EXHIBIT 4.1
REGISTRATION RIGHTS AGREEMENT
by and among
PILLOWTEX CORPORATION,
a Delaware corporation
and
THE PERSONS LISTED ON THE
SIGNATURE PAGES ATTACHED HERETO
May 24, 2002
TABLE OF CONTENTS
Page
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1. Definitions and Certain Interpretative Matters .................. 1
1.1 Definitions ............................................ 1
1.2 Certain Interpretative Matters ......................... 3
2. Demand Registration ............................................. 3
2.1 Right to Demand Registration ........................... 3
2.2 Limitations on Demand Registrations. ................... 3
2.3 Underwritten Demand Registration ....................... 4
2.4 Blackout Period ........................................ 5
2.5 Restrictions on Public Sale by the Company ............. 5
2.6 Revocation of Demand Registration ...................... 5
3. Piggyback Registration .......................................... 6
3.1 Right to Piggyback ..................................... 6
3.2 Priority on Piggyback Registrations .................... 6
3.3 Withdrawal of Piggyback Registration ................... 7
4. Shelf Registration .............................................. 8
5. Restrictions On Sale by Holders ................................. 8
6. Registration Procedures. ........................................ 9
7. Suspension of Disposition ....................................... 12
7.1 Suspensions Generally .................................. 12
7.2 Suspensions During Material Events ..................... 12
8. Registration Expenses ........................................... 13
9. Information from Stockholder .................................... 13
10. Indemnification ................................................. 14
10.1 Indemnification by the Company ......................... 14
10.2 Indemnification by Holders ............................. 14
10.3 Conduct of Indemnification Proceedings ................. 15
10.4 Contribution ........................................... 16
11. Rule 144 ........................................................ 16
12. Requirements for Participation in Underwritten Offerings ........ 16
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TABLE OF CONTENTS
(continued)
Page
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13. Transferability of Registration Rights .......................... 17
14. Future Registration Rights ...................................... 17
15. Miscellaneous ................................................... 17
15.1 Notices ................................................ 17
15.2 Confidentiality ........................................ 17
15.3 No Third-Party Beneficiaries ........................... 18
15.4 Entire Agreement ....................................... 18
15.5 Amendment and Waiver ................................... 18
15.6 Counterparts ........................................... 18
15.7 Severability ........................................... 18
15.8 Governing Law .......................................... 18
15.9 Specific Performance ................................... 18
15.10 Further Assurances ..................................... 18
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REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of May 24,
2002 (the "Effective Date"), is made by and among Pillowtex Corporation, a
Delaware corporation (the "Company"), and the Persons listed on the signature
pages attached hereto (each a "Stockholder" and collectively, the
"Stockholders").
RECITALS:
A. The Second Amended Joint Plan of Reorganization of the Company and its
debtor subsidiaries (the "Plan") was confirmed by the United States Bankruptcy
Court in the District of Delaware on May 1, 2002 .
B. Pursuant to the Plan, each of the Stockholders has become the beneficial
owner of shares of common stock, par value $0.01 per share, of the Company ("New
Common Stock").
C. In accordance with the terms of the Plan, the Company desires to provide
for the registration of the sale by the Stockholders and certain of their
transferees of the Registrable Securities (as defined below) from time to time,
on the terms and subject to conditions set forth below.
AGREEMENTS:
NOW, THEREFORE, in consideration of the foregoing and the covenants and
agreements herein contained, and intending to be legally bound hereby, the
parties hereto hereby agree as follows:
1. Definitions and Certain Interpretative Matters.
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1.1 Definitions. For purposes of this Agreement, the following terms have
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the following meanings:
(a) "Affiliate": as defined in Rule 12b-2 under the Exchange Act.
(b) "Business Day": any day, other than a Saturday or Sunday, on
which national banking institutions in New York, New York, are required or
authorized to be open.
(c) "Effective Date": as defined in the introductory paragraph
hereof.
(d) "Exchange Act": the Securities Exchange Act of 1934, as amended.
(e) "Holders": the Stockholders and Permitted Transferees , in each
case, for so long as such Person holds Registrable Securities.
(f) "Nasdaq": The Nasdaq Stock Market, Inc.
(g) "New Common Stock": as defined in Recital B.
(h) "Other Holders": as defined in Section 3.2.
(i) "Permitted Transferee": any Person who (i) acquires in a single
transfer made in compliance with all applicable securities laws from any Holder,
Registrable Securities representing at least 10% of the aggregate number of
Registrable Securities held by all Holders on the Effective Date and (ii) agrees
in writing to be bound by the terms of this Agreement.
(j) "Person": any individual, corporation, general or limited
partnership, limited liability company, joint venture, trust or other entity or
association, including without limitation any governmental authority.
(k) "Piggyback Notice": as defined in Section 3.1.
(l) "Piggyback Registration": as defined in Section 3.1.
(m) "Plan": as defined in Recital A.
(n) "Prospectus": means the prospectus included in the applicable
Registration Statement, as supplemented by any and all prospectus supplements
and as amended by any and all amendments (including post-effective amendments)
and including all material incorporated by reference or deemed to be
incorporated by reference in such prospectus.
(o) "Registrable Securities": (i) the Shares and (ii) any securities
paid, issued or distributed in respect of any of the Shares by way of stock
dividend, stock split or distribution, or in connection with a combination of
shares, recapitalization, reorganization, merger or consolidation or otherwise;
provided, however, that as to any Registrable Securities, such securities will
cease to constitute "Registrable Securities" upon the earliest to occur of: (A)
the date on which the securities are disposed of pursuant to an effective
registration statement under the Securities Act; (B) the date on which the
securities are distributed to the public pursuant to Rule 144 (or any successor
provision) under the Securities Act; (C) the date on which the securities may be
freely sold publicly without either registration under the Securities Act or
compliance with any restrictions, including without limitation, restrictions as
to volume or manner of sales under Rule 144 (or any successor provision); (D)
the date on which the securities have been transferred to any Person other than
a Permitted Transferee; or (E) the date on which the securities cease to be
outstanding.
(p) "Registration Statement": any registration statement of the
Company under the Securities Act that covers any of the Registrable Securities
pursuant to the provisions of this Agreement, including the related Prospectus,
all amendments and supplements to such registration statement (including
post-effective amendments), and all exhibits and all material incorporated by
reference or deemed to be incorporated by reference in such registration
statement.
(q) "Rule 144": Rule 144 promulgated under the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC.
(r) "SEC": the Securities and Exchange Commission.
(s) "Securities Act": the Securities Act of 1933, as amended.
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(t) "Shares": the shares of New Common Stock issued to the
Stockholders pursuant to the Plan.
(u) "Shelf Registration Statement": as defined in Section 4.
(v) "Underwritten Offering": a registration under the Securities Act
in which securities of the Company are sold to an underwriter or group of
underwriters for reoffering to the public.
1.2 Certain Interpretative Matters. Unless the context otherwise requires,
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(i) all references to Articles or Sections are to Articles or Sections of this
Agreement, (ii) each term defined in this Agreement has the meaning assigned to
it, (iii) all uses of "herein," "hereto," "hereof" and words similar thereto in
this Agreement refer to this Agreement in its entirety, and not solely to the
Article, Section or provision in which it appears, (iv) "or" is disjunctive but
not necessarily exclusive, and (v) words in the singular include the plural and
vice versa. Unless otherwise specified, the use of the term "day" will be deemed
to be a calendar day and not a Business Day.
2. Demand Registration.
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2.1 Right to Demand Registration. Commencing 180 days after the Effective
----------------------------
Date, if the Company receives a written request from the Holders of at least a
majority of the Registrable Securities then outstanding that the Company effect
a registration of all or part of their Registrable Securities (which written
request will specify the aggregate number of Registrable Securities requested to
be registered and the means of distribution), the Company will, subject to
Sections 2.2, 2.3 and 2.4, prepare and file as soon as practicable (and, in any
event within 60 days) a Registration Statement on an appropriate registration
form under the Securities Act covering the Registrable Securities subject of the
written request and agrees to use its reasonable best efforts to cause the
Registration Statement to become and remain effective until completion of the
proposed offering (not to exceed 90 days or, in the case of an Underwritten
Offering, such additional period as the managing underwriter shall reasonably
require). Upon receipt of the Holders' written request, the Company will
promptly deliver written notice to all other Holders that such registration is
to be effected. The Company agrees, subject to Section 2.3(b), to include in the
Registration Statement only those Registrable Securities for which it has
received written requests to register Registrable Securities by the Holders
thereof within 15 days after receipt of written notice by the Company.
2.2 Limitations on Demand Registrations.
-----------------------------------
(a) The Company will not be obligated to effect more than three
Registration Statements pursuant to Section 2.1. In addition, the Company will
not be obligated to effect a registration pursuant to Section 2.1 unless the
Holders request registration of not less than 25% of the Registrable Securities
then held by all Holders; provided, however, that, in the case of an
Underwritten Offering, the registration must include Registrable Securities with
a proposed aggregate public offering price of at least $15,000,000 (before
deducting underwriting discounts and commissions). Notwithstanding anything to
the contrary contained in this Agreement, no request for registration under
Section 2.1 may be made (i) within 120 days after the effective
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date of a Registration Statement effected pursuant to Section 2.1 or (ii) if the
Shelf Registration Statement is then in effect.
(b) Except as provided in Section 2.6, a registration requested
pursuant to Section 2.1 will not be deemed to be effected for purposes of
Section 2.1 unless and until the Registration Statement is declared effective by
the SEC or becomes effective in accordance with the Securities Act and the rules
and regulations thereunder and remains effective as contemplated by Section 2.1.
(c) The Company may satisfy its obligations under Section 2.1 by
amending (to the extent permitted by applicable law) any Registration Statement
previously filed by the Company under the Securities Act so that the amended
Registration Statement will permit the disposition (in accordance with the
intended methods of disposition specified as aforesaid) of all of the
Registrable Securities for which a demand for registration has been made under
Section 2.1. If the Company so amends a previously filed Registration Statement,
it will be deemed to have effected a registration for purposes of Section 2.1.
2.3 Underwritten Demand Registration.
--------------------------------
(a) In the event that a registration requested pursuant to Section
2.1 is to be an Underwritten Offering, the managing underwriter or underwriters
of the Underwritten Offering relating thereto will be selected by the Holders of
at least a majority of the Registrable Securities proposed to be included in
that Underwritten Offering, subject to the approval of the Company (which
approval will not be unreasonably withheld or delayed). All Holders proposing to
distribute their securities through an Underwritten Offering agree to enter into
an underwriting agreement with the underwriters, provided that the underwriting
agreement is in customary form and reasonably acceptable to the Holders of a
majority of the Registrable Securities to be included in the Underwritten
Offering.
(b) If the managing underwriter of an Underwritten Offering advises
the Company and the Holders participating in such registration in writing that
in its good faith judgment the number of Registrable Securities requested to be
included in the Underwritten Offering exceeds the number of Registrable
Securities which can be sold in that offering without materially and adversely
affecting the success of the Underwritten Offering, then the Registrable
Securities included in that Underwritten Offering will be allocated on a pro
rata basis among all of the participating Holders, based on the number of
Registrable Securities owned by each participating Holder as it bears to the
total number of Registrable Securities owned by all participating Holders. The
securities to be sold in any Underwritten Offering pursuant to this Section 2
will be allocated so that the total amount of Registrable Securities to be
included in the Underwritten Offering is the full amount that, in the opinion of
the managing underwriter, can be sold without materially and adversely affecting
the success of the Underwritten Offering. If any participating Holder does not
request inclusion of all of its Registrable Securities, the remaining portion of
that Holder's allocation will be reallocated on a pro rata basis among the
participating Holders whose allocations did not satisfy their requests. This
procedure will be repeated until all of the shares of Registrable Securities
which may be included in the Underwritten Offering have been allocated.
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(c) The Registrable Securities which are excluded from an
Underwritten Offering pursuant to Section 2.1 by reason of the underwriter's
marketing limitation and all other Registrable Securities not originally
requested to be so included will not be included in that Underwritten Offering.
2.4 Blackout Period. Notwithstanding anything in this Section 2 to the
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contrary, the Company will not be obligated to prepare, file and cause to become
effective pursuant to Section 2 a Registration Statement if the Company
furnishes the Holders with a resolution adopted by the majority of the Board of
Directors of the Company that in the good faith exercise of its reasonable
business judgment any registration of Registrable Securities (i) would
materially impede, delay or interfere with any material financing, acquisition,
corporate reorganization, merger or other significant transaction involving the
Company or any of its subsidiaries then being negotiated or (ii) would require
disclosure of non-public material information, the disclosure of which would
materially and adversely affect the Company. Any deferral pursuant to this
Section 2.4 may be for a period not to exceed 90 days, provided, however, the
Company may not exercise this deferral right more than once during any 12-month
period.
2.5 Restrictions on Public Sale by the Company. The Company agrees it will
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not effect any public sale or distribution (or any other type of sale as the
managing underwriter reasonably determines is necessary in order to effect the
Underwritten Offering) of its equity securities or any securities convertible
into or exchangeable or exercisable for its equity securities (except pursuant
to a registration statement on Form S-4 or S-8 or any successor form), during
the 10 days prior to, and during the 90 day period (or such additional period as
the managing underwriter reasonably determines is necessary in order to effect
the Underwritten Offering) beginning on, the effective date of the Registration
Statement for any Underwritten Offering.
2.6 Revocation of Demand Registration. The Holders of at least a majority
---------------------------------
of the Registrable Securities to be included in a Registration Statement
pursuant to Section 2.1 may, at any time prior to the effective date of the
Registration Statement relating to such registration, revoke their request to
have their Registrable Securities included therein by providing a written notice
to the Company. In the event of such a revocation, either (a) the Holders of
Registrable Securities who revoke their request must reimburse the Company for
the Company's out-of-pocket expenses incurred in the preparation, filing and
processing of the Registration Statement or (b) the requested registration that
has been revoked will be deemed to have been effected for purposes of Section
2.1; provided, however, if such revocation was based on (i) the Company's
failure to comply in any material respect with its obligations hereunder, (ii)
the closing of an Underwritten Offering is not consummated as a result of the
Company's material breach of its obligations under the related underwriting
agreement, (iii) the fact that the Holders have learned of a material adverse
change in the condition, business or prospects of the Company from that known to
the Holders at the time of the request for registration or (iv) the Company's
election to defer such registration pursuant to Section 2.4, such reimbursement
will not be required and the requested registration that has been revoked will
not be deemed to have been effected for purposes of Section 2.1.
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3. Piggyback Registration.
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3.1 Right to Piggyback. If at any time the Company proposes to file a
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registration statement under the Securities Act with respect to an offering of
any class of equity securities (other than a registration statement (i) on Form
S-4, Form S-8 or any successor form thereto or (ii) filed solely in connection
with an offering made solely to existing stockholders or employees of the
Company) (a "Piggyback Registration"), whether or not for its own account, then
the Company will give written notice (the "Piggyback Notice") of the proposed
Piggyback Registration to the Holders at least 45 days before the anticipated
filing date. Upon the written request of any Holder given within 15 days after
delivery of the Piggyback Notice, the Company agrees, subject to Section 3.2, to
cause all such Registrable Securities, the Holders of which have timely
requested registration thereof, to be included in the Piggyback Registration.
3.2 Priority on Piggyback Registrations.
-----------------------------------
(a) If the Piggyback Registration is an Underwritten Offering, the
Company will cause the managing underwriter of that proposed offering to permit
the Holders that have requested Registrable Securities to be included in the
Piggyback Registration to include all such Registrable Securities on the same
terms and conditions as any similar securities, if any, of the Company.
Notwithstanding the foregoing, if the managing underwriter of the Underwritten
Offering advises the Company and the selling Holder or Holders that the total
amount of securities that the Company, the selling Holders and any other Persons
having rights to participate in the Piggyback Registration ("Other Holders")
propose to include in that offering is such as to materially and adversely
affect the success of such Underwritten Offering, then:
(i) If the Piggyback Registration is a primary registration by
the Company for its own account, the Company will include in the Piggyback
Registration: (A) first, all securities to be offered by the Company; (B)
second, up to the full amount of securities requested to be included in the
Piggyback Registration by the selling Holders; and (C) third, up to the
full amount of securities requested to be included in the Piggyback
Registration by any Other Holders. If, after allocating securities to be
offered by the Company, any securities remain, such amount will be
allocated among the Holders, subject to any written agreement among the
selling Holders, pro rata on the basis of the amount of securities
requested to be included therein by each selling Holder. If, after
allocating securities to be offered by the Company and the selling Holders,
any securities remain, such amount will be allocated among the Other
Holders, subject to any other agreement among such Other Holders, pro rata
on the basis of the amount of securities requested to be included therein
by each Other Holder. The securities to be sold in any Underwritten
Offering pursuant to this Section 3 will be allocated so the total amount
of securities to be included in the Underwritten Offering is the full
amount that, in the opinion of the managing underwriter, can be sold
without materially and adversely affecting the success of the Underwritten
Offering.
(ii) If the Piggyback Registration is an underwritten secondary
registration for the account of holders of securities of the Company, the
Company will include in that registration: (A) first, all securities of the
Persons exercising "demand" registration rights requested to be included
therein (including without limitation the Person who demands registration
and any Persons who are entitled to participate in the
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Piggyback Registration pursuant to the same agreement as the Person
demanding the registration); (B) second, up to the full amount of
securities requested to be included in the Piggyback Registration by the
Holders; and (C) third, up to the full amount of securities requested to be
included in the Piggyback Registration by any Other Holders. If, after
allocating securities to be offered to the Persons exercising "demand"
registration rights, any securities remain, such amount will be allocated
among the Holders, subject to any written agreement among the selling
Holders, pro rata on the basis of the amount of securities requested to be
included therein by each selling Holder. If, after allocating securities to
be offered by the Persons exercising "demand" registration rights and the
selling Holders, any securities remain, such amount will be allocated among
the Other Holders, subject to any other agreement among such Other Holders,
pro rata on the basis of the amount of securities requested to be included
therein by each Other Holder. The securities to be sold in any Underwritten
Offering pursuant to this Section 3 will be allocated so the total amount
of securities to be included in the Underwritten Offering is the full
amount that, in the opinion of the managing underwriter, can be sold
without materially and adversely affecting the success of the Underwritten
Offering.
(b) The Registrable Securities which are excluded from the
Underwritten Offering pursuant to Section 3 by reason of the underwriter's
marketing limitation and all other Registrable Securities not originally
requested to be so included will not be included in that Underwritten Offering
and, if so requested (pursuant to a timely written notice) by the managing
underwriter in any Underwritten Offering by the Company for its own account, the
Holders thereof agree not to effect any public sale or distribution (or any
other type of sale as the managing underwriter reasonably determines is
necessary in order to effect the Underwritten Offering) of any such Registrable
Securities, including a sale pursuant to Rule 144, during the 10 days prior to,
and during the 90 day period (or such additional period as the managing
underwriter reasonably determines is necessary in order to effect the
Underwritten Offering) beginning on, the effective date of the Registration
Statement for the Underwritten Offering.
3.3 Withdrawal of Piggyback Registration.
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(a) If at any time after giving the Piggyback Notice and prior to the
effective date of the Registration Statement filed in connection with the
Piggyback Registration, the Company determines for any reason not to register or
to delay the Piggyback Registration, the Company may, at its election, give
written notice of its determination to all Holders of Registrable Securities,
and (i) in the case of a determination not to register, will be relieved of its
obligation to register any Registrable Securities in connection with the
abandoned Piggyback Registration, without prejudice, and (ii) in the case of a
determination to delay the Piggyback Registration, will be permitted to delay
the registration for a period not exceed 180 days.
(b) Any Holder of Registrable Securities requesting to be included in
a Piggyback Registration may withdraw its request for inclusion by giving
written notice to the Company of its intention to withdraw from that
registration, provided, however, (i) the Holder's request must be made in
writing prior to execution of the underwriting agreement (or other similar
agreement) with respect to that registration or if the registration is not
underwritten, at least three Business days prior to the filing of the
Registration Statement covering the Piggyback Registration, and (ii) the
withdrawal will be irrevocable and, after making the withdrawal, a
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Holder will no longer have any right to include its Registrable Securities in
that Piggyback Registration.
4. Shelf Registration.
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In addition to the demand rights of the Holders of Registrable Securities
pursuant to Section 2, on or after the date that is 60 days after the Effective
Date, any Holder or Holders of at least 25% of the Registrable Securities may
make a written request that a Registration Statement covering the resale of
Registrable Securities by the requesting Holders on a continuous basis pursuant
to Rule 415 of the Securities Act (a "Shelf Registration Statement") on Form S-1
or Form S-3 (if eligible) be effected by the Company, provided, however, in the
case of a registration on Form S-1, the Registrable Securities to be included in
that Shelf Registration Statement must have a proposed aggregate offering price
of at least $15,000,000 (before deducting underwriting discounts and
commissions). Upon receipt of the Holders' written request, the Company will
promptly deliver written notice to all other Holders that such registration is
to be affected. The Company agrees to include in the Registration Statement only
those Registrable Securities for which it has received written requests to
register Registrable Securities by the Holder thereof within 15 days after
receipt of written notice of the Company. The Company will use its reasonable
best efforts to cause the Shelf Registration Statement (a) to be declared
effective under the Securities Act within 90 days after the date such Shelf
Registration Statement is initially filed with the SEC and (b) once effective,
to remain continuously effective for a period ending on the earlier of (i) the
first date on which there ceases to be any Registrable Securities or (ii) the
second anniversary of the date on which the SEC declares such Shelf Registration
Statement effective (subject to any extensions pursuant to this Agreement). The
Company will not register any securities other than the Registrable Securities
pursuant to the Shelf Registration Statement. The plan of distribution contained
in the Shelf Registration Statement shall permit Underwritten Offerings;
provided, however, that the Registrable Securities to be included in the Shelf
Registration Statement to be distributed through such Underwritten Offering must
have a proposed aggregate offering price of at least $15,000,000 (before
deducting underwriting discounts and commissions). Notwithstanding anything
contained in this Agreement to the contrary, the Company will not be obligated
to effect more than four Underwritten Offerings pursuant to Sections 2 and 4 of
this Agreement.
5. Restrictions On Sale by Holders.
-------------------------------
Each Holder whose Registrable Securities are covered by a Registration
Statement filed pursuant to Section 2, 3 or 4 hereof agrees, if such Holder is
so requested (pursuant to a timely written notice) by the managing underwriter
in any Underwritten Offering by the Company for its own account, not to effect
any public sale or distribution (or any other type of sale as the managing
underwriter reasonably determines is necessary in order to effect the
Underwritten Offering) of any Registrable Securities (except as part of the
Underwritten Offering in accordance with Section 3), including a sale pursuant
to Rule 144, during the 10 days prior to, and the 90 day period (or such
additional period as the managing underwriter reasonably determines is necessary
in order to effect the Underwritten Offering) commencing on, the effective date
of the registration statement relating to such Underwritten Offering. If such a
request is made, the Company may impose, during that period, appropriate
stop-transfer instructions with respect to the Registrable Securities subject to
the restrictions. If such a request is made when the Shelf Registration
Statement is effective, the time period during which the
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Shelf Registration Statement is required to remain continuously effective
pursuant to Section 4 will be extended by 100 days or such shorter period that
will terminate when all Registrable Securities covered by the Shelf Registration
Statement have been sold pursuant to the Shelf Registration Statement.
6. Registration Procedures.
-----------------------
In connection with the Company's registration obligations pursuant to this
Agreement, the Company will use its reasonable best efforts to effect the
registrations to permit the sale of Registrable Securities by a Holder in
accordance with the intended method or methods of disposition thereof, and
pursuant thereto the Company will as promptly as reasonably practicable:
(a) prepare and file with the SEC a Registration Statement on an
appropriate form under the Securities Act available for the sale of the
Registrable Securities by the selling Holders in accordance with the intended
method or methods of distribution thereof; provided, however, the Company will,
before filing, furnish to each selling Holder and the managing underwriter, if
any, copies of the Registration Statement or Prospectus proposed to be filed,
which documents will be subject to the review of the selling Holders and the
managing underwriter, and the Company will not file any Registration Statement
or Prospectus to which the selling Holders or the managing underwriter may
reasonably object to on a timely basis;
(b) prepare and file with the SEC any amendments and post-effective
amendments to the Registration Statement as may be necessary and any supplements
to the Prospectus as may be reasonably requested by the managing underwriter or
as may be required, in the opinion of the Company and its counsel, by the rules,
regulations or instructions applicable to the registration form used by the
Company or by the Securities Act or rules and regulations thereunder to keep the
Registration Statement effective until all Registrable Securities covered by the
Registration Statement are sold in accordance with the intended plan of
distribution set forth in the Registration Statement or supplement to the
Prospectus; provided, however, the Company will, before filing, furnish to each
selling Holder and the managing underwriter, if any, copies of the amendments,
post-effective amendments or supplements proposed to be filed, which documents
will be subject to the review of the selling Holders and the managing
underwriter, and the Company will not file any amendment, post-effective
amendment or supplement to which the selling Holders of the managing underwriter
may reasonably object to on a timely basis;
(c) promptly following its actual knowledge thereof, verbally notify
the selling Holders and the managing underwriter, if any (with subsequent
written confirmation),
(i) when a Prospectus or any Prospectus supplement or amendment
has been filed and, with respect to a Registration Statement or any
post-effective amendment, when the Registration Statement has become
effective,
(ii) of any request by the SEC or any other governmental
authority for amendments or supplements to a Registration Statement or
related Prospectus or for additional information,
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(iii) of the issuance by the SEC or any other governmental
authority of any stop order suspending the effectiveness of a Registration
Statement or the initiation of any proceedings for that purpose,
(iv) of the receipt by the Company of any written notification
with respect to the suspension of the qualification or exemption from
qualification of any of the Registrable Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose,
(v) of the occurrence of any event which makes any statement
made in the Registration Statement or Prospectus untrue in any material
respect or which requires the making of any changes in a Registration
Statement or Prospectus or other documents so that it will not contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading, and
(vi) of the Company's reasonable determination that a
post-effective amendment to a Registration Statement would be appropriate;
(d) use its reasonable best efforts to obtain the withdrawal of any
order suspending the effectiveness of a Registration Statement, or the lifting
of any suspension of the qualification or exemption from qualification of any of
the Registrable Securities for sale in any jurisdiction, at the earliest
practicable date;
(e) furnish to each selling Holder and the managing underwriter, if
any, at least one conformed copy of the Registration Statement and any
post-effective amendment thereto, including financial statements (but excluding
all schedules, all documents incorporated or deemed incorporated therein by
reference and all exhibits);
(f) deliver to each selling Holder and the managing underwriter, if
any, without charge, as many copies of the Prospectus (including each
preliminary Prospectus) and any amendment or supplement thereto as such Persons
may reasonably request;
(g) prior to any public offering of Registrable Securities, register
or qualify or cooperate with the selling Holders, the managing underwriter, if
any, and their respective counsel in connection with the registration or
qualification (or exemption from such registration or qualification) of such
Registrable Securities for offer and sale under the securities or blue sky laws
of such jurisdictions within the United States as the selling Holders or the
managing underwriter reasonably request in writing and maintain each
registration or qualification (or exemption therefrom) effective during the
period such Registration Statement is required to be kept effective; provided,
however, the Company will not be required to qualify generally to do business in
any jurisdiction in which it is not then so qualified or take any action which
would subject it to general service of process or taxation in any jurisdiction
in which it is not then so subject.
(h) cooperate with the selling Holders and the managing underwriter,
if any, to facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold and cause such certificates to be
in denominations and registered in the names as the
10
managing underwriter may request at least three Business Days prior to any sale
of Registrable Securities to the managing underwriter;
(i) as promptly as practicable upon the occurrence of any event
contemplated by Section 6(c)(v) or 6(c)(vi) hereof, prepare a supplement or
post-effective amendment to each Registration Statement or a supplement to the
related Prospectus, or file any other required document so that, as thereafter
delivered to the purchasers of the Registrable Securities being sold thereunder,
such Prospectus will not contain an untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein not misleading;
(j) use its reasonable best efforts to cause all Registrable
Securities covered by the Registration Statement to be listed on a national
securities exchange on which similar securities of the Company are listed or
authorized to be quoted on Nasdaq, to the extent eligible to be so listed or
quoted, if requested by the managing underwriter;
(k) enter into customary and reasonable agreements (including an
underwriting agreement) and take all other actions reasonably necessary or
desirable to expedite or facilitate the disposition of the Registrable
Securities, and in connection therewith, whether or not an underwriting
agreement is entered into and whether or not the registration is an Underwritten
Offering,
(i) make representations and warranties to the selling Holders
and the managing underwriter, if any, in form, substance and scope as are
customarily made by issuers to holders and underwriters in Underwritten
Offerings,
(ii) use its reasonable best efforts to obtain opinions of
counsel to the Company and updates thereof (which counsel and opinions (in
form, scope and substance) are reasonably satisfactory to the managing
underwriter, if any, and each selling Holder) addressed to each selling
Holder and the managing underwriter covering the matters customarily
covered in opinions requested in Underwritten Offerings and such other
matters as may be reasonably requested by any selling Holder or
underwriter,
(iii) use its reasonable best efforts to obtain "comfort" letters
and updates thereof from the independent certified public accountants of
the Company addressed to the selling Holders and the managing underwriter
covering the matters customarily covered in "comfort" letters in connection
with Underwritten Offerings, and
(iv) if an underwriting agreement is entered into, cause the
underwriting agreement to include indemnification and contribution
provisions and procedures with respect to the underwriters;
(l) upon reasonable notice and at reasonable times during normal
business hours, make available for inspection by a representative of each
selling Holder, any underwriter participating in any disposition of Registrable
Securities and any attorney or accountant retained by any selling Holder or
underwriter, all financial and other records, pertinent corporate documents and
properties of the Company, and cause the officers, directors and employees of
the Company to supply all information reasonably requested by any such
representative, underwriter, attorney or accountant in connection with the
Registration Statement; provided,
11
however, any records, information or documents that are designated by the
Company in writing as confidential at the time of delivery of such records,
information or documents will be kept confidential by all such Persons; and
(m) use its reasonable best efforts to comply with all applicable
rules and regulations of the SEC relating to such registration and make
generally available to its security holders earning statements satisfying the
provisions of Section 11(a) of the Securities Act, provided that the Company
shall be deemed to have complied with this Section 6(m) if it has satisfied the
provisions of Rule 158 under the Securities Act (or any similar rule promulgated
under the Securities Act).
7. Suspension of Disposition.
----------------------------
7.1 Suspensions Generally. Each selling Holder will be deemed to have
---------------------
agreed that, upon receipt of any notice from the Company of the occurrence of
any event of the kind described in Section 6(c)(ii), 6(c)(iii), 6(c)(iv),
6(c)(v) or 6(c)(vi), each selling Holder will discontinue disposition of
Registrable Securities covered by a Registration Statement or Prospectus until
the Holder receives copies of the supplemented or amended Prospectus
contemplated by Section 6(i) or until it is advised in writing (the "Advice") by
the Company that the use of the applicable Prospectus may be resumed and has
received copies of any additional or supplemental filings that are incorporated
or deemed to be incorporated by reference in such Prospectus. In the event the
Company gives any such notice, the period of time for which a Registration
Statement must remain effective as set forth in Sections 2.1 and 4, as
applicable, will be extended by the number of days during the time period from
and including the date of the giving of such notice to and including the date
when each seller of Registrable Securities covered by such Registration
Statement shall have received (i) copies of the supplemented or amended
Prospectus contemplated by Section 6.1(j) or (ii) the Advice.
7.2 Suspensions During Material Events. Each selling Holder will be deemed
----------------------------------
to have agreed that, upon receipt of any notice from the Company that the
Company or any of its subsidiaries is involved in any financing, acquisition,
corporate reorganization or other significant transaction, disclosure of which
would be required in the Registration Statement and the board of directors of
the Company has determined in the good faith exercise of its reasonable business
judgment that disclosure would adversely affect the financing, acquisition,
corporate reorganization or other significant transaction, each selling Holder
will discontinue disposition of Registrable Securities covered by a Registration
Statement or Prospectus until the earlier to occur of (i) the Holder receives
copies of a supplemented or amended Prospectus describing the financing,
acquisition, corporate reorganization or other significant transaction or (ii)
the transaction is terminated; provided, however, the period during which the
offer and sale of Registrable Securities is discontinued shall not exceed 90
days during any 12-month period. In the event the Company gives any such notice,
the period of time for which a Registration Statement must remain effective as
set forth in Sections 2.1 or 4, as applicable, will be extended by the number of
days during the time period from and including the date of giving of such notice
to and including the date when each seller of Registrable Securities covered by
such Registration Statement receives (i) a supplemented or amended Prospectus
describing the financing, acquisition, corporate reorganization or other
significant transaction or (ii) notice from the Company that the financing,
acquisition, corporate reorganization or other significant transaction has been
terminated.
12
8. Registration Expenses.
----------------------
Subject to Section 2.5, all fees and expenses incurred by the Company in
complying with Sections 2, 3, 4 and 6 ("Registration Expenses") will be borne by
the Company. These fees and expenses will include without limitation (a) all
registration and filing fees (including without limitation fees and expenses (i)
with respect to filings required to be made with the National Association of
Securities Dealers, Inc. and (ii) of compliance with securities or blue sky laws
(including without limitation, reasonable fees and disbursements of counsel for
the underwriters and selling Holders in connection with blue sky qualifications
of the Registrable Securities and determination of the eligibility of the
Registrable Securities for investment under the laws of such jurisdictions as
the managing underwriter, if any, or the selling Holders may designate)), (b)
printing expenses (including without limitation, the expenses of printing
certificates for securities in a form eligible for deposit with The Depository
Trust Company and of printing Prospectuses), (c) messenger, telephone and
delivery expenses, (d) fees and disbursements of counsel for the Company, (e)
reasonable fees and disbursements (not to exceed $15,000) of one counsel for all
selling Holders collectively (which counsel will be selected by the Holders
holding a majority of the securities sought to be included in the Registration
Statement), (f) fees and disbursements of all independent certified public
accountants referred to in Section 6(k)(iii) (including the expenses of any
special audit and "comfort" letters required by or incident to such
performance), (g) reasonable fees and expenses of any "qualified independent
underwriter" or other independent appraiser participating in an offering
pursuant to Section 2720(c) of the Conduct Rules of the National Association of
Securities Dealers, Inc., and (h) fees and expenses of all other Persons
retained by the Company. In addition, the Company will pay its internal expenses
(including without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expense of any annual
audit and the fees and expenses incurred in connection with the listing of the
securities to be registered on a national securities exchange or quoted on
Nasdaq. Notwithstanding anything to the contrary herein contained, all
underwriting fees, discounts, selling commissions and stock transfer taxes
applicable to the sale of Registrable Securities will be borne by the Holder
owning such Registrable Securities. Notwithstanding anything to the contrary
herein contained, each selling Holder may have its own separate counsel in
connection with the registration of any of its Registrable Securities, which
counsel may participate therein to the full extent provided herein; provided,
however, that all fees and expenses of such separate counsel will be paid for by
such selling Holder.
9. Information from Stockholder.
----------------------------
The Company may require each selling Holder that has requested inclusion of
its Registrable Securities in any Registration Statement to furnish to the
Company any information regarding the Holder and its plan and method of
distribution of its Registrable Securities as the Company may, from time to
time, reasonably request in writing. The Company may refuse to proceed with the
registration of any selling Holder's Registrable Securities if the selling
Holder fails to furnish the requested information within a reasonable time after
receiving such request. Each selling Holder will as expeditiously as possible
(a) notify the Company of the occurrence of any event that makes any statement
made in a Registration Statement or Prospectus regarding the selling Holder
untrue in any material respect or that requires the making of any changes in a
Registration Statement or Prospectus so that, in such regard, it will not
contain any untrue statement of a material fact or omit any material fact
required to be stated therein or necessary to
13
make the statements not misleading and (b) provide the Company with any
information as may be required to enable the Company to prepare a supplement or
post-effective amendment to any Registration Statement or a supplement to any
Prospectus.
10. Indemnification.
---------------
10.1 Indemnification by the Company. The Company will indemnify and hold
------------------------------
harmless, to the fullest extent permitted by law, each Holder owning Registrable
Securities registered pursuant to this Agreement, its officers, directors,
trustees, agents and employees, each Person who controls such Holder (within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act)
and the officers, directors, trustees, agents and employees of any such
controlling Person, from and against all losses, claims, damages, liabilities,
costs (including without limitation, reasonable attorneys' fees and
disbursements) and expenses (collectively, "Losses"), arising out of or based
upon any untrue or alleged untrue statement of a material fact contained or
incorporated by reference in any Registration Statement, Prospectus or
preliminary prospectus, or arising out of or based upon any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as the
same are based solely upon information furnished in writing to the Company by or
on behalf of such Holder expressly for use therein; provided, however, the
Company will not be liable to any Holder to the extent that any Losses arise out
of or are based upon an untrue statement or alleged untrue statement or omission
or alleged omission made in any preliminary prospectus if either (a) (i) such
Holder failed to send or deliver a copy of the Prospectus with or prior to the
delivery of written confirmation of the sale by such Holder of a Registrable
Security to the Person asserting the claim from which such Losses arise and (ii)
the Prospectus would have completely corrected such untrue statement or alleged
untrue statement or such omission or alleged omission or (b) the untrue
statement or alleged untrue statement or omission or alleged omission is
completely corrected in an amendment or supplement to the Prospectus previously
furnished by or on behalf of the Company, the Holder was furnished with copies
of the Prospectus as so amended or supplemented, and the Holder thereafter
failed to deliver such Prospectus as so amended or supplemented prior to or
concurrently with the sale of a Registrable Security to the Person asserting the
claim from which such Losses arise.
10.2 Indemnification by Holders. In connection with any Registration
--------------------------
Statement in which a Holder of Registrable Securities is participating, each
participating Holder (severally and not jointly) will indemnify and hold
harmless, to the fullest extent permitted by law, the Company, its officers,
directors, agents and employees, each Person who controls the Company (within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act), and the directors, officers, agents and employees of any such controlling
Person, from and against all Losses, as incurred, arising out of or based upon
any untrue or alleged untrue statement of a material fact contained or
incorporated by reference in any Registration Statement, Prospectus or
preliminary prospectus, or arising out of or based upon any omission or alleged
omission of a material fact required to be stated therein or necessary to make
the statements therein not misleading, to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with information so
furnished in writing by or on behalf of such Holder to the Company expressly for
use in such Registration Statement, Prospectus or preliminary prospectus. In no
event will the liability of any Holder hereunder be greater in amount than the
dollar amount of the proceeds
14
received by such Holder upon the sale of the Registrable Securities giving rise
to such indemnification obligation.
10.3 Conduct of Indemnification Proceedings. If any Person becomes entitled
--------------------------------------
to indemnity hereunder (an "Indemnified Party"), such Indemnified Party will
give prompt notice to the party from which indemnity is sought (the
"Indemnifying Party") of any claim or of the commencement of any action or
proceeding with respect to which the Indemnified Party seeks indemnification or
contribution pursuant hereto; provided, however, that the failure to so notify
the Indemnifying Party will not relieve the Indemnifying Party from any
obligation or liability except to the extent that the Indemnifying Party has
been prejudiced materially by such failure. If an action or proceeding is
brought against the Indemnified Party, the Indemnifying Party will be entitled
to participate therein and, to the extent it may elect by written notice
delivered to the Indemnified Party promptly after receiving the notice referred
to in the immediately preceding sentence, to assume the defense thereof with
counsel reasonably satisfactory to the Indemnified Party. Notwithstanding the
foregoing, the Indemnified Party will have the right to employ its own counsel
in any such case, but the fees and expenses of that counsel will be at the
expense of the Indemnified Party unless (i) the employment of the counsel has
been authorized in writing by the Indemnifying Party, (ii) the Indemnifying
Party has not employed counsel (reasonably satisfactory to the Indemnified
Party) to take charge of such action or proceeding within a reasonable time
after notice of commencement thereof, or (iii) the Indemnified Party reasonably
concludes that there may be defenses or actions available to it which are
different from or in addition to those available to the Indemnifying Party
which, if the Indemnifying Party and the Indemnified Party were to be
represented by the same counsel, could result in a conflict of interest for such
counsel or materially prejudice the prosecution of defenses or actions available
to the Indemnified Party. If any of the events specified in clause (i), (ii) or
(iii) of the immediately preceding sentence are applicable, then the reasonable
fees and expenses of separate counsel for the Indemnified Party shall be borne
by the Indemnifying Party; provided, however, in no event will the Indemnifying
Party be liable for the fees and expenses of more than one separate firm for all
Indemnified Parties. If, in any case, the Indemnified Party employs separate
counsel, the Indemnifying Party will not have the right to direct the defense of
the action or proceeding on behalf of the Indemnified Party. All fees and
expenses required to be paid to the Indemnified Party pursuant to this Section
10.3 will be paid periodically during the course of the investigation or
defense, as and when reasonably itemized bills therefor are delivered to the
Indemnifying Party in respect of any particular Loss that is incurred.
Notwithstanding anything to the contrary contained in this Section 10.3, an
Indemnifying Party will not be liable for the settlement of any action or
proceeding effected without its prior written consent. The Indemnifying Party
will not, without the prior written consent of the Indemnified Party, consent to
entry of any judgment or enter into any settlement or otherwise seek to
terminate any action or proceeding in which any Indemnified Party is or could be
a party and as to which indemnification or contribution could be sought by such
Indemnified Party under this Section 10, unless such judgment, settlement or
other termination provides solely for the payment of money and includes as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect of such claim or
litigation for which such Indemnified Party would be entitled to indemnification
hereunder.
15
10.4 Contribution.
------------
(a) If the indemnification provided for in this Section 10 is unavailable
to an Indemnified Party under Section 10.1 or 10.2 in respect of any Losses or
is insufficient to hold the Indemnified Party harmless, then each applicable
Indemnifying Party (severally and not jointly), in lieu of indemnifying the
Indemnified Party, will contribute to the amount paid or payable by the
Indemnified Party as a result of the Losses, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party or
Indemnifying Parties, on the one hand, and the Indemnified Party, on the other
hand, in connection with the actions, statements or omissions that resulted in
the Losses as well as any other relevant equitable considerations. The relative
fault of the Indemnifying Party or Indemnifying Parties, on the one hand, and
the Indemnified Party, on the other hand, will be determined by reference to,
among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission of a
material fact, has been taken or made by, or related to information supplied by,
the Indemnifying Party or Indemnifying Parties or the Indemnified Party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such action, statement or omission. The amount paid or
payable by a party as a result of any Losses will be deemed to include any legal
or other fees or expenses incurred by such party in connection with any action
or proceeding.
(b) The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 10.4 were determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding anything contained in this Section 10.4 to the contrary, an
Indemnifying Party that is a selling Holder will not be required to contribute
any amount in excess of the amount by which the total price at which the
Registrable Securities were sold by such selling Holder to the public exceeds
the amount of any damages which such selling Holder has otherwise been required
to pay by reason of such untrue or alleged untrue statement or omission or
alleged omission. No Person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) will be entitled to contribution
from any Person who was not guilty of such fraudulent misrepresentation.
11. Rule 144.
--------
The Company will file all reports required to be filed by it under the
Securities Act and the Exchange Act, and will cooperate with any Holder to the
extent required from time to time to enable such Holder to sell its Registrable
Securities without registration under the Securities Act within the limitations
of the exemptions provided by Rule 144 (or any successor provision). Upon the
request of any Holder, the Company will deliver to such Holder a written
statement as to whether it has complied with such filing requirements.
Notwithstanding the foregoing, nothing in this Section 11 will require the
Company to register any securities or file any reports, under the Exchange Act
if such registration or filing is not required under the Exchange Act.
12. Requirements for Participation in Underwritten Offerings.
--------------------------------------------------------
No Person may participate in any Underwritten Offering pursuant to a
registration hereunder unless that Person (a) agrees to sell its securities on
the basis provided in any underwriting arrangements approved by the Persons
entitled hereunder to approve such
16
arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements.
13. Transferability of Registration Rights.
--------------------------------------
Each Holder of Registrable Securities will have the right to assign the
registration rights set forth in this Agreement only to a Permitted Transferee,
but only if the transferee consents in writing to be bound by the terms and
conditions of this Agreement.
14. Future Registration Rights.
--------------------------
Other than with respect to Permitted Transferees, the Company will not,
without the prior written consent of the Holders of a majority of the
Registrable Securities then outstanding, (a) permit purchasers of the Company's
equity securities to become a party to this Agreement or (b) grant any other
registration rights to any third parties other than "piggyback" registration
rights that are subordinate to the "piggyback" registration rights granted to
the Holders hereunder in a manner consistent with the provisions of Section 3.2
of this Agreement.
15. Miscellaneous.
-------------
15.1 Notices. All notices, requests, claims, demands and other
-------
communications hereunder will be in writing and will be given or made by
delivery in person, by overnight courier, by facsimile transmission or by
registered or certified mail (postage prepaid, return receipt requested) to the
respective parties at the following addresses (or at such other address for a
party as shall be specified in a notice given in accordance with this Section
15.1):
(a) If to the Company:
Pillowtex Corporation
One Lake Circle Drive
Kannapolis, North Carolina
Facsimile: (704) 939-4623
Attention: General Counsel
If to a Holder, to the then-current address thereof contained in
the stock records of the Company.
All such notices and communications will be deemed to have been delivered or
given upon receipt, if delivered personally or by overnight courier, when
receipt is acknowledged, if sent by facsimile transmission and three Business
Days after being deposited in the mail, if mailed.
15.2 Confidentiality. Each Holder will, and will cause its respective
---------------
officers, directors, employees, legal counsel, accountants, financial advisors
and other representatives to, hold in confidence any material nonpublic
information received by them pursuant to this Agreement, including without
limitation, any material nonpublic information included in any Registration
Statement or Prospectus proposed to be filed with the SEC. This Section 15.2
shall not apply to any information which (a) is or becomes generally available
to the public, (b) was already in the Holder's possession from a
non-confidential source prior to its disclosure by the Company and
17
(c) is or becomes available to the Holder on a non-confidential basis from a
source other than the Company; provided, however, that such source is not known
by the Holder to be bound by confidentiality obligations.
15.3 No Third-Party Beneficiaries. Except as expressly set forth herein,
----------------------------
this Agreement will be binding upon and inure solely to the benefit of the
parties hereto and their respective successors and permitted assigns and nothing
herein, express or implied, is intended to or shall confer upon any other Person
any legal or equitable right, benefit or remedy of any nature whatsoever under
or by reason of this Agreement.
15.4 Entire Agreement. This Agreement constitutes the entire agreement of
----------------
the parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and undertakings, both written and oral, among the parties with
respect to the subject matter hereof.
15.5 Amendment and Waiver. This Agreement may not be amended or modified or
--------------------
any provision hereof waived except by an instrument in writing signed by the
Company and Holders of at least a majority of the then outstanding Registrable
Securities. Notwithstanding anything contained herein to the contrary, a waiver
that does not adversely affect all of the parties hereto may be executed by only
the adversely affected party or parties.
15.6 Counterparts. This Agreement may be executed by facsimile signature
------------
and in any number of counterparts, each such counterpart to be deemed an
original and all such counterparts, taken together, to constitute one
instrument.
15.7 Severability. If any term or other provision of this Agreement is
------------
invalid, illegal or unenforceable under any law or public policy, all other
terms and provisions of this Agreement will nevertheless remain in full force
and effect. Upon a determination that any term or other provision is invalid,
illegal or unenforceable, the parties hereto will endeavor in good faith to
replace the invalid, illegal or unenforceable provisions with valid, legal and
enforceable provisions the economic effect of which comes as close as possible
to that of the invalid, illegal or unenforceable provisions.
15.8 Governing Law. This Agreement will be governed by, and construed in
-------------
accordance with, the laws of the State of Delaware, without giving effect to the
principles of conflict of laws thereof.
15.9 Specific Performance. The parties hereto agree that irreparable damage
--------------------
would occur in the event any provision of this Agreement was not performed in
accordance with the terms hereof and that the parties will be entitled to
specify performance of the terms hereof, in addition to any other remedy at law
or equity.
15.10 Further Assurances. The parties hereto will do such further acts and
------------------
things necessary to ensure that the terms of this Agreement are carried out and
observed.
18
IN WITNESS WHEREOF, each of the parties has executed this Agreement as of
the date first written above.
THE COMPANY:
-----------
PILLOWTEX CORPORATION
By: /s/ JOHN F. STERLING
-----------------------------------------
John F. Sterling, Vice President
STOCKHOLDERS:
-------------
OCM ADMINISTRATIVE SERVICES II, L.L.C.
By: Oaktree Capital Management LLC,
its manager
By: /s/ KENNETH LIANG
-----------------------------------------
Name: Kenneth Liang
Title: Managing Director
By: /s/ MARIUSZ J. MAZUREK
-----------------------------------------
Name: Mariusz J. Mazurek
Title: Senior Vice President
19