Exhibit 4.3
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made and
entered into as of August 15, 2003 by and among Tempur-Pedic, Inc. and Tempur
Production USA, Inc. (each a "Company," and collectively, the "Companies"), the
Guarantors (as defined herein) and Xxxxxx Brothers Inc. on behalf of UBS
Securities LLC and Credit Suisse Boston LLC (collectively, the "Initial
Purchasers").
This Agreement is made pursuant to the Purchase Agreement, dated
August 8, 2003 (the "Purchase Agreement"), by and among the Companies, the
Existing Guarantors (as defined herein) and the Initial Purchasers, which
provides for the sale by the Companies to the Initial Purchasers of $150,000,000
aggregate principal amount of the Companies' 10 1/4% Senior Subordinated Notes
due 2010 (the "Notes"). The Notes are, and the Exchange Notes (as defined
herein) will be, guaranteed on a senior subordinated basis by the Guarantors (as
defined herein). In order to induce the Initial Purchasers to purchase the
Notes, the Companies and the Existing Guarantors have agreed to provide the
registration rights set forth in this Agreement. The execution and delivery of
this Agreement is a condition to the obligations of the Initial Purchasers set
forth in Section 7 of the Purchase Agreement.
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have
the following meanings:
Additional Interest: As defined in Section 5(a) hereof.
Additional Guarantor: Any Person that executes a Guarantee under the
Indenture after the date of this Agreement.
Advice: As defined in Section 6(e) hereof.
Agreement: As defined in the preamble hereto.
Blackout Period: As defined in Section 5(a) hereof.
Blue Sky Application: As defined in Section 8(a) hereof.
Broker-Dealer: Any broker or dealer registered under the Exchange Act.
Closing Date: The date of this Agreement.
Commission: The U.S. Securities and Exchange Commission.
Companies: As defined in the preamble hereto.
Consummate: A Registered Exchange Offer shall be deemed "Consummated"
for purposes of this Agreement upon the occurrence of (i) the filing and
effectiveness under the Securities Act of the Exchange Offer Registration
Statement relating to the Exchange Notes to be issued in the Exchange Offer,
(ii) the maintenance of such Registration Statement continuously effective and
the keeping of the Exchange Offer open for a period not less than the minimum
period required pursuant to Section 3(b) hereof, and (iii) the delivery by the
Companies to the Registrar under the Indenture of Exchange Notes in the same
aggregate principal amount as the aggregate principal amount of Notes that were
tendered by Holders thereof pursuant to the Exchange Offer.
Damages Payment Date: With respect to the Notes, each Interest Payment
Date.
Effectiveness Target Date: As defined in Section 5(a) hereof.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Exchange Notes: The Companies' 10 1/4% Senior Subordinated Notes due
2010 to be issued pursuant to the Indenture in the Exchange Offer, together with
the related Guarantees.
Exchange Offer: The registration by the Companies under the Securities
Act of the Exchange Notes on a Registration Statement pursuant to which the
Companies offer the Holders of all outstanding Transfer Restricted Securities
the opportunity to exchange all such outstanding Transfer Restricted Securities
held by such Holders for Exchange Notes in an aggregate principal amount equal
to the aggregate principal amount of the Transfer Restricted Securities validly
tendered in such exchange offer by such Holders.
Exchange Offer Registration Statement: The Registration Statement
relating to the Exchange Offer, including the related Prospectus.
Existing Guarantors: The various Guarantors signatory to the Indenture
as of the date hereof.
Guarantees: Guarantees by the Guarantors of the Companies' obligations
under the Notes, the Exchange Notes and the Indenture.
Guarantors: The Additional Guarantors and the Existing Guarantors.
Holder: As defined in Section 2(b) hereof.
Indenture: The Indenture, dated as of the date hereof, among the
Companies, the Existing Guarantors and Xxxxx Fargo Bank Minnesota, National
Association, as trustee (the "Trustee"), pursuant to which the Notes and the
Exchange Notes are to be issued, as such Indenture may be amended or
supplemented from time to time in accordance with the terms thereof.
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Initial Purchasers: As defined in the preamble hereto.
Interest Payment Date: As defined in the Indenture and the Notes.
NASD: National Association of Securities Dealers, Inc.
Notes: As defined in the preamble hereto.
Person: An individual, partnership, corporation, limited liability
company, unincorporated organization, association, joint-stock company, trust,
joint venture, government or any agency or political subdivision thereof or any
other entity.
Prospectus: The prospectus included in a Registration Statement as
amended or supplemented by any prospectus supplement and by all other amendments
thereto, including post-effective amendments, and all material incorporated by
reference into such Prospectus.
Purchase Agreement: As defined in the preamble hereto.
Record Holder: With respect to any Damages Payment Date relating to
Notes, each Person who is a Holder of Notes on the record date with respect to
the Interest Payment Date on which such Damages Payment Date shall occur.
Registration Default: As defined in Section 5(a) hereof.
Registration Statement: Any Registration Statement of the Companies
relating to (a) an offering of Exchange Notes pursuant to an Exchange Offer or
(b) the registration for resale of Transfer Restricted Securities pursuant to
the Shelf Registration Statement, which is filed pursuant to the provisions of
this Agreement, in each case including the Prospectus included therein, all
amendments and supplements thereto (including post-effective amendments) and all
exhibits and material incorporated by reference therein.
Securities Act: The Securities Act of 1933, as amended.
Shelf Filing Deadline: As defined in Section 4(a) hereof.
Shelf Registration Period: As defined in Section 4(a) hereof.
Shelf Registration Statement: As defined in Section 4(a) hereof.
TWI: TWI Holdings, Inc., a Delaware corporation.
TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb)
as in effect on the date of the Indenture.
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Transfer Restricted Securities: Each Note or Exchange Note (including
the related Guarantees), as applicable, until the earliest to occur of (a) the
date on which such Note is exchanged by a person other than a Broker-Dealer in
the Exchange Offer in exchange for an Exchange Note, so long as such person is
not prohibited from reselling such Exchange Notes to the public without
delivering a prospectus and the Prospectus contained in the Exchange Offer
Registration Statement is not sufficient for such purpose, (b) following the
exchange by a Broker-Dealer in the Exchange Offer of a Note for an Exchange
Note, the date on which that Exchange Note is sold to a purchaser who receives
from that Broker-Dealer on or prior to the date of such sale a copy of the
Prospectus contained in the Exchange Offer Registration Statement, (c) the date
on which such Note has been effectively registered under the Securities Act and
disposed of in accordance with a Shelf Registration Statement and (d) the date
on which such Note is eligible to be distributed to the public pursuant to Rule
144 under the Securities Act.
Underwritten Registration or Underwritten Offering: A registration in
which securities of the Companies are sold to an underwriter for reoffering to
the public.
SECTION 2. SECURITIES SUBJECT TO THIS AGREEMENT
(a) Transfer Restricted Securities. The securities entitled to the
benefits of this Agreement are the Transfer Restricted Securities.
(b) Holders of Transfer Restricted Securities. A Person is deemed to
be a holder of Transfer Restricted Securities (each, a "Holder") whenever such
Person owns Transfer Restricted Securities.
SECTION 3. REGISTERED EXCHANGE OFFER
(a) Unless the Exchange Offer shall not be permissible under
applicable law or Commission policy (after the procedures set forth in Section
6(a) below have been complied with), the Companies and the Guarantors shall (i)
cause to be filed with the Commission on or prior to 90 days after the Closing
Date, a Registration Statement under the Securities Act relating to the Exchange
Notes and the Exchange Offer, (ii) use their reasonable best efforts to cause
such Registration Statement to be declared effective on or prior to 180 days
after the Closing Date, (iii) in connection with the foregoing, file (A) all
pre-effective amendments to such Registration Statement as may be necessary in
order to cause such Registration Statement to become effective, (B) if
applicable, a post-effective amendment to such Registration Statement pursuant
to Rule 430A under the Securities Act and (C) cause all necessary filings in
connection with the registration and qualification of the Exchange Notes to be
made under the blue sky laws of such jurisdictions as are necessary to permit
Consummation of the Exchange Offer and (iv) upon the effectiveness of such
Registration Statement, commence the Exchange Offer. The Exchange Offer shall be
on the appropriate form permitting registration of the Exchange Notes to be
offered in exchange for the Transfer Restricted Securities and to permit resales
of Exchange Notes held by Broker-Dealers as contemplated by Section 3(c) below.
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(b) The Companies and the Guarantors shall use their reasonable best
efforts to cause the Exchange Offer Registration Statement to be effective
continuously and shall keep the Exchange Offer open for a period of not less
than the minimum period required under applicable U.S. federal and state
securities laws to Consummate the Exchange Offer; provided, however, that in no
event shall such period be less than 20 business days. The Companies and the
Guarantors shall cause the Exchange Offer to comply with all applicable U.S.
federal and state securities laws. No securities other than the Exchange Notes
and the Guarantees shall be included in the Exchange Offer Registration
Statement. The Companies and the Guarantors shall use their reasonable best
efforts to cause the Exchange Offer to be Consummated 30 business days after the
date on which the Exchange Offer Registration Statement was declared effective
by the Commission.
(c) The Companies and the Guarantors shall indicate in a "Plan of
Distribution" section of the Prospectus contained in the Exchange Offer
Registration Statement that any Broker-Dealer who holds Notes that are Transfer
Restricted Securities and that were acquired for its own account as a result of
market-making activities or other trading activities (other than Transfer
Restricted Securities acquired directly from the Companies or any affiliates),
may exchange such Notes pursuant to the Exchange Offer; however, such
Broker-Dealer may be deemed to be an "underwriter" within the meaning of the
Securities Act and must, therefore, deliver a Prospectus meeting the
requirements of the Securities Act in connection with any resales of the
Exchange Notes received by such Broker-Dealer in the Exchange Offer, which
Prospectus delivery requirement may be satisfied by the delivery by such
Broker-Dealer of the Prospectus contained in the Exchange Offer Registration
Statement. Such "Plan of Distribution" section shall also contain all other
information with respect to such resales by Broker-Dealers that the Commission
may require in order to permit such resales pursuant thereto, but such "Plan of
Distribution" shall not name any such Broker-Dealer or disclose the amount of
Notes held by any such Broker-Dealer except to the extent required by the
Commission.
The Companies and the Guarantors shall use their reasonable best
efforts to keep the Exchange Offer Registration Statement continuously
effective, supplemented and amended as required by the provisions of Section
6(c) below to the extent necessary to ensure that it is available for resales of
Exchange Notes acquired by Broker-Dealers for their own accounts as a result of
market-making activities or other trading activities, and to ensure that it
conforms with the requirements of this Agreement, the Securities Act and the
policies, rules and regulations of the Commission as announced from time to
time, for a period of at least 90 days after the Consummation of the Exchange
Offer.
The Companies and the Guarantors shall provide sufficient copies of
the latest version of such Prospectus to Broker-Dealers promptly upon request at
any time during such 90-day period in order to facilitate such resales.
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SECTION 4. SHELF REGISTRATION
(a) Shelf Registration. If (i) the Companies and the Guarantors are
not required to file an Exchange Offer Registration Statement or cannot
Consummate the Exchange Offer because the Exchange Offer is not permitted by
applicable U.S. law or Commission policy (after the procedures set forth in
Section 6(a) below have been complied with) or (ii) any Holder of Transfer
Restricted Securities shall notify the Companies prior to the 20th day following
the Consummation of the Exchange Offer that such Holder (A) is prohibited by
applicable U.S. law or Commission policy from participating in the Exchange
Offer, (B) may not resell the Exchange Notes acquired by it in the Exchange
Offer to the public without delivering a prospectus and that the Prospectus
contained in the Exchange Offer Registration Statement is not appropriate or
available for such resales by such Holder or (C) is a Broker-Dealer and holds
Notes acquired directly from the Companies or one of its affiliates, then the
Companies and the Guarantors shall:
(x) use their reasonable best efforts to cause to be filed a
Registration Statement pursuant to Rule 415 under the Securities Act, which
may be an amendment to the Exchange Offer Registration Statement if
permitted by the rules and regulations of the Commission (in either event,
the "Shelf Registration Statement") on or prior to the earliest to occur of
(1) the 30th day after the date on which the Companies determines that they
are not required to file the Exchange Offer Registration Statement, or
permitted to Consummate the Exchange Offer and (2) the 30th day after the
date on which the Companies receives notice from a Holder of Transfer
Restricted Securities as contemplated by clause (ii) of paragraph (a) above
(such earliest date being the "Shelf Filing Deadline"), which Shelf
Registration Statement shall provide for resales of all Transfer Restricted
Securities by the Holders which shall have provided the information
required pursuant to Section 4(b) hereof; and
(y) use their reasonable best efforts to cause such Shelf
Registration Statement to be declared effective by the Commission on or
before the 90th day after the Shelf Filing Deadline.
Subject to Section 5(b), the Companies and the Guarantors shall use their
reasonable best efforts to keep such Shelf Registration Statement continuously
effective, supplemented and amended as required by the provisions of Sections
6(b) and (c) hereof to the extent necessary to ensure that it is available for
resales of Notes or Exchange Notes by the Holders of Transfer Restricted
Securities entitled to the benefit of this Section 4(a), and to ensure that it
conforms with the requirements of this Agreement, the Securities Act and the
policies, rules and regulations of the Commission as announced from time to
time, for a period of at least two years following the Closing Date or such
shorter period that will terminate when all Notes or Exchange Notes covered by
the Shelf Registration Statement have been sold pursuant to the Shelf
Registration Statement (such period being the "Shelf Registration Period").
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(b) Provision by Holders of Certain Information in Connection with
the Shelf Registration Statement. No Holder of Transfer Restricted Securities
may include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Companies in writing, within 10 days after receipt of a request therefor,
such information as the Companies may reasonably request for use in connection
with any Shelf Registration Statement or Prospectus or preliminary Prospectus
included therein and agrees to comply with Regulation M under the Exchange Act
to the extent applicable. The Company may exclude from such registration the
Transfer Restricted Securities of any Holder who unreasonably fails to furnish
such information. No Holder of Transfer Restricted Securities shall be entitled
to Additional Interest pursuant to Section 5 hereof unless and until such Holder
shall have used its reasonable best efforts to provide all such reasonably
requested information or has so complied. Each Holder as to which any Shelf
Registration Statement is being effected agrees to furnish promptly to the
Companies all information required to be disclosed in order to make the
information previously furnished to the Companies by such Holder not materially
misleading.
SECTION 5. ADDITIONAL INTEREST
(a) If (i) any of the Registration Statements required by this
Agreement are not filed with the Commission on or prior to the date specified
for such filing in Sections 3(a) and 4(a), as applicable, (ii) any of such
required Registration Statements have not been declared effective by the
Commission on or prior to the date specified for such effectiveness in Sections
3(a)(ii) and 4(a)(y), as applicable, (each, an "Effectiveness Target Date"),
(iii) the Exchange Offer has not been Consummated within 30 business days, or
longer, if required by federal securities laws, after the Exchange Offer
Registration Statement has been declared effective or (iv) any Registration
Statement required by this Agreement is filed and declared effective but shall
thereafter cease to be effective or fail to be usable in connection with resales
of Transfer Restricted Securities without being succeeded immediately by a
post-effective amendment to such Registration Statement that cures such failure
and that is itself immediately declared effective (except as permitted in
paragraph (b); such period of time during which any such Registration Statement
is not effective or any such Registration Statement or the related Prospectus is
not usable being referred to as a "Blackout Period") (each such event referred
to in clauses (i) through (iv), a "Registration Default"), the Companies and the
Guarantors, jointly and severally, agree to pay additional interest ("Additional
Interest") to each Holder of Transfer Restricted Securities adversely affected
by such Registration Default, in an amount equal to $.05 per week per $1,000
principal amount of Transfer Restricted Securities held by such Holder with
respect to the first 90-day period immediately following the occurrence of such
Registration Default. The amount of Additional Interest shall increase by an
additional $.05 per week per $1,000 principal amount of Transfer Restricted
Securities with respect to each subsequent 90-day period (or portion thereof)
until all Registration Defaults have been cured, up to a maximum amount of
Additional Interest of $.50 per week per $1,000 principal amount of Transfer
Restricted Securities. All accrued Additional Interest shall be paid to Record
Holders by
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the Companies and the Guarantors in the same manner as interest is paid under
the Notes. Following the cure of all Registration Defaults relating to any
particular Transfer Restricted Securities, the accrual of Additional Interest
with respect to such Transfer Restricted Securities will cease. Additional
Interest shall not accrue under more than one of the Registration Defaults
specified in clauses (i) through (iv) above at any one time.
(b) A Registration Default referred to in Section 5(a)(iv) shall be
deemed not to have occurred and be continuing in relation to a Registration
Statement or the related Prospectus if (i) the Blackout Period has occurred
solely as a result of (x) the filing of a post-effective amendment to such Shelf
Registration Statement to incorporate annual audited financial information with
respect to the Companies or the Guarantors where such post-effective amendment
is not yet effective and needs to be declared effective to permit Holders to use
the related Prospectus or (y) the occurrence of other material events with
respect to the Companies or the Guarantors that would need to be described in
such Registration Statement or the related Prospectus and (ii) in the case of
clause (y), the Companies are proceeding promptly and in good faith to amend or
supplement (including by way of filing documents under the Exchange Act which
are incorporated by reference into the Registration Statement) such Registration
Statement and the related Prospectus to describe such events; provided, however,
that in any case if such Blackout Period occurs for a continuous period in
excess of 45 days, a Registration Default shall be deemed to have occurred on
the 46th day of such Blackout Period and Additional Interest shall be payable in
accordance with the above paragraph from the day such Registration Default
occurs until such Registration Default is cured or until the Companies is no
longer required pursuant to this Agreement to keep such Registration Statement
effective or such Registration Statement or the related Prospectus usable;
provided, further, that in no event shall the total of all Blackout Periods
exceed 60 days in the aggregate of any 12-month period.
All payment obligations of the Companies and the Guarantors set forth
in this section that are outstanding with respect to any Transfer Restricted
Security at the time such security ceases to be a Transfer Restricted Security
shall survive until such time as all such payment obligations with respect to
such security shall have been satisfied in full.
SECTION 6. REGISTRATION PROCEDURES
(a) Exchange Offer Registration Statement. In connection with the
Exchange Offer, the Companies and the Guarantors shall comply with all of the
applicable provisions of Section 6(c) below, shall use their reasonable best
efforts to effect such exchange to permit the sale of Transfer Restricted
Securities being sold in accordance with the intended method or methods of
distribution thereof, and shall comply with all of the following provisions:
(i) As a condition to its participation in the Exchange Offer
pursuant to the terms of this Agreement, each Holder of Transfer Restricted
Securities shall furnish, upon the request of the Companies, prior to the
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Consummation of such Exchange Offer, a written representation to the
Companies and the Guarantors (which may be contained in the letter of
transmittal contemplated by the Exchange Offer Registration Statement) to
the effect that (A) it is not an affiliate of the Companies, (B) it is not
engaged in, and does not intend to engage in, and has no arrangement or
understanding with any Person to participate in, a distribution of the
Exchange Notes to be issued in the Exchange Offer and (C) it is acquiring
the Exchange Notes in its ordinary course of business. In addition, all
such Holders of Transfer Restricted Securities shall otherwise cooperate in
the Companies' and the Guarantors' preparations for the Exchange Offer.
Each Holder hereby acknowledges and agrees that any Broker-Dealer and any
such Holder using the Exchange Offer to participate in a distribution of
the securities to be acquired in the Exchange Offer (1) could not under
Commission policy as in effect on the date of this Agreement rely on the
position of the Commission enunciated in Exxon Capital Holdings Corporation
(available May 13, 1988) and Xxxxxx Xxxxxxx and Co., Inc. (available June
5, 1991), as interpreted in the Commission's letter to Shearman & Sterling
dated July 2, 1993, and similar no-action letters, and (2) must comply with
the registration and prospectus delivery requirements of the Securities Act
in connection with a secondary resale transaction and that such a secondary
resale transaction should be covered by an effective Registration Statement
containing the selling security holder information required by Item 507 or
508, as applicable, of Regulation S-K if the resales are of Exchange Notes
obtained by such Holder in exchange for Notes acquired by such Holder
directly from the Companies.
(ii) Prior to effectiveness of the Exchange Offer Registration
Statement, the Companies and the Guarantors shall state to the Commission
that the Companies and the Guarantors are registering the Exchange Offer in
reliance on the position of the Commission enunciated in Exxon Capital
Holdings Corporation (available May 13, 1988) and Xxxxxx Xxxxxxx and Co.,
Inc. (available June 5, 1991), as interpreted in the Commission's letter to
Shearman & Sterling dated July 2, 1993, and shall represent to the
Commission that neither the Companies nor any Guarantor has entered into
any arrangement or understanding with any Person to distribute the Exchange
Notes to be received in the Exchange Offer and that, to the best of the
Companies' and each Guarantor's information and belief, each Holder
participating in the Exchange Offer is acquiring the Exchange Notes in its
ordinary course of business and has no arrangement or understanding with
any Person to participate in the distribution of the Exchange Notes
received in the Exchange Offer; and
(iii) The Companies and the Guarantors shall issue, upon the
request of any Holder of Notes covered by the Exchange Offer, Exchange
Notes (including the related guarantees), having an aggregate principal
amount equal to the aggregate principal amount of Notes surrendered to the
Companies by such Holder in exchange therefor; such Exchange Notes
(including the related guarantees) to be registered in the name of such
Holder or in the name of the
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purchaser(s) of such Exchange Notes (including the related guarantees), as
the case may be; in return, the Notes held by such Holder shall be
surrendered to the Companies for cancellation.
(b) Shelf Registration Statement. In connection with the Shelf
Registration Statement, the Companies and the Guarantors shall comply with all
the provisions of Section 6(c) below and shall use their reasonable best efforts
to effect such registration to permit the sale of the Transfer Restricted
Securities being sold in accordance with the intended method or methods of
distribution thereof, and pursuant thereto the Companies and the Guarantors will
prepare and file with the Commission a Registration Statement relating to the
registration on any appropriate form under the Securities Act, which form shall
be available for the sale of the Transfer Restricted Securities in accordance
with the intended method or methods of distribution thereof within the time
periods and otherwise in accordance with the provisions hereof.
(c) General Provisions. In connection with any Registration Statement
and any Prospectus required by this Agreement to permit the sale or resale of
Transfer Restricted Securities (including, without limitation, any Registration
Statement and the related Prospectus required to permit resales of Notes and
Exchange Notes by Broker-Dealers), the Companies and the Guarantors shall:
(i) use their reasonable best efforts to keep such
Registration Statement continuously effective and provide all requisite
financial statements (including, if required by the Securities Act or any
regulation thereunder, financial statements of any Guarantors) for the
period specified in Sections 3 or 4 of this Agreement, as applicable; upon
the occurrence of any event that would cause any such Registration
Statement or the Prospectus contained therein (A) to contain 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 in which they
were made, not misleading, or (B) not to be effective and usable for resale
of Transfer Restricted Securities during the period required by this
Agreement, the Companies and the Guarantors shall file promptly an
appropriate amendment to such Registration Statement, in the case of clause
(A), correcting any such misstatement or omission, and, in the case of
either clause (A) or (B), use their reasonable best efforts to cause such
amendment to be declared effective and such Registration Statement and the
related Prospectus to become usable for their intended purpose(s) as soon
as practicable thereafter. Notwithstanding the foregoing, the Companies and
the Guarantors may allow the Shelf Registration Statement to cease to
become effective and usable if (x) the board of directors of TWI determines
in good faith that it is in the best interests of the Companies and
Guarantors not to disclose the existence of or facts surrounding any
proposed or pending material corporate transaction involving the Companies
or the Guarantors, notify the Holders within two business days after such
board of directors make such determination or (y) the Prospectus contained
in the Shelf Registration Statement contains an untrue statement of a
material fact or omits to state a material fact necessary in order to make
the statements made therein, in the
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light of the circumstances under which they were made, not misleading;
provided that the two-year period referred to in Section 4(a) hereof during
which the Shelf Registration Statement is required to be effective and
usable shall be extended by the number of days during which such
Registration Statement was not effective or usable pursuant to the
foregoing provisions; and provided further that Additional Interest shall
accrue on the Notes as provided in Section 5 hereof;
(ii) prepare and file with the Commission such amendments and
post-effective amendments to the Registration Statement as may be necessary
to keep the Registration Statement effective for the applicable period set
forth in Sections 3 or 4 hereof, as applicable; cause the Prospectus to be
supplemented by any required Prospectus supplement, and as so supplemented
to be filed pursuant to Rule 424 under the Securities Act, and to comply
fully with the applicable provisions of Rules 424 and 430A under the
Securities Act in a timely manner; and comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by
such Registration Statement during the applicable period in accordance with
the intended method or methods of distribution by the sellers thereof set
forth in such Registration Statement or supplement to the Prospectus;
(iii) cooperate with the selling Holders of Transfer Restricted
Securities and the underwriter(s), if any, to facilitate the timely
preparation and delivery of certificates representing Transfer Restricted
Securities to be sold and not bearing any restrictive legends; and enable
such Transfer Restricted Securities to be in such denominations and
registered in such names as the Holders or the underwriter(s), if any, may
request at least two business days prior to any sale of Transfer Restricted
Securities made by such underwriter(s);
(iv) use their reasonable best efforts to cause the Transfer
Restricted Securities covered by the Registration Statement to be
registered with or approved by such other governmental agencies or
authorities as may be necessary to enable the seller or sellers thereof or
the underwriter(s), if any, to consummate the disposition of such Transfer
Restricted Securities; provided, however, that the Companies and the
Guarantors shall not be obligated to qualify as a foreign corporation in
any jurisdiction in which it is not now so qualified or to take any action
that would subject it to general consent of process or taxation, other than
as to matters and transactions relating to the Shelf Registration
Statement, in any jurisdiction where it is not now so subject;
(v) subject to Section 6(c)(i), if any fact or event
contemplated by clause (d)(i)(D) below shall exist or have occurred,
prepare a supplement or post-effective amendment to the Registration
Statement or related Prospectus or any document incorporated therein by
reference or file any other required document so that, as thereafter
delivered to the purchasers of Transfer Restricted Securities, the
Prospectus will not contain an untrue statement of a material fact or
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omit to state any material fact necessary to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading;
(vi) provide a CUSIP, CINS or ISIN number, as applicable, for
all Transfer Restricted Securities not later than the effective date of the
applicable Registration Statement and provide the Trustee under the
Indenture with printed certificates for the Transfer Restricted Securities
which are in a form eligible for deposit with the depositary;
(vii) cooperate and assist in any filings required to be made
with the NASD and in the performance of any due diligence investigation by
any underwriter (including any "qualified independent underwriter") that is
required to be retained in accordance with the rules and regulations of the
NASD;
(viii) otherwise use their reasonable best efforts to comply with
all applicable rules and regulations of the Commission, and make generally
available to their security holders, as soon as practicable, a consolidated
earnings statement meeting the requirements of Rule 158 (which need not be
audited) for the twelve-month period (A) commencing at the end of any
fiscal quarter in which Transfer Restricted Securities are sold to
underwriters in a firm or best efforts Underwritten Offering or (B) if not
sold to underwriters in such an offering, beginning with the first month of
the Companies' first fiscal quarter commencing after the effective date of
the Registration Statement;
(ix) cause the Indenture to be qualified under the TIA not
later than the effective date of the first Registration Statement required
by this Agreement, and, in connection therewith, cooperate with the Trustee
and the Holders of Notes and Exchange Notes to effect such changes to the
Indenture as may be reasonably required for such Indenture to be so
qualified in accordance with the terms of the TIA; and execute, and use
their reasonable best efforts to cause the Trustee to execute, all
documents that may be required to effect such changes and all other forms
and documents required to be filed with the Commission to enable such
Indenture to be so qualified in a timely manner; and
(x) provide promptly to any Holder upon such Holder's written
request each document filed with the Commission pursuant to the
requirements of Section 13 and Section 15 of the Exchange Act to the extent
such documents are not otherwise filed with the Commission and available to
the public free of cost.
(d) Additional Provisions Applicable to Shelf Registration
Statements. In connection with each Shelf Registration Statement, during the
Shelf Registration Period, the Companies and the Guarantors shall:
(i) advise the underwriter(s), if any, and selling Holders of
Transfer Restricted Securities promptly and, if requested by such Persons,
to confirm such advice in writing, (A) when the Prospectus or any
Prospectus
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supplement or post-effective amendment has been filed, and, with respect to
the Shelf Registration Statement or any post-effective amendment thereto,
when the same has become effective, (B) of any request by the Commission
for amendments to the Shelf Registration Statement or amendments or
supplements to the Prospectus or for additional information relating
thereto, (C) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement under the Securities Act,
of the suspension by any state securities commission of the qualification
of the Transfer Restricted Securities for offering or sale in any
jurisdiction or of the initiation of any proceeding for any of the
preceding purposes and (D) of the existence of any fact or the happening of
any event that requires the making of any additions to or changes in the
Shelf Registration Statement or the Prospectus in order that the Shelf
Registration Statement and the Prospectus do not contain an untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made therein, in the light of the circumstances under
which they were made, not misleading. If at any time the Commission shall
issue any stop order suspending the effectiveness of the Shelf Registration
Statement, or any U.S. state securities commission or other regulatory
authority shall issue an order suspending the qualification or exemption
from qualification of the Transfer Restricted Securities under U.S. state
securities or blue sky laws, the Companies and the Guarantors shall use
their reasonable best efforts to obtain the withdrawal or lifting of such
order at the earliest possible time;
(ii) if requested in writing, furnish to each of the
selling Holders of Transfer Restricted Securities and each of the
underwriter(s), if any, before filing with the Commission, copies of any
Shelf Registration Statement or any Prospectus included therein or any
amendments or supplements to any such Shelf Registration Statement or
Prospectus (including all documents incorporated by reference after the
initial filing of such Shelf Registration Statement), which documents will
be subject to the review of such Holders and underwriter(s), if any, for a
period of at least three business days, and the Companies and the
Guarantors will not file any such Shelf Registration Statement or
Prospectus or any amendment or supplement to any such Shelf Registration
Statement or Prospectus (including all such documents incorporated by
reference) if a selling Holder of Transfer Restricted Securities covered by
such Shelf Registration Statement or the underwriter(s), if any, shall not
reasonably object within three business days after receipt thereof; such
Holders and underwriter(s) shall be deemed to have reasonably objected to
such filing if such Shelf Registration Statement, amendment, Prospectus or
supplement, as applicable, as proposed to be filed, contains an untrue
statement of a material fact or omits to state any material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or fails to comply with the
applicable requirements of the Securities Act;
13
(iii) upon request, provide copies any document that is to be
incorporated by reference into a Shelf Registration Statement or
Prospectus, provide copies of such document to the selling Holders and to
the underwriter(s), if any, make the Companies' and the Guarantors'
representatives available for discussion of such document and other
customary due diligence matters, and include such information in such
document prior to the filing thereof as such selling Holders or
underwriter(s), if any, reasonably may request in writing;
(iv) make available for inspection at reasonable times at each
of the Companies' principal places of business by the selling Holders of
Transfer Restricted Securities, any underwriter participating in any
disposition pursuant to such Shelf Registration Statement, and any attorney
or accountant retained by such selling Holders or any of the underwriter(s)
who shall certify to the Companies and the Guarantors that they have a
current intention to sell Transfer Restricted Securities pursuant to a
Shelf Registration Statement, such relevant financial and other records,
pertinent corporate documents and properties of the Companies and the
Guarantors as reasonably requested and cause the Companies' and the
Guarantors' officers, directors and employees to respond to such inquiries
as shall be reasonably necessary, in the reasonable judgment of counsel to
such Holders, to conduct a reasonable investigation; provided, however,
that the foregoing inspection and information gathering shall be
coordinated on behalf of the selling Holders by one counsel designated by
and on behalf of such Holders and, provided, further, that each such party
shall be required to maintain in confidence and not disclose to any other
Person any information or records reasonably designated by the Companies in
writing as being confidential, until such time as (A) such information
becomes a matter of public record (whether by virtue of its inclusion in
such Shelf Registration Statement or otherwise), (B) such Person shall be
required so to disclose such information pursuant to a subpoena or order of
any court or other governmental agency or body having jurisdiction over the
matter (subject to the requirements of such order, and only after such
Person shall have given the Companies prompt prior written notice of such
requirement) or (C) such information is required to be set forth in such
Shelf Registration Statement or the Prospectus included therein or in an
amendment to such Shelf Registration Statement or an amendment or
supplement to such Prospectus in order that such Shelf Registration
Statement, Prospectus, amendment or supplement, as the case may be, does
not contain an untrue statement of a material fact or omit to state therein
a material fact required to be stated therein or necessary to make the
statements made therein in light of the circumstances under which they were
made not misleading;
(v) if requested by any selling Holders of Transfer Restricted
Securities or the underwriter(s), if any, promptly incorporate in any Shelf
Registration Statement or Prospectus pursuant to a supplement or
post-effective amendment if necessary, such information as such selling
Holders and underwriter(s), if any, may reasonably request to have included
therein, including,
14
without limitation, information relating to the "Plan of Distribution" of
the Transfer Restricted Securities, information with respect to the
principal amount of Transfer Restricted Securities being sold to such
underwriter(s), the purchase price being paid therefor and any other terms
of the offering of the Transfer Restricted Securities to be sold in such
offering; and make all required filings of such Prospectus supplement or
post-effective amendment as soon as practicable after the Companies is
notified of the matters to be incorporated in such Prospectus supplement or
post-effective amendment; provided, however, that the Companies shall not
be required to take any action pursuant to this Section 6(d)(v) that would,
in the opinion of counsel for the Companies reasonably satisfactory to the
underwriters, violate applicable law;
(vi) deliver to each selling Holder of Transfer Restricted
Securities and each of the underwriter(s), if any, without charge, as many
copies of the Prospectus (including each preliminary Prospectus) and any
amendment or supplement thereto as such Persons reasonably may request; the
Companies and the Guarantors hereby consent to the use of the Prospectus
and any amendment or supplement thereto by each of the selling Holders and
each of the underwriter(s), if any, in connection with the offering and the
sale, subject to and in accordance with the terms of this Agreement, of the
Transfer Restricted Securities covered by the Prospectus or any amendment
or supplement thereto;
(vii) furnish to each Holder whose Transfer Restricted
Securities have been included in a Shelf Registration Statement in
connection with such exchange or sale, without charge, at least one copy of
the Registration Statement, as first filed with the Commission, and of each
amendment thereto, including all documents incorporated by reference
therein and all exhibits (including exhibits incorporated therein by
reference) to the extent such documents are not otherwise filed with the
Commission and available to the public free of cost;
(viii) enter into an underwriting agreement on not more than one
occasion in the case of an offering pursuant to a Shelf Registration, and
make such representations and warranties, and take all such other actions
in connection therewith in order to expedite or facilitate the disposition
of the Transfer Restricted Securities pursuant to any Registration
Statement contemplated by this Agreement, all to such extent as may be
reasonably requested by any Holder or Holders of Transfer Restricted
Securities who hold at least 25% in aggregate principal amount of such
class of Transfer Restricted Securities; provided that the Companies the
Guarantors shall not be required to enter into any such agreement more than
once with respect to all of the Transfer Restricted Securities and may
delay entering into such agreement if the board of directors of TWI not to
disclose the existence of or facts surrounding any proposed or pending
material corporate transaction involving the Companies and the Guarantors;
and in connection with an Underwritten Registration, the Companies and the
Guarantors shall:
15
(A) furnish to the Initial Purchasers, the Holders of
Transfer Restricted Securities who hold at least 25% in aggregate principal
amount of such class of Transfer Restricted Securities and each
underwriter, if any, in such substance and scope as they may reasonably
request and as are customarily made in connection with an offering of debt
securities pursuant to a Shelf Registration Statement upon the effective
date of the Shelf Registration Statement (and if such Shelf Registration
Statement contemplates an Underwritten Offering of Transfer Restricted
Securities upon the date of the closing under the underwriting agreement
related thereto):
(1) a certificate, dated the date of effectiveness of the
Shelf Registration Statement signed by (y) the respective chief
executive officer, the respective President or any Vice President and
(z) the respective chief financial officer of each of the Companies
and each of the Guarantors confirming, as of the date thereof, the
matters set forth in Section 7(n) of the Purchase Agreement and such
other matters as such parties may reasonably request;
(2) an opinion, dated the date of effectiveness of such
Shelf Registration Statement, of securities counsel for the Companies
covering matters similar to those set forth in Section 7(d) of the
Purchase Agreement and such other matters as such parties may
reasonably request, and in any event including a statement to the
effect that such counsel has participated in conferences with officers
and other representatives of the Companies, representatives of the
independent public accountants for the Companies, the underwriters'
representatives and the underwriters' counsel in connection with the
preparation of such Shelf Registration Statement and the related
Prospectus although such counsel has not independently verified the
accuracy, completeness or fairness of such statements in such Shelf
Registration Statement; and that such counsel advises that, on the
basis of the foregoing, such counsel's work in connection with this
work did not disclose information that gave such counsel reason to
believe that the Shelf Registration Statement, at the time such Shelf
Registration Statement or any post-effective amendment thereto became
effective 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, or that the Prospectus
contained in such Shelf Registration Statement as of its date
contained an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements made therein,
in the light of the circumstances under which they were made, not
misleading. Such counsel may state further that such counsel expresses
no view with respect to, and has not independently verified, the
accuracy, completeness or fairness of the financial statements, notes
and schedules, the financial projections and other financial,
statistical and accounting data included or incorporated by
16
reference in the Shelf Registration Statement contemplated by this
Agreement or the related Prospectus; and
(3) a customary comfort letter, dated as of the date of
effectiveness of the Shelf Registration Statement from the Companies'
independent accountants, in the customary form and covering matters of
the type customarily covered in comfort letters to underwriters in
connection with primary underwritten offerings, and affirming the
matters set forth in the comfort letters delivered pursuant to
Sections 7(l) and 7(m) of the Purchase Agreement;
(B) set forth in full or incorporated by reference in the
underwriting agreement, if any, the indemnification provisions and
procedures of Section 8 hereof with respect to all parties to be
indemnified pursuant to said Section; and
(C) deliver such other documents and certificates as may be
reasonably requested by such parties to evidence compliance with clause (A)
above and with any customary conditions contained in the underwriting
agreement or other agreement entered into by the Companies and the
Guarantors pursuant to this clause (viii), if any.
(ix) prior to any public offering of Transfer Restricted
Securities cooperate with the selling Holders of Transfer Restricted
Securities the underwriter(s), if any, and their respective counsel in
connection with the registration and qualification of the Transfer
Restricted Securities under the securities or blue sky laws of such
jurisdictions as the selling Holders of Transfer Restricted Securities or
underwriter(s) may reasonably request and do any and all other acts or
things necessary or advisable to enable the disposition in such
jurisdictions of the Transfer Restricted Securities covered by the Shelf
Registration Statement filed pursuant to Section 4 hereof; provided,
however, that the Companies and the Guarantors shall not be obligated to
qualify as a foreign corporation in any jurisdiction in which they are not
now so qualified or to take any action that would subject them to general
consent to service of process or taxation, other than as to matters and
transactions relating to the Shelf Registration Statement, in any
jurisdiction where they are not now so subject.
(e) Each Holder agrees by acquisition of a Transfer Restricted
Security that, upon receipt of any notice from the Companies of the existence of
any fact of the kind described in Section 6(d)(i) hereof, such Holder will
forthwith discontinue disposition of Transfer Restricted Securities pursuant to
the Shelf Registration Statement until such Holder's receipt of the copies of
the supplemented or amended Prospectus contemplated by Section 6(d)(vi) hereof,
or until it is advised in writing (the "Advice") by the Companies that the use
of the Prospectus may be resumed, and has received copies of any additional or
supplemental filings that are incorporated by reference in the Prospectus. If so
directed by the Companies, each Holder will deliver to the Companies
17
(at the Companies' expense) all copies, other than permanent file copies then in
such Holder's possession, of the Prospectus covering such Transfer Restricted
Securities that was current at the time of receipt of such notice. In the event
the Companies shall give any such notice, the time period regarding the
effectiveness of such Shelf Registration Statement set forth in Section 4
hereof, as applicable, shall be extended by the number of days during the period
from and including the date of the giving of such notice pursuant to Section
6(d)(i) hereof to and including the date when each selling Holder covered by
such Shelf Registration Statement shall have received the copies of the
supplemented or amended Prospectus contemplated by Section 6(d)(vi) hereof or
shall have received the Advice.
(f) The Companies and the Guarantors may require each Holder of
Transfer Restricted Securities as to which any registration is being effected to
furnish to the Companies such information regarding such Holder and such
Holder's intended method of distribution of the applicable Transfer Restricted
Securities as the Companies may from time to time reasonably request in writing,
but only to the extent that such information is required in order to comply with
the Securities Act. Each such Holder agrees to notify the Companies as promptly
as practicable of (i) any inaccuracy or change in information previously
furnished by such Holder to the Companies or (ii) the occurrence of any event,
in either case, as a result of which any Prospectus relating to such
registration contains or would contain an untrue statement of a material fact
regarding such Holder or such Holder's intended method of distribution of the
applicable Transfer Restricted Securities or omits to state any material fact
regarding such Holder or such Holder's intended method of distribution of the
applicable Transfer Restricted Securities required to be stated therein or
necessary to make the statements made therein, in the light of the circumstances
under which they were made, not misleading and promptly to furnish to the
Companies any additional information required to correct and update any
previously furnished information or required so that such Prospectus shall not
contain, with respect to such Holder or the distribution of the applicable
Transfer Restricted Securities 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.
SECTION 7. REGISTRATION EXPENSES
(a) All expenses incident to the Companies' and the Guarantors'
performance of or compliance with this Agreement will be borne by the Companies
regardless of whether a Registration Statement becomes effective, including
without limitation and as applicable: (i) all Commission, securities exchange or
NASD registration and filing fees and expenses (including filings made by any
underwriters or Holder with the NASD (and, if applicable, the fees and expenses
of any "qualified independent underwriter" and its counsel that may be required
by the rules and regulations of the NASD)); (ii) all fees and expenses of
compliance with U.S. federal securities and state blue sky or securities laws
and compliance with the rules of the NASD (including reasonable fees and
disbursements of one counsel for Holders in connection with blue sky and/or NASD
qualification of the Exchange Notes); (iii) all expenses of printing (including
printing certificates for the Exchange Notes to be issued
18
in the Exchange Offer and printing of Prospectuses), messenger and delivery
services; (iv) all fees and disbursements of counsel for the Companies and the
Guarantors; and (v) all fees and disbursements of independent certified public
accountants of the Companies (including the expenses of any special audit and
comfort letters required by or incident to such performance).
The Companies will, in any event, bear its and the Guarantors'
internal expenses (including, without limitation, all salaries and expenses of
its officers and employees performing legal or accounting duties), the expenses
of any annual audit and the fees and expenses of any Person, including special
experts, retained by the Companies or the Guarantors.
(b) Each Holder of Transfer Restricted Securities will pay all
underwriting discounts and commissions, if any, and agency fees commissions and
transfer taxes, if any, relating to the disposition of such Holder's Transfer
Restricted Securities and the fees and disbursements of any counsel or other
advisors or experts retained by such Holder, other than the counsel and experts
specifically referred to in clause (a) above.
SECTION 8. INDEMNIFICATION
(a) The Companies and each Guarantor shall, jointly and severally,
indemnify and hold harmless each Holder of Transfer Restricted Securities, its
officers and employees and each Person, if any, who controls any such Holders,
within the meaning of the Securities Act, from and against any loss, claim,
damage or liability, joint or several, or any action in respect thereof
(including, but not limited to, any loss, claim, damage, liability or action
relating to purchases, sales and registration of the Notes, the Guarantees and
the Exchange Notes), to which that Holder, officer, employee or controlling
Person may become subject, under the Securities Act or otherwise, insofar as
such loss, claim, damage, liability or action arises out of, or is based upon
(i) any untrue statement or alleged untrue statement of a material fact
contained (A) in any Registration Statement or preliminary Prospectus or
Prospectus or in any amendment or supplement thereto, (B) in any Blue Sky
Application (as defined below) or other document prepared or executed by any
Companies or any Guarantor (or based upon any written information furnished by
any Companies or any Guarantor) specifically for the purpose of qualifying any
or all of the Notes under the securities laws of any state or other jurisdiction
(any such application, document or information being hereinafter called a "Blue
Sky Application") or (C) in any materials or information provided to investors
by, or with the approval of, the Companies in connection with the marketing of
the offering of the Exchange Notes ("Marketing Materials"), including any
roadshow or investor presentations made to investors by the Companies (whether
in person or electronically); (ii) the omission or alleged omission to state in
any Registration Statement, preliminary Prospectus or Prospectus, or in any
amendment or supplement thereto, or in any Blue Sky Application or Marketing
Materials any 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, or (iii) any act or failure to act or any alleged act or
failure to
19
act by any Holder of Transfer Restricted Securities in connection with, or
relating in any manner to, the Notes, the Guarantees or the Exchange Notes or
the offering contemplated by any Registration Statement, and which is included
as part of or referred to in any loss, claim, damage, liability or action
arising out of or based upon matters covered by clause (i) or (ii) above
(provided that the Companies and the Guarantors shall not be liable under this
clause (iii) to the extent that it is determined in a final judgment by a court
of competent jurisdiction that such loss, claim, damage, liability or action
resulted directly from any such acts or failures to act undertaken or omitted to
be taken by such Holder through its gross negligence or willful misconduct); and
shall reimburse each Holder and each such officer, employee or controlling
Person promptly upon demand for any legal or other expenses reasonably incurred
by that Holder, officer, employee or controlling Person in connection with
investigating or defending or preparing to defend against any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that the Companies and the Guarantors shall not be liable in any such case to
the extent that any such loss, claim, damage, liability or action arises out of,
or is based upon, any untrue statement or alleged untrue statement or omission
or alleged omission made in any Registration Statement, preliminary Prospectus
or Prospectus, or in any such amendment or supplement, or in any Blue Sky
Application or Marketing Materials, in reliance upon and in conformity with
written information concerning such Holder furnished to the Companies by or on
behalf of any Holder specifically for inclusion therein; provided, further, that
with respect to any such untrue statement or omission made in any preliminary
Prospectus or Prospectus, the indemnity agreement contained in this Section 8(a)
shall not inure to the benefit of the Holder from whom the Person asserting any
such losses, claims, damages or liabilities purchased the Notes, Guarantees or
Exchange Notes concerned if, to the extent that such sale was a sale by the
Holder and any such loss, claim, damage or liability of such Holder is a result
of the fact that both (A) a copy of the Prospectus (or the Prospectus as then
amended or supplemented) was not sent or given to such Person at or prior to
written confirmation of the sale of such Notes or Exchange Notes to such Person
and (B) the untrue statement or omission in the preliminary Prospectus or
Prospectus was corrected in the Prospectus (or the Prospectus as then amended or
supplemented) unless such failure to deliver the Prospectus was a result of
noncompliance by the Companies with Section 6(d)(vi) hereof. The foregoing
indemnity agreement is in addition to any liability which the Companies and the
Guarantors may otherwise have to any Holder or to any officer, employee or
controlling Person of that Holder.
(b) Each Holder, severally and not jointly, shall indemnify and hold
harmless each of the Companies, each of the Guarantors, their respective
directors, officers and employees, and each Person, if any, who controls either
of the Companies or any of the Guarantors within the meaning of the Securities
Act, from and against any loss, claim, damage or liability, joint or several, or
any action in respect thereof, to which the Companies, the Guarantors or any
such director, officer or controlling Person may become subject, under the
Securities Act or otherwise, insofar as such loss, claim, damage, liability or
action arises out of, or is based upon (i) any untrue statement or alleged
untrue statement of a material fact contained (A) in any Registration Statement,
20
preliminary Prospectus or Prospectus, or in any amendment or supplement thereto
or (B) in any Blue Sky Application or (ii) the omission or alleged omission to
state in any Registration Statement, preliminary Prospectus or Prospectus, or in
any amendment or supplement thereto, or in any Blue Sky Application any 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, but in
each case only to the extent that the untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information concerning such Holders furnished to the
Companies by or on behalf of that Holder specifically for inclusion therein, and
shall reimburse the Companies, each of the Guarantors and each such director,
officer, employee and controlling Person for any legal or other expenses
reasonably incurred by the Companies, each such Guarantor or each such director,
officer, employee or controlling Person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage, liability
or action as such expenses are incurred. The foregoing indemnity agreement is in
addition to any liability which any Holder may otherwise have to the Companies,
any of the Guarantors or any such director, officer, employee or controlling
Person.
(c) Promptly after receipt by an indemnified party under this Section
8 of notice of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 8 except to the extent it has
been materially prejudiced by such failure and; provided, further, that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have to an indemnified party otherwise than under this Section 8.
If any such claim or action shall be brought against an indemnified party, and
it shall notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly with
any other similarly notified indemnifying party, to assume the defense thereof
with counsel reasonably satisfactory to the indemnified party. After notice from
the indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, any
indemnified party shall have the right to employ separate counsel in any such
action and to participate in the defense thereof but the fees and expenses of
such counsel shall be at the expense of the indemnified party unless (i) the
employment of such counsel has been specifically authorized by the indemnifying
party in writing, or (ii) such indemnified party shall have been advised by such
counsel that there may be one or more legal defenses available to it which are
different from or additional to those available to the indemnifying party and in
the reasonable judgment of such counsel it is advisable for such indemnified
party to employ separate counsel or (iii) the indemnifying party has failed to
assume the defense of such action and employ counsel reasonably satisfactory to
the indemnified party, in
21
which case, if such indemnified party notifies the indemnifying party in writing
that it elects to employ separate counsel at the expense of the indemnifying
party, the indemnifying party shall not, in connection with any one such action
or separate but substantially similar or related actions arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys (in addition to local
counsel) at any time for all such indemnified parties, which firm shall be
designated in writing by (x) Xxxxxx Brothers Inc. if the indemnified parties
under this Section 8 consist of the Initial Purchasers or any of their
respective officers, employees or controlling Persons or (y) by the Companies,
if the indemnified parties under this Section 8 consist of any of the Companies,
any of the Guarantors or any of their respective directors, officers, employees
or controlling Persons. No indemnifying party shall (i) without the prior
written consent of the indemnified parties (which consent shall not be
unreasonably withheld), settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding or (ii) be liable for any
settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with the consent of
the indemnifying party or if there be a final judgment of the plaintiff in any
such action, the indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss or liability by reason of such
settlement or judgment.
(d) If the indemnification provided for in this Section 8 shall for
any reason be unavailable to or insufficient to hold harmless an indemnified
party under Section 8(a) or 8(b) in respect of any loss, claim, damage or
liability, or any action in respect thereof, referred to therein, then each
indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Companies and the Guarantors, on the one hand, and the Holders
on the other, from the sale of the Transfer Restricted Securities or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Companies and
the Guarantors, on the one hand and the Holders on the other with respect to the
statements or omissions which resulted in such loss, claim, damage or liability,
or action in respect thereof, as well as any other relevant equitable
considerations. The relative fault shall be determined by reference to whether
the 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
Companies or any of the Guarantors, on the one hand, or the Holders, on the
other hand, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Companies, the Guarantors and the Holders agree that it
22
would not be just and equitable if contributions pursuant to this Section 8(d)
were to be determined by pro rata allocation (even if the Holders were treated
as one entity for such purpose) or by any other method of allocation which does
not take into account the equitable considerations referred to herein. The
amount paid or payable by an indemnified party as a result of the loss, claim,
damage or liability, or action in respect thereof, referred to above in this
Section shall be deemed to include, for purposes of this Section 8(d), any legal
or other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 8(d), no Holder shall be required to contribute any
amount in excess of the amount by which the net proceeds received by it in
connection with its sale of Notes exceeds the amount of any damages which such
Holder has otherwise paid or become liable to pay by reason of the 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
Securities Act) shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation. The Holders' obligations to
contribute as provided in this Section 8(d) are several and not joint.
SECTION 9. RULE 144A
The Companies and each Guarantor hereby agrees with each Holder of
Transfer Restricted Securities, during any period in which the Companies or such
Guarantor is not subject to Section 13 or 15(d) of the Exchange Act within the
two-year period following the Closing Date, to make available to any Holder or
beneficial owner of Transfer Restricted Securities, in connection with any sale
thereof and any prospective purchaser of such Transfer Restricted Securities
from such Holder or beneficial owner, the information required by Rule
144A(d)(4) under the Securities Act in order to permit resales of such Transfer
Restricted Securities pursuant to Rule 144A.
SECTION 10. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS
No Holder may participate in any Underwritten Registration hereunder
unless such Holder (a) agrees to sell such Holder's Transfer Restricted
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 reasonable questionnaires, powers of attorney, indemnities,
underwriting agreements, lock-up letters and other documents required under the
terms of such underwriting arrangements.
SECTION 11. SELECTION OF UNDERWRITERS
Subject to Section 6(d)(i), the Holders of Transfer Restricted
Securities covered by the Shelf Registration Statement who desire to do so may
sell such Transfer Restricted Securities in an Underwritten Offering at such
Holders' expense. In any such Underwritten Offering, the investment banker or
investment bankers and manager or managers that will administer the offering
will be selected by the Holders of a majority in aggregate principal amount of
the Transfer Restricted Securities included in such
23
offering; provided that such investment bankers and managers must be reasonably
satisfactory to the Companies.
SECTION 12. MISCELLANEOUS
(a) Remedies. The Companies and the Guarantors agree that monetary
damages (including Additional Interest) would not be adequate compensation for
any loss incurred by reason of a breach by it of the provisions of this
Agreement and hereby agree to waive the defense in any action for specific
performance that a remedy at law would be adequate.
(b) No Inconsistent Agreements. Neither the Companies nor any
Guarantor will, on or after the date of this Agreement, enter into any agreement
with respect to its securities that is inconsistent with the rights granted to
the Holders in this Agreement or otherwise conflicts with the provisions hereof.
Except as disclosed in the Offering Memorandum (as such term is defined in the
Purchase Agreement), neither the Companies nor any Guarantor has previously
entered into any agreement granting any registration rights with respect to its
securities to any Person. The rights granted to the Holders hereunder do not in
any way conflict with and are not inconsistent with the rights granted to the
holders of the Companies' or any Guarantor's securities under any agreement in
effect on the date hereof.
(c) Adjustments Affecting the Notes. The Companies and the Guarantors
will not take any action, or permit any change to occur, with respect to the
Notes that would materially and adversely affect the ability of the Holders to
Consummate any Exchange Offer.
(d) Amendments and Waivers. The provisions of this Agreement may not
be amended, modified or supplemented, and waivers or consents to or departures
from the provisions hereof may not be given unless the Companies have obtained
the written consent of Holders of a majority of the outstanding principal amount
of the Transfer Restricted Securities affected by such amendment, modification,
supplement, waiver or consent. Notwithstanding the foregoing, a waiver or
consent to departure from the provisions hereof that relates exclusively to the
rights of Holders whose securities are being tendered pursuant to the Exchange
Offer and that does not affect directly or indirectly the rights of other
Holders whose securities are not being tendered pursuant to such Exchange Offer
may be given by the Holders of a majority of the outstanding principal amount of
Transfer Restricted Securities being tendered or registered.
(e) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, facsimile or air
courier guaranteeing overnight delivery:
24
(i) if to a Holder, at the address set forth on the records of
the Registrar under the Indenture, with a copy to the Registrar under the
Indenture; and
if to the Companies or the Guarantors to:
Tempur-Pedic, Inc.
Tempur Production USA, Inc.
0000 Xxxxxx Xxx Xxx
Xxxxxxxxx Xxxxxxxx 00000
Attention: Xxxx Xxxxxxxx
with a copy to:
Xxxxxxx XxXxxxxxx LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000-0000
Attention: Xxxx Xxxxxxxxxxxx, Esq.
Any such notices and communications shall take effect at the time of
receipt thereof. The Companies shall be entitled to act and rely upon any notice
or communication given or made by the Initial Purchasers.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.
(f) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of each of the parties,
including without limitation and without the need for an express assignment,
subsequent Holders; provided, however, that this Agreement shall not inure to
the benefit of or be binding upon a successor or assign of a Holder unless and
to the extent such successor or assign acquired Transfer Restricted Securities
from such Holder.
(g) 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.
(h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
25
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED, IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.
(j) 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.
(k) Entire Agreement. This Agreement together with the other
Transaction Documents (as defined in the Purchase Agreement) is intended by the
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein with respect to the registration rights granted by the Companies and the
Guarantors with respect to the Transfer Restricted Securities. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.
[Signature pages follow.]
26
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
Very truly yours,
Tempur-Pedic, Inc.
By: /s/ H. Xxxxxx Xxxxxx
-------------------------------------
Name: H. Xxxxxx Xxxxxx
Title: Chief Executive Officer
Tempur Production USA, Inc.
By: /s/ Xxxxxx X. Xxxxxxxx, Xx.
-------------------------------------
Name: Xxxxxx X. Xxxxxxxx, Xx.
Title: President
TWI Holdings, Inc.
By: /s/ Xxxxxx X. Xxxxxxxx, Xx.
-------------------------------------
Name: Xxxxxx X. Xxxxxxxx, Xx.
Title: President and Chief Executive
Officer
Tempur World, Inc.
By: /s/ Xxxxxx X. Xxxxxxxx, Xx.
-------------------------------------
Name: Xxxxxx X. Xxxxxxxx, Xx.
Title: President and Chief Executive
Officer
Tempur World Holdings, Inc.
By: /s/ Xxxxxx X. Xxxxxxxx, Xx.
-------------------------------------
Name: Xxxxxx X. Xxxxxxxx, Xx.
Title: President and Chief Executive
Officer
Tempur-Pedic, Direct Response, Inc.
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Chief Financial Officer and
Secretary
Tempur Medical, Inc.
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Chief Financial Officer and
Secretary
Accepted:
Xxxxxx Brothers Inc.
UBS Securities LLC
Credit Suisse First Boston LLC
By: Xxxxxx Brothers Inc.
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------------
Authorized Representative
