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EXHIBIT 10.1
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REGISTRATION RIGHTS AGREEMENT
DATED AS OF MAY 18, 1999
AMONG
SLEEPMASTER L.L.C.
(A NEW JERSEY LIMITED LIABILITY COMPANY),
SLEEPMASTER FINANCE CORPORATION
(A DELAWARE CORPORATION),
XXXX MANUFACTURING COMPANY
(A PENNSYLVANIA CORPORATION),
PALM BEACH BEDDING COMPANY
(A FLORIDA CORPORATION),
LOWER ROAD ASSOCIATES, LLC
(A NEW JERSEY LIMITED LIABILITY COMPANY)
AND
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
AND
FIRST UNION CAPITAL MARKETS CORP.
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REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made and
entered into this 18th day of May, 1999, among (a) Sleepmaster L.L.C., a New
Jersey limited liability company (the "Company") and Sleepmaster Finance
Corporation, a Delaware corporation ("Finance Corp.") as co-issuers, (b) Xxxx
Manufacturing Company, a Pennsylvania corporation, Palm Beach Bedding Company, a
Florida corporation and Lower Road Associates, LLC, a New Jersey limited
liability company as guarantors (collectively, the "Guarantors"), and (c)
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated and First Union Capital
Markets Corp. (the "Initial Purchasers").
This Agreement is made pursuant to the Purchase Agreement, dated May
18, 1999, among the Company, Finance Corp., the Guarantors and the Initial
Purchasers (the "Purchase Agreement"), which provides for (i) the sale by the
Company and Finance Corp. to the Initial Purchasers of an aggregate of $115
million principal amount of 11% Senior Subordinated Notes due 2009, Series A of
the Company and Finance Corp. (the "Securities") and (ii) the issue and sale by
the Guarantors and the purchase by the Initial Purchasers of the guarantees (the
"Guarantees") of the obligations of the Company and Finance Corp. under the
Securities. In order to induce the Initial Purchasers to enter into the Purchase
Agreement, the Company, Finance Corp. and the Guarantors have agreed to provide
to the Initial Purchasers and their direct and indirect transferees the
registration rights set forth in this Agreement. The execution of this Agreement
is a condition to the closing under the Purchase Agreement.
In consideration of the foregoing, the parties hereto agree as
follows:
1. Definitions.
As used in this Agreement, the following capitalized defined terms
shall have the following meanings:
"1933 Act" shall mean the Securities Act of 1933, as amended from
time to time.
"1934 Act" shall mean the Securities Exchange Act of l934, as amended
from time to time.
"Closing Date" shall mean the Closing Time as defined in the
Purchase Agreement.
"Company" shall have the meaning set forth in the preamble and shall
also include the Company's successors.
"Depositary" shall mean The Depository Trust Company, or any other
depositary appointed by the Company, Finance Corp. and the Guarantors,
provided, however, that
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such depositary must have an address in the Borough of Manhattan, in the
City of New York.
"Exchange Offer" shall mean the exchange offer by the Company,
Finance Corp. and the Guarantors of Exchange Securities (and related
Guarantees) for Registrable Securities pursuant to Section 2.1 hereof.
"Exchange Offer Registration" shall mean a registration under the
1933 Act effected pursuant to Section 2.1 hereof.
"Exchange Offer Registration Statement" shall mean an exchange offer
registration statement on Form S-4 (or, if applicable, on another
appropriate form or on any successor form used for substantially the same
transactions), and all amendments and supplements to such registration
statement, including the Prospectus contained therein, all exhibits thereto
and all documents incorporated by reference therein.
"Exchange Period" shall have the meaning set forth in Section
2.1 hereof.
"Exchange Securities" shall mean, collectively, the 11% Senior
Subordinated Notes due 2009, Series B issued by the Company and Finance
Corp. under the Indenture and the related guarantees issued by the
Guarantors under the Indenture, containing terms identical to the
Securities and the Guarantees in all material respects (except for
references to certain interest rate provisions, restrictions on transfers
and restrictive legends), to be offered to Holders of Securities and
Guarantees in exchange for Registrable Securities pursuant to the Exchange
Offer.
"Finance Corp." shall have the meaning set forth in the preamble and
shall also include Finance Corp.'s successors.
"Guarantors" shall have the meaning set forth in the preamble and
shall also include the Guarantors' successors.
"Holder" shall mean each Initial Purchaser, for so long as it owns
any Registrable Securities, and each of its successors, assigns and direct
and indirect transferees who become registered owners of Registrable
Securities under the Indenture and each Participating Broker-Dealer that
holds Exchange Securities for so long as such Participating Broker-Dealer
is required to deliver a prospectus meeting the requirements of the 1933
Act in connection with any resale of such Exchange Securities.
"Indenture" shall mean the Indenture relating to the Securities, the
Exchange Securities and the Guarantees, dated as of May 18, 1999, between
the Company, Finance Corp., the Guarantors and United States Trust Company
of New York, as trustee, as the
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same may be amended, supplemented, waived or otherwise modified from
time to time in accordance with the terms thereof.
"Initial Purchasers" shall have the meaning set forth in the
preamble.
"Majority Holders" shall mean the Holders of a majority of the
aggregate principal amount of Outstanding (as defined in the Indenture)
Registrable Securities; provided that whenever the consent or approval of
Holders of a specified percentage of Registrable Securities is required
hereunder, Registrable Securities held by the Company, Finance Corp., the
Guarantors and other obligors on the Securities or Guarantees or any
Affiliate (as defined in the Indenture) of the Company, Finance Corp. or
any Guarantor shall be disregarded in determining whether such consent or
approval was given by the Holders of such required percentage amount.
"Participating Broker-Dealer" shall mean Xxxxxxx Lynch, Pierce,
Xxxxxx & Xxxxx Incorporated and any other broker-dealer which makes a
market in the Securities and Guarantees and exchanges Registrable
Securities in the Exchange Offer for Exchange Securities.
"Person" shall mean an individual, partnership (general or limited),
corporation, limited liability company, trust or unincorporated
organization, or a government or agency or political subdivision thereof.
"Private Exchange" shall have the meaning set forth in Section
2.1 hereof.
"Private Exchange Securities" shall have the meaning set forth in
Section 2.1 hereof.
"Prospectus" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including any such
prospectus supplement with respect to the terms of the offering of any
portion of the Registrable Securities covered by a Shelf Registration
Statement, and by all other amendments and supplements to a prospectus,
including post-effective amendments, and in each case including all
material incorporated by reference therein.
"Purchase Agreement" shall have the meaning set forth in the
preamble.
"Registrable Securities" shall mean, collectively, the Securities,
the Guarantees, and, if issued, the Private Exchange Securities; provided,
however, that Securities, Guarantees and, if issued, the Private Exchange
Securities, shall cease to be Registrable Securities when (i) a
Registration Statement with respect to such Securities and Guarantees shall
have been declared effective under the 1933 Act and such Securities and
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Guarantees shall have been disposed of pursuant to such Registration
Statement, (ii) such Securities and Guarantees have been sold to the public
pursuant to Rule l44 (or any similar provision then in force, but not Rule
144A) under the 1933 Act, (iii) such Securities and Guarantees shall have
ceased to be outstanding or (iv) the Exchange Offer is consummated (except
in the case of Securities and Guarantees purchased from the Company,
Finance Corp. and the Guarantors and continued to be held by an Initial
Purchasers or Securities which may not be exchanged in the Exchange Offer).
"Registration Expenses" shall mean any and all expenses incident to
performance of or compliance by the Company, Finance Corp. and the
Guarantors with this Agreement, including without limitation: (i) all SEC,
stock exchange or National Association of Securities Dealers, Inc. (the
"NASD") registration and filing fees, including, if applicable, the fees
and expenses of any "qualified independent underwriter" (and its counsel)
that is required to be retained by any holder of Registrable Securities in
accordance with the rules and regulations of the NASD, (ii) all fees and
expenses incurred in connection with compliance with state securities or
blue sky laws and compliance with the rules of the NASD (including
reasonable fees and disbursements of counsel for any underwriters or
Holders in connection with blue sky qualification of any of the Exchange
Securities or Registrable Securities and any filings with the NASD), (iii)
all expenses of any Persons in preparing or assisting in preparing, word
processing, printing and distributing any Registration Statement, any
Prospectus, any amendments or supplements thereto, any underwriting
agreements, securities sales agreements and other documents relating to the
performance of and compliance with this Agreement, (iv) all fees and
expenses incurred in connection with the listing, if any, of any of the
Registrable Securities on any securities exchange or exchanges, (v) all
rating agency fees, (vi) the fees and disbursements of counsel for the
Company, Finance Corp. and the Guarantors and of the independent public
accountants of the Company, Finance Corp. and the Guarantors, including the
expenses of any special audits or "cold comfort" letters required by or
incident to such performance and compliance, (vii) the fees and expenses of
the Trustee, and any escrow agent or custodian, (viii) the reasonable fees
and disbursements of counsel representing the Holders of Registrable
Securities and (ix) any fees and disbursements of the underwriters
customarily required to be paid by issuers or sellers of securities and the
fees and expenses of any special experts retained by the Company, Finance
Corp. and the Guarantors in connection with any Registration Statement, but
excluding underwriting discounts and commissions and transfer taxes, if
any, relating to the sale or disposition of Registrable Securities by a
Holder.
"Registration Statement" shall mean any registration statement of the
Company, Finance Corp. and the Guarantors which covers any of the Exchange
Securities or 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 contained therein, all exhibits thereto and all material
incorporated by reference therein.
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"SEC" shall mean the Securities and Exchange Commission or any
successor agency or government body performing the functions currently
performed by the United States Securities and Exchange Commission.
"Shelf Registration" shall mean a registration effected pursuant to
Section 2.2 hereof.
"Shelf Registration Statement" shall mean a "shelf" registration
statement of the Company, Finance Corp. and the Guarantors pursuant to the
provisions of Section 2.2 of this Agreement which covers all of the
Registrable Securities or all of the Private Exchange Securities on an
appropriate form under Rule 415 under the 1933 Act, or any successor or
similar rule that may be adopted by the SEC, and all amendments and
supplements to such registration statement, including post-effective
amendments, in each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference therein.
"Trustee" shall mean the trustee with respect to the Securities, the
Exchange Securities and the Guarantees under the Indenture.
2. Registration Under the 1933 Act.
2.1 Exchange Offer. The Company, Finance Corp. and the Guarantors
shall, for the benefit of the Holders, at the Company's and Finance Corp.'s
cost, (A) prepare and, as soon as practicable but not later than 45 days
following the Closing Date, file with the SEC an Exchange Offer Registration
Statement on an appropriate form under the 1933 Act with respect to a proposed
Exchange Offer and the issuance and delivery to the Holders, in exchange for the
Registrable Securities (other than Private Exchange Securities), of a like
principal amount of Exchange Securities, (B) use its best efforts to cause the
Exchange Offer Registration Statement to be declared effective under the 1933
Act within 135 days of the Closing Date, (C) use its best efforts to keep the
Exchange Offer Registration Statement effective until the closing of the
Exchange Offer and (D) use its best efforts to cause the Exchange Offer to be
consummated not later than 175 days following the Closing Date. The Exchange
Securities will be issued under the Indenture. Upon the effectiveness of the
Exchange Offer Registration Statement, the Company, Finance Corp. and the
Guarantors shall promptly commence the Exchange Offer, it being the objective of
such Exchange Offer to enable each Holder eligible and electing to exchange
Registrable Securities for Exchange Securities (assuming that such Holder (a) is
not an affiliate of the Company, Finance Corp. or any of the Guarantors within
the meaning of Rule 405 under the 1933 Act, (b) is not a broker-dealer tendering
Registrable Securities acquired directly from the Company, Finance Corp. or any
of the Guarantors for its own account, (c) acquired or will acquire the Exchange
Securities in the ordinary course of such Holder's business and (d) has no
arrangements or understandings with any Person to participate in the Exchange
Offer for the purpose of distributing the Exchange Securities) to transfer such
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Exchange Securities from and after their receipt without any limitations or
restrictions under the 1933 Act and under state securities or blue sky laws.
In connection with the Exchange Offer, the Company, Finance
Corp. and the Guarantors shall:
(a) mail as promptly as practicable to each Holder a copy of
the Prospectus forming part of the Exchange Offer Registration Statement,
together with an appropriate letter of transmittal and related documents;
(b) keep the Exchange Offer open for acceptance for a period of
not less than 20 business days after the date notice thereof is mailed to the
Holders (or longer if required by applicable law) (such period referred to
herein as the "Exchange Period");
(c) utilize the services of the Depositary for the Exchange
Offer;
(d) permit Holders to withdraw tendered Registrable Securities
at any time prior to 5:00 p.m. (Eastern Time), on the last business day of the
Exchange Period, by sending to the institution specified in the notice, a
telegram, telex, facsimile transmission or letter setting forth the name of such
Holder, the principal amount of Registrable Securities delivered for exchange,
and a statement that such Holder is withdrawing such Holder's election to have
such Securities and Guarantees exchanged;
(e) notify each Holder that any Registrable Security not
tendered will remain outstanding and continue to accrue interest, but will not
retain any rights under this Agreement (except in the case of the Initial
Purchasers and Participating Broker-Dealers as provided herein); and
(f) otherwise comply in all respects with all applicable laws
relating to the Exchange Offer.
If, prior to consummation of the Exchange Offer, the Initial
Purchasers hold any Securities acquired by them and having the status of an
unsold allotment in the initial distribution, the Company and Finance Corp. upon
the request of any Initial Purchaser shall, simultaneously with the delivery of
the Exchange Securities in the Exchange Offer, issue and deliver to such Initial
Purchaser in exchange (the "Private Exchange") for the Securities held by the
Initial Purchaser, a like principal amount of debt securities of the Company and
Finance Corp. on a senior subordinated basis, guaranteed by the Guarantors, that
are identical (except that such securities shall bear appropriate transfer
restrictions) to the Exchange Securities (the "Private Exchange Securities").
The Exchange Securities and the Private Exchange Securities shall be
issued under (i) the Indenture or (ii) an indenture identical in all material
respects to the Indenture and
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which, in either case, has been qualified under the Trust Indenture Act of 1939,
as amended (the "TIA"), or is exempt from such qualification and shall provide
that the Exchange Securities shall not be subject to the transfer restrictions
set forth in the Indenture but that the Private Exchange Securities shall be
subject to such transfer restrictions. The Indenture or such indenture shall
provide that the Exchange Securities, the Private Exchange Securities and the
Securities (and related Guarantees) shall vote and consent together on all
matters as one class and that none of the Exchange Securities, the Private
Exchange Securities or the Securities (and related Guarantees) will have the
right to vote or consent as a separate class on any matter. The Private Exchange
Securities shall be of the same series as and the Company, Finance Corp. and the
Guarantors shall use their commercially reasonable efforts to have the Private
Exchange Securities bear the same CUSIP number as the Exchange Securities.
As soon as practicable after the close of the Exchange Offer and/or
the Private Exchange, as the case may be, the Company, Finance Corp.
and the Guarantors shall:
(i) accept for exchange all Registrable Securities duly
tendered and not validly withdrawn pursuant to the Exchange Offer in
accordance with the terms of the Exchange Offer Registration
Statement and the letter of transmittal which shall be an exhibit
thereto;
(ii) accept for exchange all Securities properly tendered
pursuant to the Private Exchange;
(iii) deliver to the Trustee for cancellation all Registrable
Securities so accepted for exchange; and
(iv) cause the Trustee promptly to authenticate and deliver
Exchange Securities or Private Exchange Securities, as the case may
be, to each Holder of Registrable Securities so accepted for exchange
in a principal amount equal to the principal amount of the
Registrable Securities of such Holder so
accepted for exchange.
Interest on each Exchange Security and Private Exchange Security will
accrue from the last date on which interest was paid on the Registrable
Securities surrendered in exchange therefor or, if no interest has been paid on
the Registrable Securities, from the date of original issuance. The Exchange
Offer and the Private Exchange shall not be subject to any conditions, other
than (i) that the Exchange Offer or the Private Exchange, or the making of any
exchange by a Holder, does not violate applicable law or any applicable
interpretation of the staff of the SEC, (ii) the due and valid tendering of
Registrable Securities in accordance with the Exchange Offer and the Private
Exchange, (iii) that each Holder of Registrable Securities exchanged in the
Exchange Offer shall have represented that all Exchange Securities to be
received by it shall be acquired in the ordinary course of its business and that
at the time of the consummation of the Exchange Offer it shall have no
arrangement or understanding with any
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person to participate in the distribution (within the meaning of the 0000 Xxx)
of the Exchange Securities and shall have made such other representations as may
be reasonably necessary under applicable SEC rules, regulations or
interpretations to render the use of Form S-4 or other appropriate form under
the 1933 Act available and (iv) that no action or proceeding shall have been
instituted or threatened in any court or by or before any governmental agency
with respect to the Exchange Offer or the Private Exchange which, in the
Company's, Finance Corp.'s and the Guarantors' judgment, would reasonably be
expected to impair the ability of the Company, Finance Corp. and the Guarantors
to proceed with the Exchange Offer or the Private Exchange. The Company, Finance
Corp. and the Guarantors shall inform the Initial Purchasers of the names and
addresses of the Holders to whom the Exchange Offer is made, and the Initial
Purchasers shall have the right to contact such Holders and otherwise facilitate
the tender of Registrable Securities in the Exchange Offer.
2.2 Shelf Registration. (i) If, because of any changes in law, SEC
rules or regulations or applicable interpretations thereof by the staff of the
SEC, the Company, Finance Corp. or the Guarantors are not permitted to effect
the Exchange Offer as contemplated by Section 2.1 hereof, (ii) if for any other
reason the Exchange Offer Registration Statement is not declared effective
within 135 days following the original issue of the Registrable Securities or
the Exchange Offer is not consummated within 175 days after the original issue
of the Registrable Securities, (iii) upon the request of any Initial Purchaser
or (iv) if a Holder is not permitted to participate in the Exchange Offer or
does not receive fully tradeable Exchange Securities pursuant to the Exchange
Offer, then in case of each of clauses (i) through (iv) the Company, Finance
Corp. and the Guarantors shall, at their cost:
(a) As promptly as practicable, file with the SEC, and
thereafter shall use their best efforts to cause to be declared
effective as promptly as practicable but no later than 175 days after
the original issue of the Registrable Securities, a Shelf
Registration Statement relating to the offer and sale of the
Registrable Securities by the Holders from time to time in accordance
with the methods of distribution elected by the Majority Holders
participating in the Shelf Registration and set forth in such Shelf
Registration Statement.
(b) Use their 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 a period of up to
two years from the date the Shelf Registration Statement is declared
effective by the SEC, or for such shorter period that will terminate
when all Registrable Securities covered by the Shelf Registration
Statement have been sold pursuant to the Shelf Registration Statement
or cease to be outstanding or otherwise to be Registrable Securities
(the "Effectiveness Period"); provided, however, that the
Effectiveness Period in respect of the Shelf Registration Statement
shall be extended to the extent required to permit dealers to comply
with the applicable prospectus delivery requirements under the 1933
Act and as otherwise provided herein.
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(c) Notwithstanding any other provisions hereof, use their best
efforts to ensure that (i) any Shelf Registration Statement and any
amendment thereto and any Prospectus forming part thereof and any
supplement thereto complies in all material respects with the 1933
Act and the rules and regulations thereunder, (ii) any Shelf
Registration Statement and any amendment thereto does not, when it
becomes effective, 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 (iii) any
Prospectus forming part of any Shelf Registration Statement, and any
supplement to such Prospectus (as amended or supplemented from time
to time), does not include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the
statements, in light of the circumstances under which they were made,
not misleading.
The Company, Finance Corp. and the Guarantors shall not permit any
securities other than Registrable Securities to be included in the Shelf
Registration Statement. The Company, Finance Corp. and the Guarantors further
agree, if necessary, to supplement or amend the Shelf Registration Statement, as
required by Section 3(b) below, and to furnish to the Holders of Registrable
Securities copies of any such supplement or amendment promptly after its being
used or filed with the SEC.
2.3 Expenses. The Company, Finance Corp. and the Guarantors shall pay
all Registration Expenses in connection with the registration pursuant to
Section 2.1 or 2.2. Each Holder shall pay all underwriting discounts and
commissions and transfer taxes, if any, relating to the sale or disposition of
such Holder's Registrable Securities pursuant to the Shelf Registration
Statement.
2.4. Effectiveness. (a) The Company, Finance Corp. and the Guarantors
will be deemed not to have used their best efforts to cause the Exchange Offer
Registration Statement or the Shelf Registration Statement, as the case may be,
to become, or to remain, effective during the requisite period if the Company,
Finance Corp. or any Guarantor voluntarily takes any action that would, or omits
to take any action which omission would, result in any such Registration
Statement not being declared or remaining effective or in the Holders of
Registrable Securities covered thereby not being able to exchange or offer and
sell such Registrable Securities during that period as and to the extent
contemplated hereby, unless such action is required by applicable law.
(b) An Exchange Offer Registration Statement pursuant to Section 2.1
hereof or a Shelf Registration Statement pursuant to Section 2.2 hereof will not
be deemed to have become effective unless it has been declared effective by the
SEC; provided, however, that if, after it has been declared effective, the
offering of Registrable Securities pursuant to an Exchange Offer Registration
Statement or a Shelf Registration Statement is interfered with by
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any stop order, injunction or other order or requirement of the SEC or any other
governmental agency or court, such Registration Statement will be deemed not to
have become effective during the period of such interference, until the offering
of Registrable Securities pursuant to such Registration Statement may legally
resume.
2.5 Interest. The Indenture executed in connection with the Securities
and the Guarantees will provide that in the event that either (a) the Exchange
Offer Registration Statement is not filed with the SEC on or prior to the 45th
calendar day following the date of original issue of the Securities and the
Guarantees, (b) the Exchange Offer Registration Statement has not been declared
effective on or prior to the 135th calendar day following the date of original
issue of the Securities and the Guarantees, (c) the Exchange Offer is not
consummated on or prior to the 175th calendar day following the day of original
issue of the Securities and the Guarantees or (d) a Shelf Registration Statement
is not declared effective on or prior to the later of the 175th calendar day
following the day of original issue of the Securities and 40 days after such
shelf registration statement is requested (each such event referred to in
clauses (a) through (d) above, a "Registration Default"), the interest rate
borne by the Securities shall be increased ("Additional Interest") by
one-quarter of one percent per annum upon the occurrence of each Registration
Default, which rate will increase by one quarter of one percent each 90-day
period that such Additional Interest continues to accrue under any such
circumstance, provided that the maximum aggregate increase in the interest rate
will in no event exceed one percent (1%) per annum. Following the cure of all
Registration Defaults the accrual of Additional Interest will cease and the
interest rate will revert to the original rate.
If the Shelf Registration Statement is unusable by the Holders for
any reason, and the aggregate number of days in any consecutive twelve-month
period for which the Shelf Registration Statement shall not be usable exceeds 30
days in the aggregate, then the interest rate borne by the Securities will be
increased by 0.25% per annum of the principal amount of the Securities for the
first 90-day period (or portion thereof) beginning on the 31st such date that
such Shelf Registration Statement ceases to be usable, which rate shall be
increased by an additional 0.25% per annum of the principal amount of the
Securities at the beginning of each subsequent 90-day period, provided that the
maximum aggregate increase in the interest rate will in no event exceed one
percent (1%) per annum. Any amounts payable under this paragraph shall also be
deemed "Additional Interest" for purposes of this Agreement. Upon the Shelf
Registration Statement once again becoming usable, the interest rate borne by
the Securities will be reduced to the original interest rate if the Company and
Finance Corp. are otherwise in compliance with this Agreement at such time.
Additional Interest shall be computed based on the actual number of days elapsed
in each 90-day period in which the Shelf Registration Statement is unusable.
The Company and Finance Corp. shall notify the Trustee within three
business days after each and every date on which an event occurs in respect of
which Additional Interest is required to be paid (an "Event Date"). Additional
Interest shall be paid by depositing with the Trustee, in trust, for the benefit
of the Holders of Registrable Securities, on or before the
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applicable semiannual interest payment date, immediately available funds in sums
sufficient to pay the Additional Interest then due. The Additional Interest due
shall be payable on each interest payment date to the record Holder of
Securities entitled to receive the interest payment to be paid on such date as
set forth in the Indenture. Each obligation to pay Additional Interest shall be
deemed to accrue from and including the day following the applicable Event Date.
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3. Registration Procedures.
In connection with the obligations of the Company, Finance Corp.
and the Guarantors with respect to Registration Statements pursuant to
Sections 2.1 and 2.2 hereof, the Company, Finance Corp. and the Guarantors
shall:
(a) prepare and file with the SEC a Registration Statement, within
the relevant time period specified in Section 2, on the appropriate form under
the 1933 Act, which form (i) shall be selected by the Company, Finance Corp. and
the Guarantors, (ii) shall, in the case of a Shelf Registration, be available
for the sale of the Registrable Securities by the selling Holders thereof, (iii)
shall comply as to form in all material respects with the requirements of the
applicable form and include or incorporate by reference all financial statements
required by the SEC to be filed therewith or incorporated by reference therein,
and (iv) shall comply in all respects with the requirements of Regulation S-T
under the 1933 Act, and use their best efforts to cause such Registration
Statement to become effective and remain effective in accordance with Section 2
hereof;
(b) prepare and file with the SEC such amendments and post-effective
amendments to each Registration Statement as may be necessary under applicable
law to keep such Registration Statement effective for the applicable period; and
cause each Prospectus to be supplemented by any required prospectus supplement,
and as so supplemented to be filed pursuant to Rule 424 (or any similar
provision then in force) under the 1933 Act and comply with the provisions of
the 1933 Act, the 1934 Act and the rules and regulations thereunder applicable
to them with respect to the disposition of all securities covered by each
Registration Statement during the applicable period in accordance with the
intended method or methods of distribution by the selling Holders thereof
(including sales by any Participating Broker-Dealer);
(c) in the case of a Shelf Registration, (i) notify each Holder of
Registrable Securities, at least five business days prior to filing, that a
Shelf Registration Statement with respect to the Registrable Securities is being
filed and advising such Holders that the distribution of Registrable Securities
will be made in accordance with the method selected by the Majority Holders
participating in the Shelf Registration; (ii) furnish to each Holder of
Registrable Securities and to each underwriter of an underwritten offering of
Registrable Securities, if any, without charge, as many copies of each
Prospectus, including each preliminary Prospectus, and any amendment or
supplement thereto and such other documents as such Holder or underwriter may
reasonably request, including financial statements and schedules and, if the
Holder so requests, all exhibits in order to facilitate the public sale or other
disposition of the Registrable Securities; and (iii) hereby consent to the use
of the Prospectus or any amendment or supplement thereto by each of the selling
Holders of Registrable Securities in connection with the offering and sale of
the Registrable Securities covered by the Prospectus or any amendment or
supplement thereto;
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(d) use their best efforts to register or qualify the Registrable
Securities under all applicable state securities or "blue sky" laws of such
jurisdictions as any Holder of Registrable Securities covered by a Registration
Statement and each underwriter of an underwritten offering of Registrable
Securities shall reasonably request by the time the applicable Registration
Statement is declared effective by the SEC, and do any and all other acts and
things which may be reasonably necessary or advisable to enable each such Holder
and underwriter to consummate the disposition in each such jurisdiction of such
Registrable Securities owned by such Holder; provided, however, that the
Company, Finance Corp. and the Guarantors shall not be required to (i) qualify
as a foreign corporation or as a dealer in securities in any jurisdiction where
it would not otherwise be required to qualify but for this Section 3(d), or (ii)
take any action which would subject it to general service of process or taxation
in any such jurisdiction where it is not then so subject;
(e) notify promptly each Holder of Registrable Securities under a
Shelf Registration or any Participating Broker-Dealer who has notified the
Company, Finance Corp. and the Guarantors that it is utilizing the Exchange
Offer Registration Statement as provided in paragraph (f) below and, if
requested by such Holder or Participating Broker-Dealer, confirm such advice in
writing promptly (i) when a Registration Statement has become effective and when
any post-effective amendments and supplements thereto become effective, (ii) of
any request by the SEC or any state securities authority for post-effective
amendments and supplements to a Registration Statement and Prospectus or for
additional information after the Registration Statement has become effective,
(iii) of the issuance by the SEC or any state securities authority of any stop
order suspending the effectiveness of a Registration Statement or the initiation
of any proceedings for that purpose, (iv) in the case of a Shelf Registration,
if, between the effective date of a Registration Statement and the closing of
any sale of Registrable Securities covered thereby, the representations and
warranties of the Company, Finance Corp. or any Guarantor contained in any
underwriting agreement, securities sales agreement or other similar agreement,
if any, relating to the offering cease to be true and correct in all material
respects, (v) of the happening of any event or the discovery of any facts during
the period a Shelf Registration Statement is effective which makes any statement
made in such Registration Statement or the related Prospectus untrue in any
material respect or which requires the making of any changes in such
Registration Statement or Prospectus in order to make the statements therein not
misleading, (vi) of the receipt by the Company, Finance Corp. or any Guarantor
of any notification with respect to the suspension of the qualification of the
Registrable Securities or the Exchange Securities, as the case may be, for sale
in any jurisdiction or the initiation or threatening of any proceeding for such
purpose and (vii) of any determination by the Company, Finance Corp. or any
Guarantor that a post-effective amendment to such Registration Statement would
be appropriate;
(f) in the case of the Exchange Offer Registration Statement (i)
include in the Exchange Offer Registration Statement a section entitled "Plan of
Distribution" which section shall be acceptable to Xxxxxxx Xxxxx on behalf of
the Participating Broker-Dealers, and which shall contain a summary statement of
the positions taken or policies made by the staff of the
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15
SEC with respect to the potential "underwriter" status of any broker-dealer that
holds Registrable Securities acquired for its own account as a result of
market-making activities or other trading activities and that will be the
beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of Exchange
Securities to be received by such broker-dealer in the Exchange Offer, whether
such positions or policies have been publicly disseminated by the staff of the
SEC or such positions or policies, in the judgment of Xxxxxxx Xxxxx on behalf of
the Participating Broker-Dealers and its counsel, represent the prevailing views
of the staff of the SEC, including a statement that any such broker-dealer who
receives Exchange Securities for Registrable Securities pursuant to the Exchange
Offer may be deemed a statutory underwriter and must deliver a prospectus
meeting the requirements of the 1933 Act in connection with any resale of such
Exchange Securities, (ii) furnish to each Participating Broker-Dealer who has
delivered to the Company, Finance Corp. and the Guarantors the notice referred
to in Section 3(e), without charge, as many copies of each Prospectus included
in the Exchange Offer Registration Statement, including any preliminary
prospectus, and any amendment or supplement thereto, as such Participating
Broker-Dealer may reasonably request, (iii) hereby consent to the use of the
Prospectus forming part of the Exchange Offer Registration Statement or any
amendment or supplement thereto, by any Person subject to the prospectus
delivery requirements of the SEC, including all Participating Broker-Dealers, in
connection with the sale or transfer of the Exchange Securities covered by the
Prospectus or any amendment or supplement thereto, and (iv) include in the
transmittal letter or similar documentation to be executed by an exchange
offeree in order to participate in the Exchange Offer (x) the following
provision (or any other provision requested by Xxxxxxx Xxxxx on behalf of the
Participating Broker-Dealers with respect to similar matters):
"If the exchange offeree is a broker-dealer holding Registrable
Securities acquired for its own account as a result of market-making
activities or other trading activities, it will deliver a prospectus
meeting the requirements of the 1933 Act in connection with any
resale of Exchange Securities received in respect of such Registrable
Securities pursuant to the Exchange Offer;" and
(y) a statement to the effect that by a broker-dealer making the acknowledgment
described in clause (x) and by delivering a Prospectus in connection with the
exchange of Registrable Securities, the broker-dealer will not be deemed to
admit that it is an underwriter within the meaning of the 1933 Act;
(g) (i) in the case of an Exchange Offer, furnish counsel for the
Initial Purchasers and (ii) in the case of a Shelf Registration, furnish counsel
for the Holders of Registrable Securities copies of any comment letters received
from the SEC or any other request by the SEC or any state securities authority
for amendments or supplements to a Registration Statement and Prospectus or for
additional information;
(h) make every reasonable effort promptly to obtain the withdrawal of
any order suspending the effectiveness of a Registration Statement;
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16
(i) in the case of a Shelf Registration, furnish to each Holder of
Registrable Securities, and each underwriter, if any, without charge, at least
one conformed copy of each Registration Statement and any post-effective
amendment thereto, including financial statements and schedules (without
documents incorporated therein by reference and all exhibits thereto, unless
requested);
(j) in the case of a Shelf Registration, cooperate with the selling
Holders of Registrable Securities to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold and not
bearing any restrictive legends; and enable such Registrable Securities to be in
such denominations (consistent with the provisions of the Indenture) and
registered in such names as the selling Holders or the underwriters, if any, may
reasonably request at least three business days prior to the closing of any sale
of Registrable Securities;
(k) in the case of a Shelf Registration, upon the occurrence of any
event or the discovery of any facts, each as contemplated by Sections 3(e)(v)
and 3(e)(vi) hereof, as promptly as practicable after the occurrence of such an
event, use their best efforts to prepare a supplement or post-effective
amendment to the Registration Statement or the related Prospectus or any
document incorporated therein by reference or file any other required document
so that, as thereafter delivered to the purchasers of the Registrable Securities
or Participating Broker-Dealers, such Prospectus will not contain at the time of
such delivery any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading or will remain so
qualified. At such time as such public disclosure is otherwise made or the
Company and Finance Corp. determine that such disclosure is not necessary, in
each case to correct any misstatement of a material fact or to include any
omitted material fact, the Company, Finance Corp. and the Guarantors agree
promptly to notify each Holder of such determination and to furnish each Holder
such number of copies of the Prospectus as amended or supplemented, as such
Holder may reasonably request;
(l) in the case of a Shelf Registration, a reasonable time prior to
the filing of any Registration Statement, any Prospectus, any amendment to a
Registration Statement or amendment or supplement to a Prospectus or any
document which is to be incorporated by reference into a Registration Statement
or a Prospectus after initial filing of a Registration Statement, provide copies
of such document to the Initial Purchasers on behalf of such Holders; and make
representatives of the Company, Finance Corp. and the Guarantors as shall be
reasonably requested by the Holders of Registrable Securities, or the Initial
Purchasers on behalf of such Holders, available for discussion of such document;
(m) obtain a CUSIP number for all Exchange Securities, Private
Exchange Securities or Registrable Securities, as the case may be, not later
than the effective date of a Registration Statement, and provide the Trustee
with printed certificates for the Exchange
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17
Securities, Private Exchange Securities or the Registrable Securities, as the
case may be, in a form eligible for deposit with the Depositary;
(n) (i) cause the Indenture to be qualified under the Trust Indenture
Act of 1939 (the "TIA") in connection with the registration of the Exchange
Securities or Registrable Securities, as the case may be, (ii) cooperate with
the Trustee and the Holders to effect such changes to the Indenture as may be
required for the Indenture to be so qualified in accordance with the terms of
the TIA and (iii) execute, and use its best efforts to cause the Trustee to
execute, all documents as may be required to effect such changes, and all other
forms and documents required to be filed with the SEC to enable the Indenture to
be so qualified in a timely manner;
(o) in the case of a Shelf Registration, enter into agreements
(including underwriting agreements) and take all other customary and appropriate
actions in order to expedite or facilitate the disposition of such Registrable
Securities and in such connection whether or not an underwriting agreement is
entered into and whether or not the registration is an underwritten
registration:
(i) make such representations and warranties to the Holders
of such Registrable Securities and the underwriters, if any, in form,
substance and scope as are customarily made by issuers to
underwriters in similar underwritten offerings as may be reasonably
requested by them;
(ii) obtain opinions of counsel to the Company, Finance Corp.
and the Guarantors and updates thereof (which counsel and opinions
(in form, scope and substance) shall be reasonably satisfactory to
the managing underwriters, if any, and the holders of a majority in
principal amount of the Registrable Securities being sold) addressed
to each selling Holder and the underwriters, if any, covering the
matters customarily covered in opinions requested in sales of
securities or underwritten offerings and such other matters as may be
reasonably requested by such Holders and underwriters;
(iii) obtain "cold comfort" letters and updates thereof from
the Company's, Finance Corp.'s and the Guarantors' independent
certified public accountants (and, if necessary, any other
independent certified public accountants of any subsidiary of the
Company or of any business acquired by the Company for which
financial statements are, or are required to be, included in the
Registration Statement) addressed to the underwriters, if any, and
use reasonable efforts to have such letter addressed to the selling
Holders of Registrable Securities (to the extent consistent with
Statement on Auditing Standards No. 72 of the American Institute of
Certified Public Accounts), such letters to be in customary form and
covering matters of the type customarily covered in "cold comfort"
letters to underwriters in connection with similar underwritten
offerings;
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18
(iv) enter into a securities sales agreement with the Holders
and an agent of the Holders providing for, among other things, the
appointment of such agent for the selling Holders for the purpose of
soliciting purchases of Registrable Securities, which agreement shall
be in form, substance and scope customary for similar offerings;
(v) if an underwriting agreement is entered into, cause the
same to set forth indemnification provisions and procedures
substantially equivalent to the indemnification provisions and
procedures set forth in Section 4 hereof with respect to the
underwriters and all other parties to be indemnified pursuant to said
Section or, at the request of any underwriters, in the form
customarily provided to such underwriters in similar types of
transactions; and
(vi) deliver such documents and certificates as may be
reasonably requested and as are customarily delivered in similar
offerings to the Holders of a majority in principal amount of the
Registrable Securities being sold and the managing underwriters, if
any.
The above shall be done at (i) the effectiveness of such Registration Statement
(and each post-effective amendment thereto) and (ii) each closing under any
underwriting or similar agreement as and to the extent required thereunder;
(p) in the case of a Shelf Registration or if a Prospectus is
required to be delivered by any Participating Broker-Dealer in the case of an
Exchange Offer, make available for inspection by representatives of the Holders
of the Registrable Securities, any underwriters participating in any disposition
pursuant to a Shelf Registration Statement, any Participating Broker-Dealer and
any counsel or accountant retained by any of the foregoing, all financial and
other records, pertinent corporate documents and properties of the Company,
Finance Corp. and the Guarantors reasonably requested by any such persons, and
cause the respective officers, directors, employees, and any other agents of the
Company, Finance Corp. and the Guarantors to supply all information reasonably
requested by any such representative, underwriter, special counsel or accountant
in connection with a Registration Statement, and make such representatives of
the Company, Finance Corp. and the Guarantors available for discussion of such
documents as shall be reasonably requested by the Initial Purchasers;
(q) (i) in the case of an Exchange Offer Registration Statement, a
reasonable time prior to the filing of any Exchange Offer Registration
Statement, any Prospectus forming a part thereof, any amendment to an Exchange
Offer Registration Statement or amendment or supplement to such Prospectus,
provide copies of such document to the Initial Purchasers and to counsel to the
Holders of Registrable Securities and make such changes in any such document
prior to the filing thereof as the Initial Purchasers or counsel to the Holders
of Registrable Securities may reasonably request and, except as otherwise
required by applicable
- 17 -
19
law, not file any such document in a form to which the Initial Purchasers on
behalf of the Holders of Registrable Securities and counsel to the Holders of
Registrable Securities shall not have previously been advised and furnished a
copy of or to which the Initial Purchasers on behalf of the Holders of
Registrable Securities or counsel to the Holders of Registrable Securities shall
reasonably object, and make the representatives of the Company, Finance Corp.
and the Guarantors available for discussion of such documents as shall be
reasonably requested by the Initial Purchasers; and
(ii) in the case of a Shelf Registration, a reasonable time
prior to filing any Shelf Registration Statement, any Prospectus forming a part
thereof, any amendment to such Shelf Registration Statement or amendment or
supplement to such Prospectus, provide copies of such document to the Holders of
Registrable Securities, to the Initial Purchasers, to counsel for the Holders
and to the underwriter or underwriters of an underwritten offering of
Registrable Securities, if any, make such changes in any such document prior to
the filing thereof as the Initial Purchasers, the counsel to the Holders or the
underwriter or underwriters reasonably request and not file any such document in
a form to which the Majority Holders, the Initial Purchasers on behalf of the
Holders of Registrable Securities, counsel for the Holders of Registrable
Securities or any underwriter shall not have previously been advised and
furnished a copy of or to which the Majority Holders, the Initial Purchasers of
behalf of the Holders of Registrable Securities, counsel to the Holders of
Registrable Securities or any underwriter shall reasonably object, and make the
representatives of the Company, Finance Corp. and the Guarantors available for
discussion of such document as shall be reasonably requested by the Holders of
Registrable Securities, the Initial Purchasers on behalf of such Holders,
counsel for the Holders of Registrable Securities or any underwriter.
(r) in the case of a Shelf Registration, use its best efforts to
cause all Registrable Securities to be listed on any securities exchange on
which similar debt securities issued by the Company, Finance Corp. or any
Guarantor are then listed if requested by the Majority Holders, or if requested
by the underwriter or underwriters of an underwritten offering of Registrable
Securities, if any;
(s) in the case of a Shelf Registration, use its best efforts to
cause the Registrable Securities to be rated by the appropriate rating agencies,
if so requested by the Majority Holders, or if requested by the underwriter or
underwriters of an underwritten offering of Registrable Securities, if any;
(t) otherwise 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 covering at least 12 months which shall
satisfy the provisions of Section 11(a) of the 1933 Act and Rule 158 thereunder;
(u) cooperate and assist in any filings required to be made with the
NASD and, in the case of a Shelf Registration, in the performance of any due
diligence investigation by any
- 18 -
20
underwriter and its counsel (including any "qualified independent underwriter"
that is required to be retained in accordance with the rules and regulations of
the NASD); and
(v) upon consummation of an Exchange Offer or a Private Exchange,
obtain a customary opinion of counsel to the Company, Finance Corp. and the
Guarantors addressed to the Trustee for the benefit of all Holders of
Registrable Securities participating in the Exchange Offer or Private Exchange,
and which includes an opinion that (i) the Company, Finance Corp. and the
Guarantors, as the case may be, have duly authorized, executed and delivered the
Exchange Securities and/or Private Exchange Securities, as applicable, and the
related indenture, and (ii) each of the Exchange Securities and related
indenture constitute a legal, valid and binding obligation of the Company,
Finance Corp. and the Guarantors, as the case may be, enforceable against the
Company, Finance Corp. and the Guarantors, as the case may be, in accordance
with its respective terms (with customary exceptions).
If following the date hereof there has been a change in SEC policy
with respect to exchange offers such as the Exchange Offer, such that in the
opinion of counsel to the Company, Finance Corp. or the Holders there is a
substantial question as to whether the Exchange Offer is permitted by applicable
federal law, the Company, Finance Corp. and the Guarantors hereby agree to seek
a no-action letter or other favorable decision from the SEC allowing the
Company, Finance Corp. and the Guarantors to consummate an Exchange Offer for
the Notes. The Company, Finance Corp. and the Guarantors hereby agree to pursue
the issuance of such a decision to the SEC staff level. In connection with the
foregoing, the Company, Finance Corp. and the Guarantors hereby agree to take
all such other actions as are requested by the SEC or otherwise required in
connection with the issuance of such decision, including without limitation (A)
participating in telephonic conferences with the SEC, (B) delivering to the SEC
staff an analysis prepared by counsel to the Company, Finance Corp. and the
Guarantors, setting forth the legal basis, if any, upon which such counsel has
concluded that such an Exchange Offer shall be permitted and (C) diligently
pursuing a resolution (which need not be favorable) by the SEC staff of such
submission.
In the case of a Shelf Registration Statement, the Company, Finance
Corp. and the Guarantors may (as a condition to such Holder's participation in
the Shelf Registration) require each Holder of Registrable Securities to furnish
to the Company, Finance Corp. and the Guarantors such information regarding the
Holder and the proposed distribution by such Holder of such Registrable
Securities as the Company, Finance Corp. and the Guarantors may from time to
time reasonably request in writing.
In the case of a Shelf Registration Statement, each Holder agrees
that, upon receipt of any notice from the Company, Finance Corp. and the
Guarantors of the happening of any event or the discovery of any facts, each of
the kind described in Section 3(e)(v) hereof, such Holder will forthwith
discontinue disposition of Registrable Securities pursuant to a Registration
Statement until such Holder's receipt of the copies of the supplemented or
amended Prospectus contemplated by Section 3(k) hereof, and, if so directed by
the Company,
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21
Finance Corp. and the Guarantors, such Holder will deliver to the Company,
Finance Corp. and the Guarantors (at their expense) all copies in such Holder's
possession, other than permanent file copies then in such Holder's possession,
of the Prospectus covering such Registrable Securities current at the time of
receipt of such notice.
If any of the Registrable Securities covered by any Shelf
Registration Statement are to be sold in an underwritten offering, the
underwriter or underwriters and manager or managers that will manage such
offering will be selected by the Majority Holders of such Registrable Securities
included in such offering and shall be acceptable to the Company, Finance Corp.
and the Guarantors. No Holder of Registrable Securities may participate in any
underwritten registration hereunder unless such Holder (a) agrees to sell such
Holder's Registrable Securities on the basis provided in any underwriting
arrangements approved by the persons entitled hereunder to approve such
arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents required
under the terms of such underwriting arrangements. Notwithstanding any other
provision of this Agreement, the Company, Finance Corp. and the Guarantors shall
not be required to effect an underwritten offering unless such underwritten
offering covers not less than $10 million in aggregate principal amount of the
Securities.
4. Indemnification; Contribution.
(a) The Company, Finance Corp. and the Guarantors agree, jointly and
severally, to indemnify and hold harmless each Initial Purchaser, each Holder,
each Participating Broker-Dealer, each Person who participates as an underwriter
(any such Person being an "Underwriter") and each Person, if any, who controls
any Holder or Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in any Registration
Statement (or any amendment or supplement thereto) pursuant to which
Exchange Securities or Registrable Securities were registered under the
1933 Act, including all documents incorporated therein by reference, or the
omission or alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements therein not misleading,
or arising out of any untrue statement or alleged untrue statement of a
material fact contained in any Prospectus (or any amendment or supplement
thereto) or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount paid
in settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue
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22
statement or omission, or any such alleged untrue statement or omission;
provided that (subject to Section 4(d) below) any such settlement is
effected with the written consent of the Company and Finance Corp.; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by any indemnified
party), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, to the extent that any such expense
is not paid under subparagraph (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company,
Finance Corp. or the Guarantors by the Holder or Underwriter expressly for use
in a Registration Statement (or any amendment thereto) or any Prospectus (or any
amendment or supplement thereto).
(b) Each Holder severally, but not jointly, agrees to indemnify and
hold harmless the Company, Finance Corp. the Guarantors, each Initial Purchaser,
each Underwriter and the other selling Holders, and each of their respective
directors and officers, and each Person, if any, who controls the Company,
Finance Corp. any of the Guarantors, an Initial Purchaser, any Underwriter or
any other selling Holder within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act, against any and all loss, liability, claim, damage
and expense described in the indemnity contained in Section 4(a) hereof, as
incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Shelf Registration Statement (or any
amendment thereto) or any Prospectus included therein (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
with respect to such Holder furnished to the Company, Finance Corp. or the
Guarantors by such Holder expressly for use in the Shelf Registration Statement
(or any amendment thereto) or such Prospectus (or any amendment or supplement
thereto); provided, however, that no such Holder shall be liable for any claims
hereunder in excess of the amount of net proceeds received by such Holder from
the sale of Registrable Securities pursuant to such Shelf Registration
Statement.
(c) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action or proceeding
commenced against it in respect of which indemnity may be sought hereunder, but
failure so to notify an indemnifying party shall not relieve such indemnifying
party from any liability hereunder to the extent it is not materially prejudiced
as a result thereof and in any event shall not relieve it from any liability
which it may have otherwise than on account of this indemnity agreement. An
indemnifying party may participate at its own expense in the defense of such
action; provided,
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23
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying party or parties be liable for the fees and
expenses of more than one counsel (in addition to any local counsel) separate
from their own counsel for all indemnified parties in connection with any one
action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances. No indemnifying
party shall, without the prior written consent of the indemnified parties,
settle or compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 4 (whether or
not the indemnified parties are actual or potential parties thereto), unless
such settlement, compromise or consent (i) includes an unconditional release of
each indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
(d) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 4(a)(ii) effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
(e) If the indemnification provided for in this Section 4 is for any
reason unavailable to or insufficient to hold harmless an indemnified party in
respect of any losses, liabilities, claims, damages or expenses referred to
therein, then each indemnifying party shall contribute to the aggregate amount
of such losses, liabilities, claims, damages and expenses incurred by such
indemnified party, as incurred, in such proportion as is appropriate to reflect
the relative fault of the Company, Finance Corp. and the Guarantors on the one
hand and the Holders and the Initial Purchasers on the other hand in connection
with the statements or omissions which resulted in such losses, liabilities,
claims, damages or expenses, as well as any other relevant equitable
considerations.
The relative fault of the Company, Finance Corp. and the Guarantors on the
one hand and the Holders and the Initial Purchasers on the other hand shall be
determined by reference to, among other things, whether any such untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact relates to information supplied by the Company, Finance
Corp., the Guarantors, the Holders or the Initial Purchasers and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
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24
The Company, Finance Corp., the Guarantors, the Holders and the Initial
Purchasers agree that it would not be just and equitable if contribution
pursuant to this Section 4 were determined by pro rata allocation or by any
other method of allocation which does not take account of the equitable
considerations referred to above in this Section 4. The aggregate amount of
losses, liabilities, claims, damages and expenses incurred by an indemnified
party and referred to above in this Section 4 shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 4, an Initial Purchaser
shall not be required to contribute any amount in excess of the amount by which
the total price at which the Securities and Guarantees sold by it were offered
exceeds the amount of any damages which the Initial Purchaser has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission.
No Person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 0000 Xxx) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 4, each Person, if any, who controls an
Initial Purchaser or Holder within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as the
Initial Purchaser or Holder, and each director of the Company, Finance Corp. or
any Guarantor, and each Person, if any, who controls the Company, Finance Corp.
or any Guarantor within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act shall have the same rights to contribution as the Company,
Finance Corp. or such Guarantor.
5. Miscellaneous.
5.1 Rule 144 and Rule 144A. For so long as the Company, Finance Corp.
or any Guarantor is subject to the reporting requirements of Section 13 or 15 of
the 1934 Act, the Company, Finance Corp. and each Guarantor covenant that they
will file the reports required to be filed by them under the 1933 Act and
Section 13(a) or 15(d) of the 1934 Act and the rules and regulations adopted by
the SEC thereunder. If the Company, Finance Corp. and the Guarantors cease to be
so required to file such reports, the Company, Finance Corp. and the Guarantors
covenant that they will upon the request of any Holder of Registrable Securities
(a) make publicly available such information as is necessary to permit sales
pursuant to Rule 144 under the 1933 Act, (b) deliver such information to a
prospective purchaser as is necessary to permit sales pursuant to Rule 144A
under the 1933 Act and it will take such further action as any Holder of
Registrable Securities may reasonably request, and (c) take such further action
that is reasonable in the circumstances, in each case, to the extent required
from time to time to
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25
enable such Holder to sell its Registrable Securities without registration under
the 1933 Act within the limitation of the exemptions provided by (i) Rule 144
under the 1933 Act, as such Rule may be amended from time to time, (ii) Rule
144A under the 1933 Act, as such Rule may be amended from time to time, or (iii)
any similar rules or regulations hereafter adopted by the SEC. Upon the request
of any Holder of Registrable Securities, the Company, Finance Corp. and the
Guarantors will deliver to such Holder a written statement as to whether they
have complied with such requirements.
5.2 No Inconsistent Agreements. The Company, Finance Corp. and each
Guarantor have not entered into and the Company, Finance Corp. and each
Guarantor will not after the date of this Agreement enter into any agreement
which is inconsistent with the rights granted to the Holders of Registrable
Securities in this Agreement or otherwise conflicts with the provisions hereof.
The rights granted to the Holders hereunder do not and will not for the term of
this Agreement in any way conflict with the rights granted to the holders of the
Company's, Finance Corp.'s and each Guarantors' other issued and outstanding
securities under any such agreements.
5.3 Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless the Company, Finance Corp. and the Guarantors have
obtained the written consent of Holders of at least a majority in aggregate
principal amount of the outstanding Registrable Securities affected by such
amendment, modification, supplement, waiver or departure.
5.4 Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, registered
first-class mail, telex, telecopier, or any courier guaranteeing overnight
delivery (a) if to a Holder, at the most current address given by such Holder to
the Company, Finance Corp. and the Guarantors by means of a notice given in
accordance with the provisions of this Section 5.4, which address initially is
the address set forth in the Purchase Agreement with respect to the Initial
Purchasers; and (b) if to the Company, Finance Corp. or any Guarantor, initially
at the Company's, Finance Corp.'s or such Guarantor's address set forth in the
Purchase Agreement, and thereafter at such other address of which notice is
given in accordance with the provisions of this Section 5.4.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; two business days
after being deposited in the mail, postage prepaid, if mailed; when answered
back, if telexed; when receipt is acknowledged, if telecopied; and on the next
business day if timely delivered to an air courier guaranteeing overnight
delivery.
Copies of all such notices, demands, or other communications shall be
concurrently delivered by the person giving the same to the Trustee under the
Indenture, at the address specified in such Indenture.
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5.5 Successor and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors, assigns and transferees of each of the
parties, including, without limitation and without the need for an express
assignment, subsequent Holders; provided that nothing herein shall be deemed to
permit any assignment, transfer or other disposition of Registrable Securities
in violation of the terms of the Purchase Agreement or the Indenture. If any
transferee of any Holder shall acquire Registrable Securities, in any manner,
whether by operation of law or otherwise, such Registrable Securities shall be
held subject to all of the terms of this Agreement, and by taking and holding
such Registrable Securities such person shall be conclusively deemed to have
agreed to be bound by and to perform all of the terms and provisions of this
Agreement, including the restrictions on resale set forth in this Agreement and,
if applicable, the Purchase Agreement, and such person shall be entitled to
receive the benefits hereof.
5.6 Third Party Beneficiaries. Each Initial Purchaser (even if the
Initial Purchaser is not a Holder of Registrable Securities) shall be a third
party beneficiary to the agreements made hereunder between the Company, Finance
Corp. and the Guarantors, on the one hand, and the Holders, on the other hand,
and shall have the right to enforce such agreements directly to the extent they
deem such enforcement necessary or advisable to protect their rights or the
rights of Holders hereunder. Each Holder of Registrable Securities shall be a
third party beneficiary to the agreements made hereunder between the Company,
Finance Corp. and the Guarantors, on the one hand, and the Initial Purchasers,
on the other hand, and shall have the right to enforce such agreements directly
to the extent it deems such enforcement necessary or advisable to protect its
rights hereunder.
5.7. Specific Enforcement. Without limiting the remedies available to
the Initial Purchasers and the Holders, the Company, Finance Corp. and the
Guarantors acknowledge that any failure by the Company, Finance Corp. and the
Guarantors to comply with their obligations under Sections 2.1 through 2.4
hereof may result in material irreparable injury to the Initial Purchasers or
the Holders for which there is no adequate remedy at law, that it would not be
possible to measure damages for such injuries precisely and that, in the event
of any such failure, the Initial Purchasers or any Holder may obtain such relief
as may be required to specifically enforce the Company's, Finance Corp.'s and
the Guarantors' obligations under Sections 2.1 through 2.4 hereof.
5.8. Restriction on Resales. Until such time as the Issuers and the
Guarantors have consummated an Exchange Offer (as defined in the Registration
Rights Agreement), during the period of two years after the original issuance of
the Securities and the Guarantees, the Company, Finance Corp. and the Guarantors
will not, and will cause their "affiliates" (as such term is defined in Rule
144(a)(1) under the 0000 Xxx) not to, resell any Securities and Guarantees which
are "restricted securities" (as such term is defined under Rule 144(a)(3) under
the 0000 Xxx) that have been reacquired by any of them and
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shall immediately upon any purchase of any such Securities and Guarantees submit
such Securities and Guarantees to the Trustee for cancellation.
5.9 Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
5.10 Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
5.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICT OF LAWS THEREOF.
5.12 Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
Very truly yours,
SLEEPMASTER L.L.C.
By: Xxxxxxx Xxxxxxxxxx, its Managing Member
By_______________________________________________
Name:
Title:
SLEEPMASTER FINANCE CORPORATION
By_______________________________________________
Name:
Title:
XXXX MANUFACTURING COMPANY
By_______________________________________________
Name:
Title:
PALM BEACH BEDDING COMPANY
By_______________________________________________
Name:
Title:
- 00 -
00
XXXXX XXXX ASSOCIATES LLC
By_______________________________________________
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
FIRST UNION CAPITAL MARKETS CORP.
By: XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By _________________________________________________
Authorized Signatory
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