GLENOIT CORPORATION
11% Senior Subordinated Notes Due 2007
REGISTRATION AGREEMENT
New York, New York
March 26, 1997
To: SALOMON BROTHERS INC
CIBC WOOD GUNDY SECURITIES CORP.
In care of:
Salomon Brothers Inc
Seven ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Glenoit Corporation, a Delaware corporation (the "Company"), proposes
to issue and sell to certain purchasers (the "Purchasers"), upon the terms set
forth in a purchase agreement dated the date hereof (the "Purchase Agreement"),
$100,000,000 aggregate principal amount of its 11% Senior Subordinated Notes due
2007 (the "Notes") (the "Initial Placement"), to be unconditionally guaranteed
on a senior subordinated basis (the "Guarantees" and, together with the Notes,
the "Securities") by certain of the Company's subsidiaries signatories hereto
(collectively, the "Guarantors"). As an inducement to the Purchasers to enter
into the Purchase Agreement and in satisfaction of a condition to your
obligations thereunder, the Company and the Guarantors jointly and severally
agree with you, (i) for your benefit and the benefit of the other Purchasers and
(ii) for the benefit of the holders from time to time of the Securities
(including you and the other Purchasers) (each of the foregoing a "Holder" and
together the "Holders"), as follows:
1. Definitions. Capitalized terms used herein without definition
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shall have their respective meanings set forth in the Purchase Agreement. As
used in this Agreement, the following capitalized defined terms shall have the
following meanings:
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"Act" means the Securities Act of 1933, as amended, and the rules and
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regulations of the Commission promulgated thereunder.
"Affiliate" of any specified person means any other person which,
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directly or indirectly, is in control of, is controlled by, or is under common
control with, such specified person. For purposes of this definition, control
of a person means the power, direct or indirect, to direct or cause the
direction of the management and policies of such person whether by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Closing Date" has the meaning set forth in the Purchase Agreement.
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"Commission" means the Securities and Exchange Commission.
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"Exchange Act" means the Securities Exchange Act of 1934, as amended,
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and the rules and regulations of the Commission promulgated thereunder.
"Exchange Offer Registration Period" means the one-year period
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following the consummation of the Registered Exchange Offer, exclusive of any
period during which any stop order shall be in effect suspending the
effectiveness of the Exchange Offer Registration Statement.
"Exchange Offer Registration Statement" means a registration statement
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of the Company on an appropriate form under the Act with respect to the
Registered Exchange Offer, 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.
"Exchanging Dealer" means any Holder (which may include the
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Purchasers) which is a broker-dealer, electing to exchange Securities acquired
for its own account as a result of market-making activities or other trading
activities, for New Securities.
"Final Memorandum" has the meaning set forth in the Purchase
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Agreement.
"Holder" has the meaning set forth in the preamble hereto.
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"Holders' Counsel" has the meaning set forth in Section 5.
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"Indenture" means the Indenture relating to the Securities and the New
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Securities dated as of April 1, 1997, among, the Company, the Guarantors and
United States Trust Company of New York, as trustee, as the same may be amended
from time to time in accordance with the terms thereof.
"Initial Placement" has the meaning set forth in the preamble hereto.
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"Losses" has the meaning set forth in Section 6(d) hereof.
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"Majority Holders" means the Holders of a majority of the aggregate
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principal amount of securities registered under a Registration Statement.
"Managing Underwriters" means the investment banker or investment
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bankers and manager or managers that shall administer an underwritten offering.
"New Securities" means debt securities of the Company unconditionally
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guaranteed on a senior subordinated basis by the Guarantors and identical in all
material respects to the Securities (except that the cash interest and interest
rate step-up provisions and the transfer restrictions will be modified or
eliminated, as appropriate), to be issued under the Indenture.
"Prospectus" means the prospectus included in any Registration
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Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A under the Act), as amended or
supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the Securities or the New Securities, covered by such
Registration Statement, and all amendments and supplements to the Prospectus,
including post-effective amendments.
"Registered Exchange Offer" means the proposed offer to the Holders to
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issue and deliver to such Holders, in exchange for the Securities, a like
principal amount of the New Securities.
"Registrable Securities" has the meaning set forth in Section 3(a).
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"Registration Statement" means any Exchange Offer Registration
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Statement or Shelf Registration Statement that covers any of the Securities or
the New Securities pursuant to the provisions of this Agreement, 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.
"Securities" has the meaning set forth in the preamble hereto.
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"Shelf Registration" means a registration effected pursuant to
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Section 3 hereof.
"Shelf Registration Period" has the meaning set forth in Section
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3(b) hereof.
"Shelf Registration Statement" means a "shelf" registration statement
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of the Company pursuant to the provisions of Section 3 hereof which covers some
or all of the Securities or New Securities, as applicable, on an appropriate
form under Rule 415 under the Act, or any similar rule that may be adopted by
the Commission, 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" means the trustee with respect to the Securities and the New
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Securities under the Indenture and any successor trustee.
"underwriter" means any underwriter of Securities in connection with
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an offering thereof under a Shelf Registration Statement.
2. Registered Exchange Offer; Resales of New Securities by Exchanging
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Dealers; Private Exchange. (a) The Company and the Guarantors shall prepare
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and, not later than 270 days after the date of the original issuance of the
Notes, shall file with the Commission the Exchange Offer Registration Statement
with respect to the Registered Exchange Offer. The Company and the Guarantors
shall cause the Exchange Offer Registration Statement to become effective under
the Act within 345 days after the date of the original issuance of the Notes.
(b) Upon the effectiveness of the Exchange Offer Registration
Statement, the Company and the Guarantors shall promptly commence the Registered
Exchange Offer, it being
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the objective of such Registered Exchange Offer to enable each Holder electing
to exchange Securities for New Securities (assuming that such Holder is not an
affiliate of the Company or any Guarantor within the meaning of the Act,
acquires the New Securities in the ordinary course of such Holder's business and
has no arrangements with any person to participate in the distribution of the
New Securities) to trade such New Securities from and after their receipt
without any limitations or restrictions under the Act and without material
restrictions under the securities laws of a substantial proportion of the
several states of the United States.
(c) In connection with the Registered Exchange Offer, the Company
and the Guarantors shall:
(i) mail 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;
(ii) keep the Registered Exchange Offer open for not less than 30 days
and not more than 45 days after the date notice thereof is mailed to the
Holders (or longer if required by applicable law);
(iii) utilize the services of a depositary for the Registered Exchange
Offer with an address in the Borough of Manhattan, The City of New York;
and
(iv) comply in all respects with all applicable laws.
(d) As soon as practicable after the close of the Registered Exchange
Offer, the Company and the Guarantors shall:
(i) accept for exchange all Securities validly tendered and not
validly withdrawn pursuant to the Registered Exchange Offer;
(ii) deliver to the Trustee for cancellation all Securities so
accepted for exchange; and
(iii) cause the Trustee promptly to authenticate and deliver to each
Holder of Securities New Securities equal in principal amount to the
Securities of such Holder so accepted for exchange.
(e) The Purchasers, the Company and the Guarantors acknowledge that,
pursuant to current
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interpretations by the Commission's staff of Section 5 of the Act, and in the
absence of an applicable exemption therefrom, each Exchanging Dealer is required
to deliver a Prospectus in connection with a sale of any New Securities received
by such Exchanging Dealer pursuant to the Registered Exchange Offer in exchange
for Securities acquired for its own account as a result of market-making
activities or other trading activities. Accordingly, the Company and the
Guarantors shall:
(i) include the information set forth in Annex A hereto on the cover
of the Exchange Offer Registration Statement, in Annex B hereto in the
forepart of the Exchange Offer Registration Statement in a section setting
forth details of the Exchange Offer, in Annex C hereto in the underwriting
or plan of distribution section of the Prospectus forming a part of the
Exchange Offer Registration Statement, and in Annex D hereto in the Letter
of Transmittal delivered pursuant to the Registered Exchange Offer; and
(ii) use its best efforts to keep the Exchange Offer Registration
Statement continuously effective under the Act during the Exchange Offer
Registration Period for delivery by Exchanging Dealers in connection with
sales of New Securities received pursuant to the Registered Exchange Offer,
as contemplated by Section 4(h) below.
(f) In the event that any Purchaser determines that it is not
eligible to participate in the Registered Exchange Offer with respect to the
exchange of Securities constituting any portion of an unsold allotment, at the
request of such Purchaser, the Company and the Guarantors shall issue and
deliver to such Purchaser or the party purchasing New Securities registered
under a Shelf Registration Statement as contemplated by Section 3 hereof from
such Purchaser, in exchange for such Securities, a like principal amount of New
Securities. The Company and the Guarantors shall seek to cause the CUSIP
service bureau to issue the same CUSIP number for such New Securities as for New
Securities issued pursuant to the Registered Exchange Offer.
3. Shelf Registration. If, (i) because of any change in law or
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applicable interpretations thereof by the Commission's staff, the Company and
the Guarantors determine upon advice of its outside counsel that they are not
permitted to effect the Registered Exchange Offer as contemplated by Section 2
hereof, or (ii) if for any other reason the Exchange Offer Registration
Statement is not
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declared effective within 345 days after the Closing Date or the Registered
Exchange Offer is not consummated within 375 days after the Closing Date, or
(iii) if any Purchaser so requests with respect to Securities (or any New
Securities received pursuant to Section 2(f)) not eligible to be exchanged for
New Securities in a Registered Exchange Offer or, in the case of any Initial
Purchaser that participates in any Registered Exchange Offer, such Initial
Purchaser does not receive freely tradeable New Securities, or (iv) any Holder
(other than an Initial Purchaser) is not eligible to participate in the
Registered Exchange Offer or, in the case of any such Holder that participates
in the Registered Exchange Offer, such Holder does not receive freely tradeable
New Securities in exchange for tendered Securities, other than by reason of such
Holder being an affiliate of the Company within the meaning of the Act (it being
understood that, for purposes of this Section 3, (x) the requirement that a
Purchaser deliver a Prospectus containing the information required by Items 507
and/or 508 of Regulation S-K under the Act in connection with sales of New
Securities acquired in exchange for such Securities shall result in such New
Securities being not "freely tradeable" but (y) the requirement that an
Exchanging Dealer deliver a Prospectus in connection with sales of New
Securities acquired in the Registered Exchange Offer in exchange for Securities
acquired as a result of market-making activities or other trading activities
shall not result in such New Securities being not "freely tradeable"), the
following provisions shall apply:
(a) The Company and the Guarantors shall as promptly as practicable
(but in no event not more than 30 days after so required or requested pursuant
to this Section 3) file with the Commission and thereafter shall cause to be
declared effective under the Act a Shelf Registration Statement relating to the
offer and sale of the Securities or the New Securities, as applicable, by the
Holders from time to time in accordance with the methods of distribution elected
by such Holders and set forth in such Shelf Registration Statement (such
Securities or New Securities, as applicable, to be sold by Holders under such
Shelf Registration Statement being referred to herein as "Registrable
Securities"); provided, that with respect to New Securities received by a
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Purchaser in exchange for Securities constituting any portion of an unsold
allotment, the Company and the Guarantors may, if permitted by current
interpretations by the Commission's staff, file a post-effective amendment to
the Exchange Offer Registration Statement containing the information required by
Regulation S-K Items 507 and/or 508, as applicable, in satisfaction of its
obligations under this paragraph (a) with respect
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thereto, and any such Exchange Offer Registration Statement, as so amended,
shall be referred to herein as, and governed by the provisions herein applicable
to, a Shelf Registration Statement.
(b) The Company and the Guarantors shall 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
three years from the date the Shelf Registration Statement is declared effective
by the Commission (or until one year after such effective date if such Shelf
Registration Statement is filed at the request of a Purchaser) or such shorter
period that will terminate when all the Securities or New Securities, as
applicable, covered by the Shelf Registration Statement have been sold pursuant
to the Shelf Registration Statement (in any such case, such period being called
the "Shelf Registration Period"). The Company and the Guarantors shall be
deemed not to have used their best efforts to keep the Shelf Registration
Statement effective during the requisite period if any of them voluntarily takes
any action that would result in Holders of securities covered thereby not being
able to offer and sell such securities during that period, unless (i) such
action is required by applicable law or (ii) such action is taken by the Company
or any Guarantor in good faith and for valid business reasons (not including
avoidance of the Company's or such Guarantor's obligations hereunder), including
the acquisition or divestiture of assets, so long as the Company or such
Guarantor promptly thereafter complies with the requirements of Section 4(k)
hereof, if applicable.
4. Registration Procedures. In connection with any Shelf
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Registration Statement and, to the extent applicable, any Exchange Offer
Registration Statement, the following provisions shall apply:
(a) The Company and the Guarantors shall furnish to you, prior to the
filing thereof with the Commission, a copy of any Shelf Registration
Statement and any Exchange Offer Registration Statement, and each amendment
thereof and each amendment or supplement, if any, to the Prospectus
included therein and shall use their best efforts to reflect in each such
document, when so filed with the Commission, such comments as you may
reasonably and timely propose.
(b) The Company and the Guarantors shall ensure that (i) any
Registration Statement and any amendment thereto and any Prospectus forming
part thereof and any amendment or supplement thereto complies in all
9
material respects with the Act and the rules and regulations thereunder,
(ii) any 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 Registration Statement, and any amendment or supplement to such
Prospectus, 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 the
light of the circumstances under which they were made, not misleading.
(c) (1) The Company and the Guarantors shall advise you and, in the
case of a Shelf Registration Statement, the Holders of securities covered
thereby, and, if requested by you or any such Holder, confirm such advice
in writing:
(i) when a Registration Statement and any amendment thereto has
been filed with the Commission and when the Registration Statement or
any post-effective amendment thereto has become effective; and
(ii) of any request by the Commission for amendments or
supplements to the Registration Statement or the Prospectus included
therein or for additional information.
(2) The Company and the Guarantors shall advise you and, in the case
of a Shelf Registration Statement, the Holders of securities covered
thereby, and, in the case of an Exchange Offer Registration Statement, any
Exchanging Dealer which has provided in writing to the Company a telephone
or facsimile number and address for notices, and, if requested by you or
any such Holder or Exchanging Dealer, confirm such advice in writing:
(i) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose;
(ii) of the receipt by the Company or any Guarantor of any
notification with respect to the suspension of the qualification of
the securities included therein for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose; and
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(iii) of the happening of any event that requires the making of any
changes in the Registration Statement or the Prospectus so that, as of
such date, the statements therein are not misleading and do not omit
to state a material fact required to be stated therein or necessary to
make the statements therein (in the case of the Prospectus, in the
light of the circumstances under which they were made) not misleading
(which advice shall be accompanied by an instruction to suspend the
use of the Prospectus until the requisite changes have been made).
(d) The Company and the Guarantors shall use their best efforts to
obtain the withdrawal of any order suspending the effectiveness of any
Registration Statement at the earliest possible time.
(e) The Company and the Guarantors shall furnish to each Holder of
securities included within the coverage of any Shelf Registration
Statement, without charge, at least one copy of such Shelf Registration
Statement and any post-effective amendment thereto, including financial
statements and schedules, and, if the Holder so requests in writing, any
documents incorporated by reference therein and all exhibits (including
those incorporated by reference therein).
(f) The Company and the Guarantors shall, during the Shelf
Registration Period, deliver to each Holder of securities included within
the coverage of any Shelf Registration Statement, without charge, as many
copies of the Prospectus (including each preliminary Prospectus) included
in such Shelf Registration Statement and any amendment or supplement
thereto as such Holder may reasonably request; and the Company and the
Guarantors consent to the use of the Prospectus or any amendment or
supplement thereto by each of the selling Holders of securities in
connection with the offering and sale of the securities covered by the
Prospectus or any amendment or supplement thereto.
(g) The Company and the Guarantors shall furnish to each Exchanging
Dealer which so requests, without charge, at least one copy of the Exchange
Offer Registration Statement and any post-effective amendment thereto,
including financial statements and schedules, any documents incorporated by
reference therein, and, if the Exchanging Dealer so requests in writing,
any documents incorporated by reference therein and all
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exhibits (including those incorporated by reference therein).
(h) The Company and the Guarantors shall, during the Exchange Offer
Registration Period, promptly deliver to each Exchanging Dealer, without
charge, as many copies of the Prospectus included in such Exchange Offer
Registration Statement and any amendment or supplement thereto as such
Exchanging Dealer may reasonably request for delivery by such Exchanging
Dealer in connection with a sale of New Securities received by it pursuant
to the Registered Exchange Offer; and the Company and the Guarantors
consent to the use of the Prospectus or any amendment or supplement thereto
by any such Exchanging Dealer, as aforesaid.
(i) Prior to the Registered Exchange Offer or any other offering of
securities pursuant to any Registration Statement, the Company and the
Guarantors shall register or qualify or cooperate with the Holders of
securities included therein and Holders' Counsel in connection with the
registration or qualification of such securities for offer and sale under
the securities or blue sky laws of such jurisdictions as any such Holder
reasonably requests in writing and do any and all other acts or things
necessary or advisable to enable the offer and sale in such jurisdictions
of the securities covered by such Registration Statement; provided,
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however, that neither the Company nor any Guarantor will be required to
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qualify generally to do business in any jurisdiction where it is not then
so qualified or to take any action which would subject it to general
service of process or to taxation in any such jurisdiction where it is not
then so subject.
(j) The Company and the Guarantors shall cooperate with the Holders
of Securities to facilitate the timely preparation and delivery of
certificates representing Securities to be sold pursuant to any
Registration Statement free of any restrictive legends and in such
denominations and registered in such names as Holders may request prior to
sales of Securities pursuant to such Registration Statement.
(k) Upon the occurrence of any event contemplated by paragraph
(c)(2)(iii) above, the Company and the Guarantors shall promptly prepare a
post-effective amendment to any Registration Statement or an amendment or
supplement to the related Prospectus or file any other required document so
that, as thereafter
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delivered to purchasers of the securities included therein, the Prospectus
will not include an untrue statement of a material fact or omit to state
any material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
(l) Not later than the effective date of any such Registration
Statement hereunder, the Company and the Guarantors shall provide a CUSIP
number for the Securities or New Securities, as the case may be, registered
under such Registration Statement, and provide the Trustee with printed
certificates for such Securities or New Securities, in a form, if requested
by the applicable Holder or Holder's counsel, eligible for deposit with The
Depository Trust Company.
(m) The Company and the Guarantors shall use their best efforts to
comply with all applicable rules and regulations of the Commission to the
extent and so long as they are applicable to the Registered Exchange Offer
or the Shelf Registration and will make generally available to its security
holders a consolidated earnings statement (which need not be audited)
covering a twelve-month period commencing after the effective date of the
Registration Statement and ending not later than 15 months thereafter, as
soon as practicable after the end of such period, which consolidated
earnings statement shall satisfy the provisions of Section 11(a) of the
Securities Act.
(n) The Company and the Guarantors shall cause the Indenture to be
qualified under the Trust Indenture Act of 1939, as amended, on or prior to
the effective date of any Shelf Registration Statement or Exchange Offer
Registration Statement.
(o) The Company may require each Holder of Registrable Securities to
be sold pursuant to any Shelf Registration Statement to furnish to the
Company such information regarding such Holder and the distribution of such
securities as the Company may from time to time reasonably require for
inclusion in such Registration Statement.
(p) The Company and the Guarantors shall, if requested, promptly
incorporate in a Prospectus supplement or post-effective amendment to a
Shelf Registration Statement, such information as the Managing Underwriters
and Majority Holders reasonably agree should be included therein and shall
make all
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required filings of such Prospectus supplement or post-effective amendment
as soon as notified of the matters to be incorporated in such Prospectus
supplement or post-effective amendment.
(q) In the case of any Shelf Registration Statement, the Company and
the Guarantors shall enter into such agreements (including underwriting
agreements) and take all other appropriate actions in order to expedite or
facilitate the registration or the disposition of the Securities, and in
connection therewith, if an underwriting agreement is entered into, cause
the same to contain indemnification provisions and procedures no less
favorable than those set forth in Section 6 hereof (or such other
provisions and procedures acceptable to the Majority Holders and the
Managing Underwriters, if any), with respect to all parties to be
indemnified pursuant to Section 6 hereof from Holders of Securities to the
Company and the Guarantors.
(r) In the case of any Shelf Registration Statement, the Company and
the Guarantors shall (i) make reasonably available for inspection by the
Holders of securities to be registered thereunder, any underwriter
participating in any disposition pursuant to such Registration Statement,
and any attorney, accountant or other agent retained by the Holders or any
such underwriter all relevant financial and other records, pertinent
corporate documents and properties of the Company and its subsidiaries;
(ii) cause the Company's and the Guarantors' officers, directors and
employees to supply all relevant information reasonably requested by the
Holders or any such underwriter, attorney, accountant or other agent in
connection with any such Registration Statement as is customary for similar
due diligence examinations; provided, however, that any information that is
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designated in writing by the Company, in good faith, as confidential at the
time of delivery of such information shall be kept confidential by the
Holders or any such underwriter, attorney, accountant or other agent,
unless such disclosure is made in connection with a court proceeding or
required by law, or such information becomes available to the public
generally or through a third party without an accompanying obligation of
confidentiality; (iii) make such representations and warranties to the
Holders of securities registered thereunder and the underwriters, if any,
in form, substance and scope as are customarily made by issuers to
underwriters in primary underwritten offerings; (iv)
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obtain opinions of counsel to the Company and the Guarantors (which counsel
and opinions (in form, scope and substance) shall be reasonably
satisfactory to the Managing Underwriters, if any) addressed to each
selling Holder and the underwriters, if any, covering such matters as are
customarily covered in opinions requested in underwritten offerings and
such other matters as may be reasonably requested by such Holders and
underwriters; (v) obtain "cold comfort" letters (or, in the case of any
person that does not satisfy the conditions for receipt of a "cold comfort"
letter specified in Statement on Auditing Standards No. 72, an "agreed-upon
procedures letter") and updates thereof from the independent certified
public accountants of the Company and the Guarantors (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 and financial data are, or are required to be, included in the
Registration Statement), addressed to each selling Holder of securities
registered thereunder and the underwriters, if any, in customary form and
covering matters of the type customarily covered in "cold comfort" letters
in connection with primary underwritten offerings; and (vi) deliver such
documents and certificates as may be reasonably requested by the Majority
Holders and the Managing Underwriters, if any, including those to evidence
compliance with Section 4(k) and with any customary conditions contained in
the underwriting agreement or other agreement entered into by the Company
and the Guarantors. The foregoing actions set forth in clauses (iii),
(iv), (v) and (vi) of this Section 4(r) shall be performed at (A) the
effective date of such Registration Statement and each post-effective
amendment thereto and (B) each closing under any underwriting or similar
agreement as and to the extent required thereunder.
(s) In the case of any Exchange Offer Registration Statement, the
Company and the Guarantors shall (i) make reasonably available for
inspection by each Purchaser, and any attorney, accountant or other agent
retained by such Purchaser, all relevant financial and other records,
pertinent corporate documents and properties of the Company and its
subsidiaries; (ii) cause the Company's and the Guarantors' officers,
directors and employees to supply all relevant information reasonably
requested by such Purchaser or any such attorney, accountant or other agent
in connection with any such Registration Statement as is customary for
similar due diligence
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examinations; provided, however, that any information that is designated in
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writing by the Company, in good faith, as confidential at the time of
delivery of such information shall be kept confidential by such Purchaser
or any such attorney, accountant or other agent, unless such disclosure is
made in connection with a court proceeding or required by law, or such
information becomes available to the public generally or through a third
party without an accompanying obligation of confidentiality; (iii) make
such representations and warranties to such Purchaser, in form, substance
and scope as are customarily made by issuers to underwriters in primary
underwritten offerings; (iv) obtain opinions of counsel to the Company and
the Guarantors, which counsel and opinions (in form, scope and substance)
shall be reasonably satisfactory to such Purchaser and its counsel,
addressed to such Purchaser, covering such matters as are customarily
covered in opinions requested in underwritten offerings and such other
matters as may be reasonably requested by such Purchaser or its counsel;
(v) obtain "cold comfort" letters and updates thereof from the independent
certified public accountants of the Company and the Guarantors (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 and financial data are, or are required to be,
included in the Registration Statement), addressed to such Purchaser, in
customary form and covering matters of the type customarily covered in
"cold comfort" letters in connection with primary underwritten offerings,
or if requested by such Purchaser or its counsel in lieu of a "cold
comfort" letter, an agreed-upon procedures letter under Statement on
Auditing Standards No. 35, covering matters requested by such Purchaser or
its counsel; and (vi) deliver such documents and certificates as may be
reasonably requested by such Purchaser or its counsel, including those to
evidence compliance with Section 4(k) and with conditions customarily
contained in underwriting agreements. The foregoing actions set forth in
clauses (iii), (iv), (v), and (vi) of this Section 4(s) shall be performed
at the close of the Registered Exchange Offer and the effective date of any
post-effective amendment to the Exchange Offer Registration Statement.
5. Registration Expenses. The Company and the Guarantors shall bear
----------------------
all expenses incurred in connection with the performance of their obligations
under Sections 2, 3 and 4 hereof and, in the event of any Shelf Registration
16
Statement, will reimburse the Holders for the reasonable fees and disbursements
of one firm or counsel (in addition to one local counsel in each relevant
jurisdiction) designated by the Majority Holders to act as counsel for the
Holders in connection therewith ("Holders' Counsel"), and, in the case of any
Exchange Offer Registration Statement, will reimburse the Purchasers for the
reasonable fees and disbursements of counsel acting in connection therewith.
6. Indemnification and Contribution. (a) In connection with any
---------------------------------
Registration Statement, the Company and the Guarantors, jointly and severally,
agree to indemnify and hold harmless each Holder of securities covered thereby
(including each Purchaser and, with respect to any Prospectus delivery as
contemplated in Section 4(h) hereof, each Exchanging Dealer), the directors,
officers, employees and agents of each such Holder and each other person, if
any, who controls any such Holder within the meaning of Section 15 the Act or
Section 20 of the Exchange Act against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may become subject
under the Act, the Exchange Act or other Federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement as originally filed or in any amendment thereof, or
in any preliminary Prospectus or Prospectus, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and agrees to reimburse
each such indemnified party, as incurred, for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that (i)
-------- -------
neither the Company nor any Guarantor will be liable in any case to the extent
that any such loss, claim, damage or liability arises out of or is based upon
any such untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any such Holder
specifically for inclusion therein and (ii) neither the Company nor any
Guarantor shall be liable to any indemnified party under this indemnity
agreement with respect to the Registration Statement or Prospectus to the extent
that any such loss, claim, damage or liability of such indemnified party results
solely from an untrue statement of a material fact contained in, or the omission
of a material fact from, the Registration Statement
17
or Prospectus which untrue statement or omission was corrected in an amended or
supplemented Registration Statement or Prospectus, if the person alleging such
loss, claim, damage or liability was not sent or given, at or prior to the
written confirmation of such sale, a copy of the amended or supplemented
Registration Statement or Prospectus if the Company had previously furnished
copies thereof to such indemnified party and if delivery of a prospectus is
required by the Act and was not so made. This indemnity agreement will be in
addition to any liability which the Company and the Guarantors may otherwise
have.
The Company also agrees to indemnify or contribute to Losses of, as
provided in Section 6(d), any underwriters of Securities registered under a
Shelf Registration Statement, their officers and directors and each person who
controls such underwriters on substantially the same basis as that of the
indemnification of the Purchasers and the selling Holders provided in this
Section 6(a) and shall, if requested by any Holder, enter into an underwriting
agreement reflecting such agreement, as provided in Section 4(q) hereof.
(b) Each Holder of securities covered by a Registration Statement
(including each Purchaser and, with respect to any Prospectus delivery as
contemplated in Section 4(h) hereof, each Exchanging Dealer) severally agrees to
indemnify and hold harmless the Company and each Guarantor, each of their
respective directors and officers and each other person, if any, who controls
the Company or such Guarantor within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act to the same extent as the foregoing indemnity
from the Company and the Guarantors to each such Holder, but only with reference
to written information relating to such Holder furnished to the Company by or on
behalf of such Holder specifically for inclusion in the documents referred to in
the foregoing indemnity. This indemnity agreement will be in addition to any
liability which any such Holder may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section
6 of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 6, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii) will not, in any
18
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a) or (b)
above. The indemnifying party shall be entitled to appoint as counsel one firm
of attorneys of the indemnifying party's choice at the indemnifying party's
expense, which counsel, together with one local counsel in each jurisdiction,
shall act on behalf of all the indemnified parties in any action for which
indemnification is sought (in which case the indemni fying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indem nified party or parties except as set forth below);
provided, however, that such counsel shall be reasonably satisfactory to the
-------- -------
indemnified party. Notwithstanding the indemnifying party's election to appoint
counsel to represent the indemnified party in an action, the indemnified party
shall have the right to employ separate counsel (including local counsel), and
the indemnified party shall bear the fees, costs and expenses of such separate
counsel (and local counsel) unless (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would, in the reasonable
judgment of the indemnified party, present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after notice of the institution of such action or (iv) the indemnifying
party shall authorize the indemnified party to employ separate counsel at the
expense of the indemnifying party. No indemnifying party shall 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 its written
consent or if there be a final judgment for 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. An indemnifying party will not, without the prior written consent of
the indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an
19
unconditional release of each indemnified party from all liability arising out
of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 6 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, then each applicable indemnifying party, in
lieu of indemnifying such indemnified party, shall have a joint and several
obligation to contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in connection
with investigating or defending same) (collectively "Losses") to which such
indemnified party may be subject in such proportion as is appropriate to reflect
the relative benefits received by such indemnifying party, on the one hand, and
such indemnified party, on the other hand, from the Initial Placement and the
Registration Statement which resulted in such Losses; provided, however, that in
-------- -------
no case shall any Purchaser or any subsequent Holder of any Security or New
Security be responsible, in the aggregate, for any amount in excess of the
purchase discount or commission applicable to such Security, or in the case of a
New Security, applicable to the Security which was exchangeable into such New
Security, as set forth on the cover page of the Final Memorandum, nor shall any
underwriter be responsible for any amount in excess of the underwriting discount
or commission applicable to the securities purchased by such underwriter under
the Registration Statement which resulted in such Losses. If the allocation
provided by the immediately preceding sentence is unavailable for any reason,
the indemnifying party and the indemnified party shall contribute in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of such indemnifying party, on the one hand, and such
indemnified party, on the other hand, in connection with the statements or
omissions which resulted in such Losses as well as any other relevant equitable
considerations. Benefits received by the Company and the Guarantors shall be
deemed to be equal to the sum of (x) the total net proceeds from the Initial
Placement (before deducting expenses) as set forth on the cover page of the
Final Memorandum and (y) the total amount of additional interest which the
Company and the Guarantors were not required to pay as a result of registering
the securities covered by the Registration Statement which resulted in such
Losses. Benefits received by the Purchasers shall be deemed to be equal to the
total purchase discounts and commissions as set forth on the cover page of the
Final Memorandum, and benefits received by any other Holders shall be deemed to
be equal to the value of receiving Securities or New
20
Securities, as applicable, registered under the Act. Benefits received by any
underwriter shall be deemed to be equal to the total underwriting discounts and
commissions, as set forth on the cover page of the Prospectus forming a part of
the Registration Statement which resulted in such Losses. Relative fault shall
be determined by reference to whether any alleged untrue statement or omission
relates to information provided by the indemnifying party, on the one hand, or
by the indemnified party, on the other hand. The parties agree that it would
not be just and equitable if contribution were determined by pro rata allocation
or any other method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this
paragraph (d), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 6, each person who controls a Holder within the meaning of either
the Act or the Exchange Act and each director, officer, employee and agent of
such Holder shall have the same rights to contribution as such Holder, and each
person who controls the Company or any Guarantor within the meaning of either
the Act or the Exchange Act, each officer of the Company or any Guarantor who
shall have signed the Registration Statement and each director of the Company or
any Guarantor shall have the same rights to contribution as the Company and the
Guarantors, subject in each case to the applicable terms and conditions of this
paragraph (d).
(e) The provisions of this Section 6 will remain in full force and
effect, regardless of any investigation made by or on behalf of any Holder, the
Company or any Guarantor or any of the officers, directors or controlling
persons referred to in Section 6 hereof, and will survive the sale by a Holder
of securities covered by a Registration Statement.
7. Miscellaneous.
--------------
(a) No Inconsistent Agreements. Neither the Company nor any
---------------------------
Guarantor has, as of the date hereof, entered into, nor shall it, on or
after the date hereof, enter into, any agreement with respect to its
securities that is inconsistent with the rights granted to the Holders
herein or otherwise conflicts with the provisions hereof.
(b) Amendments and Waivers. The provisions of this Agreement,
-----------------------
including the provisions of this sentence, may not be amended, qualified,
modified or
21
supplemented, and waivers or consents to departures from the provisions
hereof may not be given, unless the Company has obtained the written
consent of the Holders of at least a majority of the then outstanding
aggregate principal amount of Securities (or, after the consummation of any
Exchange Offer in accordance with Section 2 hereof, of New Securities);
provided that, with respect to any matter that directly or indirectly
--------
affects the rights of any Purchaser hereunder, the Company shall obtain the
written consent of each such Purchaser against which such amendment,
qualification, supplement, waiver or consent is to be effective.
Notwithstanding the foregoing (except the foregoing proviso), a waiver or
consent to departure from the provisions hereof with respect to a matter
that relates exclusively to the rights of Holders whose securities are
being sold pursuant to a Registration Statement and that does not directly
or indirectly affect the rights of other Holders may be given by the
Majority Holders, determined on the basis of securities being sold rather
than registered under such Registration Statement.
(c) Notices. All notices and other communications provided for or
--------
permitted hereunder shall be made in writing by hand-delivery, first-class
mail, fax or air courier guaranteeing overnight delivery:
(1) if to a Holder, at the most current address given by such
holder to the Company in accordance with the provisions of this
Section 7(c), which address initially is, with respect to each Holder,
the address of such Holder maintained by the registrar under the
Indenture, with a copy in like manner to Salomon Brothers Inc by fax
(▇▇▇-▇▇▇-▇▇▇▇) and confirmed by mail to them at Seven ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇;
(2) if to you, initially at the respective addresses set forth in
the Purchase Agreement; and
(3) if to the Company or any Guarantor, initially at its address
set forth in the Purchase Agreement.
All such notices and communications shall be deemed to have been duly
given when received.
22
The Purchasers or the Company by notice to the other may designate
additional or different addresses for subsequent notices or communications.
(d) 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 the need for an express assignment or any
consent by the Company or any Guarantor thereto, subsequent Holders of
Securities and/or New Securities. The Company and the Guarantors each
hereby agrees to extend the benefits of this Agreement to any Holder of
Securities and/or New Securities and any such Holder may specifically
enforce the provisions of this Agreement as if an original party hereto.
(e) 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.
(f) Headings. The headings in this agreement are for convenience of
---------
reference only and shall not limit or otherwise affect the meaning hereof.
(g) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
--------------
IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK (WITHOUT
REGARD TO THE CONFLICT OF LAW PROVISIONS THEREOF).
(h) Severability. In the event that any one or more of the
-------------
provisions contained herein, or the application thereof in any
circumstances, is held invalid, illegal or unenforceable in any respect for
any reason, the validity, legality and enforceability of any such provision
in every other respect and of the remaining provisions hereof shall not be
in any way impaired or affected thereby, it being intended that all of the
rights and privileges of the parties shall be enforceable to the fullest
extent permitted by law.
(i) Securities Held by the Company, etc. Whenever the consent or
------------------------------------
approval of Holders of a specified percentage of principal amount of
Securities or New Securities is required hereunder, Securities or New
Securities, as applicable, held by the Company or its Affiliates (other
than subsequent Holders of Securities or New Securities if such subsequent
Holders are deemed to be Affiliates solely by reason of their holdings of
such Securities or New Securities) shall not be counted in determining
whether such consent or
23
approval was given by the Holders of such required percentage.
24
Please confirm that the foregoing correctly sets forth the agreement
among the Company, the Guarantors and you.
Very truly yours,
GLENOIT CORPORATION,
by
------------------------------------
Name:
Title:
SUBSIDIARY GUARANTORS:
GLENOIT ▇▇▇▇▇, INC.,
by
------------------------------------
Name:
Title:
GLENOIT ASSETS CORP.,
by
-------------------------------------
Name:
Title:
TARBORO PROPERTIES, LTD.,
by
-------------------------------------
Name:
Title:
25
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
SALOMON BROTHERS INC
CIBC WOOD GUNDY SECURITIES CORP.
by SALOMON BROTHERS INC
by
-------------------------
Name:
Title:
ANNEX A
Each broker-dealer that receives New Securities for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such New Securities. The Letter of
Transmittal states that by so acknowledging and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act. This Prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with resales of New Securities received in exchange for Securities where such
New Securities were acquired by such broker-dealer as a result of market-making
activities or other trading activities. The Company has agreed that, starting
on the Expiration Date (as defined herein) and ending on the close of business
on the 180th day following the Expiration Date, it will make this Prospectus
available to any broker-dealer for use in connection with any such resale. See
"Plan of Distribution."
ANNEX B
Each broker-dealer that receives New Securities for its own account in
exchange for Securities, where such Securities were acquired by such broker-
dealer as a result of market-making activities or other trading activities, must
acknowledge that it will deliver a prospectus in connection with any resale of
such New Securities. See "Plan of Distribution."
ANNEX C
PLAN OF DISTRIBUTION
Each broker-dealer that receives New Securities for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such New Securities. The
Prospectus, as it may be amended or supplemented from time to time, may be used
by a broker-dealer in connection with resales of New Securities received in
exchange for Securities where such Securities were acquired as a result of
market-making activities or other trading activities. Each of the Company and
the Guarantors has agreed that, starting on the Expiration Date and ending on
the close of business on the 180th day following the Expiration Date, it will
make this Prospectus, as amended or supplemented, available to any broker-dealer
for use in connection with any such resale. In addition, until
, 199 , all dealers effecting transactions in the Exchange Securities may be
required to deliver a prospectus./*/
Neither the Company nor the Guarantors will receive any proceeds from
any sale of New Securities by broker-dealers. New Securities received by
broker-dealers for their own account pursuant to the Exchange Offer may be sold
from time to time in one or more transactions in the over-the-counter market, in
negotiated transactions, through the writing of options on the New Securities or
a combination of such methods of resale, at market prices prevailing at the time
of resale, at prices related to such prevailing market prices or negotiated
prices. Any such resale may be made directly to purchaser or to or through
brokers or dealers who may receive compensation in the form of commissions or
concessions from any such broker-dealer and/or the purchasers of any such New
Securities. Any broker-dealer that resells New Securities that were received by
it for its own account pursuant to the Exchange Offer and any broker or dealer
that participates in a distribution of such New Securities may be deemed to be
an "underwriter" within the meaning of the Securities Act and any profit of any
such resale of New Securities and any commissions or concessions received by any
such persons may be deemed to be underwriting compensation under the Securities
Act. The Letter of Transmittal states that by acknowledging that it will
deliver and by delivering a prospectus, a broker-dealer will not be deemed to
admit that it is an "underwriter" within the meaning of the Securities Act.
-----------
/*/ In addition, the legend required by Item 502(e) of Regulation S-K will
appear on the back cover page of the Exchange Offer prospectus.
ii
For a period of 180 days after the Expiration Date, the Company will
promptly send additional copies of this Prospectus and any amendment or
supplement to this Prospectus to any broker-dealer that requests such documents
in the Letter of Transmittal. The Company and the Guarantors have jointly and
severally agreed to pay all expenses incident to the Exchange Offer (including
the expenses of one counsel for the holders of the Securities) other than
commissions or concessions of any brokers or dealers and will indemnify the
holders of the Securities (including any broker-dealers) against certain
liabilities, including liabilities under the Securities Act.
[If applicable, add information required by Regulation S-K Items 507
and/or 508.]
ANNEX D
Rider A
-------
CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10
ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY
AMENDMENTS OR SUPPLEMENTS THERETO.
Name:
-------------------------------------------------------
Address:
----------------------------------------------------
----------------------------------------------------
Rider B
-------
If the undersigned is not a broker-dealer, the undersigned represents that it is
not engaged in, and does not intend to engage in, a distribution of New
Securities. If the undersigned is a broker-dealer that will receive New
Securities for its own account in exchange for Securities that were acquired as
a result of market-making activities or other trading activities, it
acknowledges that it will deliver a prospectus in connection with any resale of
such New Securities; however, by so acknowledging and by delivering a
prospectus, the undersigned will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.