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Registration Rights Agreement
Dated as of March 18, 1999
among
Fruit of the Loom, Inc.,
Fruit of the Loom, Ltd.,
the Guarantor Subsidiaries named herein
and
the
Initial Purchasers named herein
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REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made and entered
into this 18th day of March, 1999, among Fruit of the Loom, Inc., a Delaware
corporation (the "Company"), Fruit of the Loom, Ltd., a Cayman Islands company
("FTL-Cayman"), each of the principal domestic subsidiaries of the Company
listed as signatories hereto (the "Guarantor Subsidiaries") and Credit Suisse
First Boston Corporation, NationsBanc Montgomery Securities LLC and Scotia
Capital Markets (USA), Inc. (collectively, the "Initial Purchasers").
This Agreement is made pursuant to the Purchase Agreement, dated March 18,
1999, among the Company, FTL-Cayman, the Guarantor Subsidiaries and the Initial
Purchasers (the "Purchase Agreement"), which provides for, among other things,
the sale by the Company to the Initial Purchasers of an aggregate of $250
million aggregate principal amount of the Company's 8-7/8% Senior Notes due 2006
fully and unconditionally guaranteed by FTL-Cayman and the Guarantor
Subsidiaries (the "Securities"). In order to induce the Initial Purchasers to
enter into the Purchase Agreement, the Company, FTL-Cayman and the Guarantor
Subsidiaries have agreed to provide to the Initial Purchasers and their direct
and indirect transferees the registration rights set forth in this Agreement.
The execution of this Agreement is a condition to the closing under the Purchase
Agreement.
In consideration of the foregoing, the parties hereto agree as follows:
1. DEFINITIONS.
As used in this Agreement, the following capitalized defined terms shall
have the following meanings:
"1933 ACT" shall mean the Securities Act of 1933, as amended from time
to time.
"1934 ACT" shall mean the Securities Exchange Act of 1934, as amended
from time to time.
"CLOSING DATE" shall mean the Closing Time as defined in the Purchase
Agreement.
"COMPANY" shall have the meaning set forth in the preamble hereof and
shall also include the Company's successors.
"DEPOSITARY" shall mean The Depository Trust Company, or any other
depositary appointed by the Company; PROVIDED, HOWEVER, that such
depositary must
have an address in the Borough of Manhattan in the City of New York.
"EXCHANGE OFFER" shall mean the exchange offer by the Company,
FTL-Cayman and the Guarantor Subsidiaries of Exchange Securities for
Registrable Securities pursuant to Section 2.1 hereof.
"EXCHANGE OFFER REGISTRATION" shall mean a registration under the 1933
Act effected pursuant to Section 2.1 hereof.
"EXCHANGE OFFER REGISTRATION STATEMENT" shall mean an exchange offer
registration statement on Form S-4 (or, if applicable, on another
appropriate form), and all amendments and supplements to such registration
statement, in each case including the Prospectus contained therein, all
exhibits thereto and all documents incorporated by reference therein.
"EXCHANGE PERIOD" shall have the meaning set forth in Section 2.1
hereof.
"EXCHANGE SECURITIES" shall mean the 8-7/8% Senior Notes due 2006
issued by the Company and guaranteed by FTL-Cayman and the Guarantor
Subsidiaries under the Indenture containing terms identical to the
Securities in all material respects (except for references to certain
interest rate provisions, restrictions on transfers and restrictive
legends), to be offered to Holders of Securities in exchange for
Registrable Securities pursuant to the Exchange Offer.
"FTL-CAYMAN" shall have the meaning set forth in the preamble hereof.
"GUARANTOR SUBSIDIARIES" shall have the meaning set forth in the
preamble hereof.
"HOLDER" shall mean an Initial Purchaser, for so long as it owns any
Registrable Securities, and each of its successors, assigns and direct and
indirect transferees who become registered owners of Registrable Securities
under the Indenture.
"INDENTURE" shall mean the Indenture relating to the Securities, dated
as of March 25, 1999, among the Company, FTL-Cayman, each of the Guarantor
Subsidiaries and The Bank of New York, as trustee, as the same may be
amended, supplemented, waived or otherwise modified from time to time in
accordance with the terms thereof.
"INITIAL PURCHASER" or "INITIAL PURCHASERS" shall have the meaning set
forth in the preamble hereof.
"ISSUE DATE" shall mean the date on which the Securities are
originally issued
under the Indenture.
"MAJORITY HOLDERS" shall mean the Holders of a majority of the
aggregate principal amount of Registrable Securities outstanding under the
Indenture; PROVIDED, that whenever the consent or approval of Holders of a
specified percentage of Registrable Securities is required hereunder,
Registrable Securities held by the Company, FTL-Cayman or other obligors
on the Securities or any Affiliate (as defined in the Indenture) of the
Company shall be disregarded in determining whether such consent or
approval was given by the Holders of such required percentage amount.
"OFFERING CIRCULAR" shall mean the final Offering Circular dated March
18, 1999 related to the sale of the Securities.
"PARTICIPATING BROKER-DEALER" shall mean Credit Suisse First Boston
Corporation and NationsBanc Montgomery Securities, LLC, and any other
broker-dealer which makes a market in the Securities and exchanges
Registrable Securities in the Exchange Offer for Exchange Securities.
"PERSON" shall mean an individual, partnership (general or limited),
corporation, limited liability company, trust or unincorporated
organization, or a government or agency or political subdivision thereof.
"PROSPECTUS" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including any such
prospectus supplement with respect to the terms of the offering of any
portion of the Registrable Securities covered by a Shelf Registration
Statement, and by all other amendments and supplements to a prospectus,
including post-effective amendments, and in each case including all
material incorporated by reference therein.
"PURCHASE AGREEMENT" shall have the meaning set forth in the preamble
hereof.
"REGISTRABLE SECURITIES" shall mean the Securities; PROVIDED, HOWEVER,
that Securities shall cease to be Registrable Securities when (i) a
Registration Statement with respect to such Securities shall have been
declared effective under the 1933 Act and such Securities shall have been
disposed of pursuant to such Registration Statement, (ii) such Securities
have been sold to the public pursuant to Rule 144 (or any similar provision
then in force, but not Rule 144A) under the 1933 Act, (iii) such Securities
shall have ceased to be outstanding or (iv) the Securities have been
exchanged for Exchange Securities upon consummation of the Exchange Offer
and are thereafter freely tradeable by the holder thereof.
"REGISTRATION EXPENSES" shall mean any and all expenses incident to
performance of or compliance by the Company, FTL-Cayman or any of the
Guarantor Subsidiaries with this Agreement, including without limitation:
(i) all SEC, stock exchange or National Association of Securities Dealers,
Inc. (the "NASD") registration and filing fees, (ii) all fees and expenses
incurred in connection with compliance with state securities or blue sky
laws and compliance with the rules of the NASD (including reasonable fees
and disbursements of counsel for any underwriters or Holders in connection
with blue sky qualification of any of the Exchange Securities or
Registrable Securities and any filings with the NASD), (iii) all expenses
of any Persons in preparing or assisting in preparing, word processing,
printing and distributing any Registration Statement, any Prospectus, any
amendments or supplements thereto, any underwriting agreements, securities
sales agreements and other documents relating to the performance of and
compliance with this Agreement, (iv) all fees and expenses incurred in
connection with the listing, if any, of any of the Registrable Securities
on any securities exchange or exchanges, (v) all rating agency fees, (vi)
the fees and disbursements of counsel for the Company, FTL-Cayman and the
Guarantor Subsidiaries and of the independent public accountants of the
Company, including the expenses of any special audits or "cold comfort"
letters required by or incident to such performance and compliance, (vii)
the fees and expenses of the Trustee, and any escrow agent or custodian,
(viii) the reasonable fees and disbursements of Mayer, Brown & Platt,
special counsel representing the Holders of Registrable Securities in
connection with any Shelf Registration Statement and (ix) any fees and
disbursements of the underwriters customarily required to be paid by
issuers or sellers of securities and the reasonable fees and expenses of
any special experts retained by the Company or FTL-Cayman in connection
with any Registration Statement, but excluding underwriting discounts and
commissions and transfer taxes, if any, relating to the sale or disposition
of Registrable Securities by a Holder.
"REGISTRATION STATEMENT" shall mean any Exchange Offer Registration
Statement or Shelf Registration Statement which covers any of the Exchange
Securities or Registrable Securities pursuant to the provisions of this
Agreement, and all amendments and supplements to any such Registration
Statement, including post-effective amendments, in each case including the
Prospectus contained therein, all exhibits thereto and all material
incorporated by reference therein.
"SEC" shall mean the United States Securities and Exchange Commission
or any successor agency or government body performing the functions
currently performed by the United States Securities and Exchange
Commission.
"SECURITIES" shall have the meaning set forth in the preamble hereof.
"SHELF REGISTRATION" shall mean a registration effected pursuant to
Section 2.2
hereof.
"SHELF REGISTRATION STATEMENT" shall mean a shelf registration
statement of the Company and FTL-Cayman pursuant to the provisions of
Section 2.2 of this Agreement which covers Registrable Securities on an
appropriate form under Rule 415 under the 1933 Act, or any similar rule
that may be adopted by the SEC, and all amendments and supplements to such
registration statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"TRUSTEE" shall mean the trustee with respect to the Securities under
the Indenture.
2. REGISTRATION UNDER THE 1933 ACT.
2.1 EXCHANGE OFFER. The Company, FTL-Cayman and the Guarantor
Subsidiaries shall use their best efforts to (A) prepare and, as soon as
practicable but not later than 60 days following the Closing Date, file with the
SEC an Exchange Offer Registration Statement on an appropriate form under the
1933 Act with respect to a proposed Exchange Offer and the issuance and delivery
to the Holders, in exchange for the Registrable Securities, of a like principal
amount of Exchange Securities, (B) cause the Exchange Offer Registration
Statement to be declared effective under the 1933 Act within 120 days of the
Closing Date, (C) keep the Exchange Offer Registration Statement effective until
the closing of the Exchange Offer and (D) cause the Exchange Offer to be
consummated not later than 150 days following the Closing Date. The Exchange
Securities will be issued under the Indenture. Upon the effectiveness of the
Exchange Offer Registration Statement, the Company, FTL-Cayman and the Guarantor
Subsidiaries shall promptly commence the Exchange Offer, it being the objective
of such Exchange Offer to enable each Holder eligible and electing to exchange
Registrable Securities for Exchange Securities to transfer such Exchange
Securities from and after their receipt without any limitations or restrictions
under the 1933 Act and without material restrictions under the securities laws
of a substantial proportion of the several states of the United States.
In connection with the Exchange Offer, the Company, FTL-Cayman and the
Guarantor Subsidiaries shall:
(a) 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;
(b) use their best efforts to keep the Exchange Offer open for
acceptance for a period of not less than 30 calendar days after the date
notice thereof is mailed to the Holders (or longer if required by
applicable law) (such period referred to herein as the
"Exchange Period");
(c) utilize the services of the Depositary for the Exchange Offer;
(d) permit Holders to withdraw tendered Registrable Securities at any
time prior to 5:00 p.m. (Eastern Standard Time), on the last business day
of the Exchange Period, by sending to the institution specified in the
notice, a telegram, telex, facsimile transmission or letter setting forth
the name of such Holder, the principal amount of Registrable Securities
delivered for exchange, and a statement that such Holder is withdrawing his
election to have such Securities exchanged;
(e) notify each Holder that any Registrable Security not tendered
will remain outstanding and continue to accrue interest, but will not
retain any rights under this Agreement (except in the case of the Initial
Purchasers and Participating Broker-Dealers as provided herein); and
(f) otherwise comply in all respects with all applicable laws
relating to the Exchange Offer.
As soon as practicable after the close of the Exchange Offer, the Company
shall:
(i) accept for exchange all Registrable Securities duly tendered and
not validly withdrawn pursuant to the Exchange Offer in accordance with the
terms of the Exchange Offer Registration Statement and the letter of
transmittal which shall be an exhibit thereto;
(ii) deliver, or cause to be delivered, to the Trustee for
cancellation all Registrable Securities so accepted for exchange; and
(iii) cause the Trustee promptly to authenticate and deliver
Exchange Securities to each Holder of Registrable Securities so accepted
for exchange in a principal amount equal to the principal amount of the
Registrable Securities of such Holder so accepted for exchange.
Interest on each Exchange Security will accrue from the last date on which
interest was paid on the Registrable Securities surrendered in exchange therefor
or, if no interest has been paid on the Registrable Securities, from the Issue
Date. The Exchange Offer shall not be subject to any conditions, other than (i)
that the Exchange Offer, or the making of any exchange by a Holder, does not
violate applicable law or any applicable interpretation of the staff of the SEC,
(ii) the due tendering of Registrable Securities in accordance with the Exchange
Offer, and (iii) that each Holder of Registrable Securities exchanged in the
Exchange Offer shall have made certain customary representations, including
representations (i) that such
Holder is not an affiliate of the Company, FTL-Cayman or any Guarantor
Subsidiary within the meaning of Rule 405 under the 1933 Act, (ii) that such
Holder is not a broker-dealer tendering Registrable Securities acquired
directly from the Company for its own account (unless it agrees to deliver a
prospectus meeting the requirements of the 1933 Act in connection with any
resale of Exchange Securities), (iii) that all Exchange Securities to be
received by it shall be acquired in the ordinary course of its business and
that at the time of the consummation of the Exchange Offer it shall have no
arrangement or understanding with any person to participate in the
distribution (within the meaning of the 1933 Act) of the Exchange Securities,
and (iv) any such other representations as may be reasonably necessary under
applicable SEC rules, regulations or interpretations to render the use of
Form S-4 or other appropriate form under the 1933 Act available. To the
extent permitted by law, the Company shall inform the Initial Purchasers of
the names and addresses of the Holders to whom the Exchange Offer is made,
and the Initial Purchasers shall have the right to contact such Holders and
otherwise facilitate the tender of Registrable Securities in the Exchange
Offer.
2.2 SHELF REGISTRATION. In the event that (i) any changes in law, SEC
rules or regulations or applicable interpretations thereof by the staff of the
SEC do not permit the Company, FTL-Cayman and the Guarantor Subsidiaries to
effect the Exchange Offer as contemplated by Section 2.1 hereof, (ii) if for any
other reason the Exchange Offer Registration Statement is not declared effective
within 120 days following the original issue of the Registrable Securities or
the Exchange Offer is not consummated within 150 days after the original issue
of the Registrable Securities, (iii) upon the request of any Initial Purchaser
with respect to any Registrable Securities which it acquired directly from the
Company and, with respect to other Registrable Securities held by it, if such
Initial Purchaser is not permitted, in the opinion of counsel to such Initial
Purchaser, pursuant to applicable law or applicable interpretations of the Staff
of the SEC, to participate in the Exchange Offer and thereby receive securities
that are freely tradeable without restriction under the 1933 Act and applicable
blue sky or state securities laws or (iv) if a Holder is not permitted by
applicable law to participate in the Exchange Offer based upon written advice of
counsel to the effect that such Holder may not be legally able to participate in
the Exchange Offer or does not receive Exchange Securities pursuant to the
Exchange Offer which are fully tradeable by the Holder without restriction under
the 1933 Act and under applicable blue sky or state securities laws, then in
case of each of clauses (i) through (iv) the Company, FTL-Cayman and the
Guarantor Subsidiaries shall, at the Company's cost:
(a) As promptly as practicable, file with the SEC, and thereafter
shall use their best efforts to cause to be declared effective as promptly
as practicable but no later than 150 days after the Issue Date (or, in the
case of a request by any Initial Purchaser made later than 60 days after
the Issue Date, within 90 days of such request), a Shelf Registration
Statement relating to the offer and sale of the Registrable Securities by
the Holders from time to time in accordance with the methods of
distribution elected by the Majority Holders participating in the Shelf
Registration and set forth in such Shelf
Registration Statement.
(b) Subject to Section 2.4(b), use their best efforts to keep the
Shelf Registration Statement continuously effective in order to permit the
Prospectus forming part thereof to be usable by Holders for a period of two
years from the date the Shelf Registration Statement is declared effective
by the SEC, or for such shorter period that will terminate when all
Registrable Securities covered by the Shelf Registration Statement have
been sold pursuant to the Shelf Registration Statement or cease to be
outstanding or otherwise to be Registrable Securities.
(c) Notwithstanding any other provisions hereof, use their best
efforts to ensure that (i) any Shelf Registration Statement and any
amendment thereto and any Prospectus forming a part thereof and any
supplement thereto complies in all material respects with the 1933 Act and
the rules and regulations thereunder, (ii) any Shelf Registration Statement
and any amendment thereto does not, when it becomes effective, contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading and (iii) any Prospectus forming part of any Shelf
Registration Statement, and any supplement to such Prospectus (as amended
or supplemented from time to time), does not include an untrue statement of
a material fact or omit to state a material fact necessary in order to make
the statements, in light of the circumstances under which they were made,
not misleading.
The Company, FTL-Cayman and the Guarantor Subsidiaries further agree, if
necessary, to supplement or amend the Shelf Registration Statement, as required
by Section 3(b) below, and to furnish to the Holders of Registrable Securities
copies of any such supplement or amendment promptly after its being used or
filed with the SEC.
The Company, FTL-Cayman and the Guarantor Subsidiaries shall not be
required to include any Registrable Securities of a Holder in any Shelf
Registration Statement pursuant to this Agreement unless such Holder furnishes
to the Company, within 20 business days after receipt by such Holder of a
request therefor, such information as the Company may reasonably request for use
in connection with such Shelf Registration Statement.
2.3 EXPENSES. The Company and FTL-Cayman shall pay all Registration
Expenses in connection with the registration pursuant to Section 2.1 or 2.2
hereof. Except as provided herein, each Holder shall pay all expenses of its
counsel, underwriting discounts and commissions and transfer taxes, if any,
relating to the sale or disposition of such Holder's Registrable Securities
pursuant to the Shelf Registration Statement.
2.4 EFFECTIVENESS. (a) The Company, FTL-Cayman and the Guarantor
Subsidiaries will be deemed not to have used their best efforts to cause the
Exchange Offer Registration
Statement or the Shelf Registration Statement, as the case may be, to become,
or to remain, effective during the requisite period if the Company,
FTL-Cayman or any of the Guarantor Subsidiaries voluntarily takes any
affirmative action that would, or omits to take any action which omission
would, result in any such Registration Statement not being declared effective
or in the holders of Registrable Securities covered thereby not being able to
exchange or offer and sell such Registrable Securities during that period as
and to the extent contemplated hereby, unless (i) such action is required by
applicable law or (ii) such action or omission is taken or made by the
Company, FTL-Cayman or the Guarantor Subsidiaries in good faith and for valid
business reasons (not including avoidance of the Company's, FTL-Cayman's or
the Guarantor Subsidiaries' obligations hereunder), as determined by the
Company's Board of Directors or a committee thereof, in its discretion,
including the acquisition or divestiture of a business or assets, so long as
each of the Company, FTL-Cayman and the Guarantor Subsidiaries complies with
the requirements of Section 3(k) hereof, if applicable.
(b) The Company, FTL-Cayman and the Guarantor Subsidiaries may suspend the
availability of the Shelf Registration Statement and the use of any Prospectus
which is a part thereof and shall not be required to amend or supplement such
Shelf Registration Statement (i) for one period not to exceed 60 days in any six
month period or (ii) for up to four periods not to exceed an aggregate of 90
days in any 12 month period, if such suspension is effected in good faith and
for valid business reasons (not including avoidance of the Company's,
FTL-Cayman's or the Guarantor Subsidiaries' obligations hereunder), as
determined by the Company's Board of Directors or a committee thereof, in its
discretion, including the acquisition or divestiture of a business or assets, so
long as each of the Company, FTL-Cayman and the Guarantor Subsidiaries promptly
complies with the requirements of Section 3(k) hereof, if applicable.
(c) An Exchange Offer Registration Statement pursuant to Section 2.1
hereof or a Shelf Registration Statement pursuant to Section 2.2 hereof will not
be deemed to have become effective unless it has been declared effective by the
SEC; PROVIDED, HOWEVER, that if, after it has been declared effective, the
offering of Registrable Securities pursuant to a Registration Statement is
interfered with by any stop order, injunction or other order or requirement of
the SEC or any other governmental agency or court, such Registration Statement
will be deemed not to have become effective during the period of such
interference, until the offering of Registrable Securities pursuant to such
Registration Statement may legally resume.
2.5 INTEREST. In the event that (a) the Exchange Offer Registration
Statement is not filed with the Commission on or prior to the 60th calendar day
following the Issue Date, (b) the Exchange Offer Registration Statement has not
been declared effective on or prior to the 120th calendar day following the
Issue Date, (c) the Exchange Offer is not consummated on or prior to the 150th
calendar day following the Issue Date or a Shelf Registration Statement is not
declared effective on or prior to the 150th calendar day following the Issue
Date (or, if a Shelf Registration Statement is required to be filed because of
the request of any Initial
Purchaser made later than 60 days after the Issue Date, 90 days following the
request by any such Initial Purchaser that the Company and FTL-Cayman file
the Shelf Registration Statement), or (d) the Exchange Offer Registration
Statement or Shelf Registration Statement is declared effective but
thereafter ceases to be effective or usable within the applicable period as
provided in this Agreement except pursuant to Section 2.4(b) (each such event
referred to in clauses (a) through (d) above, a "Registration Default"), the
interest rate borne by the Securities (which is guaranteed by FTL-Cayman and
the Guarantor Subsidiaries under the Indenture) shall be increased by an
amount equal to one-quarter of one percent (0.25%) per annum upon the
occurrence of any Registration Default, which rate (as increased as
aforesaid) will increase by an additional one quarter of one percent (0.25%)
each 90-day period that such additional interest continues to accrue under
any such circumstance, with an aggregate maximum increase in the interest
rate equal to one percent (1%) per annum. Following the cure of all
Registration Defaults the accrual of additional interest will cease and the
interest rate will revert to the original rate. Upon (w) the filing of the
Exchange Offer Registration Statement after the 60-day period described in
clause (a) above, (x) the effectiveness of the Exchange Offer Registration
Statement after the 120-day period described in clause (b) above, (y) the
consummation of the Exchange Offer after the 150-day period or the
effectiveness of a Shelf Registration Statement after the 150-day period (or
the 90-day period, as applicable), as the case may be, described in clause
(c) above, or (z) after the period during which such Shelf Registration
Statement ceases to be effective or usable as described in clause (d) above,
and provided that none of the conditions set forth in clauses (a), (b), (c)
and (d) above continues to exist, a Registration Default will be deemed to be
cured.
2.6 SPECIFIC ENFORCEMENT. Without limiting the remedies available to the
Initial Purchasers and the Holders, the Company, FTL-Cayman and the Guarantor
Subsidiaries acknowledge that any failure by the Company, FTL-Cayman or the
Guarantor Subsidiaries to comply with their obligations under Section 2.1 and
Section 2.2 hereof may result in material irreparable injury to the Initial
Purchasers or the Holders for which there is no adequate remedy at law, that it
would not be possible to measure damages for such injuries precisely and that,
in the event of any such failure, the Initial Purchasers or any Holder may
obtain such relief as may be required to specifically enforce the Company's,
FTL-Cayman's or the Guarantor Subsidiaries' obligations under Section 2.1 and
Section 2.2 hereof.
3. REGISTRATION PROCEDURES.
In connection with the obligations of the Company, FTL-Cayman and the
Guarantor Subsidiaries with respect to Registration Statements pursuant to
Sections 2.1 and 2.2 hereof, the Company, FTL-Cayman and the Guarantor
Subsidiaries shall:
(a) prepare and file with the SEC a Registration Statement, within
the relevant time period specified in Section 2, on the appropriate form
under the 1933 Act, which form (i) shall be selected by the Company, (ii)
shall, in the case of a Shelf
Registration, be available for the sale of the Registrable Securities
by the selling Holders thereof, (iii) shall comply as to form in all
material respects with the requirements of the applicable form and
include or incorporate by reference all financial statements required
by the SEC to be filed therewith or incorporated by reference therein,
and (iv) shall comply in all respects with the requirements of
Regulation S-T under the Securities Act, and use its best efforts to
cause such Registration Statement to become effective and remain
effective in accordance with Section 2 hereof;
(b) prepare and file with the SEC such amendments and post-effective
amendments to each Registration Statement as may be necessary under
applicable law to keep such Registration Statement effective for the
applicable period; and cause each Prospectus to be supplemented by any
required prospectus supplement, and as so supplemented to be filed pursuant
to Rule 424 under the 1933 Act and comply with the provisions of the 1933
Act applicable to them with respect to the disposition of all Securities
covered by each Registration Statement during the applicable period in
accordance with the intended method or methods of distribution by the
selling Holders thereof described in this Agreement (including sales by any
Participating Broker-Dealer);
(c) in the case of a Shelf Registration, (i) notify each Holder of
Registrable Securities, at least five days prior to filing, that a Shelf
Registration Statement with respect to the Registrable Securities is being
filed and advising such Holders that the distribution of Registrable
Securities will be made in accordance with the method selected by the
Majority Holders participating in the Shelf Registration, (ii) furnish to
each Holder of Registrable Securities and to each underwriter of an
underwritten offering of Registrable Securities, if any, without charge, as
many copies of each Prospectus, including each preliminary Prospectus, and
any amendment or supplement thereto and such other documents as such Holder
or underwriter may reasonably request, including financial statements and
schedules and, if the Holder so requests, all exhibits in order to
facilitate the public sale or other disposition of the Registrable
Securities; and (iii) subject to the last paragraph of this Section 3,
hereby consent to the use of the Prospectus or any amendment or supplement
thereto by each of the selling Holders of Registrable Securities in
connection with the offering and sale of the Registrable Securities covered
by the Prospectus or any amendment or supplement thereto;
(d) use their best efforts to register or qualify the Registrable
Securities under all applicable state securities or "blue sky" laws of such
U.S. jurisdictions as any Holder of Registrable Securities covered by a
Registration Statement and each underwriter of an underwritten offering of
Registrable Securities shall reasonably request by the time the applicable
Registration Statement is declared effective by the
SEC, and do any and all other acts and things which may be reasonably
necessary or advisable to enable each such Holder and underwriter to
consummate the disposition in each such jurisdiction of such Registrable
Securities owned by such Holder; PROVIDED, HOWEVER, that the Company,
FTL-Cayman and the Guarantor Subsidiaries shall not be required to
(i) quality as a foreign corporation or as a dealer in securities in
any jurisdiction where it would not otherwise be required to qualify
but for this Section 3(d), or (ii) take any action which would subject
it to general service of process or taxation in any such jurisdiction
where it is not then so subject;
(e) notify promptly each Holder of Registrable Securities under a
Shelf Registration or any Participating Broker-Dealer who has notified the
Company that it is utilizing the Exchange Offer Registration Statement as
provided in paragraph (f) below and, if requested by such Holder or
Participating Broker-Dealer, confirm such notice in writing promptly (i)
when a Registration Statement has become effective and when any
post-effective amendments and supplements thereto have become effective,
(ii) of any request by the SEC or any state securities authority for
post-effective amendments and supplements to a Registration Statement and
Prospectus or for additional information after the Registration Statement
has become effective, (iii) of the issuance by the SEC or any state
securities authority of any stop order suspending the effectiveness of a
Registration Statement or the initiation of any proceedings for that
purpose, (iv) in the case of a Shelf Registration, if, between the
effective date of a Registration Statement and the closing of any sale of
Registrable Securities covered thereby, the representations and warranties
of the Company and FTL-Cayman contained in any underwriting agreement,
securities sales agreement or other similar agreement, if any, relating to
the offering cease to be true and correct in all material respects, (v) of
the happening of any event or the discovery of any facts during the period
a Shelf Registration Statement is effective which makes any statement made
in such Registration Statement or the related Prospectus untrue in any
material respect or which requires the making of any changes in such
Registration Statement or Prospectus in order to make the statements
therein not misleading and (vi) of the receipt by the Company of any
notification with respect to the suspension of the qualification of the
Registrable Securities or the Exchange Securities, as the case may be, for
sale in any jurisdiction or the initiation or threatening of any proceeding
for such purpose;
(f) (A) in the case of the Exchange Offer Registration Statement, (i)
include in the Exchange Offer Registration Statement a section
entitled "Plan of Distribution" which section shall be reasonably
acceptable to the Initial Purchasers, and which shall contain a
summary statement of the positions taken or policies made by the staff
of the SEC with respect to the potential "underwriter" status of any
broker-dealer that holds Registrable Securities acquired for its own
account as a result of market-making activities or other trading
activities and that will be the beneficial owner (as defined in Rule
13d-3
under the Exchange Act) of Exchange Securities to be received by
such broker-dealer in the Exchange Offer, whether such positions or
policies have been publicly disseminated by the staff of the SEC or
such positions or policies, in the reasonable judgment of the Initial
Purchasers and its counsel, represent the prevailing views of the
staff of the SEC, including a statement that any such broker-dealer
who receives Exchange Securities for Registrable Securities pursuant
to the Exchange Offer may be deemed a statutory underwriter and must
deliver a prospectus meeting the requirements of the 1933 Act in
connection with any resale of such Exchange Securities, (ii) furnish
to each Participating Broker-Dealer who has delivered to the Company
the notice referred to in Section 3(e), without charge, as many copies
of each Prospectus included in the Exchange Offer Registration
Statement, including any preliminary prospectus, and any amendment or
supplement thereto, as such Participating Broker-Dealer may reasonably
request, (iii) subject to the last paragraph of this Section 3, hereby
consent to the use of the Prospectus forming part of the Exchange
Offer Registration Statement or any amendment or supplement thereto,
by any person subject to the prospectus delivery requirements of the
SEC, including all Participating Broker-Dealers, in connection with
the sale or transfer of the Exchange Securities covered by the
Prospectus or any amendment or supplement thereto, (iv) use their best
efforts to keep the Exchange Offer Registration Statement effective
and to amend and supplement the Prospectus contained therein in order
to permit such Prospectus to be lawfully delivered by all Persons
subject to the prospectus delivery requirements of the 1933 Act for
such period of time as such Persons must comply with such requirements
in order to resell the Exchange Securities and (v) include in the
transmittal letter or similar documentation to be executed by an
exchange offeree in order to participate in the Exchange Offer (x) the
following provision:
"If the exchange offeree is a broker-dealer holding Registrable
Securities acquired for its own account as a result of
market-making activities or other trading activities, it will
deliver a prospectus meeting the requirements of the 1933 Act in
connection with any resale of Exchange Securities received in
respect of such Registrable Securities pursuant to the Exchange
Offer;" and
(y) a statement to the effect that by a broker-dealer making the
acknowledgment described in clause (x) and by delivering a Prospectus
in connection with the exchange of Registrable Securities, the
broker-dealer will not be deemed to admit that it is an underwriter
within the meaning of the 1933 Act; and
(B) in the case of any Exchange Offer Registration Statement, if
requested by any known Participating Broker-Dealer, each of the
Company and FTL-Cayman agrees to deliver to such Participating
Broker-Dealer upon the
effectiveness of the Exchange Offer Registration Statement (i) an
opinion of Katten Muchin & Zavis in such form and to such effect
as is customary in connection with the preparation of a Registration
Statement, (ii) an officers' certificate substantially in the
form customarily delivered in a public offering of debt securities
and (iii) a comfort letter or comfort letters in customary form if
permitted by Statement on Auditing Standards No. 72 of the American
Institute of Certified Public Accountants (or if such a comfort
letter is not permitted, an agreed upon procedures letter in
customary form) at least as broad in scope and coverage as the comfort
letter or comfort letters delivered to the Initial Purchasers in
connection with the initial sale of the Securities to the Initial
Purchasers;
(g) (i) in the case of an Exchange Offer, furnish counsel for the
Initial Purchasers and (ii) in the case of a Shelf Registration, furnish
counsel for the Holders of Registrable Securities copies of any comment
letters received from the SEC or any other request by the SEC or any state
securities authority for amendments or supplements to a Registration
Statement and Prospectus or for additional information;
(h) make every reasonable effort to obtain the withdrawal of any
order suspending the effectiveness of a Registration Statement at the
earliest possible moment;
(i) in the case of a Shelf Registration, furnish to each Holder of
Registrable Securities, and each underwriter, if any, without charge, at
least one conformed copy of each Registration Statement and any
post-effective amendment thereto, including financial statements and
schedules (without documents incorporated therein by reference and all
exhibits thereto, unless requested);
(j) in the case of a Shelf Registration, cooperate with the selling
Holders of Registrable Securities to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold and
not bearing any restrictive legends; and enable such Registrable Securities
to be in such denominations (consistent with the provisions of the
Indenture) and registered in such names as the selling Holders or the
underwriters, if any, may reasonably request at least two business days
prior to the closing of any sale of Registrable Securities;
(k) in the case of a Shelf Registration, upon the occurrence of any
event or the discovery of any facts, each as contemplated by Sections
3(e)(ii), 3(e)(iii), 3(e)(v) and 3(e)(vi) hereof, use its best efforts to
prepare a supplement or post-effective amendment to the Registration
Statement or the related Prospectus or any document incorporated therein by
reference or file any other required document so that, as thereafter
delivered to the purchasers of the Registrable Securities or Participating
Broker-Dealers, such Prospectus will not contain at the time of such
delivery any untrue statement of a material fact or omit to state a
material fact necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading or will remain so qualified;
(l) obtain a CUSIP number for all Exchange Securities not later than
the effective date of a Registration Statement, and provide the Trustee
with printed certificates for the Exchange Securities in a form eligible
for deposit with the Depositary;
(m) (i) cause the Indenture to be qualified under the Trust Indenture
Act of 1939, as amended (the "TIA"), in connection with the registration of
the Exchange Securities or Registrable Securities, as the case may be, (ii)
cooperate with the Trustee and the Holders to effect such changes to the
Indenture as may be required for the Indenture to be so qualified in
accordance with the terms of the TIA and (iii) execute, and use its best
efforts to cause the Trustee to execute, all documents as may be required
to effect such changes, and all other forms and documents required to be
filed with the SEC to enable the Indenture to be so qualified in a timely
manner;
(n) in the case of a Shelf Registration, enter into agreements
(including customary underwriting agreements) and take all other customary
and appropriate actions in order to expedite or facilitate the disposition
of such Registrable Securities and in such connection whether or not an
underwriting agreement is entered into and whether or not the registration
is an underwritten registration:
(i) make such representations and warranties to the Holders of
such Registrable Securities and the underwriters, if any, in form,
substance and scope as are customarily made by issuers to underwriters
in similar underwritten offerings as may be reasonably requested by
them;
(ii) obtain opinions of counsel to the Company and FTL-Cayman and
updates thereof (which opinions (in form, scope and substance) and
counsel shall be reasonably satisfactory to the managing underwriters,
if any, and the Holders of a majority in principal amount of the
Registrable Securities being sold) addressed to each selling Holder
and the underwriters, if any, covering the matters customarily covered
in opinions requested in sales of securities or underwritten offerings
and such other matters as may be reasonably requested by such Holders
and underwriters;
(iii) obtain "cold comfort" letters and updates thereof from
the Company's independent certified public accountants addressed to
the underwriters, if any, and use reasonable efforts to have such
letters addressed to the selling Holders of Registrable Securities (to
the extent consistent with Statement on Auditing Standards No. 72 of
the American Institute of Certified
Public Accountants), such letters to be in customary form and
covering matters of the type customarily covered in "cold comfort"
letters to underwriters in connection with similar underwritten
offerings and such other matters as reasonably requested by such
selling Holders and any underwriters;
(iv) enter into a securities sales agreement with the Holders and
an agent of the Holders providing for, among other things, the
appointment of such agent for the selling Holders for the purpose of
soliciting purchases of Registrable Securities, which agreement shall
be in form, substance and scope customary for similar offerings;
(v) if an underwriting agreement is entered into, cause the same
to set forth indemnification provisions and procedures substantially
equivalent to the indemnification provisions and procedures set forth
in Section 4 hereof with respect to the underwriters and all other
parties to be indemnified pursuant to said Section or, at the request
of any underwriters, in the form customarily provided to such
underwriters in similar types of transactions; and
(vi) deliver such documents and certificates as may be reasonably
requested and as are customarily delivered in similar offerings to the
Holders of a majority in principal amount of the Registrable
Securities being sold and the managing underwriters, if any.
The above shall be done at (i) the effectiveness of such Registration
Statement (and each post-effective amendment thereto) and (ii) each closing
under any underwriting or similar agreement as and to the extent required
thereunder;
(o) in the case of a (i) Shelf Registration, or (ii) Prospectus
contained in an Exchange Offer pursuant to Section 2.1 which is required to
be delivered under the 1933 Act by a Participating Broker-Dealer who seeks
to sell Exchange Securities, make available for inspection by
representatives of the Holders of the Registrable Securities and any such
Participating Broker-Dealer, as the case may be, and any underwriters
participating in any disposition pursuant to a Shelf Registration Statement
and any counsel or accountant retained by such Holders, Participating
Broker Dealers or underwriters, all pertinent financial and other records,
pertinent corporate documents and properties of the Company or FTL-Cayman
reasonably requested by any such persons, and cause the respective
officers, directors, employees and any other agents of the Company or
FTL-Cayman to supply all information reasonably requested by any such
representative, underwriter, counsel or accountant in connection with a
Registration Statement or Prospectus, and make such representatives of the
Company or FTL-Cayman available for discussion of such documents as shall
be reasonably requested by the Initial Purchasers; PROVIDED, that any such
records, documents,
properties and information that is designated in writing by the Company,
in good faith, as confidential at the time of delivery of such records,
documents, properties or information shall be kept confidential by any
such representative, underwriter, counsel or accountant and shall be
used only in connection with such Registration Statement or Prospectus,
unless such information has become available (not in violation of this
Agreement) to the public generally or through a third party without an
accompanying obligation of confidentiality, and except that such
representative, underwriter, counsel or accountant shall have no
liability, and shall not be in breach of this provision, if disclosure of
such confidential information is made in connection with a court proceeding
or required by law, and the Company shall be entitled to request that such
representative, underwriter, counsel or accountant sign a confidentiality
agreement to the foregoing effect;
(p) in the case of a Shelf Registration, a reasonable time prior to
filing any Shelf Registration Statement, any Prospectus forming a part
thereof, any amendment to such Shelf Registration Statement or any
amendment or supplement to such Prospectus, provide copies of such document
to the Holders of Registrable Securities, to counsel on behalf of the
Holders and to the underwriter or underwriters of an underwritten offering
of Registrable Securities, if any, make such changes in any such document
prior to the filing thereof as the Holders, the counsel to the Holders or
the underwriter or underwriters reasonably request and make the
representatives of the Company and FTL-Cayman available for discussion of
such document as shall be reasonably requested by the Holders of
Registrable Securities, or any underwriter;
(q) use their best efforts to cause the Exchange Securities or the
Registrable Securities, as the case may be, to be rerated (or reconfirmed
as applicable) by the appropriate rating agencies, if so requested by the
Initial Purchasers (on behalf of the Holders) in the case of an Exchange
Offer Registration Statement, or by the Majority Holders, or if requested
by the underwriter or underwriters of an underwritten offering of
Registrable Securities, if any;
(r) otherwise use their best efforts to comply with all applicable
rules and regulations of the SEC and make available to its security
holders, as soon as reasonably practicable, an earnings statement covering
at least 12 months which shall satisfy the provisions of Section 11 (a) of
the 1933 Act and Rule 158 thereunder;
(s) cooperate and assist in any filings required to be made with the
NASD and, in the case of a Shelf Registration, in the performance of any
due diligence investigation by any underwriter and its counsel (including
any "qualified independent underwriter" that is required to be retained in
accordance with the rules and regulations of the NASD); and
(t) upon consummation of an Exchange Offer, obtain a customary
opinion of counsel to the Company and FTL-Cayman addressed to the Trustee
for the benefit of all Holders of Registrable Securities participating in
the Exchange Offer, and which includes an opinion that (i) the Company has
duly authorized, executed and delivered the Exchange Securities and the
related indenture and (ii) each of the Exchange Securities (including the
guarantee thereof by FTL-Cayman and the Guarantor Subsidiaries) and related
indenture constitutes a legal, valid and binding obligation of the Company,
FTL-Cayman and each of the Guarantor Subsidiaries, enforceable against the
Company, FTL-Cayman and each of the Guarantor Subsidiaries in accordance
with their respective terms (with customary exceptions).
In the case of a Shelf Registration Statement, the Company may (as a
condition to such Holder's participation in the Shelf Registration) require each
Holder of Registrable Securities to furnish to the Company such information
regarding the Holder and the proposed distribution by such Holder of such
Registrable Securities as the Company may from time to time reasonably request
in writing.
If any of the Registrable Securities covered by any Shelf Registration
Statement are to be sold in an underwritten offering, the underwriter or
underwriters and manager or managers that will manage such offering will be
selected by the Majority Holders of such Registrable Securities included in such
offering and must be acceptable to the Company. No Holder of Registrable
Securities may participate in any underwritten registration hereunder unless
such Holder (a) agrees to sell such Holder's Registrable Securities on the basis
provided in any underwriting arrangements approved by the persons entitled
hereunder to approve such arrangements and (b) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents required under the terms of such underwriting arrangements.
In the case of a Shelf Registration Statement, each Holder agrees that,
upon receipt of any notice from the Company of the happening of any event or the
discovery of any facts, each of the kind described in Sections 3(e)(ii),
3(e)(iii), 3(e)(v) or 3(e)(vi) hereof, such Holder will forthwith discontinue
disposition of Registrable Securities pursuant to a Registration Statement until
such Holder's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 3(k) hereof, and, if so directed by the Company, such
Holder will deliver to the Company (at its expense) all copies in such Holder's
possession, other than permanent file copies then in such Holder's possession,
of the Prospectus covering such Registrable Securities current at the time of
receipt of such notice. If the Company or FTL-Cayman shall give any such notice
to suspend the disposition of Registrable Securities pursuant to a Shelf
Registration Statement as a result of the happening of any event or the
discovery of any facts, each of the kind described in Sections 3(e)(ii),
3(e)(iii), 3(e)(v) or 3(e)(vi) hereof, the Company, FTL-Cayman and the Guarantor
Subsidiaries shall be deemed to have used their best efforts to keep the Shelf
Registration Statement effective during such
period of suspension provided that the Company, FTL-Cayman and the Guarantor
Subsidiaries shall use their best efforts to file and have declared effective
(if an amendment) as soon as practicable an amendment or supplement to the
Shelf Registration Statement and shall extend the period during which the
Shelf Registration Statement shall be maintained effective pursuant to this
Agreement by the number of days during the period from and including the date
of the giving of such notice to and including the date when the Holders shall
have received copies of the supplemented or amended Prospectus necessary to
resume such dispositions.
4. INDEMNIFICATION, CONTRIBUTION.
(a) The Company, FTL-Cayman and each of the Guarantor Subsidiaries agree,
jointly and severally, to indemnify and hold harmless each Holder, each
Participating Broker-Dealer, each Person who participates as an underwriter (any
such Person being an "Underwriter"), their respective affiliates, and each
Person, if any, who controls any of such parties within the meaning of Section
15 of the 1933 Act or Section 20 of the 1934 Act and each of their respective
directors, officers, employees and agents, as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in any Registration Statement
(or any amendment or supplement thereto) pursuant to which Exchange
Securities or Registrable Securities were registered under the 1933 Act,
including all documents incorporated therein by reference, or the omission
or alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading, or
arising out of any untrue statement or alleged untrue statement of a
material fact contained in any Prospectus (or any amendment or supplement
thereto) or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; PROVIDED that (subject to Section
4(d) below) any such settlement is effected with the written consent of the
Company; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by any indemnified
party, except to the extent otherwise expressly provided in Section 4(c)
hereof), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under subparagraph (i) or (ii) above;
PROVIDED, HOWEVER, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by such
Holder or Underwriter expressly for use in a Registration Statement (or any
amendment thereto) or any Prospectus (or any amendment or supplement thereto);
PROVIDED, FURTHER, that such indemnity with respect to any preliminary
prospectus or final Prospectus shall not inure to the benefit of any Holder or
Underwriter (or any persons controlling such Holder or Underwriter) (i) from
whom the person asserting such loss, claim, damage or liability purchased the
Securities which are the subject thereof if a prospectus was required to be
delivered under the 1933 Act and such person did not receive a copy of the final
Prospectus (or the final Prospectus as amended or supplemented) at or prior to
the confirmation of the sale of such Securities to such person in any case where
the Company complied with its obligations under Section 3(c) or 3(f)(A)(ii)
hereof, as applicable, and any such untrue statement or omission or alleged
untrue statement or omission of a material fact contained in such preliminary
prospectus (or any amendment or supplement thereto) or final Prospectus was
corrected in the final Prospectus (or the final Prospectus as amended or
supplemented) or (ii) if it resulted from the use of the Prospectus during a
period when the use of the Prospectus had been suspended in accordance with
Section 2.4(b) or Sections 3(e)(ii), 3(e)(iii), 3(e)(v) and 3(e)(vi) hereof;
PROVIDED, in each case, that Holders received prior notice of such suspension.
(b) Each Holder severally, but not jointly, agrees to indemnify and hold
harmless the Company, FTL-Cayman, the Guarantor Subsidiaries, each Underwriter
and the other selling Holders, and each of their respective directors and
officers, and each Person, if any, who controls the Company, FTL-Cayman, the
Guarantor Subsidiaries, any Underwriter or any other selling Holder within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, against any
and all loss, liability, claim, damage and expense described in the indemnity
contained in Section 4(a) hereof, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in the
Shelf Registration Statement (or any amendment thereto) or any Prospectus
included therein (or any amendment or supplement thereto) in reliance upon and
in conformity with written information furnished to the Company expressly for
use in the Shelf Registration Statement (or any amendment thereto) or such
Prospectus (or any amendment or supplement thereto); PROVIDED, HOWEVER, that no
such Holder shall be liable for any claims hereunder in excess of the amount of
net proceeds received by such Holder from the sale of Registrable Securities
pursuant to such Shelf Registration Statement.
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action or proceeding commenced
against it in respect of
which indemnity may be sought hereunder, but failure so to notify an
indemnifying party shall not relieve such indemnifying party from any
liability hereunder to the extent it is not materially prejudiced as a result
thereof and in any event shall not relieve it from any liability which it may
have otherwise than on account of this indemnity agreement. An indemnifying
party may participate at its own expense in the defense of such action;
PROVIDED, HOWEVER, that counsel to the indemnifying party shall not (except
with the consent of the indemnified party, which consent shall not be
unreasonably withheld) also be counsel to the indemnified party.
Notwithstanding the foregoing, if it so elects within a reasonable time after
receipt of such notice, an indemnifying party, jointly with any other
indemnifying parties receiving such notice, may assume the defense of such
action with counsel chosen by it and approved by the indemnified parties
defendant in such action (which approval shall not be unreasonably withheld),
unless such indemnified parties reasonably object to such assumption on the
ground that there may be legal defenses available to them which are different
from or in addition to those available to such indemnifying party. If an
indemnifying party assumes the defense of such action, the indemnifying party
shall not be liable for any fees and expenses of counsel for the indemnified
parties incurred thereafter in connection with such action. In no event
shall the indemnifying party or parties be liable for the fees and expenses
of more than one counsel (in addition to any local counsel) separate from
their own counsel for all indemnified parties in connection with any one
action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding
by any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be
sought under this Section 4 (if the indemnified parties are actual or
potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all
liability arising out of such litigation, investigation, proceeding or claim
and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act by or on behalf of any indemnified party.
(d) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel pursuant to Section 4(a)(iii) hereof, such indemnifying party agrees
that it shall be liable for any settlement of the nature contemplated by Section
4(a)(ii) effected without its written consent if (i) such settlement is entered
into more than 45 days after receipt by such indemnifying party of the aforesaid
request, (ii) such indemnifying party shall have received notice of the terms of
such settlement at least 30 days prior to such settlement being entered into and
(iii) such indemnifying party shall not have reimbursed such indemnified party
in accordance with such request prior to the date of such settlement.
(e) The Guarantor Subsidiaries shall not be required by this Section 4 or
otherwise under this Agreement to make any payment to any Holder, Participating
Broker-Dealer or Underwriter or any person, if any, who controls any such
person, so long as and to the extent
that the Company and FTL-Cayman pay and perform in full their obligations to
such person and controlling person under this Section 7 or otherwise under
this Agreement.
(f) If the indemnification provided for in this Section 4 is for any
reason unavailable to, or insufficient to hold harmless, an indemnified party in
respect of any losses, liabilities, claims, damages or expenses referred to
therein, then each indemnifying party shall contribute to the aggregate amount
of such losses, liabilities, claims, damages and expenses incurred by such
indemnified party, as incurred, (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company, FTL-Cayman and the
Guarantor Subsidiaries on the one hand and the Holders on the other hand, from
the offering of the Securities, the Exchange Securities and the Registrable
Securities (taken together) included in such offering or (ii) if the allocation
provided by clause (i) is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Company, FTL-Cayman and the
Guarantor Subsidiaries on the one hand, and the Holders on the other hand in
connection with the statements or omissions which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Company, FTL-Cayman and the Guarantor
Subsidiaries from the offering of the Securities, the Exchange Securities and
the Registrable Securities (taken together) included in such offering shall in
each case be deemed to include the proceeds received by the Company in
connection with the offering of the Securities pursuant to the Purchase
Agreement.
The relative fault of the Company, FTL-Cayman and the Guarantor
Subsidiaries on the one hand and the Holders on the other hand shall be
determined by reference to, among other things, whether any such untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact relates to information supplied by the Company or
FTL-Cayman or the Holders and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, FTL-Cayman and the Holders agree that it would not be just and
equitable if contribution pursuant to this Section 4 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to above in this Section 4. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 4 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever, based upon any such untrue or alleged
untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 4, each Person, if any, who controls a Holder
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
shall have the same rights to contribution as such Holder, and each director of
the Company, FTL-Cayman or any Guarantor Subsidiary, each officer of the
Company, FTL-Cayman or any Guarantor Subsidiary who signed the Registration
Statement and each Person, if any, who controls the Company, FTL-Cayman or any
Guarantor Subsidiary within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act shall have the same rights to contribution as the Company,
FTL-Cayman and the Guarantor Subsidiaries.
5. MISCELLANEOUS.
5.1 RULE 144 AND RULE 144A. For so long as the Company or FTL-Cayman is
subject to the reporting requirements of Section 13 or 15 of the 1934 Act, the
Company and FTL-Cayman each covenant that it will file the reports required to
be filed by either of them under the 1933 Act and Section 13(a) or 15(d) of the
1934 Act and the rules and regulations adopted by the SEC thereunder. If the
Company or FTL-Cayman ceases to be so required to file such reports, the Company
and FTL-Cayman each covenant that it will upon the request of any Holder of
Registrable Securities (a) make publicly available such information as is
necessary to permit sales of Registrable Securities pursuant to Rule 144 under
the 1933 Act, (b) deliver such information to a prospective purchaser as is
necessary to permit sales of Registrable Securities pursuant to Rule 144A under
the 1933 Act and it will take such further action as any Holder of Registrable
Securities may reasonably request, and (c) take such further action that is
reasonable in the circumstances, in each case, to the extent required from time
to time to enable such Holder to sell its Registrable Securities without
registration under the 1933 Act within the limitation of the exemptions provided
by (i) Rule 144 under the 1933 Act, as such Rule may be amended from time to
time, (ii) Rule 144A under the 1933 Act, as such Rule may be amended from time
to time, or (iii) any similar rules or regulations hereafter adopted by the
SEC. Upon the request of any Holder of Registrable Securities, the Company and
FTL-Cayman will deliver to such Holder a written statement as to whether the
Company and FTL-Cayman have complied with such requirements.
5.2 NO INCONSISTENT AGREEMENTS. Neither the Company nor FTL-Cayman has
entered into, and neither the Company nor FTL-Cayman will after the date of this
Agreement enter into, any agreement which is inconsistent with the rights
granted to the Holders of Registrable Securities in this Agreement or otherwise
conflicts with the provisions hereof. The rights granted to the Holders
hereunder do not in any way conflict with the rights granted to the holders of
the Company's other issued and outstanding securities under any such agreements.
5.3 AMENDMENTS AND WAIVERS. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given unless the Company has obtained the written consent of Holders of at least
a majority in aggregate principal amount of the outstanding Registrable
Securities affected by such amendment, modification, supplement, waiver or
departure.
5.4 NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, registered
first-class mail, telex, telecopier, or any courier guaranteeing overnight
delivery (a) if to a Holder, at the most current address given by such Holder to
the Company by means of a notice given in accordance with the provisions of this
Section 5.4, and (b) if to the Company, FTL-Cayman or the Guarantor
Subsidiaries, initially at the Company's address set forth in the Purchase
Agreement, and thereafter at such other address of which notice is given in
accordance with the provisions of this Section 5.4.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; two business days
after being deposited in the mail, postage prepaid, if mailed; when answered
back, if telexed; when receipt is acknowledged, if telecopied; and on the next
business day if timely delivered to an air courier guaranteeing overnight
delivery.
Copies of all such notices, demands, or other communications shall be
concurrently delivered by the person giving the same to the Trustee under the
Indenture, at the address specified in such Indenture.
5.5 SUCCESSOR AND ASSIGNS. This Agreement shall inure to the benefit of
and be binding upon the successors, assigns and transferees of each of the
parties, including, without limitation and without the need for an express
assignment, subsequent Holders; provided that nothing herein shall be deemed to
permit any assignment, transfer or other disposition of Registrable Securities
in violation of the terms of the Purchase Agreement. If any transferee of any
Holder shall acquire Registrable Securities, in any manner, whether by operation
of law or otherwise, such Registrable Securities shall be held subject to all of
the terms of this Agreement, and by taking and holding such Registrable
Securities such person shall be conclusively deemed to have agreed to be bound
by and to perform all of the terms and provisions of this Agreement, including
the restrictions on resale set forth in this Agreement and, if applicable, the
Purchase Agreement, and such person shall be entitled to receive the benefits
hereof.
5.6 THIRD PARTY BENEFICIARIES. The Initial Purchasers (even if the
Initial Purchasers are not Holders of Registrable Securities) shall be third
party beneficiaries to the agreements made hereunder between the Company,
FTL-Cayman and the Guarantor Subsidiaries, on the
one hand, and the Holders, on the other hand, and shall have the right to
enforce such agreements directly to the extent they deem such enforcement
necessary or advisable to protect their rights or the rights of Holders
hereunder. Each Holder of Registrable Securities shall be a third party
beneficiary to the agreements made hereunder by the Company, FTL-Cayman and
the Guarantor Subsidiaries, and shall have the right to enforce such
agreements directly to the extent it deems such enforcement necessary or
advisable to protect its rights hereunder. Other than the foregoing
sentences, nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Initial Purchasers, the Holders, including Participating Broker-Dealers, each
underwriter who participates in an offering of Registrable Securities, their
respective affiliates, and the Company, FTL-Cayman and the Guarantor
Subsidiaries and their respective successors and the controlling persons,
directors, officers, employees, and agents referred to in Section 4 and their
heirs and legal representatives, any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are
intended to be for the sole benefit of the Initial Purchasers, the Holders
and the Company, FTL-Cayman and the Guarantor Subsidiaries and the other
persons referenced by the preceding sentences and their heirs and legal
representatives, and for the benefit of no other person, firm or corporation.
5.7 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
5.8 HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
5.9 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICT OF LAWS THEREOF.
5.10 SEVERABILITY. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
5.11 EFECTIVENESS. This Agreement shall be effective upon original
issuance of the Securities.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
FRUIT OF THE LOOM, INC.
By:
--------------------------------
Name:
Title:
FRUIT OF THE LOOM, LTD.
By:
--------------------------------
Name:
Title:
Aliceville Cotton Mill, Inc. Jet Sew Technologies, Inc.
The B.V.D. Licensing Corporation Leesburg Yarn Mills, Inc.
DeKalb Knitting Corporation, Inc. Martin Mills, Inc.
Fayette Cotton Mill, Inc. Pro-Player, Inc.
FOL Caribbean Corporation Rabun Apparel, Inc.
Fruit of the Loom Arkansas, Inc. Russell Hosiery Mills, Inc.
Fruit of the Loom Caribbean, Inc. Salem Sportswear Corporation
Fruit of the Loom, Inc. (N.Y.) Salem Sportswear, Inc.
Fruit of the Loom Trading Company Sherman Warehouse Corporation
FTL Regional Sales Company, Inc. Union Sales, Inc.
FTL Sales Company, Inc. Union Underwear Company, Inc.
Fruit of the Loom, Texas, Inc. Union Yarn Mills, Inc.
Gitano Fashions Limited Whitmire Manufacturing, Inc.
Greenville Manufacturing, Inc. Winfield Cotton Mill, Inc.
By:
--------------------------------
Name:
Title:
Confirmed and accepted as
of the date first above
written:
CREDIT SUISSE FIRST BOSTON CORPORATION
NATIONSBANC MONTGOMERY SECURITIES LLC
SCOTIA CAPITAL MARKETS (USA), INC.
BY: CREDIT SUISSE FIRST BOSTON CORPORATION
By: ----------------------------------
Name:
Title: