SLM HOLDING CORPORATION
REGISTRATION RIGHTS AGREEMENT
Dated as of July 31, 2000
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TABLE OF CONTENTS
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1. Background...............................................................................................1
2. Definitions..............................................................................................1
3. Registration.............................................................................................4
3.1 Demand Registration.............................................................................4
(a) Requests..................................................................................4
(b) Obligation to Effect Registration.........................................................4
(c) Shelf Registration........................................................................4
(d) Effective Registration Statement..........................................................5
(e) Pro Rata Allocation.......................................................................5
(f) Inclusion of Other Securities in Demand Registration......................................5
3.2 Registration Procedures.........................................................................6
3.3 Underwritten Offerings.........................................................................10
(a) Underwritten Offerings Exclusive.........................................................10
(b) Underwriting Agreement...................................................................11
(c) Selection of Underwriters................................................................11
(d) Hold Back Agreements.....................................................................11
3.4 Preparation; Reasonable Investigation..........................................................12
3.5 Indemnification................................................................................12
(a) Indemnification by the Company...........................................................12
(b) Indemnification by the Sellers...........................................................13
(c) Notices of Claims, etc...................................................................13
(d) Other Indemnification....................................................................14
(e) Other Remedies...........................................................................14
3.6 Expenses.......................................................................................15
4. Miscellaneous...........................................................................................15
4.1 Rule 144; Legended Securities; etc.............................................................15
4.2 Amendments and Waivers.........................................................................15
4.3 Nominees for Beneficial Owners.................................................................16
4.4 Successors, Assigns and Transferees............................................................16
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4.5 Notices........................................................................................16
4.6 No Inconsistent Agreements.....................................................................17
4.7 Remedies; Attorneys' Fees......................................................................17
4.8 Severability...................................................................................17
4.9 Headings.......................................................................................17
4.10 Counterparts...................................................................................17
4.11 Governing Law..................................................................................17
4.12 No Third Party Beneficiaries...................................................................17
4.13 Consent to Jurisdiction........................................................................17
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REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (the "Agreement"), dated as of July 31, 2000,
between SLM Holding Corporation, a Delaware corporation (the "Company"), and USA
Group, Inc., a Delaware corporation (the "Group").
1. BACKGROUND.
(a) The Company is a party to a Purchase Agreement with the Group, HIJ
Corporation, a Delaware corporation, USA Group Loan Services, Inc., a Delaware
corporation, and USA Group Guarantee Services, Inc., a Delaware corporation
dated June 14, 2000 (the "Purchase Agreement"), pursuant to which the Company
agreed to deliver at Closing to the Group 9,034,505 shares of common stock, par
value $.01 per share, of the Company, subject to adjustment as set forth in the
Purchase Agreement (as adjusted from time to time, the "Shares"). In order to
induce the Group to enter into the Purchase Agreement, the Company has agreed to
provide the registration rights set forth in this Agreement for the benefit of
the Group and its direct and indirect transferees. The execution and delivery of
this Agreement by the Company is a condition to the Group's obligations pursuant
to the Purchase Agreement.
(b) This Agreement shall become effective with respect to any Registrable
Securities upon the issuance or sale of Registrable Securities pursuant to the
Purchase Agreement. This Agreement shall remain in effect upon the assignment or
transfer of Registrable Securities by the Group or a Holder to an Affiliate, or
other successors, assigns and transferees of Group of such Holder pursuant to
Section 4.4.
2. DEFINITIONS.. For purposes of this Agreement, the following terms have
the following respective meanings:
"AFFILIATE" means, with respect to any Person, any other Person directly or
indirectly Controlling, Controlled by or under common Control with such first
Person. "Control" means the power to direct or cause the direction of management
or policies of such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise. Any director, member
of management or other employee of the Company or any of its Subsidiaries who
would not otherwise be an Affiliate of the Group shall not be deemed to be an
Affiliate of the Group.
"AGREEMENT" is defined in the first paragraph of this Agreement.
"BUSINESS DAY" means a day other than a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required to close.
"COMMON STOCK" means the Common Stock, par value of $.01 per share, of the
Company.
"COMPANY" is defined in the first paragraph of this Agreement.
"DTC" means the Depository Trust Company.
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"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, or
any successor federal statute, and the rules and regulations thereunder which
shall be in effect at the time. Any reference to a particular section thereof
shall include a reference to the corresponding section, if any, of any such
successor federal statute, and the rules and regulations thereunder.
"GROUP" is defined in the introduction to this Agreement.
"HOLDER" means any holder of Registrable Securities, including an Affiliate
or other successors, assigns and transferees of Group or a Holder that has
received Registrable Securities pursuant to Section 4.4.
"PURCHASE AGREEMENT" is defined in Section 1(a).
"NASD" means the National Association of Securities Dealers, Inc. ----
"PERSON" means any natural person, firm, partnership, association,
corporation, company, trust, business trust, governmental entity or other
entity.
"POSTPONEMENT PERIOD" is defined in Section 3.2(o).
"PROSPECTUS" means the prospectus included in any Registration Statement
(including, without limitation, a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A), as amended or supplemented by any
prospectus supplement, with respect to the terms of the offering of any portion
of the Registrable Securities covered by such Registration Statement and all
other amendments and supplements to the prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such prospectus.
"REGISTRABLE SECURITIES" means the Shares and any securities issued or
issuable with respect to any Shares (i) upon any conversion or exchange thereof,
(ii) by way of stock dividend or other distribution, stock split or reverse
stock split or (iii) in connection with a combination of shares,
recapitalization, merger, consolidation, exchange offer or other reorganization.
As to any particular Registrable Securities, once issued such securities shall
cease to be Registrable Securities when (A) a Registration Statement with
respect to the sale of such securities shall have become effective under the
Securities Act and such securities shall have been disposed of in accordance
with such Registration Statement, (B) such securities shall have been
distributed to the public in reliance upon Rule 144, (C) subject to the
provisions of Section 4.1(b)(ii), such securities shall have been otherwise
transferred, new certificates for such securities not bearing a legend
restricting further transfer shall have been delivered by the Company and
subsequent disposition of such securities shall not require registration or
qualification of such securities under the Securities Act or any similar state
law then in force or (D) such securities shall have been acquired by the
Company.
"REGISTRATION EXPENSES" means all fees and expenses incident to the
performance of or compliance with the provisions of this Agreement, whether or
not any registration statement is filed or becomes effective, including, without
limitation, all (i) registration and filing fees (including, without limitation,
(A) fees with respect to filings required to be made with the NASD in connection
with an underwritten offering, (B) fees and expenses of compliance with
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state securities or blue sky laws (including, without limitation, fees and
disbursements of counsel for the underwriter or underwriters in connection with
blue sky qualifications of the Registrable Securities and determination of the
eligibility of the Registrable Securities for investment under the laws of such
jurisdictions as provided in Section 3.2(e)), and (C) fees and other expenses
associated with the listing of the Shares and any securities issued or issuable
with respect to any Shares on the New York Stock Exchange and any other
applicable exchange, (ii) printing expenses (including, without limitation,
expenses of printing certificates for Registrable Securities in a form eligible
for deposit with DTC and of printing prospectuses), (iii) fees and disbursements
of all independent certified public accountants referred to in Section 3.3
(including, without limitation, the reasonable expenses of any special audit and
"cold comfort" letters required by or incident to such performance), (iv) the
fees and expenses of any "qualified independent underwriter" or other
independent appraiser participating in an offering pursuant to Rule 2720 of the
NASD Rules of Conduct, (v) liability insurance under the Securities Act or any
other securities laws, if the Company desires such insurance, (vi) fees and
expenses of all attorneys, advisers, appraisers and other persons retained by
the Company or any Subsidiary of the Company, (vii) internal expenses of the
Company and its Subsidiaries (including, without limitation, all salaries and
expenses of officers and employees of the Company and its Subsidiaries
performing legal or accounting duties), (viii) the expense of any annual audit,
(ix) the expenses relating to printing, word processing and distributing all
registration statements, underwriting agreements, securities sales agreements,
indentures and any other documents necessary in order to comply with this
Agreement and (x) the reasonable out-of-pocket expenses of the Holders of the
Registrable Securities being registered in such registration incurred in
connection therewith including, without limitation, the reasonable fees and
disbursements of not more than one counsel chosen by the Holders of a majority
of the Registrable Securities to be included in such Registration Statement.
"Registration Expenses" shall not include any underwriting discounts or
commissions or any transfer taxes payable in respect of the sale of Registrable
Securities by the Holders thereof.
"REGISTRATION STATEMENT" means any registration statement of the Company
that covers any of the Registrable Securities pursuant to the provisions of this
Agreement, and all amendments and supplements to any such registration
statement, including post-effective amendments, in each case including the
Prospectus, all exhibits and all material incorporated by reference or deemed to
be incorporated by reference in such registration statement.
"RULE 144" means Rule 144 (or any successor provision) under the Securities
Act.
"RULE 145" means Rule 145 (or any successor provision) under the Securities
Act.
"SECURITIES ACT" means the Securities Act of 1933, as amended, or any
successor federal statute, and the rules and regulations thereunder which shall
be in effect at the time. Any reference to a particular section thereof shall
include a reference to the corresponding section, if any, of any such successor
federal statute, and the rules and regulations thereunder.
"SEC" means the Securities and Exchange Commission or any other federal
agency at the time administering the Securities Act or the Exchange Act.
"SHARES" is defined in Section 1(a).
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"SPECIAL REGISTRATION" means the registration of shares of equity
securities and/or options or other rights in respect thereof to be offered
solely to directors, members of management, employees, consultants or sales
agents, distributors or similar representatives of the Company or its direct or
indirect Subsidiaries, solely on Form S-8 or any successor form.
"SUBSIDIARY" means, with respect to any Person, any corporation or Person,
a majority of the outstanding voting stock or other equity interests of which is
owned, directly or indirectly, by that Person.
"UNDERWRITTEN REGISTRATION" or "UNDERWRITTEN OFFERING" means a registration
in which securities of the Company (including Registrable Securities) are sold
to an underwriter for reoffering to the public.
3. REGISTRATION.
3.1 DEMAND REGISTRATION.
(a) REQUESTS. Subject to the provisions of Section 3.5, beginning on the
date that is six months after the Closing (as defined in the Purchase Agreement)
under the Purchase Agreement, Holders of not less than 25% of the then
outstanding Registrable Securities shall have the right to request that the
Company register under the Securities Act all or part of the Registrable
Securities of the Holders making such request, which requests shall specify the
intended method of disposition thereof by such Holders, including whether the
registration requested is for an underwritten offering. For a registration to be
underwritten, a majority of the Holders requesting registration (as measured by
ownership of Registrable Securities) must so request. The Company shall not be
required to file more than one registration statement in any 6-month period and
shall not be required to file a registration statement in any 6-month period for
more than 25% (subject to adjustment for a stock split, stock dividend,
recapitalization, or similar event) of the total Shares issued to Group pursuant
to the Purchase Agreement.
(b) OBLIGATION TO EFFECT REGISTRATION. Within 10 days after receipt by
the Company of any request for registration pursuant to Section 3.1(a), the
Company shall promptly give written notice of such requested registration to all
Holders, and thereupon will use its best efforts to effect the registration
under the Securities Act of
(i) the Registrable Securities that the Company has been so requested
to register pursuant to Section 3.1(a), and
(ii) subject to the limitation on number of shares set forth in
Section 3.1(a), all other Registrable Securities which the Company has been
requested to register by the Holders thereof by written request given to the
Company within 10 days after the Company has given such written notice (which
request shall specify the intended method of disposition of such Registrable
Securities), all to the extent required to permit the disposition (in accordance
with the intended methods thereof as aforesaid) of the Registrable Securities
so to be registered.
(c) SHELF REGISTRATION. If the Company is eligible to file such
Registration Statement on Form S-3, the Registration Statement covering such
Registrable Securities may (and, subject to the limitations contained elsewhere
herein shall, if requested by the Holders of a
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majority of the Registrable Securities) provide for the sale by the Holders
thereof of the Registrable Securities from time to time on a delayed or a
continuous basis under Rule 415 under the Securities Act. If more than one
underwritten offering is requested under any particular shelf registration, each
such additional underwritten offering shall constitute a separate "demand"
registration for purposes of Section 3.1(a).
(d) EFFECTIVE REGISTRATION STATEMENT. A registration requested pursuant
to Section 3.1(a) shall not be deemed to have been effected unless it is
declared effective by the SEC and remains effective for the period specified in
Section 3.2(b). Notwithstanding the preceding sentence, a registration requested
pursuant to Section 3.1(a) that does not become effective after the Company has
filed a Registration Statement with respect thereto by reason of the refusal to
proceed of the Holders of Registrable Securities requesting the registration, or
by reason of a request by a majority of the Selling Holders participating in
such registration that such registration be withdrawn, shall be deemed to have
been effected by the Company at the request of such Holders.
(e) PRO RATA ALLOCATION. If the Holders of a majority of the Registrable
Securities for which registration is being requested pursuant to Section 3.1(a)
determine, based on consultation with the managing underwriters or, in an
offering that is not underwritten, with an investment banker, that the number of
securities to be sold in any such offering should be limited due to market
conditions or otherwise, Holders of Registrable Securities proposing to sell
their securities in such registration shall share pro rata in the number of
securities being offered (as determined by the Holders holding a majority of the
Registrable Securities for which registration is being requested in consultation
with the managing underwriters or investment banker, as the case may be) and
registered for their account, such sharing to be based on the number of
Registrable Securities as to which registration was requested by such Holders.
(f) INCLUSION OF OTHER SECURITIES IN DEMAND REGISTRATION.
(i) The Company may, subject to the remainder of this Section
3.1(f), elect to include in any Registration Statement made pursuant to
Section 3.1(a), authorized but unissued shares of Common Stock, shares of
Common Stock held as treasury stock or, if approved by the Holders of a
majority of Registrable Securities, shares held by the Company's officers or
directors.
(ii) Notwithstanding any other provision of this Section 3(f), the
Company shall not register securities (other than Registrable Securities) for
sale for the account of any Person (other than the Company, its officers or
directors) in any registration requested pursuant to Section 3.1(a) unless
permitted to do so by the written consent of the Holders holding at least a
majority of the Registrable Securities proposed to be sold in such registration.
(iii) If any Registration Statement made pursuant to Section 3.1(a)
involves an underwritten offering and the managing underwriter of such offering
(or, in connection with an offering that is not underwritten, an investment
banker) shall advise the Company that, in its view, the number of securities
requested to be included in such Registration exceeds the largest number that
can be sold in an orderly manner in such offering within a price range
acceptable to the selling Holders, the Company shall include in such
Registration:
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(A) first, all shares of Common Stock requested to be included
in such Registration by the selling Holders as provided in Section 3.1(e); and
(B) second, to the extent that the number of securities to be
registered pursuant to clause (A) is less than the largest number that can be
sold in an orderly manner in such offering within a price range acceptable to
the selling Holders, securities that the Company proposes to register; and
(C) third, to the extent that the number of shares registered
pursuant to clauses (A) and (B) is less than the largest number that can be
sold in an orderly manner in such offering within a price range acceptable to
the selling Holders, the securities requested to be included by any other
holders. The securities to be included in any such registration pursuant
to clause (C) shall be allocated on a pro rata basis among all holders
requesting that securities be included in such registration pursuant to such
clause on the basis of the number of securities requested to be included by
such holders.
3.2 REGISTRATION PROCEDURES. If and whenever the Company is required to
use its best efforts to effect the registration of any Registrable Securities
under the Securities Act as provided in Section 3.1, the Company shall:
(a) prepare and file with the SEC, as soon as practicable, a
Registration Statement with respect to such securities, make all required
filings with the NASD and use best efforts to cause such Registration Statement
to become effective at the earliest possible date;
(b) prepare and file with the SEC such amendments and supplements to such
Registration Statement and the Prospectus used in connection therewith and such
other documents as may be necessary to keep such Registration Statement
effective until the earlier of (i) 30 days after the effective date of such
Registration Statement (180 days in the case of a Shelf Registration pursuant to
Section 3.1(c)) or (ii) the consummation of the disposition by the Holders of
all the Registrable Securities covered by such Registration Statement and
otherwise comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such Registration Statement;
(c) furnish to counsel (if any) selected by the Holders of a majority of
the Registrable Securities covered by such Registration Statement and to counsel
for the underwriters in any underwritten offering copies of all documents
proposed to be filed with the SEC in connection with such registration a
reasonable time prior to the proposed filing thereof and give reasonable
consideration in good faith to any comments of such Holders, counsel and
underwriters. The Company shall not file any Registration Statement or
Prospectus or any amendments or supplements thereto pursuant to a registration
under Section 3.1(a) if the Holders of a majority of the Registrable Securities
covered by such Registration Statement, their counsel, or the underwriters, if
any, shall reasonably object in writing;
(d) furnish to each seller of Registrable Securities, without charge,
such reasonable number of conformed copies of such Registration Statement and of
each such amendment and supplement thereto (in each case, including all exhibits
(including exhibits incorporated by reference), financial statements, schedules
and all documents incorporated
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therein, deemed to be incorporated therein by reference or filed therewith,
except that the Company shall not be obligated to furnish any seller of
securities with more than two copies of such exhibits and documents), such
number of copies of the Prospectus included in such Registration Statement
(including each preliminary prospectus and any summary prospectus) in conformity
with the requirements of the Securities Act, and such other documents, as such
seller may reasonably request in order to facilitate the disposition of the
securities owned by such seller;
(e) use its best efforts to register or qualify and cooperate with the
Holders of Registrable Securities, the underwriters and their respective
counsels in connection with the registration or qualification (or exemption from
such registration or qualification) of the securities covered by such
Registration Statement under such other securities or blue sky laws of such
jurisdictions as each seller shall request; provided, however, that where
Registrable Securities are offered other than through an underwritten offering,
the Company agrees to cause its counsel to perform blue sky investigations and
file registrations and qualifications required to be filed pursuant to this
Section 3.2(e); keep each such registration or qualification (or exemption
therefrom) effective during the period such Registration Statement is required
to be effective hereunder and do any and all other acts and things which may be
necessary or advisable to enable such seller to consummate the disposition in
such jurisdictions of the securities owned by such seller, except that the
Company shall not for any such purpose be required to qualify generally to do
business as a foreign corporation in any jurisdiction wherein it is not so
qualified, subject itself to taxation in any jurisdiction wherein it is not so
subject, or take any action which would subject it to general service of process
in any jurisdiction wherein it is not so subject;
(f) in connection with an underwritten public offering only, furnish to
each seller of Registrable Securities a signed counterpart, addressed to the
sellers, of
(i) an opinion of counsel for the Company experienced in securities
law matters, dated the effective date of the Registration Statement, and
(ii) a "cold comfort" letter signed by the independent public
accountants who have issued an audit report on the Company's financial
statements included in the Registration Statement, subject to such seller having
executed and delivered to the independent public accountants such certificates
and documents as such accountants shall reasonably request, covering
substantially the same matters with respect to the Registration Statement (and
the Prospectus included therein) and, in the case of such accountants' letter,
with respect to events subsequent to the date of such financial statements, as
are customarily covered in opinions of issuer's counsel and in accountants'
letters delivered to the underwriters in underwritten public offerings of
securities;
(g) notify each Holder of Registrable Securities subject to such
Registration Statement
(i) if such Registration Statement, at the time it or any amendment
thereto became effective, (x) contained an untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary
to make the statements therein not misleading upon discovery by the Company of
such material misstatement or omission or (y)
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upon discovery by the Company of the happening of any event as a result of which
the Company believes there would be such a material misstatement or omission,
and, as promptly as practicable, prepare and file with the SEC a post-effective
amendment to such registration statement and use best efforts to cause such
post-effective amendment to become effective such that such registration
statement, as so amended, shall 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 not misleading, and
(ii) at any time when a Prospectus relating thereto is required to be
delivered under the Securities Act, if the Prospectus included in such
Registration Statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading upon discovery by the Company of such
material misstatement or omission or upon discovery by the Company of the
happening of any event as a result of which the Company believes there would be
a material misstatement or omission, and, as promptly as is practicable, prepare
and furnish to such Holder a reasonable number of copies of a supplement to or
an amendment of such Prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such securities, such Prospectus shall not
include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading;
(h) otherwise use its best efforts to comply with all applicable rules
and regulations of the SEC, and make available to its security holders, as soon
as reasonably practicable, an earnings statement of the Company complying with
the provisions of Section 11(a) of the Securities Act and Rule 158 under the
Securities Act (or any similar rule promulgated under the Securities Act) no
later than 45 days after the end of any 12-month period (or 90 days after the
end of any 12-month period if such period is a fiscal year) (i) commencing at
the end of any fiscal quarter in which Registrable Securities are sold to an
underwriter or to underwriters in a firm commitment or best efforts underwritten
offering and (ii) if not sold to an underwriter or to underwriters in such an
offering, commencing on the first day of the first fiscal quarter of the Company
after the effective date of the relevant Registration Statement, which
statements shall cover said 12-month periods;
(i) promptly notify each Holder of any Registrable Securities covered by
such Registration Statement, their counsel and the underwriters (i) when such
Registration Statement, or any post-effective amendment to such Registration
Statement, shall have become effective, or any amendment of or supplement to the
Prospectus used in connection therewith shall have been filed, (ii) of any
request by the SEC to amend such Registration Statement or to amend or
supplement such Prospectus or for additional information, (iii) of the issuance
by the SEC of any stop order suspending the effectiveness of such Registration
Statement or of any order preventing or suspending the use of any preliminary
prospectus or the initiation or threatening of any proceedings for any of such
purposes, (iv) of the suspension of the qualification of such securities for
offering or sale in any jurisdiction, or of the institution of any proceedings
for any of such purposes and (v) if at any time when a Prospectus is to be
required by the Securities Act to be delivered in connection with the sale of
the Registrable Securities, the representations and warranties of the Company
contained in any agreement (including the underwriting agreement
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contemplated in Section 3.3(b) below), to the knowledge of the Company, cease to
be true and correct in any material respect;
(j) use its best efforts to prevent the issuance of any order suspending
the effectiveness of the 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 covered thereby for
sale in any jurisdiction, and, if any such order is issued, to obtain the
withdrawal of any such order at the earliest possible moment;
(k) if requested by the managing underwriter, if any, or the Holders of a
majority of the Registrable Securities being sold in connection with an
underwriting offering, (i) promptly incorporate in a prospectus supplement or
post-effective amendment such information as the managing underwriter, if any,
or such Holders reasonably request to be included therein to comply with
applicable law and (ii) make all required filings of such prospectus supplement
or such post-effective amendment as soon as practicable after the Company has
received notification of the matters to be incorporated in such prospectus
supplement or post-effective amendment;
(l) cooperate with the Holders and the managing underwriter, 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 whatsoever and shall be in a form eligible for deposit with
DTC, and enable such Registrable Securities to be in such denominations and
registered in such names as the underwriters, if any, or Holders may reasonably
request at least two business days prior to any sale of Registrable Securities
in a firm commitment underwritten public offering;
(m) use its best efforts to cause the Registrable Securities covered by a
Registration Statement to be registered with, and to obtain the consent or
approval of, each governmental agency or authority, whether federal, state,
local or foreign, which may be required to effect such registration or the
offering or sale in connection therewith or to enable the selling Holders to
offer, or to consummate the disposition of, the Registrable Securities subject
to such Registration Statement, except as may be required solely as a
consequence of the nature of such selling Holder's business, in which case the
Company will cooperate in all reasonable respects with the filing of the
Registration Statement and the granting of such approvals;
(n) prior to the effective date of the Registration Statement,
(i) provide the registrar for the Common Stock or such other Registrable
Securities with printed certificates for such securities in a form eligible
for deposit with DTC and (ii) provide a CUSIP number for such securities; and
(o) have the right -- if the Board of Directors of the Company, in its
good faith judgment based on advice from its investment banker or legal counsel,
determines that any Registration of shares of Common Stock should not be made or
continued because it would materially interfere with any material financing,
acquisition, corporation reorganization, merger, or other transaction involving
the Company (a "Valid Business Reason") -- (i) to postpone filing a Registration
Statement until such Valid Business Reason no longer exists, but in no event for
more than 45 days, and (ii) to cause any Registration Statement that has already
been filed to be
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withdrawn and its effectiveness terminated or to postpone amending or
supplementing such Registration Statement until such Valid Business Reason no
longer exists, but in no event for more than 45 days (the "Postponement
Period"); provided, however, that in no event shall the Company be permitted to
postpone or withdraw a Registration Statement within 190 days after the
expiration of the Postponement Period.
The Company may require each Holder of any Registrable Securities as to
which any registration is being effected to furnish to the Company such
information regarding such Holder and the distribution of such securities as the
Company may from time to time reasonably request in writing and as shall be
required by law in connection therewith. Each such Holder agrees to furnish
promptly to the Company all information required to be disclosed in order to
make the information previously furnished to the Company by such Holder not
materially misleading.
The Company agrees not to file or make any amendment to any Registration
Statement with respect to any Registrable Securities, or any amendment of or
supplement to the Prospectus used in connection therewith, which refers to any
seller of any securities covered thereby by name, or otherwise identifies such
seller as the holder of any securities of the Company, without the consent of
such seller, such consent not to be unreasonably withheld, except that no such
consent shall be required for any disclosure that is required by law.
By the acquisition of Registrable Securities, each Holder shall be deemed
to have agreed that upon receipt of any notice from the Company pursuant to
Section 3.2(g) or (o), such Holder will promptly discontinue such Holder's
disposition of Registrable Securities pursuant to the Registration Statement
covering such Registrable Securities until such Holder shall have received, in
the case of clause (i) of Section 3.2(g), notice from the Company that such
Registration Statement has been amended, as contemplated by Section 3.2(g); in
the case of clause (ii) of Section 3.2(g), copies of the supplemented or amended
Prospectus contemplated by Section 3.2(g); or, in the case of Section 3.2(o),
the time period specified has elapsed or such Holder has received notice from
the Company that the Postponement Period has been terminated. If so directed by
the Company, each Holder will deliver to the Company (at the Company's expense)
all copies, other than permanent file copies, in such Holder's possession of the
Prospectus covering such Registrable Securities at the time of receipt of such
notice. In the event that the Company shall give any such notice, the period
mentioned in Section 3.2(b) shall be extended by the number of days during the
period from and including the date of the giving of such notice to and including
the date when each seller of any Registrable Securities covered by such
Registration Statement shall have received the copies of the supplemented or
amended Prospectus contemplated by Section 3.2(g).
3.3 UNDERWRITTEN OFFERINGS. The provisions of this Section 3.3 do not
establish additional registration rights but instead set forth procedures
applicable, in addition to those set forth in Sections 3.1 and 3.2, to any
registration that is an underwritten offering.
(a) UNDERWRITTEN OFFERINGS EXCLUSIVE. Whenever a registration requested
pursuant to Section 3.1 is for an underwritten offering, only securities that
are to be distributed by the underwriters may be included in the registration.
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(b) UNDERWRITING AGREEMENT. If requested by the underwriters for any
underwritten offering by Holders pursuant to a registration requested under
Section 3.1, the Company shall enter into an underwriting agreement with such
underwriters for such offering, such agreement to be reasonably satisfactory in
substance and form to the Holders of a majority of the Registrable Securities to
be covered by such registration and to the underwriters and to contain such
representations and warranties by the Company and such other terms and
provisions as are customarily contained in agreements of this type, including,
but not limited to, indemnities to the effect and to the extent provided in
Section 3.5, provisions for the delivery of officers' certificates, opinions of
counsel and accountants' "cold comfort" letters, and hold-back arrangements. The
Holders of Registrable Securities to be distributed by such underwriters shall
be parties to such underwriting agreement and may, at their option, require that
any or all of the representations and warranties by, and the agreements on the
part of, the Company to and for the benefit of such underwriters be made to and
for the benefit of such Holders and that any or all of the conditions precedent
to the obligations of such underwriters under such underwriting agreement shall
also be conditions precedent to the obligations of such Holders. No such Holder
shall be required by the Company to make any representations or warranties to,
or agreements with, the Company or the underwriters other than as set forth in
Section 3.3(d) and representations, warranties or agreements regarding such
Holder and such Holder's intended method of distribution.
(c) SELECTION OF UNDERWRITERS. Whenever a registration requested pursuant
to Section 3.1 is for an underwritten offering, the Holders of a majority of the
Registrable Securities to be registered pursuant to such offering shall have the
right to select one or more underwriters to administer the offering, subject to
the consent of the Company, which shall not be unreasonably withheld. In all
cases in this Section 3.3(c), at least one of the underwriters shall be an
underwriter of nationally recognized standing.
(d) HOLD BACK AGREEMENTS. If the executive officers of the Company are
required to enter into a similar agreement, if whenever the Company proposes to
register any of its equity securities under the Securities Act, whether or not
for its own account (other than pursuant to a Special Registration), or is
required to use its best efforts to effect the registration of any Registrable
Securities under the Securities Act pursuant to Section 3.1, each Holder who at
such time holds more than 5% of the issued and outstanding shares of Common
Stock of the Company, if required by the managing underwriter in an underwritten
offering, agrees by acquisition of such Registrable Securities not to effect
(other than pursuant to such registration) any public sale or distribution,
including, but not limited to, any sale pursuant to Rule 144, of any Registrable
Securities, any other equity securities of the Company or any securities
convertible into or exchangeable or exercisable for any equity securities of the
Company during the 10 days prior to, and for 90 days after, the effective date
of such registration, to the extent timely notified in writing by the Company or
the managing underwriter, and the Company agrees to cause each holder of any
equity security, or of any security convertible into or exchangeable or
exercisable for any equity security, of the Company purchased from the Company
at any time other than in a public offering to enter into a similar agreement
with the Company. The foregoing provisions shall not apply to any Holder if such
Holder is prevented by applicable statute or regulation from entering into any
such agreement; provided, however, that any such Holder shall undertake, in its
request to participate in any such underwritten offering, not to effect any
public sale or distribution of any applicable class of Registrable Securities
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commencing on the date of sale of such applicable class of Registrable
Securities unless it has provided 45 days prior written notice of such sale or
distribution to the underwriter or underwriters. The Company further agrees not
to effect (other than pursuant to such registration or pursuant to a Special
Registration) any public sale or distribution, or to file any Registration
Statement (other than such registration or a Special Registration) covering any,
of its equity securities, or any securities convertible into or exchangeable or
exercisable for such securities, during the 10 days prior to, and for 90 days
after, the effective date of such registration if required by the managing
underwriter.
3.4 PREPARATION; REASONABLE INVESTIGATION. In connection with the
preparation and filing of each Registration Statement registering Registrable
Securities under the Securities Act, the Company shall give the Holders of such
Registrable Securities so to be registered and their underwriters, if any, and
their respective counsel and accountants, the opportunity to participate in the
preparation of such Registration Statement, each Prospectus included therein or
filed with the SEC, and each amendment thereof or supplement thereto, and shall
give each of them such access to all pertinent financial, corporate and other
documents and properties of the Company and its Subsidiaries, and such
opportunities to discuss the business of the Company with its officers,
directors, employees and the independent public accountants who have issued
audit reports on its financial statements as shall be necessary, in the opinion
of such Holders' and such underwriters' respective counsel, to conduct a
reasonable investigation within the meaning of the Securities Act.
3.5 INDEMNIFICATION.
(a) INDEMNIFICATION BY THE COMPANY. In the event of any registration of
any Registrable Securities under the Securities Act pursuant to Section 3.1, the
Company shall indemnify and hold harmless the seller of such securities, its
directors, officers, and employees, each other person who participates as an
underwriter, broker or dealer in the offering or sale of such securities and
each other person, if any, who controls such seller or any such participating
person within the meaning of either Section 15 of the Securities Act or Section
20 of the Exchange Act, against any and all losses, claims, damages or
liabilities, joint or several, to which such seller or any such director,
officer, employee, participating person or controlling person may become subject
under the Securities Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions or proceedings in respect thereof) arise out of or
are based upon (i) any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement under which such
securities were registered under the Securities Act, any Prospectus or
preliminary prospectus included therein, or any amendment or supplement thereto,
or (ii) any omission or alleged omission to state a material fact required to be
stated in any such Registration Statement, Prospectus, preliminary prospectus,
amendment or supplement or necessary to make the statements therein not
misleading; and the Company shall reimburse such seller and each such director,
officer, employee, participating person and controlling person for any legal or
any other expenses reasonably incurred by them in connection with investigating
or defending any such loss, claim, liability, action or proceeding as such
expenses are incurred; provided that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage, liability or expense
arises out of or is based upon an untrue statement or omission made in any such
Registration Statement, Prospectus, preliminary prospectus, amendment or
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supplement in reliance upon and in conformity with written information furnished
to the Company by such seller or participating person expressly for use in the
preparation thereof.
(b) INDEMNIFICATION BY THE SELLERS. In the event of any registration of
any Registrable Securities under the Securities Act pursuant to Section 3.1,
each of the prospective sellers of such securities, will indemnify and hold
harmless the Company, each director of the Company, each officer of the Company
who shall sign such Registration Statement, and each other person, if any, who
controls the Company or any such participating person within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, against any
and all losses, claims, damages or liabilities, joint or several, to which the
Company or any such director, officer, employee, participating person or
controlling person may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in any
Registration Statement under which such securities were registered under the
Securities Act, any Prospectus or preliminary prospectus included therein, or
any amendment or supplement thereto, or any omission or alleged omission to
state a material fact with respect to such seller required to be stated in any
such Registration Statement, Prospectus, preliminary prospectus, amendment or
supplement or necessary to makethe statements therein not misleading if such
statement or omission was made in reliance upon and in conformity with written
information furnished to the Company by such seller expressly for use in the
preparation of any such Registration Statement, Prospectus, preliminary
prospectus, amendment or supplement; provided that the liability of each such
seller shall be in proportion to and limited to the net amount received by such
seller (after deducting any underwriting discount and expenses) from the sale of
Registrable Securities pursuant to such Registration Statement.
(c) NOTICES OF CLAIMS, ETC. Promptly after receipt by an indemnified
party of notice of the commencement of any action or proceeding involving a
claim referred to in the preceding paragraphs of this Section 3.5, such
indemnified party shall, if a claim in respect thereof is to be made against an
indemnifying party hereunder, give prompt written notice to the latter of the
commencement of such action, provided that the failure of any indemnified party
to give notice as provided therein shall not relieve the indemnifying party of
its obligations under the preceding paragraphs of this Section 3.5 unless the
failure to provide prompt written notice shall cause actual prejudice to the
indemnifying party. In case any such action is brought against an indemnified
party and it notifies the indemnifying party of the commencement thereof, the
indemnifying party shall have the right to retain counsel reasonably
satisfactory to such indemnified party to defend against such proceeding and
shall pay the reasonable fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified party shall have the right
to retain its own counsel, but the fees and expenses of such counsel shall be at
the expense of such indemnified party unless (i) the indemnifying party and the
indemnified party shall have mutually agreed to the retention of such counsel
and the payment of such fees by the indemnifying party or (ii) the named parties
to any such proceeding (including any impleaded parties) include both the
indemnifying party and the indemnified party and representation of both parties
by the same counsel would be inappropriate due to actual or potential differing
interests between them or (iii) the indemnifying party has not retained counsel
to defend such proceeding, in which case (under any of such clauses (i), (ii) or
(iii)) it is understood that (x) the indemnifying party shall not, in connection
with any proceeding or
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related proceedings in the same jurisdiction, be liable for the reasonable fees
and expenses of more than one separate firm for all such indemnified parties and
(y) such firm shall be designated in writing by the Holders of a majority of the
Registrable Securities included in such Registration Statement in the case of
parties indemnified pursuant to Section 3.5(a) and by the Company in the case of
parties indemnified pursuant to Section 3.5(b). All fees and expenses that an
indemnified party is entitled to receive from an indemnifying party under this
Section 3.5 shall be reimbursed as they are incurred, provided that each such
indemnified party shall promptly repay such fees and expenses if it is finally
judicially determined that such indemnified party is not entitled to
indemnification hereunder. No indemnifying party, in the defense of any such
claim or litigation, shall, except with the consent of such indemnified party,
which consent shall not be unreasonably withheld, consent to entry of any
judgment or enter into any settlement of any pending or threatened action in
respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party unless such
judgment or settlement includes 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.
(d) OTHER INDEMNIFICATION. Indemnification similar to that specified in
the preceding paragraphs of this Section 3.5 (with appropriate modifications)
shall be given by the Company and each seller of Registrable Securities with
respect to any required registration or other qualification of such Registrable
Securities under any federal or state law or regulation of governmental
authority other than the Securities Act.
(e) OTHER REMEDIES. If for any reason the foregoing indemnity is
unavailable, or is insufficient to hold harmless an indemnified party, other
than by reason of the exceptions provided therein, then the indemnifying party
shall contribute to the amount paid or payable by the indemnified party as a
result of such losses, claims, damages, liabilities or expenses 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 losses, claims, damages
or liabilities, as well as any other relevant equitable considerations. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company or the Holders of Registrable Securities covered by the Registration
Statement in question and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Holders agree that it would not be just and equitable
if contribution pursuant to this Section 3.5 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph of this Section 3.5 shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. No party
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shall be liable for contribution under this Section 3.5(e) except to the extent
and under such circumstances as such party would have been liable to indemnify
under this Section 3.5 if such indemnification were enforceable under applicable
law.
3.6 EXPENSES.. The Company shall pay all Registration Expenses in
connection with each registration of Registrable Securities pursuant to this
Section 3.
4 MISCELLANEOUS.
4.1 RULE 144; LEGENDED SECURITIES; ETC.
(a) The Company shall 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 (or, if the Company is not required to file such reports, it
shall, upon the request of any Holder, make publicly available such information
as necessary to permit sales pursuant to Rule 144 or Rule 145), and shall take
such further action as any Holder may reasonably request, all to the extent
required from time to time to enable such holder to sell shares of Registrable
Securities without registration under the Securities Act within the limitation
of the exemptions provided by Rule 144 or Rule 145. Upon the request of any
Holder, the Company shall deliver to such Holder a written statement as to
whether it has complied with such requirements.
(b) The Company shall issue new certificates for Registrable Securities
without a legend restricting further transfer if (i) such securities have been
sold to the public pursuant to an effective Registration Statement under the
Securities Act (other than Form S-8 if the Holder of such Registrable Securities
is an Affiliate) or Rule 144, or (ii) (x) such issuance is otherwise permitted
under the Securities Act, (y) the Holder of such shares has delivered to the
Company an opinion of counsel, which opinion and counsel shall be reasonably
satisfactory to the Company, to such effect and (z) the Holder of such shares
expressly requests the issuance of such certificates in writing.
4.2 AMENDMENTS AND WAIVERS. This Agreement may be amended, modified or
supplemented, and the Company may take any action herein prohibited, or omit to
perform any act herein required to be performed by it, only if the Company shall
have obtained the written consent to such amendment, action or omission to act,
of the Holder or Holders of at least a majority of the Registrable Securities.
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 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 may be given by Holders of at least a majority of the
Registrable Securities being sold by such Holders pursuant to such Registration
Statement; provided, however, that the provisions of this sentence may not be
amended, modified or supplemented except in accordance with the provisions of
the immediately preceding sentence. No amendment, modification or discharge of
this Agreement, and no waiver hereunder, shall be valid or binding unless set
forth in writing. Any such waiver shall constitute a waiver only with respect to
the specific matter described in such writing and shall in no way impair the
rights of the party or parties granting such waiver in any other respect or at
any other time.
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4.3 NOMINEES FOR BENEFICIAL OWNERS. In the event that any Registrable
Securities are held by a nominee for the beneficial owner thereof, the
beneficial owner thereof may, at its election and unless notice is otherwise
given to the Company by the record owner, be treated as the holder of such
Registrable Securities for purposes of any request or other action by any Holder
or Holders pursuant to this Agreement or any determination of any number or
percentage of shares of Registrable Securities held by any Holder or Holders
contemplated by this Agreement. If the beneficial owner of any Registrable
Securities so elects, the Company may require assurances reasonably satisfactory
to it of such owner's beneficial ownership of such Registrable Securities.
4.4 SUCCESSORS, ASSIGNS AND TRANSFEREES. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors assign and transferees. Group or a Holder may assign its rights
hereunder to an Affiliate or to other successors, assigns and transferees of
Group or such Holder. This Agreement shall survive any transfer of Registrable
Securities to and shall inure to the benefit of an Affiliate or such other
successors, assigns and transferees of Group or such Holder. In addition, and
whether or not any express assignment shall have been made, the provisions of
this Agreement which are for the benefit of the parties hereto other than the
Company shall also be for the benefit of and enforceable by any subsequent
Holder of Registrable Securities, subject to the provisions respecting the
minimum numbers or percentages of shares of Registrable Securities required in
order to be entitled to certain rights, or take certain actions, contained
herein.
4.5 NOTICES. All notices and other communications in connection with
this Agreement shall be in writing. Any notice or other communication in
connection herewith shall be deemed duly given to any party (a) two Business
Days after it is sent by express, registered or certified mail, return receipt
requested, postage prepaid, (b) one Business Day after it is sent by overnight
courier, (c) when delivered by hand, if personally delivered or (d) when receipt
is acknowledged by the addressee, if telecopied. Notices shall be addressed, if
to any Holder not a party hereto on the date hereof, to the address of such
Holder in the stock record books of the Company, and if to the Company to the
following address:
SLM Holding Corporation
11600 Sallie Mae Drive
Reston, VA 20193
Attn: Marianne M. Keler
(703) 810-5208 (phone)
(703) 810-7695 (telefax)
with a copy to:
Wilmer, Cutler & Pickering
2445 M Street, N.W.
Washington, D.C. 20037
Facsimile: (202) 663-6363
Attention: Richard W. Cass
or at such other address or addresses as the Company may have designated in
writing to each holder of Registrable Securities at the time outstanding.
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Any party may give any notice or other communication in connection herewith
using any other means (including, but not limited to, messenger service, telex
or ordinary mail), but no such notice or other communication shall be deemed to
have been duly given unless and until it is actually received by the individual
for whom it is intended.
4.6 NO INCONSISTENT AGREEMENTS. The Company shall not hereafter enter
into any agreement, or amend any existing agreement, with respect to its
securities if such agreement would be inconsistent with the rights granted to
the Holders by this Agreement.
4.7 REMEDIES; ATTORNEYS' FEES. Each Holder of Registrable Securities,
in addition to being entitled to exercise all rights provided herein or granted
by law, including recovery of damages, shall be entitled to specific performance
of its rights under this Agreement. The Company agrees that monetary damages
would not be adequate compensation for any loss incurred by reason of a breach
by it of any provision of this Agreement and hereby agrees to waive the defense
in any action for specific performance that a remedy at law would be adequate.
As between the parties to this Agreement, in any action or proceeding brought to
enforce any provision of this Agreement, or where any provision hereof is
validly asserted as a defense, the successful party shall be entitled to recover
reasonable attorney's fees in addition to its costs and expenses and any other
available remedy.
4.8 SEVERABILITY. If any clause, provision or section of this Agreement
shall be invalid, illegal or unenforceable, the invalidity, illegality or
unenforceability of such clause, provision or section shall not affect the
enforceability or validity of any of the remaining clauses, provisions or
sections hereof to the extent permitted by applicable law. The invalidity of any
one or more phrases, sentences, clauses, Sections or subsections of this
Agreement shall not affect the remaining portions of this Agreement.
4.9 HEADINGS. The headings contained in this Agreement are for purposes
of convenience only and shall not affect the meaning or interpretation of this
Agreement.
4.10 COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed an original and all of which
together constitute one and the same instrument.
4.11 GOVERNING LAW. This Agreement shall be governed by and construed
and enforced in accordance with the internal laws of the State of Delaware,
without giving effect to its principles or rules of conflict of laws that would
require the application of the laws of any other jurisdiction.
4.12 NO THIRD PARTY BENEFICIARIES. Except as provided in Sections 3.5
and 4.4, nothing in this Agreement shall confer any rights upon any person or
entity other than the parties hereto, each such party's respective successors
and permitted assigns.
4.13 CONSENT TO JURISDICTION. Each party irrevocably submits to the
personal exclusive jurisdiction of the United States District Court for the
District of Delaware for the purposes of any suit, action or other proceeding
arising out of this Agreement or any transaction contemplated hereby (and, to
the extent permitted under applicable rules of procedure, agrees not to commence
any action, suit or proceeding relating hereto except in such court). Each party
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further agrees that service of any process, summons, notice or document hand
delivered or sent by registered mail to such party's respective address set
forth in Section 4.5 will be effective service of process for any action, suit
or proceeding in Delaware with respect to any matters to which it has submitted
to jurisdiction as set forth in the immediately preceding sentence. Each party
irrevocably and unconditionally waives any objection to the laying of venue of
any action, suit or proceeding arising out of this Agreement or the transactions
contemplated hereby in the United States District Court for the District of
Delaware, and hereby further irrevocably and unconditionally waives and agrees
not to plead or claim in such court that any such action, suit or proceeding
brought in such court has been brought in an inconvenient forum.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, each of the undersigned has executed this Registration
Rights Agreement or caused this Agreement to be executed on its behalf as of the
date first written above.
SLM HOLDING CORPORATION
By: /s/ Marianne M. Keler
-------------------------------------
Name: Marianne M. Keler
------------------------------------
Title: Senior Vice President
-----------------------------------
USA GROUP, INC.
By: /s/ Jeffrey E. Good
-------------------------------------
Name: Jeffrey E. Good
------------------------------------
Title: Executive Vice President
-----------------------------------
Registration Rights Agreement Signature Page
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