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EXHIBIT 10.5
EXECUTION COPY
PILLOWTEX CORPORATION
$185,000,000
9% SENIOR SUBORDINATED NOTES DUE 2007
PURCHASE AGREEMENT
December 15, 1997
NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities, Inc.
Bear, ▇▇▇▇▇▇▇ & Co. Inc.
c/o NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Pillowtex Corporation, a Texas corporation (the "Company"),
proposes to issue and sell to you (the "Initial Purchasers") $185,000,000
principal amount of its 9% Senior Subordinated Notes due 2007 (the "Notes").
The Notes will be fully and unconditionally guaranteed (the "Guarantees" and,
collectively with the Notes, the "Securities") on a senior subordinated basis,
jointly and severally, (i) by each subsidiary of the Company listed on the
signature page hereto (the "Pillowtex Guarantors") and (ii) upon (A)
consummation of the merger (the "Merger") of a wholly owned subsidiary of the
Company with and into Fieldcrest ▇▇▇▇▇▇, Inc., a Delaware corporation
("Fieldcrest"), and (B) the execution of a counterpart to this Agreement in
substantially the form set forth in Exhibit A hereto (the "Purchase Agreement
Supplement") pursuant to Section 5(k) hereof, by Fieldcrest and each subsidiary
of Fieldcrest listed on the signature page to the Purchase Agreement Supplement
(together with Fieldcrest, the "Fieldcrest Guarantors" and, together with the
Pillowtex Guarantors, the "Guarantors"). The Securities are to be issued
pursuant to an indenture, dated as of December 18, 1997 (the "Indenture"), to
be entered into by and among the Company, the Pillowtex Guarantors and Norwest
Bank Minnesota, National Association (the "Trustee"). Upon consummation of the
Merger, the Fieldcrest Guarantors and the Trustee will execute a supplemental
indenture, dated as of the date of consummation of the Merger (the
"Supplemental Indenture"). In addition, upon consummation of the Merger, the
Fieldcrest Guarantors shall execute a supplemental Registration Rights
Agreement (as defined below)(the "Supplemental Registration Rights Agreement").
As used in this Agreement, (i) prior to consummation of the
Merger, references to the "Issuers" shall mean the Company and the Pillowtex
Guarantors and references to the "Guarantors" shall mean the Pillowtex
Guarantors and (ii) upon consummation of the Merger and the due execution and
delivery of the Purchase Agreement Supplement by the Fieldcrest Guarantors in
connection therewith, references to the "Issuers" shall mean the Company, the
Pillowtex Guarantors and the Fieldcrest Guarantors and references to the
"Guarantors" shall mean the Pillowtex Guarantors and the Fieldcrest Guarantors,
in each case as if all such parties had executed this Agreement as of the date
hereof. In addition, as used in this Agreement, (i) prior to consummation of
the Merger, references to the Company's
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"subsidiaries" shall mean each of the subsidiaries listed on Schedule A hereto
and (ii) upon consummation of the Merger, references to the Company's
"subsidiaries" shall mean each of the subsidiaries listed on Schedule A hereto
and the Fieldcrest Guarantors.
The sale of the Securities to the Initial Purchasers will be
made without registration of the Securities under the Securities Act of 1933,
as amended (the "Securities Act"), in reliance upon exemptions from the
registration requirements of the Securities Act. You have advised the Issuers
that the Initial Purchasers will offer and sell the Securities purchased by
them hereunder in accordance with Section 3 hereof as soon as you deem
advisable.
In connection with the sale of the Securities, the Issuers
have prepared a preliminary offering memorandum, dated November 26, 1997 (the
"Preliminary Memorandum") and a final offering memorandum, dated December 15,
1997 (the "Final Memorandum"). Each of the Preliminary Memorandum and the
Final Memorandum sets forth certain information concerning the Issuers and the
Securities. The Issuers hereby confirm that they have authorized the use of
the Preliminary Memorandum and the Final Memorandum, and any amendment or
supplement thereto, in connection with the offer and sale of the Securities by
the Initial Purchasers. Unless stated to the contrary, all references herein
to the Final Memorandum are to the Final Memorandum at the time of execution
and delivery of this Agreement (the "Execution Time") and are not meant to
include any amendment or supplement, or any information incorporated by
reference therein, subsequent to the Execution Time.
The Initial Purchasers and their direct and indirect
transferees will be entitled to the benefits of the Registration Rights
Agreement, substantially in the form attached hereto as Exhibit B (the
"Registration Rights Agreement"), pursuant to which the Issuers will agree to
use their best efforts to commence an offer to exchange the Securities for
Exchange Securities (the "Exchange Securities") that have been registered under
the Securities Act, and that otherwise are identical in all respects to the
Securities, or to cause a shelf registration statement to become effective
under the Securities Act and to remain effective for the period designated in
such Registration Rights Agreement.
1. REPRESENTATIONS AND WARRANTIES. The Company and the Pillowtex
Guarantors jointly and severally represent and warrant to each Initial
Purchaser as set forth below in this Section 1.
(a) The Preliminary Memorandum, at the date thereof, did
not contain any untrue statement of a material fact or omit to state
any material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
The Final Memorandum, at the date hereof, does not, and at the Closing
Date (as defined below) will not (and any amendment or supplement
thereto, at the date thereof and at the Closing Date, will not),
contain any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading;
provided, however that the Company and the Pillowtex Guarantors make
no representation or warranty as to the information contained in or
omitted from the Preliminary Memorandum or the Final Memorandum, or
any amendment or supplement thereto, in reliance upon and in
conformity with information furnished in writing to the Issuers by or
on behalf of the Initial Purchasers specifically for inclusion
therein.
(b) Neither the Company nor the Pillowtex Guarantors,
nor, to the Company's knowledge, Fieldcrest nor the Fieldcrest
Guarantors, nor any of their Affiliates (as defined in Rule 501(b) of
Regulation D under the Securities Act ("Regulation D")), nor any
person acting on their behalf has, directly or indirectly, made offers
or sales of any security, or solicited offers to buy any
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security, under circumstances that would require the registration of
the Securities under the Securities Act. Neither the Company nor the
Pillowtex Guarantors, nor, to the Company's knowledge, Fieldcrest nor
the Fieldcrest Guarantors, nor any of their Affiliates, nor any person
acting on their behalf has engaged in any form of general solicitation
or general advertising (within the meaning of Regulation D) in
connection with any offer or sale of the Securities (provided that the
Issuers make no representations regarding the Initial Purchasers).
The Securities satisfy the eligibility requirements of Rule 144A(d)(3)
under the Securities Act. The Final Memorandum and each amendment or
supplement thereto, as of its date, contains the information specified
in Rule 144A(d)(4) under the Act.
(c) Neither the Company nor any of its subsidiaries is an
"investment company" within the meaning of the Investment Company Act
of 1940, as amended (the "Investment Company Act"), without taking
account of any exemption arising out of the number of holders of any
the Company's or any Pillowtex Guarantors' securities.
(d) Assuming (i) that the representations and warranties
and covenants of the Initial Purchasers contained in Section 3 hereof
are true, correct and complete and (ii) that the Initial Purchasers
comply with their covenants in Section 3 hereof, (A) registration
under the Securities Act of the Securities or qualification of the
Indenture under the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"), is not required in connection with the offer
and sale of the Securities to the Initial Purchasers in the manner
contemplated by the Final Memorandum or this Agreement and (B) initial
resales of the Securities by the Initial Purchasers on the terms and
in the manner set forth in the Final Memorandum and Section 3 hereof
are exempt from the registration requirements of the Securities Act.
(e) Since the respective dates as of which information is
given in the Preliminary Memorandum and the Final Memorandum, except
as otherwise stated therein, (i) there has been no material adverse
change in the condition (financial or otherwise), earnings, affairs or
business prospects of the Company and its subsidiaries considered as a
whole, whether or not arising in the ordinary course of business and
(ii) there have been no material transactions entered into by the
Company or any of its subsidiaries (collectively, a "Material Adverse
Change").
(f) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the State
of Texas with power and authority to own, lease and operate its
properties and conduct its business as described in the Preliminary
Memorandum and the Final Memorandum; and the Company is duly qualified
as a foreign corporation to transact business and is in good standing
in each jurisdiction in which it owns or leases properties or in which
the conduct of its business requires such qualification, except to the
extent that the failure to be so qualified or be in good standing
would not, singly or in the aggregate, reasonably be expected to have
a material adverse effect on the condition (financial or otherwise),
earnings, affairs or business prospects of the Company and its
subsidiaries considered as a whole (a "Material Adverse Effect"). The
authorized and outstanding capital stock of the Company at September
27, 1997 was as set forth in the "Historical" column under the caption
"Capitalization" in the Preliminary Memorandum and the Final
Memorandum. All of the shares of capital stock of the Company have
been duly authorized and validly issued and are fully paid and
nonassessable.
(g) Each of the subsidiaries of the Company has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has corporate
power and authority to own, lease and operate its properties and
conduct its business
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as described in the Preliminary Memorandum and the Final Memorandum
and is duly qualified as a foreign corporation to transact business
and is in good standing in each jurisdiction in which it owns or
leases properties or in which the conduct of its business requires
such qualification, except to the extent that the failure to be so
qualified or be in good standing would not, singly or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
All of the issued and outstanding capital stock of each subsidiary has
been duly authorized and validly issued and is fully paid and
nonassessable, and, except as described in the Preliminary Memorandum
and the Final Memorandum, all such capital stock of each subsidiary is
owned by the Company, directly or through subsidiaries, free and clear
of any mortgage, pledge, lien, encumbrance, claim or equity except for
(i) a pledge of such shares pursuant to the Credit Agreement (as
defined below) upon consummation of the Merger as described in the
Final Memorandum and (ii) the pledge of such shares pursuant to the
Company's existing credit agreement with NationsBank of Texas, N.A.,
as agent.
(h) This Agreement has been duly authorized, executed and
delivered by the Company and the Pillowtex Guarantors and constitutes
the valid and binding agreement of the Company and the Pillowtex
Guarantors, enforceable against the Company and the Pillowtex
Guarantors in accordance with its terms, except that (i) enforcement
thereof may be subject to (A) bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws now or
hereafter in effect relating to or affecting creditors' rights
generally and (B) general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at law) and
(ii) the enforceability of any indemnification or contribution
provisions thereof may be limited under applicable securities laws or
the public policies underlying such laws. When the Merger is
consummated (the "Merger Closing Date"), the Purchase Agreement
Supplement will be duly authorized by the Fieldcrest Guarantors and
will be duly executed and delivered by the Fieldcrest Guarantors and
will constitute the valid and binding agreement of the Fieldcrest
Guarantors, enforceable against the Fieldcrest Guarantors in
accordance with its terms, except that (i) enforcement thereof may be
subject to (A) bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws now or hereafter in
effect relating to or affecting creditors' rights generally and (B)
general principles of equity (regardless of whether enforceability is
considered in a proceeding in equity or at law) and (ii) the
enforceability of any indemnification or contribution provisions
thereof may be limited under applicable securities laws or the public
policies underlying such laws.
(i) The Notes have been duly authorized by the Company,
and, when executed and authenticated in accordance with the provisions
of the Indenture and delivered to and paid for by the Initial
Purchasers in accordance with this Agreement, will constitute the
valid and binding obligations of the Company enforceable against the
Company in accordance with the terms, and will be entitled to the
benefits of, the Indenture, except that (i) enforcement thereof may be
subject to (A) bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws now or hereafter in
effect relating to or affecting creditors' rights generally and (B)
general principles of equity (regardless of whether enforceability is
considered in a proceeding in equity or at law) and (ii) the
enforceability of any indemnification or contribution provisions
thereof may be limited under applicable securities laws or the public
policies underlying such laws.
(j) The Guarantees endorsed on the Notes (i) have been
duly authorized by each Pillowtex Guarantor and (ii) as of the Merger
Closing Date, will be duly authorized by each Fieldcrest Guarantor
and, in each case, when the Notes are executed and authenticated in
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accordance with the provisions of the Indenture and delivered to and
paid for by the Initial Purchasers in accordance with this Agreement,
the Guarantees will constitute the valid and binding obligation of the
Guarantors enforceable against the Guarantors in accordance with their
terms and will be entitled to the benefits of the Indenture except
that (i) enforcement thereof may be subject to (A) bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws now or hereafter in effect relating to or affecting
creditors' rights generally and (B) general principles of equity
(regardless of whether enforceability is considered in a proceeding in
equity or at law) and (ii) the enforceability of any indemnification
or contribution provisions thereof may be limited under applicable
securities laws or the public policies underlying such laws.
(k) The Indenture (i) has been duly authorized by the
Company and the Pillowtex Guarantors and (ii) as of the Merger Closing
Date, will be duly authorized by the Fieldcrest Guarantors. When the
Securities are delivered and paid for pursuant to this Agreement on
the Closing Date, the Indenture will have been duly executed and
delivered by the Company and the Pillowtex Guarantors and (assuming
the due execution and delivery thereof by the Trustee) will be a
legally valid and binding agreement of the Company and the Pillowtex
Guarantors, enforceable against the Company and the Pillowtex
Guarantors in accordance with its terms except that enforcement
thereof may be subject to (i) bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium, and other similar laws now or
hereafter in effect relating to or affecting creditors' rights
generally and (ii) general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at law). As
of the Merger Closing Date, the Supplemental Indenture will be duly
executed and delivered by the Fieldcrest Guarantors and (assuming the
due execution and delivery thereof by the Trustee) will be legally
valid and binding agreement of the Fieldcrest Guarantors, enforceable
against the Fieldcrest Guarantors in accordance with its terms except
that enforcement thereof may be subject to (i) bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium, and other similar
laws now or hereafter in effect relating to or affecting creditors'
rights generally and (ii) general principles of equity (regardless of
whether enforceability is considered in a proceeding in equity or at
law).
(l) The Exchange Securities have been, and in the case of
the Fieldcrest Guarantors will be as of the Merger Closing Date, duly
authorized, and, when duly executed, authenticated, issued and
delivered, will be validly issued and outstanding, and will constitute
the valid and binding obligations of the Issuers, entitled to the
benefits of the Indenture and enforceable against the Issuers in
accordance with their terms except that (i) enforcement thereof may be
subject to (A) bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws now or hereafter in
effect relating to or affecting creditors' rights generally and (B)
general principles of equity (regardless of whether enforceability is
considered in a proceeding in equity or at law) and (ii) the
enforceability of any indemnification or contribution provisions
thereof may be limited under applicable securities laws or the public
policies underlying such laws.
(m) The Registration Rights Agreement (i) has been duly
authorized by the Company and the Pillowtex Guarantors and (ii) as of
the Merger Closing Date, will be authorized by the Fieldcrest
Guarantors, and when duly executed and delivered by the Issuers
(assuming the due execution and delivery by the Initial Purchasers),
will constitute a valid and binding agreement of the Issuers,
enforceable against the Issuers in accordance with its terms except
that (i) enforcement thereof may be subject to (A) bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws now or hereafter in effect relating to or affecting
creditors' rights generally and (B) general principles of equity
(regardless of whether enforceability is
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considered in a proceeding in equity or at law) and (ii) the
enforceability of any indemnification or contribution provisions
thereof may be limited under applicable securities laws or the public
policies underlying such laws. As of the Merger Closing Date, the
Supplemental Registration Rights Agreement will be duly executed and
delivered by the Fieldcrest Guarantors and (assuming the due execution
and delivery thereof by the Initial Purchasers) will be a legally
valid and binding agreement of the Fieldcrest Guarantors, enforceable
against the Fieldcrest Guarantors in accordance with its terms except
that (i) enforcement thereof may be subject to (A) bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium, and
other similar laws now or hereafter in effect relating to or affecting
creditors' rights generally and (B) general principles of equity
(regardless of whether enforceability is considered in a proceeding in
equity or at law) and (ii) the enforceability of any indemnification
or contribution provisions thereof may be limited under applicable
securities laws or the public policies underlying such laws.
(n) On the Merger Closing Date, the New Senior Credit
Facilities (as defined in the Final Memorandum) (the "Credit
Agreement") (a) will be duly authorized, executed and delivered by the
Issuers and will constitute the valid and binding agreement of the
Issuers, enforceable against the Issuers in accordance with its terms
except that (i) enforcement thereof may be subject to (A) bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws now or hereafter in effect relating to or affecting
creditors' rights generally and (B) general principles of equity
(regardless of whether enforceability is considered in a proceeding in
equity or at law) and (ii) the enforceability of any indemnification
or contribution provisions thereof may be limited under applicable
securities laws or the public policies underlying such laws; and (b)
shall be in full force and effect. On the Merger Closing Date, no
event of default or event which, with the giving of notice or passage
of time or both, would constitute an event of default under the Credit
Agreement shall have occurred and all conditions to the extension of
credit thereunder still have been satisfied without waiver.
(o) The Agreement and Plan of Merger, dated September 10,
1997 by and among the Company, Pegasus Merger Sub, Inc., a wholly
owned subsidiary of the Company ("Merger Sub") and Fieldcrest (the
"Merger Agreement") has been duly authorized, executed and delivered
by the Company and Merger Sub and constitutes the valid and binding
agreement of the Company and Merger Sub enforceable against each of
the Company and Merger Sub in accordance with its terms except that
(i) enforcement thereof may be subject to (A) bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar
laws now or hereafter in effect relating to or affecting creditors'
rights generally and (B) general principles of equity (regardless of
whether enforceability is considered in a proceeding in equity or at
law) and (ii) the enforceability of any indemnification or
contribution provisions thereof may be limited under applicable
securities laws or the public policies underlying such laws. The
Merger Agreement is in full force and effect and there exists no
breach by the Company or Merger Sub, or, to the knowledge of the
Company and the Pillowtex Guarantors, any other party of any
representation or covenant thereunder and, to the knowledge of the
Company, all conditions to the consummation of the transactions
contemplated thereby will be satisfied without waiver.
(p) Both before and after giving effect to the Merger,
the execution, delivery and performance of this Agreement, the
Indenture, the Registration Rights Agreement, the Credit Agreement and
the Merger Agreement by the Company and the Pillowtex Guarantors (to
the extent each is a party thereto), and the consummation of the
transactions contemplated hereby and thereby and the issuance and sale
of the Securities and Exchange Securities by the Issuers will not
conflict with or result in a breach or violation of any of the terms
or provisions of, or constitute a
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default under, any indenture, mortgage, deed of trust, loan or credit
agreement or other agreement or instrument to which either the Company
or any of its subsidiaries is a party or by which the Company or any
of its subsidiaries is bound or to which any of the properties or
assets of the Company or any of its subsidiaries are subject, nor will
such actions result in any violation of the provisions of the charter
or by-laws of the Company or any of its subsidiaries or any statute to
which it may be subject or any order, rule or regulation of any court
or governmental agency or body having jurisdiction over the Company or
any of its subsidiaries or any of their properties or assets (except
to the extent any such conflict, breach, violation or default singly
or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect); and except for such consents, approvals,
authorizations, registrations or qualifications as may be required
under applicable state securities and Blue Sky laws in connection with
the purchase and distribution of the Securities by the Initial
Purchasers or as set forth in the Registration Rights Agreement, no
consent, approval, authorization or order of, or filing or
registration with, any such court or governmental agency or body is
required for the execution, delivery and performance of this
Agreement, the Indenture, the Registration Rights Agreement, the
Credit Agreement and the Merger Agreement by the Issuers, the
consummation of the transactions contemplated hereby and thereby, and
the issuance and sale of the Securities and Exchange Securities by the
Issuers.
(q) Both before and after giving effect to the Merger,
neither the Company nor any of its subsidiaries is in breach or
violation of any of the terms or provisions of any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries is a party
or by which the Company or any of its subsidiaries is bound or to
which any of the properties or assets of the Company or any of its
subsidiaries are subject, nor is the Company or any of its
subsidiaries in violation of the provisions of its respective charter
or by-laws or any statute or any judgment, order, rule or regulation
of any court or governmental agency or body having jurisdiction over
the Company, any of its subsidiaries or any of their properties or
assets (except to the extent any such conflict, breach, violation or
default is cured at or prior to the Closing Date and within the grace
period applicable thereto or would not, singly or in the aggregate,
reasonably be expected to have a Material Adverse Effect).
(r) The Securities, the Indenture and the Registration
Rights Agreement conform in all material respects to the descriptions
thereof contained in the Final Memorandum and the descriptions are
accurate summaries in all material respects.
(s) Both before and after giving effect to the Merger and
except for registration rights granted to Apollo Investment Fund III,
L.P., Apollo Overseas Partner III, L.P. and Apollo (U.K.) Partners
III, L.P. under that certain Preferred Stock Purchase Agreement, dated
September 10, 1997, as amended, and as set forth in the Registration
Rights Agreement, there are no contracts, agreements or understandings
between the Company or any of its subsidiaries and any person granting
such person the right to require the Company or any of its
subsidiaries to file a registration statement under the Securities Act
with respect to any securities owned or to be owned by such person or
to require the Company or any of its subsidiaries to include such
securities in any securities being registered pursuant to any
registration statement filed by the Company or any of its subsidiaries
under the Securities Act.
(t) Both before and after giving effect to the Merger and
except as set forth in the Preliminary Memorandum and the Final
Memorandum, there is no action, suit or proceeding before or by any
court or governmental agency or body, domestic or foreign, now pending
or, to the knowledge of the Company and the Pillowtex Guarantors,
threatened against or affecting the
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Company or any of its subsidiaries, which would reasonably be expected
to result in a Material Adverse Change or singly or in the aggregate,
reasonably be expected to have a Material Adverse Effect or materially
and adversely affect the offering of the Securities.
(u) Both before and after giving effect to the Merger,
the Company and each of its subsidiaries has good and indefeasible
title in fee simple to all real property and good and indefeasible
title to all personal property owned by it and necessary in the
conduct of the business of the Company or such subsidiary in each case
free and clear of all liens, encumbrances and defects except (i) such
as are referred to in the Final Memorandum or (ii) such as do not
materially adversely affect the value of such property to the Company
or such subsidiary, and do not interfere with the use made and
proposed to be made of such property by the Company or such subsidiary
to an extent that such interference would, singly or in the aggregate,
reasonably be expected to have a Material Adverse Effect. The Company
and its subsidiaries possess adequate certificates, authorizations or
permits issued by the appropriate state, federal or foreign regulatory
agencies or bodies necessary to conduct the business now operated by
them, and neither the Company nor any of its subsidiaries has received
any notice of proceedings relating to the revocation or modification
of any such certificate, authority or permit which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or
finding, would, singly or in the aggregate, reasonably be expected to
have a Material Adverse Effect.
(v) KPMG Peat Marwick L.L.P. and Ernst & Young L.L.P.,
who have certified certain financial statements of the Company and its
subsidiaries and Fieldcrest and its subsidiaries, respectively, are
independent public accountants within the meaning of the Securities
Act and the rules and regulations thereunder. The consolidated
financial statements included in the Preliminary Memorandum and the
Final Memorandum present fairly in all material respects the
consolidated financial position of the Issuers, on a consolidated
basis, as at the dates indicated and the results of their operations
and the changes in their consolidated financial position for the
periods specified; said financial statements have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis during the periods involved, except as indicated
therein. Both before and after giving effect to the Merger, the
Company and each of its subsidiaries and Fieldcrest and each of its
subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability;
(iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to
any differences.
(w) Both before and after giving effect to the Merger,
neither the Company nor any of its subsidiaries is now or, after
giving effect to the issuance of the Securities, and the application
of the proceeds thereof, will be (i) insolvent, (ii) left with
unreasonably small capital with which to engage in its anticipated
businesses or (iii) incurring debts beyond its ability to pay such
debts as they become due.
(x) Both before and after giving effect to the Merger,
the Company and its subsidiaries own or otherwise possess the right to
use all patents, trademarks, service marks, trade names and
copyrights, all applications and registrations for each of the
foregoing, and all other proprietary rights and confidential
information used in the conduct of their respective businesses
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as currently conducted; and, except as disclosed in the Final
Memorandum, neither the Company nor any of its subsidiaries has
received any notice or is otherwise aware, of any infringement of or
conflict with the rights of any third party with respect to any of the
foregoing which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would reasonably be expected
to have a Material Adverse Effect.
(y) Both before and after giving effect to the Merger,
the Company and its subsidiaries are (i) in compliance with any and
all applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment
or hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (ii) have received all permits, licenses or
other approvals required of them under applicable Environmental Laws
to conduct their respective businesses and (iii) are in compliance
with all terms and conditions of any such permit, license or approval,
except where such noncompliance with Environmental Laws, failure to
receive required permits, licenses or other approvals or failure to
comply with the terms and conditions of such permits, licenses or
approvals would not, singly or in the aggregate, reasonably be
expected to have a Material Adverse Effect. In the ordinary course of
its business, the Company evaluates changes in Environmental Laws that
may affect the facilities of the Company and its subsidiaries and to
the extent any changes to the Company's facilities are deemed
necessary as a result of such change in Environmental Laws, the
Company attempts to implement such changes. On the basis of such
evaluation, the Company has reasonably concluded that the costs and
liabilities associated with any such change would not, singly or in
the aggregate, reasonably be expected to have a Material Adverse
Effect.
(z) Both before and after giving effect to the Merger and
except as described in the Final Memorandum, no labor problem or
disturbance with the employees of the Company or any of its
subsidiaries exists or, to the knowledge of the Company, is threatened
which, singly or in the aggregate, would reasonably be expected to
have a Material Adverse Effect.
(aa) Both before and after giving effect to the Merger,
neither the Company nor any of its subsidiaries, nor, to the knowledge
of the Company, any director, officer, agent, employee or other person
associated with or acting on behalf of the Company or any of its
subsidiaries, has used any corporate funds during the last five years
for any unlawful contribution, gift, entertainment or other unlawful
expense relating to political activity; made any unlawful payment to
any foreign or domestic government official or employee from corporate
funds; violated or is in violation of any provision of the Foreign
Corrupt Practices Act of 1977; or made any bribe, payoff, influence
payment, kickback or other unlawful payment.
(ab) Neither the Company nor any of its subsidiaries has
taken, and none of them will take, any action that would cause this
Agreement or the issuance or sale of the Securities and Exchange
Securities to violate Regulation G, T, U or X of the Board of
Governors of the Federal Reserve System or analogous foreign laws and
regulations.
(ac) The Issuers have complied with all provisions of
Section 517.075, Florida Statutes (Chapter 92- 198, Laws of Florida)
relating to doing business with the Government of Cuba or with persons
or affiliates located in Cuba.
2. PURCHASE AND SALE. On the basis of the
representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Issuers agree to sell to the Initial
Purchasers, and each Initial Purchaser agrees to purchase the aggregate
principal amount of Securities set
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forth opposite its name as shown in Schedule B hereto, at a purchase price
equal to 97.60% of such principal amount thereof. The Initial Purchasers shall
reimburse the Company for certain costs incurred in connection with the
offering in the amount of $647,500.
The Issuers shall not be obligated to deliver any of the
Securities to be delivered except upon payment for all the Securities to be
purchased as provided herein.
3. SALE AND RESALE OF THE SECURITIES BY THE INITIAL
PURCHASERS. Each Initial Purchaser represents and warrants to the Issuers that
it will offer the Securities to be purchased hereunder for resale only upon the
terms and conditions set forth in this Agreement and in the Final Memorandum.
The Initial Purchasers hereby represent and warrant to, and agree with, the
Issuers that the Initial Purchasers (i) will not solicit offers for, or offer
or sell, the Notes by means of any form of general solicitation or general
advertising within the meaning of Regulation D or in any manner involving a
public offering within the meaning of Section 4(2) of the Securities Act, and
(ii) will solicit offers for the Notes only from, and will offer, sell or
deliver the Notes, as part of its initial offering, only to the following
persons (each an "Eligible Purchaser") (A) persons in the United States whom
such Initial Purchaser reasonably believes to be qualified institutional buyers
("Qualified Institutional Buyers") as defined in Rule 144A under the Securities
Act, as such rule may be amended from time to time ("Rule 144A") or, if any
such person is buying for one or more institutional accounts for which such
person is acting as fiduciary or agent, only when such person has represented
to such Initial Purchaser that each such account is a Qualified Institutional
Buyer, to whom notice has been given that such sale or delivery is being made
in reliance on Rule 144A, (B) to a limited number of institutional accredited
investors as defined in Rule 501(a) (1), (2), (3) or (7) under Regulation D
("Accredited Investors") that, prior to their purchase of the Securities,
executes and delivers a letter containing certain representations and
agreements in the form attached as Annex A to the Final Memorandum, or (C) in
offshore transactions pursuant to Regulation S under the Securities Act, and in
each case, in transactions under Rule 144A or Regulation D in private sales
exempt from registration under the Securities Act.
4. DELIVERY OF AND PAYMENT FOR THE NOTES. Delivery of
and payment for the Securities shall be made at the office of ▇▇▇▇▇, Day,
▇▇▇▇▇▇ & ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, at 9:00 A.M., New York
City time, on December 18, 1997 or at such other date or place as shall be
determined by agreement between the Initial Purchasers and the Company. This
date and time are sometimes referred to as the "Closing Date." On the Closing
Date, the Company and the Pillowtex Guarantors shall deliver or cause to be
delivered the Securities to the Initial Purchasers for the account of the
Initial Purchasers against payment to or upon the order of the Company of the
purchase price by wire transfer in federal (same-day) funds. Time shall be of
the essence, and delivery at the time and place specified pursuant to this
Agreement is a further condition of the obligation of the Initial Purchasers
hereunder. Upon delivery, the Securities shall be in definitive fully
registered form and registered in the name of Cede & Co., as nominee of the
Depository Trust Company ("DTC"), or such other name or names and in such
denominations as the Initial Purchasers shall request in writing not less than
one business day prior to the Closing Date. For the purpose of expediting the
checking and packaging of the Securities, the Company and the Pillowtex
Guarantors shall make the Securities available for inspection by the Initial
Purchasers in New York, New York, not later than 2:00 P.M., New York City time,
on the business day prior to the Closing Date.
5. FURTHER AGREEMENTS OF THE ISSUERS. The Issuers
jointly and severally agree with each Initial Purchaser as set forth below in
this Section 5:
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(a) The Issuers will furnish to the Initial
Purchasers, without charge, as many copies of the Final Memorandum and
any supplements and amendments thereto as they may reasonably request.
(b) Prior to making any amendment or supplement
to the Final Memorandum, the Issuers shall furnish a copy thereof to
the Initial Purchasers and counsel to the Initial Purchasers and will
not effect any such amendment or supplement to which the Initial
Purchasers shall reasonably object by notice to the Company after a
reasonable period to review.
(c) If, at any time prior to completion of the
distribution of the Securities by the Initial Purchasers, any event
shall occur or condition exist as a result of which it is necessary,
in the opinion of counsel for the Initial Purchasers or counsel for
the Issuers, to amend or supplement the Final Memorandum in order that
the Final Memorandum will not include an untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein not misleading in light of the
circumstances existing at the time it is delivered to a purchaser, or
if it is necessary to amend or supplement the Final Memorandum to
comply with applicable law, the Issuers will promptly prepare such
amendment or supplement as may be necessary to correct such untrue
statement or omission or so that the Final Memorandum, as so amended
or supplemented, will comply with applicable law and furnish to the
Initial Purchasers such number of copies of such amendment or
supplement as they may reasonably request.
(d) So long as any Securities are outstanding and
are "Restricted Securities" within the meaning of Rule 144(a)(3) under
the Securities Act and during any period in which the Issuers are not
subject to Section 13 or 15(d) of the Exchange Act, the Issuers will
furnish to holders of the Securities and prospective purchasers of
Securities designated by such holders, upon request of such holders or
such prospective purchasers, the information, if any, required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act.
(e) So long as the Securities and Exchange
Securities are outstanding, the Issuers will furnish to the Initial
Purchasers copies of any annual reports, quarterly reports and current
reports filed with the Securities and Exchange Commission ("SEC") on
Forms 10-K, 10-Q and 8-K, or such other similar forms as may be
designated by the SEC, and such other documents, reports and
information as shall be furnished by the Issuers to the Trustee or to
the holders of the Securities and Exchange Securities pursuant to the
Indenture.
(f) The Issuers will use their best efforts to
qualify the Securities for sale under the securities or Blue Sky laws
of such jurisdictions as the Initial Purchasers reasonably designate
and to continue such qualifications in effect so long as reasonably
required for the distribution of the Securities. The Issuers will
also arrange for the determination of the eligibility for investment
of the Securities under the laws of such jurisdictions as the Initial
Purchasers reasonably request. Notwithstanding the foregoing, the
Issuers shall not be obligated to qualify as a foreign corporation in
any jurisdiction in which it is not so qualified or to file a general
consent to service of process or to subject itself to taxation in
respect of doing business in any jurisdiction in which it is not
otherwise subject.
(g) The Issuers will use their best efforts to
permit the Securities to be designated Private Offerings, Resales and
Trading through the Automated Linkages Market ("PORTAL") securities in
accordance with the rules and regulations adopted by the National
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Association of Securities Dealers, Inc. relating to trading in the
PORTAL market and to permit the Securities to be eligible for
clearance and settlement through DTC.
(h) The Issuers will not, and will cause their
Affiliates not to, sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any security (as defined in the
Securities Act) in a transaction that could be integrated with the
sale of the Securities in a manner which would require the
registration of the Securities under the Securities Act.
(i) Except following the effectiveness of any
Registration Statement (as defined in the Registration Rights
Agreement) and except for such offers as may be made as a result of,
or subsequent to, filing such Registration Statement or amendments
thereto prior to the effectiveness thereof, the Issuers will not, and
will cause their affiliates not to, solicit any offer to buy or offer
to sell the Securities by means of any form of general solicitation or
general advertising (as those terms are used in Regulation D under the
Securities Act) or in any manner involving a public offering within
the meaning of Section 4(2) of the Securities Act.
(j) The Company will consummate the transactions
contemplated by the Merger Agreement in accordance with the terms
thereof, and apply the net proceeds from the sale of the Securities,
in each case, as set forth in the Final Memorandum.
(k) On the Merger Closing Date, the Company will
cause the Fieldcrest Guarantors to execute the Purchase Agreement
Supplement, the Supplemental Indenture, the Supplemental Registration
Rights Agreement and the Guarantees.
(l) The Issuers will take such steps as shall be
necessary to ensure that neither the Company nor any of its
subsidiaries shall become (i) an "investment company" within the
meaning of the Investment Company Act, or (ii) a "holding company" or
a "subsidiary company" or an "affiliate" of a holding company within
the meaning of the Public Utility Holding Company Act of 1935, as
amended.
(m) The Issuers will not, and will cause their
Affiliates not to, take any actions which would require the
registration under the Securities Act of the Securities (other than
pursuant to the Registration Rights Agreement).
(n) Prior to the consummation of the Exchange
Offer or the effectiveness of an applicable shelf registration
statement if, in the reasonable judgment of the Initial Purchasers,
the Initial Purchasers or any of their Affiliates are required to
deliver an offering memorandum in connection with sales of, or
market-making activities with respect to, the Securities, (i) the
Issuers will periodically amend or supplement the Final Memorandum so
that the information contained in the Final Memorandum complies with
the requirements of Rule 144A of the Securities Act, (ii) the Issuers
will amend or supplement the Final Memorandum when necessary to
reflect any material changes in the information provided therein so
that the Final Memorandum will not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to
make the statements therein, in light of the circumstances existing as
of the date the Final Memorandum is so delivered, not misleading and
(iii) the Issuers will provide the Initial Purchasers with copies of
each such amended or supplemented Final Memorandum, as the Initial
Purchasers may reasonably request.
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The Issuers hereby expressly acknowledge that the
indemnification and contribution provisions of Section 8 hereof are
specifically applicable and relate to each offering memorandum,
registration statement, prospectus, amendment or supplement referred
to in this Section 5(n).
(o) The Issuers will do all things necessary to
satisfy the closing conditions set forth in Section 7 hereof.
6. EXPENSES. The Issuers jointly and severally, agree
to pay (a) the costs incident to the authorization, issuance, sale and delivery
of the Securities and Exchange Securities and any issue or stamp taxes payable
in that connection; (b) the costs incident to the preparation and printing of
the Preliminary Memorandum, the Final Memorandum and any amendments,
supplements and exhibits thereto; (c) the costs of distributing the Preliminary
Memorandum, the Final Memorandum and any amendment or supplement thereto; (d)
the fees and expenses of qualifying the Securities and Exchange Securities
under the securities laws of the several jurisdictions as provided in Section
5(f) and of preparing, printing and distributing a Blue Sky Memorandum
(including related fees and expenses of counsel to the Initial Purchasers); (e)
the cost of printing the Securities and the Exchange Securities; (f) the fees
and expenses of the Trustee and any agent of the Trustee and the fees and
disbursements of any counsel for the Trustee in connection with the Indenture
and the Securities and Exchange Securities; (g) any fees paid to rating
agencies in connection with the rating of the Securities and Exchange
Securities; (h) the costs and expenses of DTC and its nominee, including its
book-entry system; (i) all expenses and listing fees incurred in connection
with the application for quotation of the Securities on the PORTAL market; and
(j) all other costs and expenses incident to the performance of the obligations
of the Issuers under this Agreement.
7. CONDITIONS OF INITIAL PURCHASERS' OBLIGATIONS. The
obligations of the Initial Purchasers to purchase the Securities shall be
subject to the accuracy of the representations and warranties on the part of
the Issuers contained herein at the Execution Time and the Closing Date, to the
accuracy of the statements of the Issuers made in any certificates pursuant to
the provisions hereof, to the performance by the Issuers of their obligations
hereunder and to the following additional conditions:
(a) The Initial Purchasers shall not have
discovered and disclosed to the Company on or prior to the Closing
Date that the Final Memorandum or any amendment or supplement thereto
contains an untrue statement of a fact which, in the opinion of ▇▇▇▇▇▇
& ▇▇▇▇▇▇▇, counsel for the Initial Purchasers, is material or omits to
state a fact which, in the opinion of such counsel, is material and is
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(b) The Final Memorandum shall have been printed
and copies distributed to the Initial Purchasers as soon as
practicable but in no event later than on the second Business Day
following the date of this Agreement or at such later date and time as
to which the Initial Purchasers may agree, and no stop order
suspending the qualification or exemption from qualification of the
Securities in any jurisdiction referred to in Section 5(f) shall have
been issued and no proceeding for that purpose shall have been
commenced or shall be pending or threatened.
(c) No action shall have been taken and no
statute, rule, regulation or order shall have been enacted, adopted or
issued by any governmental agency which would, as of the Closing Date,
singly or in the aggregate, reasonably be expected to have a Material
Adverse Effect; no action, suit or proceeding shall have been
commenced and be pending against or affecting or, to the knowledge of
the Company, threatened against, the Company or any of its
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subsidiaries before any court or arbitrator or any governmental body,
agency or official that, singly or in the aggregate, if adversely
determined, would reasonably be expected to result in a Material
Adverse Effect; and no stop order shall have been issued by the SEC or
any governmental agency of any jurisdiction referred to in Section
5(f) preventing the use of the Final Memorandum, or any amendment or
supplement thereto, or which would reasonably be expected to have a
Material Adverse Effect.
(d) Since the dates as of which information is
given in the Final Memorandum and other than as set forth in the Final
Memorandum, (i) there shall not have been any Material Adverse Change,
or any development that is reasonably likely to result in a Material
Adverse Change, or any material change in the long-term debt of the
Issuers, or material increase in the short-term debt of the Issuers,
from that set forth in the Final Memorandum; (ii) no dividend or
distribution of any kind shall have been declared, paid or made by the
Issuers on any class of their capital stock; (iii) the Issuers shall
not have incurred any liabilities or obligations, direct or
contingent, that are material, individually or in the aggregate, to
the Issuers, taken as a whole, and that are required to be disclosed
on a balance sheet or notes thereto in accordance with generally
accepted accounting principles and are not disclosed on the latest
balance sheet or notes thereto included in the Final Memorandum.
(e) The Initial Purchasers shall have received a
certificate, dated the Closing Date, signed on behalf of the Company
by ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chief Operating Officer, confirming that (i)
such officer, has participated in conferences with other officers and
representatives of the Issuers, representatives of the independent
public accountants of the Issuers and representatives of counsel to
the Issuers at which the contents of the Final Memorandum and related
matters were discussed and (ii) the matters set forth in paragraphs
(b), (c) and (d) of this Section 7 are true and correct as of the
Closing Date.
(f) All corporate proceedings and other legal
matters incident to the authorization, form and validity of this
Agreement, the Purchase Agreement Supplement, the Securities and
Exchange Securities, the Indenture, the Registration Rights Agreement,
the Final Memorandum, the Credit Agreement, the Merger Agreement, the
Supplemental Indenture, the Supplemental Registration Rights Agreement
and all other legal matters relating to this Agreement and the
transactions contemplated hereby and thereby, shall be satisfactory in
all material respects to counsel for the Initial Purchasers, and the
Company shall have furnished to such counsel all documents and
information that they may reasonably request to enable them to pass
upon such matters.
(g) ▇▇▇▇▇, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇, counsel for the
Company and the Pillowtex Guarantors (other than ▇▇▇▇▇▇▇ Home
Fashions, Inc. ("▇▇▇▇▇▇▇"), Tennessee Woolen ▇▇▇▇▇, Inc. ("Woolen
▇▇▇▇▇") and Beacon Manufacturing Company ("Beacon")) and in connection
with the matters set forth in (xix) through (xxvii) below with respect
to the Fieldcrest Guarantors (other than Crestfield Cotton Company
("Crestfield") and Bangor Investment Company ("Bangor"), shall have
furnished to the Initial Purchasers its written opinion, addressed to
the Initial Purchasers and dated the Closing Date, in form and
substance reasonably satisfactory to the Initial Purchasers, to the
effect that:
(i) The Company and each of Pillowtex,
Inc. ("PI") and PTEX Holding Company ("PTEX"), each a Delaware
corporation and wholly owned subsidiary of the Company, are
validly existing as corporations in good standing under the
laws of
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their respective jurisdictions of incorporation. Pillowtex
Management Services Company ("PMSC") is a business trust
existing in good standing under the laws of the State of
Delaware. The Company and each of the Pillowtex Guarantors
(other than ▇▇▇▇▇▇▇, Woolen ▇▇▇▇▇ and Beacon) are duly
qualified to do business and in good standing in each
jurisdiction set forth in Schedule 1 hereto which the Company
has certified to us (A) are the jurisdictions in which the
Company, PI, PTEX and PMSC own property, maintain business or
have employees and (B) the failure to so qualify to transact
business in other jurisdictions would not, singly or in the
aggregate, reasonably be expected to have a Material Adverse
Effect;
(ii) Assuming, (A) the accuracy of the
representations, warranties and covenants of the Company set
forth in this Agreement, and (B) the accuracy of the Initial
Purchasers' representations and warranties set forth in this
Agreement, no registration of the Securities under the
Securities Act or qualification of the Indenture under the
Trust Indenture Act is required in connection with the
issuance, sale and delivery of the Securities by the Company
and the Pillowtex Guarantors to the Initial Purchasers, and
the initial reoffer, resale and delivery of the Securities by
the Initial Purchasers, as contemplated by this Agreement and
the Final Memorandum, it being understood that no opinion is
expressed as to any subsequent resale of Securities or any
resale of Securities by any person other than the Initial
Purchasers;
(iii) The Company, PI and PTEX have the
corporate power and authority, and PMSC has the business trust
power and authority, to consummate the transactions
contemplated by this Agreement; and to issue, sell and deliver
the Securities as contemplated by this Agreement;
(iv) This Agreement has been duly
authorized, executed and delivered by the Company and each of
the Pillowtex Guarantors (other than ▇▇▇▇▇▇▇, Woolen ▇▇▇▇▇ and
Beacon);
(v) The Indenture has been duly
authorized, executed and delivered by the Company and each of
the Pillowtex Guarantors (other than ▇▇▇▇▇▇▇, Woolen ▇▇▇▇▇ and
Beacon) and assuming due authorization, execution and delivery
thereof by the Trustee, is a valid and binding agreement of
the Company and each of the Pillowtex Guarantors (other than
▇▇▇▇▇▇▇, Woolen ▇▇▇▇▇ and Beacon), enforceable against the
Company and each of the Pillowtex Guarantors (other than
▇▇▇▇▇▇▇, Woolen ▇▇▇▇▇ and Beacon) in accordance with its
terms, except as the enforcement thereof may be subject to (A)
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws now or hereafter in effect
relating to or affecting enforcement of creditors' rights
generally and (B) general principles of equity (regardless of
whether enforceability is considered in a proceeding in equity
or at law);
(vi) The execution and delivery of the
Securities have been duly authorized by all requisite
corporate or business trust action of the Company and the
Pillowtex Guarantors (other than ▇▇▇▇▇▇▇, Woolen ▇▇▇▇▇ and
Beacon), as the case may be; the Notes have been duly executed
and delivered by the Company, and the Guarantees have been
duly executed and delivered by the Pillowtex Guarantors (other
than ▇▇▇▇▇▇▇, Woolen ▇▇▇▇▇ and Beacon) and, assuming due
authentication of the Notes by the Trustee and upon payment of
the purchase price therefor in accordance with this Agreement,
the
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Notes and the Guarantees are valid and binding obligations of
the Company and the Pillowtex Guarantors (other than ▇▇▇▇▇▇▇,
Woolen ▇▇▇▇▇ and Beacon), respectively, entitled to the
benefits of the Indenture, enforceable against the Company and
the Pillowtex Guarantors (other than ▇▇▇▇▇▇▇, Woolen ▇▇▇▇▇ and
Beacon), respectively, in accordance with their terms, except
as the enforcement thereof may be subject to (A) bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium
and other similar laws now or hereafter in effect relating to
or affecting enforcement of creditors' rights generally and
(B) general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at
law);
(vii) The execution and delivery of the
Exchange Securities have been duly authorized by all requisite
corporate or business trust action of each of the Company and
each of the Pillowtex Guarantors (other than ▇▇▇▇▇▇▇, Woolen
▇▇▇▇▇ and Beacon), as the case may be; and, when duly executed
and delivered by the Company and the Pillowtex Guarantors
(other than ▇▇▇▇▇▇▇, Woolen ▇▇▇▇▇ and Beacon) and duly
authenticated by the Trustee, the Exchange Securities will be
valid and binding obligations of the Company and the Pillowtex
Guarantors (other than ▇▇▇▇▇▇▇, Woolen ▇▇▇▇▇ and Beacon)(as
applicable), entitled to the benefits of the Indenture and
enforceable against the Company and the Pillowtex Guarantors
(other than ▇▇▇▇▇▇▇, Woolen ▇▇▇▇▇ and Beacon) (as applicable)
in accordance with their terms, except as the enforcement
thereof may be subject to (A) bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other
similar laws now or hereafter in effect relating to or
affecting enforcement of creditors' rights generally and (B)
general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at
law);
(viii) The Registration Rights Agreement
has been duly authorized, executed and delivered by the
Company and each of the Pillowtex Guarantors (other than
▇▇▇▇▇▇▇, Woolen ▇▇▇▇▇ and Beacon) and, assuming due
authorization, execution and delivery thereof by the Initial
Purchasers, the Registration Rights Agreement is a valid and
binding agreement of the Company and each of the Pillowtex
Guarantors (other than ▇▇▇▇▇▇▇, Woolen ▇▇▇▇▇ and Beacon),
enforceable against the Company and each of the Pillowtex
Guarantors (other than ▇▇▇▇▇▇▇, Woolen ▇▇▇▇▇ and Beacon) in
accordance with its terms, except as the (i) enforcement
thereof may be subject to (A) bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other
similar laws now or hereafter in effect relating to or
affecting enforcement of creditors' rights generally and (B)
general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at
law) and (ii) the enforceability of any indemnification or
contribution provisions thereof may be limited under
applicable securities laws or the public policies underlying
such laws;
(ix) The execution and delivery of the
Credit Agreement and the Merger Agreement have been duly
authorized by all requisite corporate or business trust
action, as the case may be, of the Company and each of the
Pillowtex Guarantors (other than ▇▇▇▇▇▇▇, Woolen ▇▇▇▇▇ and
Beacon) (to the extent each is a party thereto); and the
Merger Agreement has been duly executed and delivered by the
Company and Merger Sub and, assuming the due authorization,
execution and delivery thereof by the other parties thereto,
is a valid and binding agreement of the Company and Merger Sub
enforceable against the Company and Merger Sub in accordance
with its terms, except as the enforcement thereof may be
subject to (A) bankruptcy, insolvency, fraudulent
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conveyance, reorganization, moratorium and other similar laws
now or hereafter in effect relating to or affecting
enforcement of creditors' rights generally and (B) general
principles of equity (regardless of whether enforceability is
considered in a proceeding in equity or at law);
(x) All outstanding shares of capital
stock of PI and PTEX have been duly authorized and validly
issued, are fully paid and nonassessable; and, to the
knowledge of such counsel, all such shares and the beneficial
interests of PMSC are owned of record by the Company or a
subsidiary of the Company, and except for the pledge of such
shares pursuant to the Credit Agreement upon consummation of
the Merger as described in the Final Memorandum, are free and
clear of any security interests, liens, pledges or
encumbrances except for (A) a pledge of such shares pursuant
to the Credit Agreement upon consummation of the Merger as
described in the Final Memorandum and (B) the pledge of such
shares pursuant to the Company's existing credit agreement
with NationsBank of Texas, N.A., as agent.;
(xi) The execution and delivery by the
Company and the Pillowtex Guarantors of this Agreement, the
Indenture, the Registration Rights Agreement and the Merger
Agreement, to the extent each is a party thereto, and the
performance by the Company and the Pillowtex Guarantors of
their obligations thereunder will not (A) to the knowledge of
such counsel, result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any
agreement or instrument set forth on Schedule 2 thereto of the
Company or the Pillowtex Guarantors (other than ▇▇▇▇▇▇▇,
Beacon and Woolen ▇▇▇▇▇) or (B) result in any violation of the
provisions of the articles or bylaws or comparable governing
documents of the Company or the Pillowtex Guarantors (other
than ▇▇▇▇▇▇▇, Woolen ▇▇▇▇▇ and Beacon), or any applicable law,
rule or regulation with respect to the Company or the
Pillowtex Guarantors (other than ▇▇▇▇▇▇▇, Woolen ▇▇▇▇▇ and
Beacon) or, to the knowledge of such counsel, order of any
court or governmental agency having jurisdiction over the
Company or the Pillowtex Guarantors (other than ▇▇▇▇▇▇▇,
Woolen ▇▇▇▇▇ and Beacon), and except for such consents,
approvals or authorizations of, or registrations or
qualifications with, governmental authorities as may be
required under the Securities Act and the rules and
regulations thereunder or applicable states securities or Blue
Sky laws in connection with the purchase and distribution of
the Notes by the Initial Purchasers and as set forth in the
Registration Rights Agreement, no consent, approval,
authorization or order of, or filing or registration with, any
such court or governmental agency or body, is required in
connection with the execution and delivery by the Company and
the Pillowtex Guarantors (other than ▇▇▇▇▇▇▇, Woolen ▇▇▇▇▇ and
Beacon) of this Agreement, the Indenture, the Registration
Rights Agreement, the Credit Agreement or the Merger
Agreement, and the performance by the Company and the
Pillowtex Guarantors of their obligations thereunder;
(xii) The Indenture, the Securities, the
Registration Rights Agreement and the Merger Agreement conform
and, in the case of the Credit Agreement will conform, in all
material respects to the descriptions thereof contained in the
Final Memorandum;
(xiii) To such counsel's knowledge, no
legal or governmental proceedings are pending to which the
Company or the Pillowtex Guarantors is a party which seek to
restrain, enjoin, prevent the consummation of or otherwise
challenge the
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issuance or sale of the Securities to the Initial Purchasers
or the consummation of the transactions described in the Final
Memorandum under the caption "The Merger";
(xiv) Neither the Company nor any of the
Pillowtex Guarantors is (i) subject to registration and
regulation as an "investment company" within the meaning of
the Investment Company Act, or (ii) a "holding company" or a
"subsidiary company" or, to the knowledge of such counsel, an
"affiliate" of a holding company within the meaning of the
Public Utility Holding Company Act of 1935, as amended;
(xv) When the Securities are issued and
delivered pursuant to this Agreement, such Securities will not
be of the same class (within the meaning of Rule 144A(d)(3)
under the Securities Act) as securities of Company or the
Pillowtex Guarantors or, to such counsel's knowledge,
Fieldcrest or the Fieldcrest Guarantors, that are listed on a
national securities exchange registered under Section 6 of the
Securities Exchange Act of 1934, as amended (the "Exchange
Act") or quoted on an automated inter-dealer quotation system;
(xvi) Assuming the Initial Purchasers
purchase the Securities in accordance with Rule 144A under the
Securities Act and comply with their representations,
warranties and covenants contained in this Agreement, neither
the issuance or sale of the Securities nor the application by
the Company of the net proceeds thereof as set forth in the
Final Memorandum will violate Regulation G, T, U or X of the
Board of Governors of the Federal Reserve System;
(xvii) Assuming due authorization by each of
▇▇▇▇▇▇▇, Beacon and Woolen ▇▇▇▇▇, this Agreement, the
Indenture, the Registration Rights Agreement and the
Guarantees have been duly executed and delivered by each of
▇▇▇▇▇▇▇, Beacon and Woolen ▇▇▇▇▇;
(xviii) Assuming (A) the due execution and
delivery by the parties thereto of the Indenture, (B) the
issuance of the Securities by the Company and the Pillowtex
Guarantors, (C) the receipt by the Trustee of the proceeds of
the sale of the Securities to secure the payment and the
performance of the Company's obligations to redeem the Notes
upon a Special Redemption (as defined in the Indenture), (D)
the deposit by the Trustee, pursuant to the Indenture, of the
Special Redemption Amount (as defined in the Indenture) in the
Collateral Account (as defined in the Indenture) and the
immediate investment, pursuant to the Indenture, by the
Trustee of amounts on deposit in the Collateral Account in the
Mutual Fund Account (as defined in the Indenture) maintained
by Nations Fund, (E) the continuing qualification of Nations
Fund as a "securities intermediary" pursuant to and as defined
in Section 8-102 of the Uniform Commercial Code of the State
of New York (the "UCC"), and (F) the delivery by the Trustee
to Nations Fund as "securities intermediary" on whose books
the Mutual Fund Account is registered of instructions to
comply with "entitlement orders" (as defined in Section 8-102
of the UCC) (as attached to such counsel's opinion) originated
by the Trustee without further consent by any of the Company,
the Pilowtex Guarantors, the Initial Purchasers or the
Holders, the Trustee's security interest in the Company's
right, title and interest in the Collateral (as defined in the
Indenture) is and will remain perfected until the Collateral
is released pursuant to the terms of the Indenture;
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(xix) Each of the Fieldcrest Guarantors
(other than Crestfield and Bangor) is duly qualified to do
business and in good standing in each jurisdiction set forth
in Schedule 3 hereto which the Company has certified to us (A)
are the jurisdictions in which the Fieldcrest Guarantors own
property, maintain business or have employees and (B) the
failure to so qualify to transact business in other
jurisdictions would not, singly or in the aggregate,
reasonably be expected to have a Material Adverse Effect;
(xx) Assuming the consummation of the Merger
as described in the Final Memorandum and the due
authorization, execution and delivery of the Indenture and the
Supplemental Indenture by each of the Fieldcrest Guarantors
(other than Crestfield and Bangor), and assuming due
authorization, execution and delivery thereof by the Trustee,
each of the Indenture and the Supplemental Indenture will be
valid and binding agreement of each of the Fieldcrest
Guarantors (other than Crestfield and Bangor), enforceable
against each of the Fieldcrest Guarantors (other than
Crestfield and Bangor) in accordance with its terms, except as
enforcement thereof may be subject to (A) bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium
and other similar laws now or hereafter in effect relating to
or affecting enforcement of creditors' rights generally and
(B) general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at
law);
(xxi) Assuming the consummation of the
Merger as described in the Final Memorandum and the due
authorization, execution and delivery of the Guarantees by
each of the Fieldcrest Guarantors (other than Crestfield and
Bangor), the Guarantees will be valid and binding obligations
of each of the Fieldcrest Guarantors (other than Crestfield
and Bangor), entitled to the benefits of the Indenture,
enforceable against each of the Fieldcrest Guarantors (other
than Crestfield and Bangor) in accordance with their terms,
except as the enforcement thereof may be subject to (A)
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws now or hereafter in effect
relating to or affecting enforcement of creditors' rights
generally and (B) general principles of equity (regardless of
whether enforceability is considered in a proceeding in equity
or at law);
(xxii) Assuming the consummation of the
Merger as described in the Final Memorandum and the due
authorization, execution and delivery of the Exchange
Securities by each of the Fieldcrest Guarantors (other than
Crestfield and Bangor), the Exchange Securities will be valid
and binding obligations of the Fieldcrest Guarantors (other
than Crestfield and Bangor) entitled to the benefits of the
Indenture and enforceable against the Fieldcrest Guarantors
(other than Crestfield and Bangor) in accordance with their
terms, except as the enforcement thereof may be subject to (A)
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws now or hereafter in effect
relating to or affecting enforcement of creditors' rights
generally and (B) general principles of equity (regardless of
whether enforceability is considered in a proceeding in equity
or at law);
(xxiii) Assuming the consummation of the
Merger as described in the Final Memorandum and the due
authorization, execution and delivery of the Registration
Rights Agreement and the Supplemental Registration Rights
Agreement by each of the Fieldcrest Guarantors (other than
Crestfield and Bangor), and assuming due authorization,
execution and delivery thereof by the Initial Purchasers, the
Registration Rights
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Agreement and the Supplemental Registration Rights Agreement
will be a valid and binding agreement of each of the
Fieldcrest Guarantors (other than Crestfield and Bangor),
enforceable against each of the Fieldcrest Guarantors (other
than Crestfield and Bangor) in accordance with their terms,
except as the (i) enforcement thereof may be subject to (A)
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws now or hereafter in effect
relating to or affecting enforcement of creditors' rights
generally and (B) general principles of equity (regardless of
whether enforceability is considered in a proceeding in equity
or at law) and (ii) the enforceability of any indemnification
or contribution provisions thereof may be limited under
applicable securities laws or the public policies underlying
such laws;
(xxiv) Assuming the consummation of the
Merger as described in the Final Memorandum and the due
authorization, execution and delivery of the subsidiary
guarantee in connection with the Credit Agreement (the
"Subsidiary Guarantee") by each of the Fieldcrest Guarantors
(other than Crestfield and Bangor) and, assuming the due
authorization, execution and delivery by the other parties
thereto, each Subsidiary Guarantee will be a valid and binding
agreement of each of the Fieldcrest Guarantors (other than
Crestfield and Bangor), enforceable against each of the
Fieldcrest Guarantors (other than Crestfield and Bangor) in
accordance with its terms, except as the enforcement thereof
may be subject to (A) bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws
now or hereafter in effect relating to or affecting creditors'
rights generally and (B) general principles of equity
(regardless of whether enforceability is considered in a
proceeding in equity or at law);
(xxv) Assuming the consummation of the
Merger as described in the Final Memorandum and in reliance
upon the representations and warranties made to the Company in
the Merger Agreement, all of the outstanding shares of capital
stock of each of the Fieldcrest Guarantors (other than
Crestfield and Bangor) are owned by the Company or a
subsidiary of the Company;
(xxvi) Assuming the consummation of the
Merger as described in the Final Memorandum, and assuming the
due authorization, execution and delivery by each of the
parties thereto of the Purchase Agreement Supplement, the
Supplemental Indenture, the Supplemental Registration Rights
Agreement, the Credit Agreement and the Merger Agreement, the
performance by each of the Fieldcrest Guarantors (other than
Crestfield and Bangor) of their obligations thereunder will
not (A) to the knowledge of such counsel, result in a breach
or violation of any of the terms or provisions of, or
constitute a default under, any agreement or instrument set
forth on Schedule 4 hereto or (B) result in any violation of
the provisions of the charter or bylaws of any of the
Fieldcrest Guarantors (other than Crestfield and Bangor), any
applicable federal, Delaware General Corporate or Texas law or
regulation to which the Fieldcrest Guarantors (other than
Crestfield and Bangor) are bound; and except for such
consents, approvals or authorizations of, or registrations or
qualifications with, governmental authorities as may be
required under the Securities Act and the rules and
regulations thereunder or applicable states securities or Blue
Sky laws in connection with the purchase and distribution of
the Notes by the Initial Purchasers and as set forth in the
Registration Rights Agreement, no consent, approval,
authorization or order of, or filing or registration with, any
governmental agency or authority of the State of Texas,
Delaware or of the United States of America other than such
filings that are required to effect the Merger that have not
been made or obtained, is
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required in connection with the execution and delivery by each
of the Fieldcrest Guarantors (other than Crestfield and
Bangor) of the Purchase Agreement Supplement, the Supplemental
Indenture, the Supplemental Registration Rights Agreement, the
Credit Agreement or the Merger Agreement, and the performance
of the obligations thereunder of the Fieldcrest Guarantors
(other than Crestfield and Bangor); and
(xxvii) To such counsel's knowledge, no
legal or governmental proceedings are pending to which any of
the Fieldcrest Guarantors is a party which seek to restrain,
enjoin, prevent the consummation of or otherwise challenge the
issuance or sale of the Securities to the Initial Purchasers
or the consummation of the transactions described in the Final
Memorandum under the caption "The Merger".
In addition, such counsel shall also state that such counsel
has participated in conferences with officers and representatives of
the Issuers, representatives of KPMG Peat Marwick LLP and Ernst &
Young LLP, the independent public accountants for the Issuers who
examined certain of the consolidated financial statements of the
Company and Fieldcrest included in the Final Memorandum, and the
Initial Purchasers at which the information contained in the
Preliminary Memorandum and Final Memorandum and related matters were
discussed. Such counsel is not passing upon and does not assume any
responsibility for and has not verified the accuracy, completeness or
fairness of the information contained in the Final Memorandum, and has
not made any independent check or verification thereof. On the basis
of the foregoing (relying as to materiality upon facts provided by
officers and other representatives of the Issuers), no facts have come
to the attention of such counsel that lead such counsel to believe
that the Final Memorandum, as of its date or the Closing Date,
contained an untrue statement of a material fact or omitted to state
any material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading (it
being understood that such counsel need express no belief or opinion
with respect to the financial statements and the notes thereto, and
other financial and statistical data included therein and the
information referred to under the caption "Independent Public
Accountants" as having been included in the Final Memorandum on the
authority of KPMG Peat Marwick LLP and Ernst & young LLP, as experts).
In rendering such opinion, such counsel may state that such
opinion is limited to the laws of the state of New York, the laws of
the state of Texas, the General Corporation Law of the State of
Delaware and the federal law of the United States of America. In
rendering such opinion, such counsel shall be entitled to rely, as to
certain matters of fact, on information contained in certificates of
officers of the Company and the Pillowtex Guarantors.
(h) Parker, Poe, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ L.L.P.,
special North Carolina counsel for ▇▇▇▇▇▇▇ and Beacon, shall have
furnished to the Initial Purchasers its written opinion, addressed to
the Initial Purchasers and dated the Closing Date, in form and
substance reasonably satisfactory to the Initial Purchasers, to the
effect that:
(i) Each of ▇▇▇▇▇▇▇ and Beacon is
validly existing as a corporation and is in good standing
under the laws of its jurisdiction of incorporation. Each of
▇▇▇▇▇▇▇ and Beacon is duly qualified to do business and in
good standing as a foreign corporation in each jurisdiction
with respect to which it has certified to us that it owns
property, maintains business or has employees (except where
failure to so qualify would not, singly or in the aggregate,
reasonably be expected to have a Material Adverse Effect);
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(ii) Each of ▇▇▇▇▇▇▇ and Beacon has the
corporate power and authority to execute and deliver, and to
consummate the transactions contemplated by this Agreement;
and each of ▇▇▇▇▇▇▇ and Beacon has the corporate power and
authority to issue, sell and deliver the Securities as
contemplated by this Agreement;
(iii) To such counsel's knowledge, neither
▇▇▇▇▇▇▇ nor Beacon is in violation of its corporate charter or
by-laws by virtue of the execution, delivery or performance of
the Purchase Agreement, the Indenture, the Guarantees, the
Registration Rights Agreement or the Credit Agreement;
(iv) The execution and delivery of this
Agreement have been duly authorized by all requisite corporate
action of each of ▇▇▇▇▇▇▇ and Beacon;
(v) The execution and delivery of the
Indenture have been duly authorized by all requisite corporate
action of each of ▇▇▇▇▇▇▇ and Beacon;
(vi) The execution and delivery of the
Guarantees have been duly authorized by all requisite
corporate action of each of ▇▇▇▇▇▇▇ and Beacon;
(vii) The execution and delivery of the
Registration Rights Agreement have been duly authorized by all
requisite corporate action of each of ▇▇▇▇▇▇▇ and Beacon; and
(viii) All of the capital stock of each of
▇▇▇▇▇▇▇ and Beacon is owned of record by the Company or a
subsidiary of the Company. All shares of capital stock of
each of ▇▇▇▇▇▇▇ and Beacon have been duly authorized and
validly issued, are fully paid and nonassessable.
In rendering such opinion, such counsel may state that such
opinion is limited to the laws of the state of North Carolina and the
federal law of the United States of America. In rendering such
opinion, such counsel shall be entitled to rely, as to certain matters
of fact, on information contained in certificates of officers of the
Issuers, provided that such counsel shall state that they believe that
they and the Initial Purchasers are justified in relying upon such
certificates and on certificates and reports of public officials.
(i) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇, special
Tennessee counsel for Woolen ▇▇▇▇▇, shall have furnished to the
Initial Purchasers its written opinion, addressed to the Initial
Purchasers and dated the Closing Date, in form and substance
reasonably satisfactory to the Initial Purchasers, to the effect that:
(i) Woolen ▇▇▇▇▇ is validly existing as
a corporation and is in good standing under the laws of its
jurisdiction of incorporation. Woolen ▇▇▇▇▇ is duly qualified
to do business and in good standing as a foreign corporation
in each jurisdiction with respect to which it has certified to
us that it owns property, maintains business or has employees
(except where failure to so qualify would not, singly or in
the aggregate, reasonably be expected to have a Material
Adverse Effect);
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(ii) Woolen ▇▇▇▇▇ has the corporate power
and authority to execute and deliver, and to consummate the
transactions contemplated by this Agreement and the Guarantee;
(iii) To such counsel's knowledge, Woolen
▇▇▇▇▇ is not in violation of its corporate charter or by-laws
by virtue of the execution, delivery or performance of the
Indenture, the Purchase Agreement, the Registration Rights
Agreement or the Credit Agreement;
(iv) The execution and delivery of this
Agreement have been duly authorized by all requisite corporate
action of Woolen ▇▇▇▇▇;
(v) The execution and delivery of the
Indenture have been duly authorized by all requisite corporate
action of Woolen ▇▇▇▇▇;
(vi) The execution and delivery of the
Guarantee have been duly authorized by all requisite corporate
action of Woolen ▇▇▇▇▇;
(vii) The execution and delivery of the
Registration Rights Agreement have been duly authorized by all
requisite corporate action of Woolen ▇▇▇▇▇;
(viii) The execution and delivery of the
Credit Agreement has been duly authorized by all requisite
corporate action of Woolen ▇▇▇▇▇; and
(ix) All of the capital stock of Woolen
▇▇▇▇▇ is owned of record by the Company or a subsidiary of the
Company. All shares of capital stock of Woolen ▇▇▇▇▇ have
been duly authorized and validly issued, are fully paid and
nonassessable and except as disclosed in the Final Memorandum,
to such counsel's knowledge, all such shares are owned by the
Company or a subsidiary of the Company free and clear of any
security interests, liens, pledges or encumbrances.
In rendering such opinion, such counsel may state that such
opinion is limited to the laws of the state of Tennessee and the
federal law of the United States of America. In rendering such
opinion, such counsel shall be entitled to rely, as to certain matters
of fact, on information contained in certificates of officers of the
Issuers, provided that such counsel shall state that they believe that
they and the Initial Purchasers are justified in relying upon such
certificates and on certificates and reports of public officials.
(j) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Arsht & ▇▇▇▇▇▇▇, counsel for
the Fieldcrest Guarantors (other than Crestfield and Bangor), shall
have furnished to the Initial Purchasers its written opinion,
addressed to the Initial Purchasers and dated the Closing Date, in
form and substance reasonably satisfactory to the Initial Purchasers,
to the effect that:
(i) The Fieldcrest Guarantors (other
than Crestfield and Bangor) have the corporate power and
authority to consummate the transactions contemplated by this
Agreement; and to execute and deliver the Guarantees as
contemplated by this Agreement and the Purchase Agreement
Supplement;
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(ii) This Agreement and the Purchase
Agreement Supplement have been duly authorized by all
requisite corporate action of each of the Fieldcrest
Guarantors (other than Crestfield and Bangor) and, upon
consummation of the Merger, this Agreement and the Purchase
Agreement Supplement will be duly executed and delivered by
each of the Fieldcrest Guarantors (other than Crestfield and
Bangor);
(iii) The Indenture has been duly
authorized by all requisite corporate action of each of the
Fieldcrest Guarantors (other than Crestfield and Bangor), and,
upon the consummation of the Merger, the Indenture and the
Supplemental Indenture will be duly executed and delivered by
the Fieldcrest Guarantors (other than Crestfield and Bangor);
(iv) The execution and delivery of the
Securities have been duly authorized by all requisite
corporate action of the Fieldcrest Guarantors (other than
Crestfield and Bangor); upon consummation of the Merger, the
Guarantees will be duly executed and delivered by the
Fieldcrest Guarantors (other than Crestfield and Bangor);
(v) Assuming consummation of the Merger,
the execution and delivery of the Exchange Securities have
been duly authorized by all requisite corporate action of each
of the Fieldcrest Guarantors (other than Crestfield and
Bangor);
(vi) Assuming consummation of the Merger,
the Registration Rights Agreement and the Supplemental
Registration Rights Agreement have been duly authorized by all
requisite corporate action of each of the Fieldcrest
Guarantors (other than Crestfield and Bangor);
(vii) Assuming consummation of the Merger,
the execution and delivery of the Credit Agreement and the
Merger Agreement have been duly authorized by all requisite
corporate action of the Fieldcrest Guarantors (other
Crestfield and Bangor); and
(viii) All outstanding shares of capital
stock of the Fieldcrest Guarantors (other than Crestfield and
Bangor) have been duly authorized and validly issued, are
fully paid and nonassessable; and, to the knowledge of such
counsel, all such shares are owned of record by the Fieldcrest
Guarantors free and clear of any security interests, liens,
pledges or encumbrances of record.
In rendering such opinion, such counsel may state that such
opinion is limited to the General Corporation Law of the State of
Delaware and the federal law of the United States of America. In
rendering such opinion, such counsel shall be entitled to rely, as to
certain matters of fact, on information contained in certificates of
officers of the Issuers, provided that such counsel shall state that
they believe that they and the Initial Purchasers are justified in
relying upon such certificates and on certificates and reports of
public officials.
(k) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇, special
Tennessee counsel for Crestfield, shall have furnished to the Initial
Purchasers its written opinion, addressed to the Initial Purchasers
and dated the Closing Date, in form and substance reasonably
satisfactory to the Initial Purchasers, to the effect that:
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(i) Crestfield is validly existing as a
corporation and is in good standing under the laws of its
jurisdiction of incorporation. Crestfield is duly qualified
to do business and in good standing as a foreign corporation
in each jurisdiction with respect to which it has certified to
us that it owns property, maintains business or has employees
(except where failure to so qualify would not, singly or in
the aggregate, reasonably be expected to have a Material
Adverse Effect);
(ii) Crestfield has the corporate power
and authority to execute and deliver, and to consummate the
transactions contemplated by this Agreement and the Guarantee;
(iii) To such counsel's knowledge,
Crestfield is not in violation of its corporate charter or
by-laws by virtue of the execution, delivery or performance of
the Supplemental Indenture, the Purchase Agreement Supplement,
the Supplemental Registration Rights Agreement or the Credit
Agreement;
(iv) Assuming the consummation of the
Merger, the execution and delivery of this Agreement and the
Purchase Agreement Supplement have been duly authorized by all
requisite corporate action of Crestfield;
(v) Assuming the consummation of the
Merger, the execution and delivery of the Indenture and the
Supplemental Indenture have been duly authorized by all
requisite corporate action of Crestfield;
(vi) Assuming the consummation of the
Merger, the execution and delivery of the Guarantee have been
duly authorized by all requisite corporate action of
Crestfield;
(vii) Assuming the consummation of the
Merger, the execution and delivery of the Registration Rights
Agreement and the Supplemental Registration Rights Agreement
have been duly authorized by all requisite corporate action of
Crestfield;
(viii) Assuming the consummation of the
Merger, the execution and delivery of the Credit Agreement has
been duly authorized by all requisite corporate action of
Crestfield; and
(ix) Assuming the consummation of the
Merger, all of the capital stock of Crestfield is owned of
record by the Company or a subsidiary of the Company. All
shares of capital stock of Crestfield have been duly
authorized and validly issued, are fully paid and
nonassessable and except as disclosed in the Final Memorandum,
to such counsel's knowledge, all such shares are owned by the
Company or a subsidiary of the Company free and clear of any
security interests, liens, pledges or encumbrances.
In rendering such opinion, such counsel may state that such
opinion is limited to the laws of the state of Tennessee and the
federal law of the United States of America. In rendering such
opinion, such counsel shall be entitled to rely, as to certain matters
of fact, on information contained in certificates of officers of the
Issuers, provided that such counsel shall state that they believe that
they and the Initial Purchasers are justified in relying upon such
certificates and on certificates and reports of public officials.
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(l) ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, special Maine
counsel for Bangor, shall have furnished to the Initial Purchasers its
written opinion, addressed to the Initial Purchasers and dated the
Closing Date, in form and substance reasonably satisfactory to the
Initial Purchasers, to the effect that:
(i) Bangor is validly existing as a
corporation and is in good standing under the laws of its
jurisdiction of incorporation. Bangor is duly qualified to do
business and in good standing as a foreign corporation in each
jurisdiction with respect to which it has certified to us that
it owns property, maintains business or has employees (except
where failure to so qualify would not, singly or in the
aggregate, reasonably be expected to have a Material Adverse
Effect);
(ii) Bangor has the corporate power and
authority to execute and deliver this Agreement and the
Purchase Agreement Supplement; and Bangor has the corporate
power and authority to issue, sell and deliver the Securities
as contemplated by this Agreement and the Purchase Agreement
Supplement;
(iii) To such counsel's knowledge, the
execution and delivery of the Purchase Agreement Supplement,
the Supplemental Indenture, the Supplemental Registration
Rights Agreement and the Credit Agreement will not violate
Bangor's corporate charter or bylaws;
(iv) Assuming the consummation of the
Merger, the execution and delivery of this Agreement and the
Purchase Agreement Supplement have been duly authorized by all
requisite corporate action of Bangor;
(v) Assuming the consummation of the
Merger, the execution and delivery of the Indenture and the
Supplemental Indenture have been duly authorized by all
requisite corporate action of Bangor;
(vi) Assuming the consummation of the
Merger, the execution and delivery of the Guarantee have been
duly authorized by all requisite corporate action of Bangor;
(vii) Assuming the consummation of the
Merger, the execution and delivery of the Registration Rights
Agreement and the Supplemental Registration Rights Agreement
have been duly authorized by all requisite corporate action of
Bangor;
(viii) Assuming the consummation of the
Merger, the execution and delivery of the Credit Agreement has
been duly authorized by all requisite corporate action of
Bangor; and
(ix) Assuming the consummation of the
Merger, all of the capital stock of Bangor is owned of record
by the Company or a subsidiary of the Company. All shares of
capital stock of Bangor have been duly authorized and validly
issued, are fully paid and nonassessable and except as
disclosed in the Final Memorandum, to such counsel's
knowledge, all such shares are owned by the Company or a
subsidiary of the Company free and clear of any security
interests, liens, pledges or encumbrances.
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In rendering such opinion, such counsel may state that such
opinion is limited to the laws of the state of Maine and the federal
law of the United States of America. In rendering such opinion, such
counsel shall be entitled to rely, as to certain matters of fact, on
information contained in certificates of officers of the Issuers,
provided that such counsel shall state that they believe that they and
the Initial Purchasers are justified in relying upon such certificates
and on certificates and reports of public officials.
(m) You shall have received on the Closing Date
an opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for the Initial Purchasers,
dated the Closing Date and addressed to you, in form and substance
reasonably satisfactory to you.
(n) The Company, the Pillowtex Guarantors and the
Trustee shall have entered into the Indenture and the Initial
Purchasers shall have received counterparts, conformed as executed,
thereof.
(o) The Company, the Pillowtex Guarantors and the
Initial Purchasers shall have entered into the Registration Rights
Agreement and the Initial Purchaser shall have received counterparts,
conformed as executed, thereof.
(p) At the Execution Time and at the Closing
Date, KPMG Peat Marwick L.L.P. and Ernst & Young L.L.P. shall have
furnished to the Initial Purchasers a letter or letters, dated
respectively as of the Execution Time and as of the Closing Date, in
form and substance satisfactory to the Initial Purchasers, confirming
that they are independent accountants within the meaning of the
Securities Act and the Exchange Act and the applicable rules and
regulations thereunder and Rule 101 of the Code of Professional
Conduct of the American Institute of Certified Public Accountants (the
"AICPA") and otherwise satisfactory in form and substance to the
Initial Purchasers and their counsel.
(q) (i) Neither the Company nor its subsidiaries
shall have sustained since the date of the latest audited financial
statements included in the Final Memorandum losses or interferences
with their businesses, taken as a whole, from fire, explosion, flood
or other calamity, whether or not covered by insurance, or from any
labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Final Memorandum or
(ii) since such date there shall not have been any change in the
capital stock or long-term debt of the Company or any of its
subsidiaries or any change, or any development involving a prospective
change, in or affecting the general affairs, management, financial
position, shareholders' equity or results of operations of the Company
or its subsidiaries, taken as a whole, otherwise than as set forth or
contemplated in the Final Memorandum, the effect of which, in any such
case described in clause (i) or (ii), is, in the reasonable judgment
of the Initial Purchasers, so material and adverse as to make it
impracticable or inadvisable to proceed with the offering or the
delivery of the Securities being delivered on the Closing Date on the
terms and in the manner contemplated herein and in the Final
Memorandum.
(r) Subsequent to the execution and delivery of
this Agreement there shall not have occurred any of the following: (i)
trading in securities generally on the New York Stock Exchange or The
NASDAQ Stock Market's National Market or in the over-the-counter
market shall have been suspended or materially limited, or minimum
prices shall have been established on such exchange by the SEC, or by
such exchange or by any other regulatory body or governmental
authority having jurisdiction, (ii) a banking moratorium shall have
been declared by Federal or
27
▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, (▇▇▇) ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ shall have become engaged
in hostilities, there shall have been an escalation in hostilities
involving the United States or there shall have been a declaration of
a national emergency or war by the United States or (iv) there shall
have occurred such a material adverse change in general economic,
political or financial conditions (or the effect of international
conditions on the financial markets in the United States shall be
such) as to make it, in the reasonable judgment of the Initial
Purchaser, impracticable or inadvisable to proceed with the offering
or delivery of the Securities being delivered on the Closing Date on
the terms and in the manner contemplated herein and in the Final
Memorandum.
(s) ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ shall have been furnished
with such documents, in addition to those set forth above, as they may
reasonably require for the purpose of enabling them to review or pass
upon the matters referred to in this Section 7 and in order to
evidence the accuracy, completeness or satisfaction in all material
respects of any of the representations, warranties or conditions
herein contained.
(t) Prior to the Closing Date, the Issuers shall
have furnished to the Initial Purchaser such further information,
certificates and documents as the Initial Purchaser may reasonably
request.
(u) The Company shall have been advised by PORTAL
that the Securities have been designated PORTAL eligible securities in
accordance with the rules and regulations of the National Association
of Securities Dealers, Inc.
All opinions, letters, evidence and certificates mentioned
above or elsewhere in this Agreement shall be deemed to be in compliance with
the provisions hereof only if they are in form and substance reasonably
satisfactory to counsel for the Initial Purchasers.
8. POST CLOSING COVENANTS.
(a) On the Merger Closing Date, the Issuers shall
enter into the Credit Agreement (the form and substance of which shall
be reasonably acceptable to the Initial Purchasers) and the Initial
Purchasers shall receive counterparts, conformed as executed, thereof
and of all other documents and agreements entered into in connection
therewith. There shall exist at and as of the Merger Closing Date no
conditions that would constitute a default (or an event that with
notice or the lapse of time, or both, would constitute a default)
under the Credit Agreement. On the Merger Closing Date, the Credit
Agreement shall be in full force and effect and shall not have been
modified.
(b) On the Merger Closing Date, the Company shall
cause each of the Fieldcrest Guarantors to authorize, execute and
deliver the Purchase Agreement Supplement, the Supplemental Indenture,
the Supplemental Registration Rights Agreement and a Guarantee with
respect to the Notes.
(c) On the Merger Closing Date, the Company shall
issue and sell the Pillowtex Preferred Stock (as defined in the Final
Memorandum) in the manner contemplated by the Final Memorandum and the
Company shall provide the Initial Purchasers with final and complete
copies of the Certificate of Designations, Securities Purchase
Agreement and all other related documents.
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(d) On or prior to the Merger Closing Date, a
two-thirds majority of the stockholders of Fieldcrest shall have
approved the Merger in accordance with applicable laws and a majority
of the shareholders of the Company shall have approved the Share
Issuance (as such term is defined in the Joint Proxy
Statement/Prospectus dated November 26, 1997, of the Company and
Fieldcrest). On the Closing Date, a wholly owned subsidiary of the
Company shall merge with and into Fieldcrest in the manner
contemplated by the Merger Agreement and as described in the Final
Memorandum.
9. INDEMNIFICATION AND CONTRIBUTION. (a) The Issuers
jointly and severally agree to indemnify and hold harmless each Initial
Purchaser, the directors, officers, employees and agents of each Initial
Purchaser and each person who controls any Initial Purchaser within the meaning
of either the Securities Act or the Exchange Act against any and all losses,
claims, damages or liabilities, joint or several, to which they or any of them
may become subject under the Securities Act, the Exchange Act or other Federal
or state statutory law or regulation, at common law or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact contained in the Preliminary Memorandum, the Final
Memorandum or any information provided by the Issuers to any holder or
prospective purchaser of Notes pursuant to Section 5(e), or in any amendment
thereof or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and agree to
reimburse each such indemnified party, as incurred, for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action: provided, however,
that the Issuers will not be liable in any such case to any Initial Purchaser
to the extent that any such loss, claim, damage or liability arises out of or
is based upon any such untrue statement or alleged untrue statement or omission
or alleged omission made in the Preliminary Memorandum or the Final Memorandum,
or in any amendment thereof or supplement thereto, in reliance upon and in
conformity with written information furnished to the Issuers by or on behalf of
such Initial Purchaser specifically for inclusion therein; provided further
that with respect to any such untrue statement or omission made in the
Preliminary Memorandum, the indemnity agreement contained in this Section 9(a)
shall not inure to the benefit of an Initial Purchaser from whom the person
asserting any such losses, claims, damages, liabilities, judgments, actions or
expenses purchased Securities, or any controlling person of such Initial
Purchaser if a copy of the Final Memorandum was sent or given by or on behalf
of such Initial Purchaser to such person at or prior to the written
confirmation of the sale of Securities to such person and the Final Memorandum
cured the defect giving rise to such losses, claims, damages, liabilities,
judgments, actions or expenses, unless, such failure to deliver the Final
Memorandum was a result of noncompliance by the Issuers with Section 5(c)
hereof.
(b) Each Initial Purchaser severally and not jointly
agrees to indemnify and hold harmless the Issuers, their directors, officers,
employees and agents and each person who controls the Issuers within the
meaning of either the Securities Act or the Exchange Act, to the same extent as
the foregoing indemnity from the Issuers to each Initial Purchaser, but only
with reference to written information relating to such Initial Purchaser
furnished to the Issuers by or on behalf of such Initial Purchaser specifically
for inclusion in the Preliminary Memorandum or the Final Memorandum (or in any
amendment or supplement thereto). This indemnity agreement will be in addition
to any liability which any Initial Purchaser may otherwise have. The Issuers
acknowledge that the statements set forth in the last paragraph of the cover
page, the last paragraph on page (iii) and under the heading "Plan of
Distribution" in the Preliminary Memorandum and the Final Memorandum constitute
the only information furnished in writing by or on behalf of the Initial
Purchasers for inclusion in the Preliminary Memorandum or the Final Memorandum
(or any amendment or supplement thereto).
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30
(c) Promptly after receipt by an indemnified party under
this Section 8 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 9, notify the indemnifying party in
writing of the commencement thereof, but the failure so to notify the
indemnifying party (i) will not relieve it from liability under paragraph (a)
or (b) above unless and to the extent it did not otherwise learn of such action
and such failure results in the forfeiture by the indemnifying party of
substantial rights and defenses and (ii) will not, in any event, relieve the
indemnifying party from any obligations to any indemnified party other than the
indemnification obligation provided in paragraph (a) or (b) above. The
indemnifying party shall be entitled to appoint counsel of the indemnifying
party's choice at the indemnifying party's expense to represent the indemnified
party in any action for which indemnification is sought (in which case the
indemnifying party shall not thereafter be responsible for the fees and
expenses of any separate counsel retained by the indemnified party or parties
except as set forth below); provided, however that such counsel shall be
reasonably satisfactory to the indemnified party. Notwithstanding the
indemnifying party's election to appoint counsel to represent the indemnified
party in an action, the indemnified party shall have the right to employ
separate counsel (including local counsel), and the indemnifying party shall
bear the reasonable fees, costs and expenses of such separate counsel if (i)
the use of counsel chosen by the indemnifying party to represent the
indemnified party would, in the opinion of legal counsel to the indemnified
party, present such counsel with a conflict of interest, (ii) the actual or
potential defendants in, or targets of, any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have been informed in writing by legal counsel that there may be legal defenses
available to it and/or other indemnified parties which are different from or
additional to those available to the indemnifying party, (iii) the indemnifying
party shall not have employed counsel reasonably satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. An indemnifying party will not, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise
or consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph
(a) or (b) of this Section 8 is unavailable to or insufficient to hold harmless
an indemnified party for any reason, the Issuers and the Initial Purchasers
agree to contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating or defending same) (collectively "Losses") to which the Issuers
and the Initial Purchasers may be subject in such proportion as is appropriate
to reflect the relative benefits received by the Issuers and by the Initial
Purchasers from the offering of the Securities; provided, however, that in no
case shall the Initial Purchasers be responsible for any amount in excess of
the purchase discount or commission applicable to the Securities purchased by
the Initial Purchasers hereunder. If the allocation provided by the
immediately preceding sentence is unavailable for any reason, the Issuers and
the Initial Purchasers shall contribute in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Issuers and of the Initial Purchasers in connection with the statements or
omissions which resulted in such Losses as well as any other relevant equitable
considerations. Benefits received by the Issuers shall be deemed to be equal
to the total net proceeds from the offering (before deducting expenses), and
benefits received by the Initial Purchasers shall be deemed to be equal to the
total purchase discounts and commissions received by the Initial Purchasers
from the Issuers in connection with the purchase of the Securities hereunder.
Relative fault shall be determined by reference to whether any alleged untrue
statement or omission relates to
30
31
information provided by the Issuers or the Initial Purchasers. The Issuers and
the Initial Purchasers agree that it would not be just and equitable if
contribution were determined by pro rata allocation or any other method of
allocation which does not take account of the equitable considerations referred
to above. Notwithstanding the provisions of this paragraph (d), no person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. For purposes of this Section
8, each person who controls an Initial Purchaser within the meaning of either
the Securities Act or the Exchange Act and each director, officer, employee and
agent of an Initial Purchaser shall have the same rights to contribution as
such Initial Purchaser, and each person who controls the Issuers within the
meaning of either the Securities Act or the Exchange Act and each partner,
officer and director of the Issuers shall have the same rights to contribution
as the Issuers, subject in each case to the applicable terms and conditions of
this paragraph (d).
10. TERMINATION. The obligations of the Initial
Purchasers hereunder may be terminated by the Initial Purchasers by notice
given to and received by the Company prior to delivery of and payment for the
Securities if, prior to that time, any of the events described in Sections 7
(r) or 7(s) shall have occurred or if the Initial Purchaser shall decline to
purchase the Securities for any reason permitted under this Agreement.
11. REIMBURSEMENT OF INITIAL PURCHASERS' EXPENSES. If
(a) the Issuers shall fail to tender the Securities for delivery to the Initial
Purchasers otherwise than for any reason permitted under this Agreement or (b)
the Initial Purchasers shall decline to purchase the Securities for any reason
permitted under this Agreement, the Issuers shall reimburse the Initial
Purchasers for the reasonable fees and expenses of their counsel and for such
other out-of-pocket expenses as shall have been incurred by them in connection
with this Agreement and the proposed purchase of the Securities, and upon
demand the Issuers shall pay the full amount thereof to the Initial Purchasers.
12. NOTICES, ETC. All statements, requests, notices and
agreements hereunder shall be in writing, and:
(a) if to the Initial Purchasers, shall be
delivered or sent by mail, telex or facsimile transmission to
NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities, Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇▇▇▇▇ (Fax:
(▇▇▇) ▇▇▇-▇▇▇▇), with a copy to ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ (Fax: (212)
751-4864);
(b) if to the Company, shall be delivered or sent
by mail, telex or facsimile transmission to the address of the Company
set forth in the Final Memorandum, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (Fax:
(214) 330- 6016).
Any such statements, requests, notices or agreements shall take effect at the
time of receipt thereof. The Issuers shall be entitled to act and rely upon
any request, consent, notice or agreement given or made on behalf of the
Initial Purchasers.
13. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This
Agreement shall inure to the benefit of and be binding upon the Initial
Purchasers, the Issuers and their respective successors. This Agreement and
the terms and provisions hereof are for the sole benefit of only those persons,
except that (a) the representations, warranties, indemnities and agreements of
the Issuers contained in this Agreement shall also be deemed to be for the
benefit of the person or persons, if any, who control an Initial Purchaser
31
32
within the meaning of Section 15 of the Securities Act and (b) the indemnity
agreement of the Initial Purchasers contained in Section 9(b) of this Agreement
shall be deemed to be for the benefit of directors of the Issuers, officers
employees and agents of the Issuers and any person controlling any of the
Issuers within the meaning of Section 15 of the Securities Act. Nothing in
this Agreement is intended or shall be construed to give any person, other than
the persons referred to in this Section 12, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision
contained herein.
14. SURVIVAL. The respective indemnities,
representations, warranties and agreements of the Issuers and the Initial
Purchasers contained in this Agreement or made by or on behalf on them,
respectively, pursuant to this Agreement, shall survive the delivery of and
payment for the Securities and shall remain in full force and effect,
regardless of any investigation made by or on behalf of any of them or any
person controlling any of them.
15. DEFINITION OF "BUSINESS DAY." For purposes of this
Agreement, "business day" means each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which banking institutions in The City of New York,
New York are authorized or obligated by law, executive order or regulation to
close.
16. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF NEW YORK.
17. COUNTERPARTS. This Agreement may be executed in one
or more counterparts and, if executed in more than one counterpart, the
executed counterparts shall each be deemed to be an original but all such
counterparts shall together constitute one and the same instrument.
18. HEADINGS. The headings herein are inserted for
convenience of reference only and are not intended to be part of, or to affect
the meaning or interpretation of, this Agreement.
[Signature page follows]
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33
If the foregoing correctly sets forth the agreement between
the Company and the Initial Purchasers, please indicate your acceptance in the
space provided for that purpose below.
Very truly yours,
Pillowtex Corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
Pillowtex, Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
Beacon Manufacturing Company
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
▇▇▇▇▇▇▇ Home Fashions, Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
Tennessee Woolen ▇▇▇▇▇, Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
34
PTEX Holding Company
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
Pillowtex Management Services Company
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
35
The foregoing Agreement is hereby confirmed and accepted as of
the date first above written.
NATIONSBANC ▇▇▇▇▇▇▇▇▇▇ SECURITIES, INC.
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
By: NATIONSBANC ▇▇▇▇▇▇▇▇▇▇ SECURITIES, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Director
36
EXHIBIT A
PURCHASE AGREEMENT SUPPLEMENT
THIS PURCHASE AGREEMENT SUPPLEMENT is a supplement to that
certain Purchase Agreement, dated December 15, 1997 (the "Purchase Agreement"),
among Pillowtex Corporation, a Texas corporation, the Pillowtex Guarantors
listed on the signature page thereto, and NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities,
Inc. and Bear ▇▇▇▇▇▇▇ & Co. Inc.
As a result of the consummation of the Merger, the Fieldcrest
Guarantors have become direct subsidiaries of the Company and hereby agree to
be bound by the terms and provisions applicable to the Fieldcrest Guarantors
under the Purchase Agreement, including but not limited to the representations
in Section 1 thereof and the agreements in Section 5 thereof, as if the
Fieldcrest Guarantors had executed the Purchase Agreement on the date thereof.
Other than as set forth on Schedule A hereto, the Fieldcrest
Guarantors are not a party to any contract or agreement that would be required
to be filed with the Commission as an exhibit to a registration statement on
Form S- 1 pursuant to entries (2), (4) and (10) of the Exhibit Table of Item
601 of Regulation S-K under the Securities Act.
This Purchase Agreement Supplement does not cancel or
extinguish any right or obligation of the parties to the Purchase Agreement.
The parties hereto agree that the Purchase Agreement shall be supplemented only
with respect to the matters referred to herein and the provisions of the
Purchase Agreement are otherwise in full force and effect.
Terms used but not defined herein shall have the meanings
given to them in the Purchase Agreement. This Purchase Agreement Supplement
may be executed in one or more counterparts and, if executed in more than one
counterpart, the executed counterparts shall each be deemed to be an original
and all such counterparts shall together constitute one and the same
instrument.
THIS PURCHASE AGREEMENT SUPPLEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT OF LAW RULES THEREOF.
37
If the foregoing correctly sets forth the agreement between
the Fieldcrest Guarantors and the Initial Purchasers, please indicate your
acceptance in the space provided for that purpose below.
Very truly yours,
FIELDCREST ▇▇▇▇▇▇, INC.
CRESTFIELD COTTON COMPANY
ENCEE, INC.
FIELDCREST ▇▇▇▇▇▇ FINANCING, INC.
FIELDCREST ▇▇▇▇▇▇ LICENSING, INC.
FIELDCREST ▇▇▇▇▇▇ INTERNATIONAL, INC.
FIELDCREST ▇▇▇▇▇▇ SURE FIT, INC.
FIELDCREST ▇▇▇▇▇▇ TRANSPORTATION, INC.
ST. MARYS INC.
AMOSKEAG COMPANY
AMOSKEAG MANAGEMENT CORPORATION
BANGOR INVESTMENT COMPANY
▇▇▇▇▇'▇ FALLS CORPORATION
DOWNEAST SECURITIES CORPORATION
FCC CANADA INC.
By:
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
NATIONSBANC ▇▇▇▇▇▇▇▇▇▇ SECURITIES, INC.
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
By: NATIONSBANC ▇▇▇▇▇▇▇▇▇▇ SECURITIES, INC.
By:
-----------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Director
38
EXHIBIT B
REGISTRATION RIGHTS AGREEMENT
