REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated as of January 31,
1996, is entered into by and among Western Publishing Group, Inc., a Delaware
corporation (the "Company"), ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇▇▇"), the Trust, fbo
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ u/a March 16, 1978, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇,
as trustees (the "▇▇▇▇▇▇▇▇▇ Trust"), The ▇▇▇▇▇▇▇ ▇. and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Foundation, Inc., a New York not-for-profit corporation (the "▇▇▇▇▇▇▇▇▇
Foundation"), and the Trust fbo ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ u/a ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
dated April 5, 1986, Fleet National Bank of Connecticut, as trustee (the "Fleet
National Trust").
WHEREAS, ▇▇▇▇▇▇▇▇▇ is the owner of 3,501,000 shares of common
stock, par value $.01 per share, of the Company ("Common Stock"), the ▇▇▇▇▇▇▇▇▇
Trust is the owner of 400,000 shares of Common Stock, the ▇▇▇▇▇▇▇▇▇ Foundation
is the owner of 60,000 shares of Common Stock and the Fleet National Trust is
the owner of 95,771 shares of Common Stock (collectively, the "Registrable
Securities" (subject to Section 1(e) below));
WHEREAS, the Company has agreed to grant to each Holder
certain rights to have the shares of Common Stock owned by such Holder
registered under the Securities Act of 1933, as amended (the "Act");
NOW, THEREFORE, in consideration of the foregoing and the
mutual promises and covenants herein contained, the parties hereto hereby agree
as follows:
SECTION 1. Definitions.
As used in this Agreement:
(a) "Commission" shall mean the Securities and Exchange
Commission or any other federal agency at the time administering the Act;
(b) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended;
(c) the term "Holders" shall mean ▇▇▇▇▇▇▇▇▇, the ▇▇▇▇▇▇▇▇▇
Trust, the ▇▇▇▇▇▇▇▇▇ Foundation, the Fleet National Trust and permitted
transferees of Registrable Securities pursuant to Section 10 hereof;
(d) the term "Initiating Holder" shall mean any Holder or
Holders who in the aggregate are Holders of more than 50% of the then
outstanding Registrable Securities;
(e) the terms "register," "registered" and "registration"
refer to a registration effected by preparing and filing a registration
statement in compliance with the Act (and any post-effective amendments filed or
required to be filed) and the declaration or ordering of effectiveness of such
registration statement;
(f) "Registrable Securities" is defined in the first recital
hereof and shall also include any capital stock of the Company issued as a
dividend or other distribution with respect to, or in exchange for or in
replacement of, any such securities, provided, however, that any shares
transferred to a person other than a Holder shall cease to be Registrable
Securities;
(g) "Registration Expenses" shall mean all expenses incurred
by the Company in compliance with Sections 2, 3, 4, 5 and 6 hereof, including,
without limitation, all registration and filing fees, printing expenses, fees
and disbursements of counsel for the Company, blue sky fees and expenses, the
expense of any special audits incident to or required by any such registration
(but excluding the compensation of regular employees of the Company, which shall
be paid in any event by the Company);
(h) "Selling Expenses" shall mean all underwriting discounts
and selling commissions applicable to the sale of Registrable Securities and all
fees and disbursements of counsel for each of the Holders.
SECTION 2. Demand Registration.
(a) Request for Registration. If the Company shall receive
from an Initiating Holder, at any time after the Company's publicly announcing
(which may include disclosure in the proxy statement mailed to the holders of
Company Common Stock in connection with the transaction contemplated by the
Securities Purchase Agreement (as defined in Section 7(a) hereof)) the
consolidated financial results of the Company and its consolidated subsidiaries
for the fiscal year ending February 3, 1996 in the same detail as the Company's
public announcement of such results for the fiscal year ended January 29, 1995
(containing at least the consolidated revenues, operating income and net income
of the Company and its consolidated subsidiaries),
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a written request that the
Company effect any registration with respect to all or a part of the Registrable
Securities, the Company will:
(i) within five (5) days of receipt of such
request, give written notice of the proposed registration,
qualification or compliance to all other Holders; and
(ii) as soon as practicable, use its diligent best
efforts to effect such registration (including, without
limitation, the execution of an undertaking to file
post-effective amendments, appropriate qualification under
applicable blue sky or other state securities laws and
appropriate compliance with applicable regulations issued
under the Act) as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of
such Registrable Securities as are specified in such request,
together with all or such portion of the Registrable
Securities of any Holder or Holders joining in such request as
are specified in a written request received by the Company
within ten (10) days after written notice from the Company is
given under Section 2(a)(i) above; provided further that the
Company shall not be obligated to effect, or take any action
to effect, any such registration pursuant to this Section 2:
(A) In any particular jurisdiction in
which the Company would be required to execute a
general consent to service of process in effecting
such registration, qualification or compliance,
unless the Company is already subject to service in
such jurisdiction and except as may be required by
the Act or applicable rules or regulations
thereunder;
(B) After the Company has effected two
(2) such registrations pursuant to this Section 2,
provided that the Company shall be deemed to have
effected such a registration if a registration
statement is filed at the request of the Holders and
(x) is subsequently withdrawn other than at the
initiative of the Company or (y) is declared
effective;
(C) If, after the first anniversary of
the date hereof, in the good faith judgment of the
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Board of Directors of the Company, it would not be in
the best interests of the Company and its
stockholders generally for such registration
statement to be filed, provided that such deferral
does not last longer than 90 days and will not occur
more than once in any 12-month period.
The registration statement filed pursuant to the request of
the Initiating Holders may, subject to the provisions of Section 2(b) below,
include other securities of the Company which are held by officers or directors
of the Company, or which are held by persons who, by virtue of agreements with
the Company, are entitled to include their securities in any such registration,
but the Company shall have no absolute right to include any of its securities in
any such registration.
(b) Underwriting. Any distribution of Registrable Securities
pursuant to this Section 2 shall be accomplished by means of a firm commitment
underwriting.
If officers or directors of the Company holding other
securities of the Company shall request inclusion in any registration pursuant
to Section 2, or if holders of securities of the Company other than Registrable
Securities who are entitled, by contract with the Company or otherwise, to have
securities included in such a registration (the "Other Stockholders") request
such inclusion, the Holders shall offer to include the securities of such
officers, directors and Other Stockholders in the underwriting and may condition
such offer on their acceptance of the further applicable provisions of this
Section 2. The Holders whose shares are to be included in such registration and
the Company shall (together with all officers, directors and Other Stockholders
proposing to distribute their securities through such underwriting) enter into
an underwriting agreement in customary form with the representative of the
underwriter or underwriters selected for such underwriting by the Company, which
selection shall be reasonably acceptable to the Initiating Holders.
Notwithstanding any other provision of this Section 2, if the representative
advises the Holders in writing that marketing factors require a limitation on
the number of shares to be underwritten, the securities of the Company held by
officers or directors (other than Registrable Securities) of the Company and the
securities held by Other Stockholders shall be excluded from such registration
to the extent so required by such limitation. If, after the exclusion of such
shares, further reductions are still required, the number of shares included in
the registration by each Holder shall be reduced on a pro rata basis (based on
the number of shares originally proposed to be registered by such Holder) by
such minimum number of shares as is
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necessary to comply with such request. No
Registrable Securities or any other securities excluded from the underwriting by
reason of the underwriter's marketing limitation shall be included in such
registration. If any of the Holders or any officer, director or Other
Stockholder who has requested inclusion in such registration as provided above
disapproves of the terms of the underwriting, such person may elect to withdraw
therefrom by written notice to the Company, the underwriter and the Initiating
Holders. The securities so withdrawn shall also be withdrawn from registration.
If the underwriter has not limited the number of Registrable Securities or other
securities to be underwritten, the Company may include its securities for its
own account in such registration if the representative so agrees and if the
number of Registrable Securities and other securities which would otherwise have
been included in such registration and underwriting will not thereby be limited.
(c) Conditions. Any offering of Registrable Securities
registered pursuant to this Section 2 shall be subject to the following
conditions:
(i) No purchaser shall be an
Entrepreneurial Investor (as defined in the Irrevocable Proxy,
dated as of even date herewith, between Golden Press Holding,
L.L.C. ("GP Holding") and the Shareholder); and
(ii) Such offering shall not be made for
reasonable periods before and, as determined by the managing
underwriter in respect of such offering, after the effective
date of a registration statement for any primary or secondary
public offering of the Company's securities.
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SECTION 3. Company Registration.
(a) Request For Registration. If the Company shall determine
to register any of its equity securities either for its own account or for the
account of a security holder or holders exercising their respective demand
registration rights (other than a registration relating solely to employee
benefit plans, or a registration relating solely to a Commission Rule 145
transaction, or a registration on any registration form which does not permit
secondary sales or does not include substantially the same information as would
be required to be included in a registration statement covering the sale of
Registrable Securities), the Company will:
(i) promptly give to each of the Holders a written
notice thereof which shall describe in reasonable detail the
proposed registration and distribution (including those
jurisdictions in which the Company intends to attempt to
qualify such securities under the applicable blue sky or other
state securities laws); and
(ii) include in such registration (and any related
qualification under blue sky laws or other compliance), and in
any underwriting involved therein, all the Registrable
Securities specified in a written request or requests, made by
the Holders within fifteen (15) days after receipt of the
written notice from the Company described in clause (i) above,
except as set forth in Section 3(b) below. Such written
request may specify all or a part of the Holders' Registrable
Securities.
(b) Underwriting. If the registration of which the Company
gives notice is for a registered public offering involving an underwriting, the
Company shall so advise each of the Holders as a part of the written notice
given pursuant to Section 3(a)(i). In such event, the right of each of the
Holders to registration pursuant to this Section 3 shall be conditioned upon
such Holder's participation in such underwriting and the inclusion of such
Holder's Registrable Securities in the underwriting to the extent provided
herein. The Holders whose shares are to be included in such registration shall
(together with the Company and the Other Stockholders distributing their
securities through such underwriting) enter into an underwriting agreement in
customary form with the representative of the underwriter or underwriters
selected for underwriting by the Company. Notwithstanding any other provision of
this Section 3, if the representative determines that marketing factors require
a
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limitation on the number of shares to be underwritten, the representative may
(subject to the allocation priority set forth below) limit the number of
Registrable Securities to be included in the registration and underwriting as
the representative deems necessary and appropriate. The Company shall so advise
all holders of securities requesting registration, and the number of shares of
securities that are entitled to be included in the registration and underwriting
shall be allocated in the following manner: The securities of the Company held
by officers, directors and Other Stockholders of the Company (other than
Registrable Securities, securities held by holders who by contractual right
demanded such registration ("Demanding Holders") and securities held by
"Holders" under the Registration Rights Agreement, dated as of the effective
date of this Agreement, between the Company and GP Holding (the "GP Holding
Holders")) shall be excluded from such registration and underwriting to the
extent required by such limitation, and, if a limitation on the number of shares
is still required, the number of shares that may be included in the registration
and underwriting by each of the Holders and the GP Holding Holders (if the GP
Holding Holders are not Demanding Holders) shall be reduced, on a pro rata basis
(based on the number of shares originally proposed to be registered by each such
person), by such minimum number of shares as is necessary to comply with such
limitation. If any of the Holders disapprove of the terms of any such
underwriting, such Holder may elect to withdraw therefrom by written notice to
the Company and the underwriter. Any Registrable Securities or other securities
excluded or withdrawn from such underwriting shall be withdrawn from such
registration. The Company shall have the right to withdraw such registration at
any time in its sole discretion.
(c) Number. Each of the Holders shall be entitled to have
its shares included in an unlimited number of registrations pursuant to this
Section 3.
SECTION 4. Shelf Registration. If the Company shall receive
from an Initiating Holder, at any time prior to two (2) months after the
effective date hereof set forth in Section 19 hereof, a written request that the
Company effect a registration pursuant to Rule 415, or any successor rule under
the Act, that would permit the sale of all or a part of the Registrable
Securities from time to time:
(a) The Company shall use its best efforts to file
with the Commission and thereafter to cause to be declared
effective as promptly as practicable a registration statement
on an appropriate form under the
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Act as reasonably determined by the Company relating to the
offer and sale of the Registrable Securities by the Holders
from time to time pursuant to Rule 415, or any successor rule
under the Act, in accordance with the methods of distribution
set forth in such registration statement (a "Shelf
Registration Statement").
(b) The Company shall use its best efforts to keep
the Shelf Registration Statement continuously effective in
order to permit the prospectus forming part thereof to be
usable by Holders for the period ending three (3) months after
the effective date hereof or such shorter period that will
terminate when all the Registrable Securities covered by the
Shelf Registration Statement have been sold. Notwithstanding
any other provision hereof, the Company may postpone or
suspend the filing or the effectiveness of the Shelf
Registration Statement (or any amendments or supplements
thereto) if (i) such action is required by applicable law, or
(ii) such action is taken by the Company in good faith and for
valid business reasons (not including avoidance of the
Company's obligations hereunder), including the acquisition or
divestiture of assets, other pending corporate developments,
public filings with the Commission or other similar events, so
long as the Company promptly thereafter complies with the
requirements of Section 6(a)(v) hereof, if applicable. The
Company shall be deemed not to have used its best efforts to
keep the Shelf Registration Statement effective during the
requisite period if it intentionally takes any action not
contemplated by clause (i) or (ii) above that would result in
holders of Registrable Securities covered thereby not being
able to offer and sell such Registrable Securities during the
period.
SECTION 5. Expenses of Registration. With respect to a
registration pursuant to Section 2 and 4 hereof, all Registration Expenses and
all Selling Expenses shall be borne by the Holders of the securities so
registered, together with any other party whose shares are included in such
registration (including the Company, either because shares are included in such
registration for its own account or because it agreed to pay the expenses of
other registering holders), pro rata, on the basis of the number of their shares
so registered. With respect to a registration pursuant to Section 3(a) hereof,
all Registration Expenses shall be borne by the Company and all
8
Selling Expenses shall be borne by the Holders of the securities so registered,
together with any other party whose shares are included in such registration
(including the Company, either because shares are included in such registration
for its own account or because it agreed to pay the expenses of another
registering holder), pro rata on the basis of the number of their shares so
registered. In addition to the Company's other rights in respect of expenses in
this Agreement, the Company shall have the right, in order to cover such
expenses, to deduct the amount of such expenses from the offering proceeds to
which the ▇▇▇▇▇▇▇▇▇ Trust, the ▇▇▇▇▇▇▇▇▇ Foundation and the Fleet National Trust
would otherwise have been entitled.
SECTION 6. Registration Procedure.
(a) In the case of each registration effected by the Company
pursuant to this Agreement, the Company will:
(i) provide the Holders of Registrable Securities to
be registered under the registration statement, their
underwriters, if any, and their respective counsel and
accountants, a reasonable opportunity to participate in the
preparation of such registration statement, each prospectus
included therein or filed with the Commission, and each
amendment thereof or supplement thereto;
(ii) notify each Holder as to the filing of the
registration statement and of all amendments or supplements
thereto filed prior to the effective date of such registration
statement;
(iii) notify each Holder, promptly after it shall
receive notice thereof, of the time when such registration
statement becomes effective or when any amendment or
supplement to any prospectus forming a part of such
registration statement has been filed;
(iv) notify each Holder promptly of any request by
the Commission for the amending or supplementing of such
registration statement or prospectus or for additional
information;
(v) prepare and promptly file with the Commission,
and promptly notify each Holder of the filing of, any
amendments or supplements to such registration statement or
prospectus as may be necessary to correct any statements or
omissions if, at
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any time when a prospectus relating to the Registrable
Securities is required to be delivered under the Act, any
event with respect to the Company shall have occurred as a
result of which any such prospectus or any other prospectus as
then in effect would include an untrue statement of a material
fact or omit to state any material fact necessary in order to
make the statements made, in the light of the circumstances
under which they were made, not misleading, and, in addition,
prepare and file with the Commission, promptly upon the
written request of any Holder, any amendments or supplements
to such registration statement or prospectus which may be
reasonably necessary or advisable in connection with the
distribution of the Registrable Securities;
(vi) prepare promptly upon request of the Holders or
any underwriters for the Holders such amendment or amendments
to such registration statement and such prospectus or
prospectuses as may be reasonably necessary to permit
compliance with the requirements of Section 10(a)(3) of the
Act, unless, in the good faith judgment of the Board of
Directors of the Company, it would not be in the best
interests of the Company and its stockholders generally for
such amendment or amendments to be filed, provided that such
deferral does not last longer than 90 days and will not occur
more than once in any 12-month period;
(vii) advise each Holder promptly after the Company
shall receive notice or obtain knowledge of the issuance of
any stop order by the Commission suspending the effectiveness
of any such registration statement or amendment thereto or of
the initiation or threatening of any proceeding for that
purpose, and promptly use its best efforts to prevent the
issuance of any stop order or obtain its withdrawal promptly
if such stop order should be issued;
(viii) use its best efforts to qualify as soon as
reasonably practicable the Registrable Securities included in
the registration statement for sale under the blue sky or
other state securities laws of such states and jurisdictions
within the United States as shall be reasonably requested by
any Holder, provided that the Company shall not be required in
connection therewith or as a condition thereto to qualify to
do business, to become subject to taxation or to file a
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consent to service of process generally in any of the
aforesaid states or jurisdictions;
(ix) furnish each Holder, as soon as available,
copies of any registration statement and each preliminary or
final prospectus, or supplement or amendment required to be
prepared pursuant hereto, all in such quantities as any Holder
may from time to time reasonably request;
(x) furnish, at the request of any Holder
requesting registration of Registrable Securities pursuant to
this Agreement, on the date that such Registrable Securities
are delivered to the underwriters for sale in connection with
a registration pursuant to this Agreement, if such securities
are being sold through underwriters or, if such securities are
not being sold through underwriters, on the date that the
registration statement with respect to such securities becomes
effective, (i) an opinion, dated such date, of the counsel
representing the Company for the purposes of such
registration, in form and substance as is customarily given by
company counsel to the underwriters in an underwritten public
offering, addressed to the underwriters, if any, and to the
holders requesting registration of Registrable Securities, and
(ii) a letter, dated such date, from the independent certified
public accountant of the Company, in form and substance as is
customarily given by independent certified public accountants
to underwriters in an underwritten public offering, addressed
to the underwriters, if any, and, if customarily given to
holders of securities to be sold in a registration, to the
Holders requesting registration of Registrable Securities;
(xi) otherwise use its best efforts to comply with
all applicable rules and regulations of the Commission, and
make available to its security holders as soon as reasonably
practicable, but not later than 16 months after the effective
date of the registration statement, an earnings statement
covering a period of at least twelve (12) months beginning
after the effective date of the registration statement, which
earnings statement shall satisfy the provision of Section
11(a) of the Act; and
(xii) enter into and perform an underwriting
agreement with the managing underwriter, if any,
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selected as provided in Section 2(b) and 3(b), containing
customary (y) terms of offer and sale of the securities,
payment provisions, underwriting discounts and commissions,
and (z) representations, warranties, covenants, indemnities,
terms and conditions provided that the Holders may, at their
option, require that any or all agreements on the part of the
Company to and for the benefit of such underwriters shall also
be made to and for the benefit of such Holders, any or all of
the conditions precedent to the obligations of the Company
shall also be conditions precedent to the obligations of such
Holders, and all representations and warranties by the Company
to and for the benefit of such underwriters shall also be made
to and for the benefit of such Holders, and provided further
that such Holders shall not be required to make any
representations or warranties to or agreements with the
Company or the underwriters other than representations,
warranties or agreements reasonably requested by the managing
underwriter or otherwise required by law.
(b) At the expense of the Company, the Company will keep each
registration effected by the Company pursuant to Section 3(a) effective for a
period of nine (9) months or until the Holders have completed the distribution
described in the registration statement relating thereto, whichever first
occurs. At the expense of the Holders, together with any other party whose
shares are included in such registration (including the Company, either because
shares are included in such registration for its own account or because it
agreed to pay the expenses of other registering holders), pro rata, on the basis
of the number of their shares so registered, the Company will keep each
registration effected by the Company pursuant to Section 2 effective for a
period of nine (9) months or until the Holders have completed the distribution
described in the registration statement relating thereto, whichever first
occurs, unless, in the good faith judgment of the Board of Directors of the
Company, it would not be in the best interests of the Company and its
stockholders generally for such registration to be kept effective for such
period, provided that such deferral does not last longer than 90 days and will
not occur more than once in any 12-month period. In addition to the Company's
other rights in respect of expenses in this Agreement, the Company shall have
the right, in order to cover such expenses, to deduct the amount of such
expenses from the offering proceeds to which the ▇▇▇▇▇▇▇▇▇ Trust, the ▇▇▇▇▇▇▇▇▇
Foundation and the Fleet National Trust would otherwise have been entitled.
SECTION 7. Indemnification.
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(a) To the extent permitted by law, the Company will
indemnify each of the Holders, each of its officers, directors, agents,
trustees, representatives and affiliates of the foregoing, each underwriter (as
defined in the Act), if any, and each person controlling each of the Holders or
such underwriter within the meaning of the Act and the rules and regulations
thereunder, with respect to each registration which has been effected pursuant
to this Agreement, against all claims, losses, damages and liabilities (or
actions in respect thereof) arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any prospectus,
offering circular or other document (including any related registration
statement, notification or the like) incident to any such registration,
qualification or compliance, or based on any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, or any violation by the Company of the
Act or any rule or regulation thereunder applicable to the Company and relating
to action or inaction required of the Company in connection with any such
registration, qualification or compliance, and will reimburse each of the
Holders, each of its officers, directors, partners, members, managers, agents,
representatives and their affiliates, each such underwriter and each person
controlling any such Holder or underwriter, for any legal and any other expenses
reasonably incurred in connection with investigating and defending any such
claim, loss, damage, liability or action, provided that the Company will not be
liable in any such case to the extent that any such claim, loss, damage,
liability or expense arises out of or is based on any untrue statement or
omission based upon (i) written information furnished to the Company by the
Holders or underwriter and stated to be specifically for use therein or (ii)
until the date of issuance of the Company's audited consolidated financial
statements for the fiscal year ended on or about January 31, 1997, any
representation or warranty made by the Company in that certain Securities
Purchase Agreement, dated as of even date herewith, between the Company and GP
Holding (the "Securities Purchase Agreement").
(b) To the extent permitted by law, each of the Holders will,
if Registrable Securities held by it are included in the securities as to which
such registration, qualification or compliance is being effected, indemnify the
Company, each of its directors, officers, agents and representatives and each
underwriter, if any, and each person controlling the Company or such underwriter
within the meaning of the Act and the rules and regulations thereunder, against
all claims, losses, damages and liabilities (or actions in respect thereof)
arising out of or
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based on any untrue statement (or alleged untrue statement) of a material fact
contained in any such registration statement, prospectus, offering circular or
other document made by such Holder, or any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary to make
the statements by such Holder therein not misleading, and will reimburse the
Company and such directors, officers, agents, representatives, underwriters or
control persons for any legal or any other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage,
liability or action, in each case to the extent, but only to the extent, that
such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus, offering circular
or other document in reliance upon and in conformity with written information
furnished to the Company by such Holder and stated to be specifically for use
therein; provided, however, that the indemnity agreement contained in this
Section 7(b) shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability or action if such settlement is effected without the
consent of the Holders, and provided further that the obligations of each of the
Holders hereunder shall be limited to an amount equal to the proceeds to such
Holder of securities sold as contemplated herein.
(c) Each party entitled to indemnification under this Section
7 (the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom; provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or any litigation resulting
therefrom, shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld) and the Indemnified Party may participate in such
defense at such party's expense (unless the Indemnified Party shall have
reasonably concluded that there may be a conflict of interest between the
Indemnifying Party and the Indemnified Party in such action, in which case the
fees and expenses of counsel shall be at the expense of the Indemnifying Party),
and provided further that the failure of any Indemnified Party to give notice as
provided herein shall not relieve the Indemnifying Party of its obligations
under this Section 7 unless the Indemnifying Party is materially prejudiced
thereby. No Indemnifying Party, in the defense of any such claim or litigation,
shall, except with the consent of each Indemnified Party, consent to entry of
any judgment or enter into any
14
settlement which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect to such claim or litigation. Each Indemnified Party shall
furnish such information regarding itself or the claim in question as an
Indemnifying Party may reasonably request in writing and as shall be reasonably
required in connection with the defense of such claim and litigation resulting
therefrom.
(d) If the indemnification provided for in this Section 7 is
held by a court of competent jurisdiction to be unavailable to an Indemnified
Party with respect to any loss, liability, claim, damage or expense referred to
herein, then the Indemnifying Party, in lieu of indemnifying such Indemnified
Party hereunder, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such loss, liability, claim, damage or expense
in such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party on the one hand and of the Indemnified Party on the other in
connection with the statements or omissions which resulted in such loss,
liability, claim, damage or expense, as well as any other relevant equitable
considerations, provided, however, that the obligations of each Holder shall be
limited to an amount equal to the proceeds to such Holder from the sale of
Registrable Securities as contemplated herein. The relative fault of the
Indemnifying Party and of the Indemnified Party 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 Indemnifying Party or by the Indemnified
Party and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. No person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Act), shall be entitled to contribution from any person who is not guilty of
such fraudulent misrepresentation.
(e) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the underwriting
agreement entered into in connection with any underwritten public offering
contemplated by this Agreement are in conflict with the foregoing provisions,
the provisions in such underwriting agreement shall be controlling.
(f) The foregoing indemnity agreements are subject to the
condition that, insofar as they relate to any loss, claim, liability or damage
made in a preliminary prospectus but eliminated or remedied in the amended
prospectus on file with the Commission at the time the registration statement in
question
15
becomes effective or the amended prospectus filed with the Commission
pursuant to Commission Rule 424(b) (the "Final Prospectus"), such indemnity
agreement shall not inure to the benefit of any underwriter if a copy of the
Final Prospectus was furnished to the underwriter and was not furnished to the
person asserting the loss, liability, claim or damage at or prior to the time
such action is required by the Act.
(g) The obligations of the Company and the Holders under this
Section 7 shall survive the completion of any offering of Registrable Securities
in a registration statement under this Agreement and otherwise.
(h) The foregoing indemnity agreements shall include
reasonable fees and expenses of counsel incurred by the Indemnified Party in any
action or proceeding between the Indemnifying Party and the Indemnified Party or
between the Indemnified Party and any third party or otherwise.
SECTION 8. Information by the Holders. Each of the Holders
shall furnish to the Company such information regarding such Holder and the
distribution proposed by such Holder as the Company may reasonably request in
writing and as shall be reasonably required in connection with any registration,
qualification or compliance referred to in this Agreement.
SECTION 9. Rule 144 Reporting. With a view to making
available the benefits of certain rules and regulations of the Commission which
may permit the sale of restricted securities to the public without registration,
the Company agrees to use its reasonable best efforts to:
(a) make and keep public information available, as those
terms are understood and defined in Rule 144 under the Act;
(b) file with the Commission in a timely manner all reports
and other documents required of the Company under the Act and the Exchange Act;
and
(c) furnish to any Holder upon request, (i) a written
statement by the Company as to its compliance with the reporting requirements of
Rule 144, the Act and the Exchange Act, (ii) a copy of the most recent annual or
quarterly report of the Company filed with the Commission and such other reports
and documents so filed by the Company and (iii) such other information as a
Holder may reasonably request in availing itself
16
of any rule or regulation of the Commission allowing such Holder to sell any
such securities without registration.
SECTION 10. Assignability. No party may assign or transfer
its rights or obligations hereunder without the prior written consent of the
other, except that ▇▇▇▇▇▇▇▇▇'▇ rights hereunder may be transferred by will or
the laws of descent and distribution to a charitable organization, an immediate
family member or a trust (25% or more of the beneficial interests of which are
owned by affiliates of ▇▇▇▇▇▇▇▇▇ or one or more members of his immediate
family), in each case to which ▇▇▇▇▇▇▇▇▇ has transferred Registrable Securities
to the extent permitted by Section 5(d)(i) or (iv) of the Irrevocable Proxy,
dated as of even date herewith, between GP Holding and ▇▇▇▇▇▇▇▇▇.
SECTION 11. Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York.
SECTION 12. Amendment. Any modification, amendment or waiver
of this Agreement or any provision hereof shall be in writing and executed by
the Company, GP Holding and the Holders of not less than 50% of the Registrable
Securities, provided, however, that no such modification, amendment or waiver
shall reduce the aforesaid percentage of Registrable Securities without the
consent of all of the Holders of the Registrable Securities.
SECTION 13. Notices. All notices, requests, consents and
demands shall be in writing and shall be personally delivered, mailed, postage
prepaid, telecopied or telegraphed or delivered by any nationally recognized
overnight delivery service to the Company at:
to the Company:
Western Publishing Group, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: Chief Executive Officer
17
with a copy to:
General Counsel
Western Publishing Group, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
and, until the effective date hereof, a copy to:
Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
and to GP Holding and each Holder at such address set forth on the signature
page hereof or as shall be furnished in writing to the Company. All such
notices, requests, demands and other communication shall, when mailed
(registered or certified mail, return receipt requested, postage prepared),
personally delivered, or telegraphed, be effective four (4) days after deposit
in the mails, when personally delivered, or when delivered to the telegraph
company, respectively, addressed as aforesaid, unless otherwise provided herein
and, when telecopied or delivered by any nationally recognized overnight
delivery service, shall be effective upon actual receipt.
SECTION 14. Specific Performance. The parties hereto agree
that irreparable damage would occur in the event that any of the provisions of
this Agreement were not performed in accordance with their specific terms or
were otherwise breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions hereof in any court of the
United States or any state having jurisdiction, this being in addition to any
other remedy to which they are entitled at law or in equity.
SECTION 15. Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be an original, but all of which
together shall constitute one instrument.
SECTION 16. Severability. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this Agreement
or
18
affecting the validity or enforceability of such provision in any other
jurisdiction.
SECTION 17. Headings. The various headings of this Agreement
are inserted for convenience only and shall not affect the meaning or
interpretation of this Agreement or any provisions hereof or thereof.
SECTION 18. Entire Agreement. This Agreement constitutes the
entire understanding among the parties hereto with respect to the subject matter
hereof and supersedes any prior agreements, written or oral, with respect
thereto.
SECTION 19. Effective Date. This Agreement shall become
effective as of the date of consummation of the transactions contemplated by the
Securities Purchase Agreement, and this Agreement shall have no effect for any
purpose unless and until such transactions have been consummated.
19
IN WITNESS WHEREOF, the Company and each of the undersigned
parties has executed this Agreement effective for all purposes as of the date
first above written.
WESTERN PUBLISHING GROUP, INC.
By: _________________________
Name:
Title:
______________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ AND ▇▇▇▇▇▇ ▇▇▇▇▇▇,
trustees ▇/▇ ▇▇▇▇▇ ▇▇, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇
By: ___________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Trustee
By: ___________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇
Trustee
THE ▇▇▇▇▇▇▇ ▇. AND ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
FOUNDATION, INC.
_______________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
President
Address for notices for all
Holders named above:
_______________________________
▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇▇
trustee u/a ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ dated
April 5, 1986 fbo ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
By: ________________________________
Name:
Title:
Address for notices:
Fleet National Bank of Connecticut
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: _______________
Attn: Ms. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Section 12 is hereby
acknowledged and agreed to:
GOLDEN PRESS HOLDING, L.L.C.
By: WARBURG, ▇▇▇▇▇▇ VENTURES, L.P.
Member
By: __________________________
Name:
Title: General Partner
Address for notices:
Golden Press Holding, L.L.C.
c/o Warburg, ▇▇▇▇▇▇ Ventures, L.P.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
21
Index of Defined Terms
▇▇▇▇▇▇▇▇▇............................. 1
▇▇▇▇▇▇▇▇▇ Foundation.................. 1
▇▇▇▇▇▇▇▇▇ Trust....................... 1
Commission............................ 1
Common Stock.......................... 1
Company............................... 1
Demanding Holders..................... 7
Exchange Act.......................... 1
Fleet National Trust.................. 1
Final Prospectus...................... 16
GP Holding............................ 5
Holders............................... 1
Indemnified Party..................... 14
Indemnifying Party.................... 14
Initiating Holder..................... 2
Registrable Securities................ 2
Registration Expenses................. 2
Selling Expenses...................... 2
Shelf Registration Statement.......... 8
Act................................... 1
GP Holding Holders.................... 7
Securities Purchase Agreement......... 13
