1 and March 1 (to the holders of record on the August 15 and February 15 immediately preceding such dates), commencing with the first such date occurring after any such Additional Interest commences to accrue.  The amount of Additional Interest will be determined by the Issuer by multiplying the applicable Additional Interest rate by the principal amount of the Registrable Securities affected by the Registration Default, multiplied by a fraction, the numerator of which is the number of days such Additional Interest rate was applicable during such period (determined on the basis of a 360 day year comprised of twelve 30-day months and, in the case of a partial month, the actual number of days elapsed), and the denominator of which is 360.

 

5.                                      Registration Procedures

 

In connection with the filing of any Registration Statement pursuant to Section 2 or 3 hereof, the Issuer shall effect such registrations to permit the sale of the securities covered thereby in accordance with the intended method or methods of disposition thereof, and pursuant thereto and in connection with any Registration Statement filed by the Issuer hereunder, the Issuer shall:

 

(a)                                 Prepare and file with the SEC, a Registration Statement or Registration Statements as prescribed by Section 2 or 3 hereof, and use its commercially reasonable efforts to cause each such Registration Statement to become effective and remain effective as provided

 

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herein; provided, however, that if (1) such filing is pursuant to Section 3 hereof or (2) a Prospectus contained in the Exchange Offer Registration Statement filed pursuant to Section 2 hereof is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Securities during the Applicable Period relating thereto from whom the Issuer has received prior written notice that it will be a Participating Broker-Dealer in the Exchange Offer, before filing any Registration Statement or Prospectus or any amendments or supplements thereto, the Issuer shall furnish to and afford counsel for the Holders of the Registrable Securities covered by such Registration Statement (with respect to a Registration Statement filed pursuant to Section 3 hereof), which shall be a single firm selected by the Holders holding a majority in principal amount of the Registrable Securities covered by such Registration Statement, or counsel for such Participating Broker-Dealer (with respect to any such Registration Statement), as the case may be, and counsel to the managing underwriters, if any, a reasonable opportunity to review copies of all such documents (including copies of any documents to be incorporated by reference therein and all exhibits thereto) proposed to be filed (in each case, at least three Business Days prior to such filing).  The Issuer shall not file any Registration Statement or Prospectus or any amendments or supplements thereto if the Holders of a majority in aggregate principal amount of the Registrable Securities covered by such Registration Statement, their counsel or the managing underwriters, if any, shall reasonably object.

 

(b)                                 Prepare and file with the SEC such amendments and post-effective amendments to each Shelf Registration Statement or Exchange Offer Registration Statement, as the case may be, as may be necessary to keep such Registration Statement continuously effective for the Effectiveness Period, the Applicable Period or until consummation of the Exchange Offer, as the case may be; cause the related Prospectus to be supplemented by any Prospectus supplement required by applicable law, and as so supplemented to be filed pursuant to Rule 424; and comply with the provisions of the Securities Act and the Exchange Act applicable to it with respect to the disposition of all securities covered by such Registration Statement as so amended or in such Prospectus as so supplemented and with respect to the subsequent resale of any securities being sold by a Participating Broker-Dealer covered by any such Prospectus in all material respects.  The Issuer shall be deemed not to have used its commercially reasonable efforts to keep a Registration Statement effective if it voluntarily takes any action that is reasonably expected to result in selling Holders of the Registrable Securities covered thereby or Participating Broker Dealers seeking to sell Exchange Securities not being able to sell such Registrable Securities or such Exchange Notes during that period unless such action is required by applicable law or permitted by this Agreement.

 

(c)                                  If (1) a Shelf Registration is filed pursuant to Section 3 hereof or (2) a Prospectus contained in the Exchange Offer Registration Statement filed pursuant to Section 2 hereof is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Securities during the Applicable Period relating thereto from whom the Issuer has received written notice that it will be a Participating Broker-Dealer in the Exchange Offer, notify the selling Holders of Registrable Securities (with respect to a Registration Statement filed pursuant to Section 3 hereof), or each such Participating Broker-Dealer (with respect to any such Registration Statement), as the case may be, their counsel and the managing underwriters, if any, promptly (but in any event within three Business Days), and

 

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confirm such notice in writing, (i) when a Prospectus or any Prospectus supplement or post-effective amendment has been filed, and, with respect to a Registration Statement or any post-effective amendment, when the same has become effective under the Securities Act (including in such notice a written statement that any Holder may, upon request, obtain, at the sole expense of the Issuer, one conformed copy of such Registration Statement or post-effective amendment including financial statements and schedules, documents incorporated or deemed to be incorporated by reference and exhibits), (ii) of the issuance by the SEC of any stop order suspending the effectiveness of a Registration Statement or of any order preventing or suspending the use of any preliminary prospectus or the initiation of any proceedings for that purpose, (iii) if at any time when a Prospectus is required by the Securities Act to be delivered in connection with sales of the Registrable Securities or resales of Exchange Securities by Participating Broker-Dealers the representations and warranties of the Issuer contained in any agreement (including any underwriting agreement) contemplated by Section 5(m) hereof cease to be true and correct, (iv) of the receipt by the Issuer of any notification with respect to the suspension of the qualification or exemption from qualification of a Registration Statement or any of the Registrable Securities or the Exchange Securities to be sold by any Participating Broker-Dealer for offer or sale in any jurisdiction, or the initiation or threatening of any proceeding for such purpose, (v) of the happening of any event, the existence of any condition or any information becoming known that makes any statement made in such Registration Statement or related Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires the making of any changes in or amendments or supplements to such Registration Statement, Prospectus or documents so that, in the case of the Registration Statement, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and that in the case of the Prospectus, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, and (vi) of the Issuer’s determination that a post-effective amendment to a Registration Statement would be appropriate.

 

(d)                                 Use its commercially reasonable efforts to prevent the issuance of any order suspending the effectiveness of a Registration Statement or of any order preventing or suspending the use of a Prospectus or suspending the qualification (or exemption from qualification) of any of the Registrable Securities or the Exchange Securities to be sold by any Participating Broker-Dealer, for sale in any jurisdiction.

 

(e)                                  If a Shelf Registration is filed pursuant to Section 3 hereof and if requested during the Effectiveness Period by the managing underwriter or underwriters, if any, or the Holders of a majority in aggregate principal amount of the Registrable Securities being sold in connection with an underwritten offering, (i) as promptly as practicable incorporate in a prospectus supplement or post-effective amendment such information as the managing underwriter or underwriters, if any, such Holders or counsel for either of them reasonably request to be included therein, (ii) make all required filings of such prospectus supplement or such post-effective amendment as soon as practicable after the Issuer has received written notification of the matters to be incorporated in such prospectus supplement or post-effective amendment, and (iii) supplement or make amendments to such Registration Statement.

 

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(f)                                   If (1) a Shelf Registration is filed pursuant to Section 3 hereof, or (2) a Prospectus contained in the Exchange Offer Registration Statement filed pursuant to Section 2 hereof is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Securities during the Applicable Period, furnish to each selling Holder of Registrable Securities (with respect to a Registration Statement filed pursuant to Section 3 hereof) and to each such Participating Broker-Dealer who so requests (with respect to any such Registration Statement) and to their respective counsel and each managing underwriter, if any, at the sole expense of the Issuer, one conformed copy of the Registration Statement or Registration Statements and each post-effective amendment thereto, including financial statements and schedules, and, if requested, all documents incorporated or deemed to be incorporated therein by reference and all exhibits.

 

(g)                                  If (1) a Shelf Registration is filed pursuant to Section 3 hereof, or (2) a Prospectus contained in the Exchange Offer Registration Statement filed pursuant to Section 2 hereof is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Securities during the Applicable Period, deliver to each selling Holder of Registrable Securities (with respect to a Registration Statement filed pursuant to Section 3 hereof), or each such Participating Broker-Dealer (with respect to any such Registration Statement), as the case may be, their respective counsel, and the underwriters, if any, at the sole expense of the Issuer, as many copies of the Prospectus or Prospectuses (including each form of preliminary prospectus) and each amendment or supplement thereto and any documents incorporated by reference therein as such Persons may reasonably request; and, subject to the last paragraph of this Section 5, the Issuer hereby consents to the use of such Prospectus and each amendment or supplement thereto by each of the selling Holders of Registrable Securities or each such Participating Broker-Dealer, as the case may be, and the underwriters or agents, if any, and dealers, if any, in connection with the offering and sale of the Registrable Securities covered by, or the sale by Participating Broker-Dealers of the Exchange Securities pursuant to, such Prospectus and any amendment or supplement thereto.

 

(h)                                 Prior to any public offering of Registrable Securities or any delivery of a Prospectus contained in the Exchange Offer Registration Statement by any Participating Broker-Dealer who seeks to sell Exchange Securities during the Applicable Period, use its commercially reasonable efforts to register or qualify, and to cooperate with the selling Holders of Registrable Securities or each such Participating Broker-Dealer, as the case may be, the managing underwriter or underwriters, if any, and their respective counsel in connection with the registration or qualification (or exemption from such registration or qualification) of such Registrable Securities for offer and sale under the securities or Blue Sky laws of such jurisdictions within the United States as any selling Holder, Participating Broker-Dealer, or the managing underwriter or underwriters reasonably request in writing; provided, however, that where Exchange Securities held by Participating Broker-Dealers or Registrable Securities are offered other than through an underwritten offering, the Issuer agrees to cause its counsel to perform Blue Sky investigations and file registrations and qualifications required to be filed pursuant to this Section 5(h), keep each such registration or qualification (or exemption therefrom) effective during the period such Registration Statement is required to be kept effective and do any and all other acts or things necessary or advisable to enable the disposition in such jurisdictions of the Exchange Securities held by Participating Broker-Dealers or the

 

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Registrable Securities covered by the applicable Registration Statement; provided, however, that the Issuer shall not be required to (A) qualify generally to do business in any jurisdiction where it is not then so qualified, (B) take any action that would subject it to general service of process in any such jurisdiction where it is not then so subject or (C) subject itself to taxation in excess of a nominal dollar amount in any such jurisdiction where it is not then so subject.

 

(i)                                     If a Shelf Registration is filed pursuant to Section 3 hereof, cooperate with the selling Holders of Registrable Securities and the managing underwriter or underwriters, if any, to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold, which certificates shall not bear any restrictive legends and shall be in a form eligible for deposit with The Depository Trust Company; and enable such Registrable Securities to be in such denominations (subject to applicable requirements contained in the Indenture) and registered in such names as the managing underwriter or underwriters, if any, or Holders may request.

 

(j)                                    Use its commercially reasonable efforts to cooperate with a selling Holder to cause the Registrable Securities covered by the Registration Statement to be registered with or approved by such other U.S. governmental agencies or authorities as may be necessary to enable the seller or sellers thereof or the underwriter or underwriters, if any, to consummate the disposition of such Registrable Securities, except as may be required solely as a consequence of the nature of such selling Holder’s business, in which case the Issuer will cooperate in all respects with the filing of such Registration Statement and the granting of such approvals.

 

(k)                                 If (1) a Shelf Registration is filed pursuant to Section 3 hereof, or (2) a Prospectus contained in the Exchange Offer Registration Statement filed pursuant to Section 2 hereof is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Securities during the Applicable Period, upon the occurrence of any event contemplated by Section 5(c)(v) or 5(c)(vi) hereof, as promptly as practicable prepare and (subject to Section 5(a) hereof) file with the SEC, at the sole expense of the Issuer, a supplement or post-effective amendment to the Registration Statement or a supplement to the related Prospectus or any document incorporated therein by reference, or file any other required document so that, as thereafter delivered to the purchasers of the Registrable Securities being sold thereunder (with respect to a Registration Statement filed pursuant to Section 3 hereof) or to the purchasers of the Exchange Securities to whom such Prospectus will be delivered by a Participating Broker-Dealer (with respect to any such Registration Statement), any such Prospectus will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

 

(l)                                     Prior to the effective date of the first Registration Statement relating to the Registrable Securities, (i) provide the Trustee with certificates for the Registrable Securities in a form eligible for deposit with The Depository Trust Company and (ii) provide a CUSIP number for the Registrable Securities.

 

(m)                             In connection with any underwritten offering of Registrable Securities pursuant to a Shelf Registration, enter into an underwriting agreement as is customary in underwritten offerings of debt securities similar to the Notes (including, without limitation, a

 

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customary condition to the obligations of the underwriters that the underwriters shall have received “cold comfort” letters and updates thereof in form, scope and substance reasonably satisfactory to the managing underwriter or underwriters from the independent registered public accountants of the Issuer (and, if necessary, any other independent registered public accountants of the parent or any subsidiary of the Issuer, or of any business acquired by the Issuer, for which financial statements and financial data are, or are required to be, included or incorporated by reference in the Registration Statement), addressed to each of the underwriters, such letters to be in customary form and covering matters of the type customarily covered in “cold comfort” letters in connection with underwritten offerings of debt securities similar to the Securities), and take all such other customary actions as are reasonably requested by the managing underwriter or underwriters in order to expedite or facilitate the registration or the disposition of such Registrable Securities and, in such connection, (i) make such representations and warranties to, and covenants with, the underwriters with respect to the business of the Issuer (including any acquired business, properties or entity, if applicable), and the Registration Statement, Prospectus and documents, if any, incorporated or deemed to be incorporated by reference therein, in each case, as are customarily made by issuers to underwriters in underwritten offerings of debt securities similar to the Securities, and confirm the same in writing if and when requested; (ii) obtain the written opinions of counsel to the Issuer, and written updates thereof in form, scope and substance reasonably satisfactory to the managing underwriter or underwriters, addressed to the underwriters covering the matters customarily covered in opinions reasonably requested in underwritten offerings; and (iii) if an underwriting agreement is entered into, the same shall contain indemnification provisions and procedures no less favorable to the sellers and underwriters, if any, than those set forth in Section 7 hereof (or such other provisions and procedures reasonably acceptable to Holders of a majority in aggregate principal amount of Registrable Securities covered by such Registration Statement and the managing underwriter or underwriters or agents, if any).  The above shall be done at each closing under such underwriting agreement, or as and to the extent required thereunder.

 

(n)                                 If (1) a Shelf Registration is filed pursuant to Section 3 hereof, or (2) a Prospectus contained in the Exchange Offer Registration Statement filed pursuant to Section 2 hereof is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, make available for inspection by any Initial Purchaser, any selling Holder of such Registrable Securities being sold (with respect to a Registration Statement filed pursuant to Section 3 hereof), or each such Participating Broker-Dealer, as the case may be, any underwriter participating in any such disposition of Registrable Securities, if any, and any attorney (which shall be a single firm selected by the Holders holding a majority in principal amount of the Registrable Securities covered by such Registration Statement), accountant or other agent retained by any such selling Holder or each such Participating Broker-Dealer (with respect to any such Registration Statement), as the case may be, or underwriter (any such Initial Purchasers, Holders, Participating Broker-Dealers, underwriters, attorneys, accountants or agents, collectively, the “Inspectors”), upon written request, at the offices where normally kept, during reasonable business hours, all pertinent financial and other records, pertinent corporate documents and instruments of the Issuer and its subsidiaries (collectively, the “Records”), as shall be reasonably necessary to enable them to exercise any applicable due diligence responsibilities, and cause the officers, directors and employees of the Issuer and any of its subsidiaries to supply all information (“Information”)

 

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reasonably requested by any such Inspector in connection with such due diligence responsibilities.  Each Inspector shall agree in writing that it will keep the Records and Information confidential, to use the Records and Information only for due diligence purposes, to abstain from using the Records and Information as the basis for any market transactions in securities of the Issuer and that it will not disclose any of the Records or Information that the Issuer determines, in good faith, to be confidential and notifies the Inspectors in writing are confidential unless (i) the disclosure of such Records or Information is necessary to avoid or correct a misstatement or omission in such Registration Statement or Prospectus, (ii) the release of such Records or Information is ordered pursuant to a subpoena or other order from a court of competent jurisdiction, (iii) disclosure of such Records or Information is necessary or advisable, in the opinion of counsel for any Inspector, in connection with any action, claim, suit or proceeding, directly or indirectly, involving or potentially involving such Inspector and arising out of, based upon, relating to, or involving this Agreement, the Indenture or the Purchase Agreement, or any transactions contemplated hereby or thereby or arising hereunder or thereunder, or (iv) the information in such Records or Information has been made generally available to the public other than by an Inspector or an “affiliate” (as defined in Rule 405) thereof; provided, however, that prior notice shall be provided as soon as practicable to the Issuer of the potential disclosure of any information by such Inspector pursuant to clause (ii) or (iii) of this sentence to permit the Issuer to obtain a protective order (or waive the provisions of this paragraph (n)) and that such Inspector shall take such actions as are reasonably necessary to protect the confidentiality of such information (if practicable) to the extent such action is otherwise not inconsistent with, an impairment of or in derogation of the rights and interests of the Holder or any Inspector.

 

(o)                                 Provide an indenture trustee for the Registrable Securities or the Exchange Securities, as the case may be, and cause the Indenture or the trust indenture provided for in Section 2(a) hereof, as the case may be, to be qualified under the TIA not later than the effective date of the first Registration Statement relating to the Registrable Securities; and in connection therewith, cooperate with the trustee under any such indenture and the Holders of the Registrable Securities, to effect such changes (if any) to such indenture as may be required for such indenture to be so qualified in accordance with the terms of the TIA; and execute, and use its commercially reasonable efforts to cause such trustee to execute, all documents as may be required to effect such changes, and all other forms and documents required to be filed with the SEC to enable such indenture to be so qualified in a timely manner.

 

(p)                                 Comply with Section 4.03 of the Indenture.

 

(q)                                 Upon consummation of the Exchange Offer or a Private Exchange, obtain an opinion of counsel to the Issuer as required pursuant to the Indenture.  If the Exchange Offer or a Private Exchange is to be consummated, upon delivery of the Registrable Securities by Holders to the Issuer (or to such other Person as directed by the Issuer), in exchange for the Exchange Securities or the Private Exchange Notes (and the related Guarantees), as the case may be, the Issuer shall mark, or cause to be marked, on such Registrable Securities that such Registrable Securities are being cancelled in exchange for the Exchange Securities or the Private Exchange Notes (and the related guarantees), as the case may be; in no event shall such Registrable Securities be marked as paid or otherwise satisfied.

 

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(r)                                    Use commercially reasonable efforts to cooperate with each seller of Registrable Securities covered by any Registration Statement and each underwriter, if any, participating in the disposition of such Registrable Securities and their respective counsel in connection with any filings required to be made with the Financial Industry Regulatory Authority, Inc. (“FINRA”).

 

(s)                                   Use its commercially reasonable efforts to take all other steps reasonably necessary to effect the registration of the Exchange Securities and/or Registrable Securities covered by a Registration Statement contemplated hereby.

 

(t)                                    So long as any Registrable Securities remain outstanding, cause each Additional Guarantor upon the creation or acquisition by the Issuer of such Additional Guarantor, to execute a counterpart to this Agreement in the form attached hereto as Exhibit A and to deliver such counterpart to the Initial Purchasers no later than five Business Days following the execution thereof.

 

The Issuer may require each seller of Registrable Securities as to which any registration is being effected to furnish to the Issuer such information regarding such seller and the distribution of such Registrable Securities as the Issuer may, from time to time, reasonably request.  The Issuer may exclude from such registration the Registrable Securities of any seller so long as such seller fails to furnish such information within a reasonable time after receiving such request.  Each seller as to which any Shelf Registration is being effected agrees to furnish promptly to the Issuer all information required to be disclosed in order to make the information previously furnished to the Issuer by such seller not materially misleading.

 

If any such Registration Statement refers to any Holder by name or otherwise as the holder of any securities of the Issuer, then such Holder shall have the right to require (i) the insertion therein of language, in form and substance reasonably satisfactory to such Holder, to the effect that the holding by such Holder of such securities is not to be construed as a recommendation by such Holder of the investment quality of the securities covered thereby and that such holding does not imply that such Holder will assist in meeting any future financial requirements of the Issuer, or (ii) in the event that such reference to such Holder by name or otherwise is not required by the Securities Act or any similar federal statute then in force, the deletion of the reference to such Holder in any amendment or supplement to the Registration Statement filed or prepared subsequent to the time that such reference ceases to be required.

 

Each Holder of Registrable Securities and each Participating Broker-Dealer agrees by its acquisition of such Registrable Securities or Exchange Securities to be sold by such Participating Broker-Dealer, as the case may be, that, upon actual receipt of any notice from the Issuer of the happening of any event of the kind described in Section 5(c)(ii), 5(c)(iv), 5(c)(v) or 5(c)(vi) hereof, such Holder will forthwith discontinue disposition of such Registrable Securities covered by such Registration Statement or Prospectus or Exchange Securities to be sold by such Holder or Participating Broker-Dealer, as the case may be, until such Holder’s or Participating Broker-Dealer’s receipt of the copies of the supplemented or amended Prospectus contemplated by Section 5(k) hereof, or until it is advised in writing (the “Advice”) by the Issuer that the use of the applicable Prospectus may be resumed, and has received copies of any amendments or supplements thereto.  In the event that the Issuer shall give any such notice, each of the

 

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Applicable Period and the Effectiveness Period shall be extended by the number of days during such periods from and including the date of the giving of such notice to and including the date when each seller of Registrable Securities covered by such Registration Statement or Exchange Securities to be sold by such Participating Broker-Dealer, as the case may be, shall have received (x) the copies of the supplemented or amended Prospectus contemplated by Section 5(k) hereof or (y) the Advice, ending when all Registrable Securities covered by such Registration Statement or Exchange Securities to be sold by such Participating Broker-Dealer have been sold in the manner set forth herein and as contemplated hereby.

 

6.                                      Registration Expenses

 

All fees and expenses incident to the performance of or compliance with this Agreement by the Issuer of its obligations under Sections 2, 3, 5 and 8 hereof shall be borne by the Issuer, whether or not the Exchange Offer Registration Statement or any Shelf Registration Statement is filed or becomes effective or the Exchange Offer is consummated, including, without limitation, (i) all registration and filing fees (including, without limitation, (A) fees with respect to filings required to be made with FINRA in connection with an underwritten offering and (B) fees and expenses of compliance with state securities or Blue Sky laws (including, without limitation, reasonable fees and disbursements of counsel in connection with Blue Sky qualifications of the Registrable Securities or Exchange Securities and determination of the eligibility of the Registrable Securities or Exchange Securities for investment under the laws of such jurisdictions in the United States (x) where the holders of Registrable Securities are located, in the case of the Exchange Securities, or (y) as provided in Section 5(h) hereof, in the case of Registrable Securities or Exchange Securities to be sold by a Participating Broker-Dealer during the Applicable Period)), (ii) printing expenses, including, without limitation, printing prospectuses if the printing of prospectuses is requested by the managing underwriter or underwriters, if any, by the Holders of a majority in aggregate principal amount of the Registrable Securities included in any Registration Statement or in respect of Registrable Securities or Exchange Securities to be sold by any Participating Broker-Dealer during the Applicable Period, as the case may be, (iii) fees and expenses of the Trustee, any exchange agent and their counsel, (iv) fees and disbursements of counsel for the Issuer and, in the case of a Shelf Registration, reasonable fees and disbursements of one special counsel for all of the sellers of Registrable Securities selected by the Holders of a majority in aggregate principal amount of Registrable Securities covered by such Shelf Registration (which counsel shall be reasonably satisfactory to the Issuer) exclusive of any counsel retained pursuant to Section 7 hereof), (v) fees and disbursements of all independent registered public accountants referred to in Section 5(m) hereof (including, without limitation, the expenses of any “cold comfort” letters required by or incident to such performance), (vi) rating agency fees, if any, and any fees associated with making the Registrable Securities or Exchange Securities eligible for trading through The Depository Trust Company, (vii) Securities Act liability insurance, if the Issuer desires such insurance, (viii) fees and expenses of all other Persons retained by the Issuer, (ix) internal expenses of the Issuer (including, without limitation, all salaries and expenses of officers and employees of the Issuer performing legal or accounting duties), (x) the expense of any annual audit, (xi) any fees and expenses incurred in connection with the listing of the securities to be registered on any securities exchange, and the obtaining of a rating of the securities, in each case, if applicable and (xii) the expenses relating to printing, word processing and distributing all

 

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Registration Statements, underwriting agreements, indentures and any other documents necessary in order to comply with this Agreement.

 

7.                                      Indemnification and Contribution

 

(a)                                 The Issuer and the Guarantors, jointly and severally, agree to indemnify and hold harmless each Holder of Registrable Securities and each Participating Broker-Dealer selling Exchange Securities during the Applicable Period, and each Person, if any, who controls any such Persons or its affiliates within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (each, a “Participant”) against any losses, claims, damages or liabilities, joint or several, to which any Participant may become subject under the Securities Act, the Exchange Act or otherwise, insofar as any such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon:

 

(i)                  any untrue statement or alleged untrue statement of any material fact contained in any Registration Statement (or any amendment thereto) or Prospectus (as amended or supplemented if the Issuer shall have furnished any amendments or supplements thereto) or any preliminary prospectus; or

 

(ii)               the omission or alleged omission to state, in any Registration Statement (or any amendment thereto) or Prospectus (as amended or supplemented if the Issuer shall have furnished any amendments or supplements thereto) or any preliminary prospectus or any other document or any amendment or supplement thereto, a material fact required to be stated therein or necessary to make the statements therein not misleading,

 

and agree (subject to the limitations set forth in this sentence) to reimburse, as incurred, the Participant for any reasonable legal or other expenses incurred by the Participant in connection with investigating, defending against or appearing as a third-party witness in connection with any such loss, claim, damage, liability or action; provided, however, neither the Issuer nor the Guarantors will be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon any untrue statement or alleged untrue statement or omission or alleged omission made in any Registration Statement (or any amendment thereto) or Prospectus (as amended or supplemented if the Issuer shall have furnished any amendments or supplements thereto) or any preliminary prospectus or any amendment or supplement thereto in reliance upon and in conformity with written information relating to any Participant furnished to the Issuer by such Participant specifically for use therein.  The indemnity provided for in this Section 7 will be in addition to any liability that the Issuer and the Guarantors may otherwise have to the indemnified parties.  The Issuer and the Guarantors shall not be liable under this Section 7 to any indemnified party regarding any settlement or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent is consented to by the Issuer and the Guarantors, which consent shall not be unreasonably withheld.

 

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(b)                                 Each Participant, severally and not jointly, agrees to indemnify and hold harmless the Issuer, the Guarantors, their respective directors (or equivalent), their respective officers who sign any Registration Statement and each person, if any, who controls the Issuer within the meaning of Section 15 of the Act or Section 20 of the Exchange Act against any losses, claims, damages or liabilities to which the Issuer, the Guarantors or any such director, officer or controlling person may become subject under the Securities Act, the Exchange Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon (i) any untrue statement or alleged untrue statement of any material fact contained in any Registration Statement or Prospectus, any amendment or supplement thereto, or any preliminary prospectus, or (ii) the omission or the alleged omission to state therein a material fact necessary to make the statements therein not misleading, in each case to the extent, 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 written information concerning such Participant, furnished to the Issuer by or on behalf of such Participant, specifically for use therein; and subject to the limitation set forth immediately preceding this clause, will reimburse, as incurred, any reasonable legal or other expenses incurred by the Issuer, the Guarantors or any such director, officer or controlling person in connection with investigating or defending against or appearing as a third party witness in connection with any such loss, claim, damage, liability or action in respect thereof.  The indemnity provided for in this Section 7 will be in addition to any liability that the Participants may otherwise have to the indemnified parties.  The Participants shall not be liable under this Section 7 to any indemnified party regarding any settlement or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent is consented to by the Participants, which consent shall not be unreasonably withheld.

 

(c)                                  Promptly after receipt by an indemnified party under this Section 7 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 7, notify the indemnifying party of the commencement thereof in writing; but the omission to so notify the indemnifying party (i) will not relieve it from any liability under paragraph (a) or (b) above unless and to the extent such indemnifying party did not otherwise learn of such action and such failure results in the forfeiture by the indemnifying party of substantial rights and defenses and (ii) will not, in any event, relieve the indemnifying party from any obligations to any indemnified party other than the indemnification obligation provided in paragraphs (a) and (b) above.  The indemnifying party shall be entitled to appoint counsel (including local counsel) of the indemnifying party’s choice at the indemnifying party’s expense to represent the indemnified party in any action for which indemnification is sought (in which case the indemnifying party shall not thereafter be responsible for the fees and expenses of any separate counsel, other than local counsel if not appointed by the indemnifying party, retained by the indemnified party or parties except as set forth below); provided, however, that such counsel shall be reasonably satisfactory to the indemnified party.  Notwithstanding the indemnifying party’s election to appoint counsel (including local counsel) to represent the indemnified party in an action, the indemnified party shall have the right to employ separate counsel (including local counsel), and

 

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the indemnifying party shall bear the reasonable fees, costs and expenses of such separate counsel if (i) the use of counsel chosen by the indemnifying party to represent the indemnified party would present such counsel with a conflict of interest (based on the advice of counsel to the indemnified person); (ii) such action includes both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded (based on the advice of counsel to the indemnified person) that there may be legal defenses available to it and/or other indemnified parties that are different from or additional to those available to the indemnifying party; (iii) the indemnifying party shall not have employed counsel reasonably satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of the institution of such action; or (iv) the indemnifying party shall authorize the indemnified party to employ separate counsel at the expense of the indemnifying party.  It is understood and agreed that the indemnifying person shall not, in connection with any proceeding or separate but related or substantially similar proceedings in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of more than one separate firm (in addition to any local counsel) representing the indemnified parties under paragraph (a) or paragraph (b) of this Section 7, as the case may be, who are parties to such action or actions.  In the event that any Participants are indemnified persons collectively entitled, in connection with a proceeding or separate but related or substantially similar proceedings in a single jurisdiction, to the payment of fees and expenses of a single separate firm under this Section 7(c), and any such Participants cannot agree to a mutually acceptable separate firm to act as counsel thereto, then such separate firm for all such Indemnified Persons shall be designated in writing by Participants who sold a majority in interest of the Registrable Securities and Exchange Securities sold by all such Participants.  An indemnifying party will not, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent includes an unconditional release of each indemnified party from all liability arising out of such claim, action, suit or proceeding and does not include any statement as to, or any admission of, fault, culpability or failure to act by or on behalf of any indemnified party.  All fees and expenses that are reimbursable pursuant to this paragraph (c) shall be reimbursed as they are incurred.

 

(d)                                 After notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof and approval by such indemnified party of counsel appointed to defend such action, the indemnifying party will not be liable to such indemnified party under this Section 7 for any legal or other expenses, other than reasonable costs of investigation, subsequently incurred by such indemnified party in connection with the defense thereof, unless (i) the indemnified party shall have employed separate counsel in accordance with the third sentence of paragraph (c) of this Section 7 or (ii) the indemnifying party has authorized in writing the employment of counsel for the indemnified party at the expense of the indemnifying party.  After such notice from the indemnifying party to such indemnified party, the indemnifying party will not be liable for the costs and expenses of any settlement of such action effected by such indemnified party without the prior written consent of the indemnifying party (which consent shall not be unreasonably withheld), unless such indemnified party waived

 

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in writing its rights under this Section 7, in which case the indemnified party may effect such a settlement without such consent.

 

(e)                                  In circumstances in which the indemnity agreement provided for in the preceding paragraphs of this Section 7 is unavailable to, or insufficient to hold harmless, an indemnified party in respect of any losses, claims, damages or liabilities (or actions in respect thereof) (other than by virtue of the failure of an indemnified party to notify the indemnifying party of its right to indemnification pursuant to paragraph (a) or (b) of this Section 7, where such failure materially prejudices the indemnifying party (through the forfeiture of substantial rights or defenses)), each indemnifying party, in order to provide for just and equitable contribution, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect (i) the relative benefits received by the indemnifying party or parties on the one hand and the indemnified party on the other from the offering of the Notes or (ii) if the allocation provided by the foregoing clause (i) is not permitted by applicable law, not only such relative benefits but also the relative fault of the indemnifying party or parties on the one hand and the indemnified party on the other in connection with the statements or omissions or alleged statements or omissions that resulted in such losses, claims, damages or liabilities (or actions in respect thereof).  The relative benefits received by the Issuer and the Guarantors on the one hand and such Participant on the other shall be deemed to be in the same proportion that the total net proceeds from the offering (before deducting expenses) of the Notes received by the Issuer bear to the total discounts and commissions received by such Participant in connection with the sale of the Notes (or if such Participant did not receive discounts or commissions, the value of receiving the Notes sold).  The relative fault of the parties shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Issuer on the one hand, or the Participants on the other, the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission or alleged statement or omission, and any other equitable considerations appropriate in the circumstances.  The parties agree that it would not be equitable if the amount of such contribution were determined by pro rata or per capita allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the first sentence of this paragraph (e).  Notwithstanding any other provision of this paragraph (e), no Participant shall be obligated to make contributions hereunder that in the aggregate exceed the total discounts, commissions and other compensation received by each Participant in connection with the sale of the Notes (or if such Participant did not receive discounts or commissions, the net proceeds on the sale of Notes received by such Participant in connection with the sale of the Notes), less the aggregate amount of any damages that such Participant has otherwise been required to pay by reason of the untrue or alleged untrue statements or the omissions or alleged omissions to state a material fact, and no person guilty of fraudulent misrepresentation (within the meaning of Section 10(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.  For purposes of this paragraph (e), each person, if any, who controls a Participant within the meaning of Section 15 of the Act or Section 20 of the Exchange Act shall have the same rights to contribution as the Participants, and each director and officer of the Issuer and the Guarantors and each person, if any, who controls the Issuer and the Guarantors

 

22

 

within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, shall have the same rights to contribution as the Issuer.

 

8.                                      Rule 144A

 

The Issuer covenants and agrees that it will use commercially reasonable efforts to file the reports required to be filed by it under the Securities Act and the Exchange Act and the rules and regulations adopted by the SEC thereunder in a timely manner in accordance with the requirements of the Securities Act and the Exchange Act and, if at any time the Issuer is not required to file such reports, the Issuer will, upon the request of any Holder or beneficial owner of Registrable Securities, make available such information necessary to permit sales pursuant to Rule 144A.  The Issuer covenants and agrees, for so long as any Registrable Securities remain outstanding that it will take such further action as any Holder of Registrable Securities may reasonably request, all to the extent required from time to time to enable such holder to sell Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by Rule 144A unless the Issuer is then subject to Section 13 or 15(d) of the Exchange Act and reports filed thereunder satisfy the information requirements of Rule 144A then in effect.

 

9.                                      Underwritten Registrations

 

The Issuer shall not be required to assist in an underwritten offering unless requested by the Holders of a majority in aggregate principal amount of the Registrable Securities.  If any of the Registrable Securities covered by any Shelf Registration are to be sold in an underwritten offering, the underwriters and managers that will manage the offering will be selected by the Holders of a majority in aggregate principal amount of such Registrable Securities included in such offering and shall be reasonably acceptable to the Issuer.

 

No Holder of Registrable Securities may participate in any underwritten registration hereunder unless such Holder (a) agrees to sell such Holder’s Registrable Securities on the basis provided in any underwriting arrangements approved by the Persons entitled hereunder to approve such arrangements and (b) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents required under the terms of such underwriting arrangements.

 

10.                               Miscellaneous

 

(a)                                 No Inconsistent Agreements.  The Issuer and the Guarantors have not as of the date hereof, and the Issuer and the Guarantors shall not, after the date of this Agreement, enter into any agreement with respect to any of its securities that is inconsistent with the rights granted to the Holders of Registrable Securities in this Agreement or otherwise conflicts with the provisions hereof.  The rights granted to the Holders hereunder do not in any way conflict with and are not inconsistent with the rights granted to the holders of the Issuer’s other issued and outstanding securities under any such agreements.  The Issuer and the Guarantors will not enter into any agreement with respect to any of the Issuer’s securities which will grant to any Person “piggy-back” registration rights with respect to any Registration Statement filed pursuant to this Agreement.

 

23

 

(b)                                 Adjustments Affecting Registrable Securities.  The Issuer and the Guarantors shall not, directly or indirectly, take any action with respect to the Registrable Securities as a class that would adversely affect the ability of the Holders of Registrable Securities to include such Registrable Securities in a registration undertaken pursuant to this Agreement.

 

(c)                                  Amendments and Waivers.  The provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, otherwise than with the prior written consent of (i) the Issuer, and (ii) (a) the Holders of not less than a majority in aggregate principal amount of the then outstanding Registrable Securities and (b) in circumstances that would adversely affect the Participating Broker-Dealers, the Participating Broker-Dealers holding not less than a majority in aggregate principal amount of the Exchange Securities held by all Participating Broker-Dealers; provided, however, that Section 7 and this Section 10(c) may not be amended, modified or supplemented without the prior written consent of each Holder and each Participating Broker-Dealer (including any person who was a Holder or Participating Broker-Dealer of Registrable Securities or Exchange Securities, as the case may be, disposed of pursuant to any Registration Statement) affected by any such amendment, modification or supplement.  Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of Holders of Registrable Securities whose securities are being sold pursuant to a Registration Statement and that does not directly or indirectly affect, impair, limit or compromise the rights of other Holders of Registrable Securities may be given by Holders of at least a majority in aggregate principal amount of the Registrable Securities being sold pursuant to such Registration Statement.

 

(d)                                 Notices.  All notices and other communications (including, without limitation, any notices or other communications to the Trustee and the registrar, paying agent and transfer agent) provided for or permitted hereunder shall be made in writing by hand-delivery, registered first-class mail, next-day air courier or facsimile:

 

(i)                  if to a Holder of the Registrable Securities or any Participating Broker-Dealer, at the most current address of such Holder or Participating Broker-Dealer, as the case may be, set forth on the records of the registrar under the Indenture;

 

(ii)        if to the Issuer, at the address as follows:

 

Laureate Education, Inc.
 650 S. Exeter Street

Baltimore, Maryland 21202
 Facsimile No.:  [       ]
 Attention:  Robert W. Zentz, Esq., Senior Vice President, Secretary and General Counsel

 

24

 

with a copy to:

 

DLA Piper LLP (US)
 6225 Smith Avenue
 Baltimore, Maryland 21209
 Facsimile No.:  [       ]
 Attention:  Robert W. Smith, Jr., Esq.

 

All such notices and communications shall be deemed to have been duly given:  when delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; one Business Day after being timely delivered to a next-day air courier; and upon written confirmation, if sent by facsimile.

 

Copies of all such notices, demands or other communications shall be concurrently delivered by the Person giving the same to the Trustee or the registrar, paying agent and/or transfer agent at the respective addresses and in the manner specified in such Indenture.

 

(e)                                  Successors and Assigns.  This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties hereto, the Holders and the Participating Broker-Dealers; provided, however, that nothing herein shall be deemed to permit any assignment, transfer or other disposition of Registrable Securities in violation of the terms of the Purchase Agreement or the Indenture.

 

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

 

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

 

(h)                                 GOVERNING LAW.  THIS AGREEMENT AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED ENTIRELY WITHIN THE STATE OF NEW YORK.  EACH OF THE PARTIES HEREBY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT.

 

(i)                                     Severability.  If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their best efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant

 

25

 

or restriction.  It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.

 

(j)                                    Notes Held by the Issuer or Its Affiliates.  Whenever the consent or approval of Holders of a specified percentage of Registrable Securities is required hereunder, Registrable Securities held by the Issuer or its affiliates (as such term is defined in Rule 405 under the Securities Act) shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage.

 

(k)                                 Third-Party Beneficiaries.  Holders of Registrable Securities and Participating Broker-Dealers are intended third-party beneficiaries of this Agreement, and this Agreement may be enforced by such Persons.

 

(l)                                     Entire Agreement.  This Agreement, together with the Purchase Agreement and the Indenture, is intended by the parties as a final and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein and therein and any and all prior oral or written agreements, representations, or warranties, contracts, understandings, correspondence, conversations and memoranda between the Holders on the one hand and the Issuer on the other, or between or among any agents, representatives, parents, subsidiaries, affiliates, predecessors in interest or successors in interest with respect to the subject matter hereof and thereof are merged herein and replaced hereby.

 

[Signature Page Follows]

 

26

 

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

 

	
 
    	
LAUREATE EDUCATION, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Robert W. Zentz
    
	
 
    	
 
    	
Name:
    	
Robert W. Zentz
    
	
 
    	
 
    	
Title: 
    	
Senior Vice President,   Secretary and General Counsel
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
LAUREATE VENTURES, INC.
    
	
 
    	
LAUREATE INTERNATIONAL UNIVERSITIES, INC.
    
	
 
    	
INTERNATIONAL UNIVERSITY VENTURES, LTD.
    
	
 
    	
LAUREATE PROPERTIES, LLC (DELAWARE)
    
	
 
    	
POST-SECONDARY EDUCATION ACQUISITION CORPORATION
    
	
 
    	
TUITION FINANCE, INC.
    
	
 
    	
WALDEN E-LEARNING, LLC
    
	
 
    	
THE CANTER GROUP OF COMPANIES, LLC
    
	
 
    	
LAUREATE EDUCATION INTERNATIONAL LTD.
    
	
 
    	
CANTER AND ASSOCIATES, LLC
    
	
 
    	
EDUCATIONAL SATELLITE SERVICES, INC.
    
	
 
    	
WALL STREET INTERNATIONAL HOLDINGS — US   I, INC.
    
	
 
    	
LEI ADMINISTRATION, LLC
    
	
 
    	
EXETER STREET HOLDINGS LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Robert W. Zentz
    
	
 
    	
 
    	
Name:
    	
Robert W. Zentz
    
	
 
    	
 
    	
Title:
    	
Vice President and   Secretary
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
LAUREATE BAGBY INVESTORS LLC
    
	
 
    	
 
    
	
 
    	
By:
    	
LAUREATE   EDUCATION, INC.,
    
	
 
    	
 
    	
its Sole Member
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Robert W. Zentz
    
	
 
    	
 
    	
Name:
    	
Robert W. Zentz
    
	
 
    	
 
    	
Title:
    	
Senior Vice President,   Secretary and General Counsel
    

 

Signature Page to Registration Rights Agreement

 

 

	
 
    	
FLEET STREET AVIATION, LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Robert W. Zentz
    
	
 
    	
 
    	
Name:
    	
Robert W. Zentz
    
	
 
    	
 
    	
Title:
    	
Manager
    

 

Signature Page to Registration Rights Agreement

 

 

The foregoing Agreement is hereby
 confirmed and accepted as of the 
 date first above written.

 

CITIGROUP GLOBAL MARKETS, INC.
 J.P. MORGAN SECURITIES LLC

Acting on behalf of themselves and as the
 Representatives of the several Initial Purchasers

 

 

	
By:
    	
/s/ Caesar   Wyszomirski
    	
 
    
	
 
    	
Name: Caesar   Wyszomirski
    	
 
    
	
 
    	
Title: Director
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/ Varun   Rastogi
    	
 
    
	
 
    	
Name: Varun   Rastogi
    	
 
    
	
 
    	
Title: Vice   President
    	
 
    

 

Signature Page to Registration Rights Agreement

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