Registration No. 33-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
under
THE SECURITIES ACT OF 1933
ONEITA INDUSTRIES, INC.
(Exact name of issuer as specified in its charter)
Delaware 57-0351045
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
4130 Faber Place Drive Herbert J. Fleming, President
Suite 200 Oneita Industries, Inc.
Charleston, South Carolina 29405 4130 Faber Place Drive, Suite 200
(803) 529-5225 Charleston, South Carolina 29405
(Address, including zip code and
telephone number, including area code) (803) 529-5225
(Name, address and telephone number,
including area code, of agent for service)
Copy to:
Neil M. Kaufman, Esq.
Blau, Kramer, Wactlar, & Lieberman, P.C.
100 Jericho Quadrangle
Jericho, New York 11753
(516) 822-4820
Approximate date of commencement of proposed sale to public: As soon as
practicable after the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box [ ].
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CALCULATION OF REGISTRATION FEE
<S> <C> <C> <C> <C>
Title of each class Amount to be Proposed maximum Proposed maximum Amount of
of securities to be Registered offering price aggregate offering registration fee
registered per security price (1)
Common Stock, par 1,607,143 shares(2) $7.00 $11,250,000 $3,879
value $.25 per share
- ---------------------------------------------------------------------------------------------------------
Common Stock 6,878,506 Rights (3) - -
Subscription Rights
- ---------------------------------------------------------------------------------------------------------
<FN>
(1) Aggregate offering price assumes maximum amount of shares are issued
upon exercise of all non-transferable subscription rights.
(2) Maximum amount of shares issuable upon exercise of all non-transferable
subscription rights.
(3) No consideration will be received for the Rights.
</FN>
</TABLE>
<PAGE>
PRELIMINARY PROSPECTUS, SUBJECT TO COMPLETION, DATED FEBRUARY 7, 1996
ONEITA INDUSTRIES, INC.
1,607,143 Shares of Common Stock,
$.25 par value
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
Oneita Industries, Inc., (the "Company") is offering (the "Rights
Offering") up to 1,607,143 shares of its Common Stock, $.25 par value (the
"Common Stock"), to holders of record of Common Stock at the close of business
on February __, 1996 (the "Record Date"), pursuant to non-transferable rights
(the "Rights") to purchase shares of Common Stock at a price of $7.00 per share
(the "Subscription Price"). The Rights Offering is made as part of an offering
of 1,607,143 shares (the "Offering") which also includes purchases by Standby
Purchasers described below. Holders of Rights ("Rights Holders") will be able to
exercise their Rights until 5:00 p.m., Eastern time on March __, 1996, unless
extended by the Company (the "Expiration Time"). If all of the Rights were to be
exercised in full, the number of shares (and the aggregate purchase price
therefor) obtainable upon exercise of each Right will be proportionately reduced
so that the maximum number of shares issuable pursuant to this offering will be
1,607,143. In this connection, Robert M. Gintel, the beneficial owner of
2,075,000 shares, or approximately twenty-nine percent (29%), of the outstanding
shares of Common Stock, has agreed not to exercise his Rights with respect to
the 1,100,000 shares of Common Stock directly owned of record by him. See "The
Rights Offering".
Each shareholder is receiving one Right for each share of Common Stock held
of record on the Record Date. Each Right will entitle the Rights Holder to
subscribe for one-quarter of one share of Common Stock (the "Basic Subscription
Privilege"). In lieu of fractional Rights the aggregate number of Rights issued
by the Company to a shareholder will be rounded down to the next whole number.
Once a Rights Holder has exercised the Basic Subscription Privilege such
exercise may not be revoked. The Rights will be evidenced by non-transferable
certificates. See "The Rights Offering".
The Company has entered into a Standby Agreement, pursuant to which Robert
M. Gintel and Avondale Mills, Inc. have severally agreed to acquire from the
Company, at the Subscription Price, all remaining shares of Common Stock
available as a result of the Rights Offering after the exercise of the Basic
Subscription Privilege by the Rights Holders. See "Standby Agreement".
The Common Stock is traded on the New York Stock Exchange (the "NYSE")
under the symbol "ONA". On January 31, 1996, the last reported sale price of the
Common Stock was $6 7/8.
After the Expiration Time, the Rights will no longer be exercisable and
will have no value. Since the Rights are non-transferable, the Rights may not be
sold and there will be no trading market for the rights.
POTENTIAL PURCHASERS OF RIGHTS OR COMMON STOCK SHOULD CAREFULLY CONSIDER
THE MATTERS SET FORTH UNDER "RISK FACTORS" BEGINNING ON PAGE 6.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<S> <C> <C>
Subscription Price Proceeds to the
Company(1)
Per Share $7.00 $7.00
Total(2) $11,250,000 $11,250,000
<FN>
(1) Before deducting expenses payable by the Company estimated at an aggregate of $100,000.
(2) The Total amount assumes the purchase of all 1,607,143 shares pursuant to this Offering.
</FN>
</TABLE>
The date of this Prospectus is February __, 1996.
<PAGE>
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission"), Washington, D.C., a Registration Statement under the Securities
Act of 1933, as amended (the "Act"), with respect to the Common Stock offered
hereby. This Prospectus does not contain all the information set forth in the
Registration Statement and the exhibits relating thereto. For further
information with respect to the Company and the shares of Common stock offered
by this Prospectus, reference is made to such Registration Statement and the
exhibits thereto. Statements contained in this Prospectus as to the contents of
any contract or other document are not necessarily complete and in each instance
reference is made to the copy of such contract or other document filed as an
exhibit to the Registration Statement for a full statement of the provisions
thereof; each such statement contained herein is qualified in its entirety by
such reference.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Commission. Such reports, proxy statements and other information can be
inspected and copied at the public reference facilities maintained at the office
of the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549 and at the Commission's Regional Offices at Northwestern Atrium Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511 and 7 World
Trade Center, New York, New York 10048. Copies of such material can be obtained
from the Public Reference Section of the Commission, Washington, D.C. 20549, at
prescribed rates. In addition, the Company's Common Stock is listed on the New
York Stock Exchange, and copies of the foregoing materials and other information
concerning the Company can be inspected at the offices of such exchange at 20
Broad Street, New York, New York 10005.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed by the Company with the Commission
(File No. 1-9734) pursuant to the Exchange Act, are incorporated by reference in
this Prospectus and shall be deemed to be a part hereof:
(1) The Company's Annual Report on Form 10-K for the fiscal year ended
September 30, 1995, filed with the Commission on December 29, 1995.
(2) The description of the Company's Common Stock, par value $.25 per
share, which is contained in registration statements on Form 8-A filed with the
Commission on July 13, 1988 and January 21, 1993 under Section 12 of the
Securities Exchange Act of 1934, including any amendment or report filed for the
purpose of updating such description.
All documents filed pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act after the date of this Prospectus and prior to the termination of
this offering of Common Stock shall be deemed to be incorporated by reference in
this Prospectus and to be part hereof from the date of filing of such documents.
Any statement contained in a document incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Prospectus to
the extent that a statement contained herein, or in any subsequently filed
document that also is or is deemed to be incorporated by reference herein,
modifies or supersedes such statement. Any statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this Prospectus.
The Company will provide without charge to each person to whom a copy of
this Prospectus is delivered, upon the written or oral request of such person, a
copy of any or all of the documents incorporated by reference (except for
exhibits thereto unless specifically incorporated by reference therein).
Requests for such copies should be directed to the Secretary, Oneita Industries,
Inc., 4130 Faber Place Drive, Suite 200, Charleston, South Carolina 29405, (803)
529-5225.
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information appearing elsewhere in this Prospectus. As used in this Prospectus,
unless the context indicates otherwise, the "Company" means Oneita Industries,
Inc.
The Company
The Company is a manufacturer and marketer of activewear, including
T-shirts and fleecewear, and produces infantswear primarily for the newborn and
toddler markets. These products are sold to the imprinted sportswear industry
through the Company's Activewear Division and to major retailers through the
Company's Retail Division. The Company's executive offices are located at 4130
Faber Place Drive, Suite 200, Charleston, South Carolina 29405, and its
telephone number is (803) 529-5225.
Risk Factors
The investment in the Common Stock or the Rights offered hereby is subject
to risk factors that should be carefully reviewed prior to determining whether
to purchase the Common Stock or exercise the Rights. These factors relate to the
Company's decreased sales, excess capacity, product price fluctuations, yarn
price fluctuations, dependence on major customers and related party
transactions. See "Risk Factors".
The Offering
Rights. . . . Each record holder of Common Stock ("Record Date Holder") at
the close of business on February __, 1996 (the "Record Date")
is receiving one non-transferable subscription right ("Right")
for each share of Common Stock held of record on the Record
Date. Each Right will entitle the holder thereof ("Rights
Holder") to purchase from the Company one-quarter of one share
of Common Stock (an "Underlying Share") for a price of $7.00
per share (the "Subscription Price"). The number of shares
subject to Rights issued by the Company to a Record Date Holder
will be rounded down to the nearest whole number. An
aggregate of up to 1,607,143 shares of Common Stock will be
sold in the Offering upon exercise of the Rights or pursuant to
the Standby Agreement (as defined below). The Rights will be
evidenced by non-transferable certificates (the "Subscription
Rights Certificates").
Basic Subscription
Privilege. . Rights Holders are entitled to purchase, at the Subscription
Price, one-quarter of one Underlying Share for each whole Right
held (the "Basic Subscription Privilege"). See "The Rights
Offering - Subscription Privileges - Basic Subscription
Privilege".
Subscription
Price. . . . $7.00 per Underlying Share, payable in cash. See "The Rights
Offering - Exercise of Rights" and "The Rights Offering -
Determination of Subscription Price."
Shares of Common Stock
Outstanding after Rights
Offering. . . As of the Record Date there were 6,878,506 shares of Common
Stock outstanding. An aggregate of 1,607,143 shares of Common
Stock will be issued pursuant to the Basic Subscription Privilege
and the Standby Agreement. Accordingly, after this offering,
approximately 8,485,649 shares of Common Stock will be
outstanding.
Transferability
of Rights . . The Rights, including the Basic Subscription Privilege, are not
transferable.
Record Date . February __,1996.
<PAGE>
Expiration
Time. 5:00 p.m., Eastern time, March __,1996, or such later time
to which the Offering may have been extended (the
Expiration Time"). See "The Rights Offering - Expiration
Time". Rights not exercised prior to the Expiration Time
will expire and become worthless.
Procedure for Exercising
Rights. . . . The Basic Subscription Privilege may be exercised by
properly completing the Subscription Rights Certificate and
forwarding it (or following the Guaranteed Delivery
Procedures), with payment of the Subscription Price for each
Underlying Share subscribed for pursuant to the Basic
Subscription Privilege to the Subscription Agent, which
must receive such Subscription Rights Certificate or Notice
of Guaranteed Delivery and payment at or prior to the
Expiration Time. If Subscription Rights Certificates are
sent by mail, Rights Holders are urged to use insured,
registered mail. See "The Rights Offering - Exercise of
Rights".
No Revocation of
Exercise . . . Once a Rights Holder has exercised the Basic Subscription
Privilege, such exercise may not be revoked.
Persons Holding Common
Stock, or Wishing to
Exercise Rights, Through
Others. . . . Persons holding shares of Common Stock beneficially, and
receiving the Rights issuable with respect thereto, through
a broker, dealer, commercial bank, trust company or other
nominee, as well as persons holding certificates for Common
Stock directly who would prefer to have such institutions
effect transactions relating to the Rights on their behalf,
should contact the appropriate institution or nominee and
request it to effect such transactions for them. See "The
Rights Offering - Exercise of Rights".
Issuance of Common
Stock . . . . Certificates representing shares of Common Stock purchased
pursuant to the Basic Subscription Privilege will be
delivered to subscribers as soon as practicable after
the corresponding Rights have been validly exercised and
payment therefor has been received by the Company.
Standby
Agreement. . . . The Company has entered into a standby agreement (the
"Standby Agreement") pursuant to which Robert M. Gintel,
the Company's Chairman of the Board, and Avondale Mills,
Inc., the Company's largest yarn supplier, (collectively,
the "Standby Purchasers"), have severally agreed to acquire,
at the Subscription Price, from the Company all Underlying
Shares which have not been purchased by the remaining Rights
Holders that have elected not to exercise their Basic
Subscription Privilege (the "Unsubscribed Shares"). The
first 750,000 Unsubscribed Shares will be purchased by the
Standby Purchasers in equal amounts, subject to the
respective $3,750,000 and $7,500,000 maximum standby
commitments of Robert M. Gintel and Avondale Mills, Inc.
See "Standby Agreement").
NYSE Symbol for
Common Stock. . . ONA.
Use of Proceeds. The proceeds from the Rights Offering are estimated to be
$11,250,000. Such proceeds will be used to repay
$11,250,000 of the $15,000,000 principal amount of
subordinated loans made to the Company by Robert M. Gintel
and Avondale Mills, Inc. Of this amount, Avondale Mills,
Inc. will be repaid $7,500,000 and Robert M. Gintel will be
repaid $3,750,000 from such proceeds.
<PAGE>
RISK FACTORS
The following risk factors, in addition to other information in this
Prospectus and in the documents incorporated herein by reference, should be
considered carefully by potential purchasers in evaluating the Company, its
business and an investment in shares of the Common Stock offered hereby.
Decreased Sales Due to Reduced Demand for Products
Net sales of the Company for the fiscal year ended September 30, 1995 were
approximately $175,000,000, as compared to approximately $193,500,000 for the
immediately preceding fiscal year, a decrease of $18,500,000 or 9.6%. The
decrease was due primarily to a reduction in customer orders reflecting industry
trends.
Excess Capacity and Effects on Financial Performance
Due to fluctuations in customer demand for the Company's products, the
Company has accumulated excess amounts of inventory, which in turn has required
the Company to reduce the prices for its products and temporarily suspend and/or
limit its manufacturing operations. Operating at reduced levels has and in the
future may be expected to continue to adversely affect the Company's results of
operations and financial performance.
Product Price Fluctuations
The Company's revenues and profitability are directly affected by the
prices it charges for its products. These prices historically have varied
significantly based primarily on supply and demand factors, as well as raw
material costs. Product prices are often determined based on competitive
pressures. Accordingly, the Company's financial performance has been materially
adversely affected during periods in which prices are reduced or fail to rise
correspondingly with costs.
Yarn Price Fluctuations; Expiration of Supply Contracts
Unlike certain of its competitors, the Company does not spin its own yarn.
The Company obtains yarn from several yarn suppliers pursuant to requirements
contracts generally with a term of approximately one year, and for the fiscal
year ended September 30, 1995 purchased approximately 65% of its yarn from
Avondale Mills, Inc. If the Company were unable to extend or renew its supply
contracts on satisfactory terms, or replace these contracts with suitable
alternative sources of supply, the Company may be forced to pay higher prices
for its yarn and the Company's business and financial performance could be
materially adversely affected.
Significant Dependence on Major Customers
Approximately 29% of the Company's revenues in the fiscal year ended
September 30, 1995 are attributable to its three largest customers, and
approximately 51% of the Company's revenues for such period are attributable to
its 10 largest customers. The loss of these customers or a substantial reduction
in their purchases from the Company could have a material adverse effect on the
Company's financial performance. The Company's remaining sales of Activewear
products are made to approximately 300 customers. There can be no assurance
given that the Company will not continue to be dependent upon a small number of
major customers for a significant portion of its revenues and earnings.
Related-Party Transactions
In January 1996, as a condition to the Company's lenders' willingness to
extend to the Company a commitment to lend $60,000,000, Robert M. Gintel, the
Company's Chairman of the Board, and Avondale Mills, Inc., the Company's largest
yarn supplier, loaned to the Company an aggregate of $15,000,000. See "Recent
Developments - The Company's Financial Restructuring". The entire proceeds of
this offering will be used to repay $11,250,000 of this $15,000,000
indebtedness. The remaining $3,750,000 of indebtedness will remain outstanding.
The Promissory Note issued by the Company to Mr. Gintel in respect of this
indebtedness to remain outstanding matures on February 26, 1999, bears interest
at ten per cent (10%) per annum and is subordinated to the Company's senior
debt. In connection with extending this loan to the Company, subject to the
<PAGE>
approval of the Company's stockholders, Mr. Gintel will also receive a warrant
to purchase 125,000 shares of Common Stock, at an exercise price of $7.00 per
share.
USE OF PROCEEDS
The proceeds from the sale of the shares offered hereby are estimated to be
$11,250,000. The proceeds from the sale of the shares will be used to repay
one-half of the Company's $7,500,000 borrowing from Robert M. Gintel and all of
the Company's $7,500,000 borrowing from Avondale Mills, Inc. These loans bear
interest at the rate of ten percent (10%) per annum and will become due on
February 26, 1999. The proceeds of these loans were used for working capital and
general corporate purposes. See "Recent Developments-The Company's Financial
Restructuring" - "The 10% Subordinated Loans".
The Company will bear the expenses of this offering from its working
capital and such expenses will not be paid from the proceeds of this offering.
PRICE RANGE OF COMMON STOCK AND DIVIDENDS
The Company's Common Stock is listed for trading on the New York Stock
Exchange under the symbol "ONA". The following table sets forth the high and low
sales prices of the Common Stock as reported on the New York Stock Exchange for
the fiscal periods indicated. The prices have been adjusted to reflect the
payment of stock dividends.
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Fiscal 1994 High Low
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First Quarter. . . . . . . . $ 8 3/8 $ 6 1/4
Second Quarter . . . . . . . 7 3/4 6 3/8
Third Quarter. . . . . . . . 9 1/4 6 5/8
Fourth Quarter . . . . . . . 11 1/8 8 7/8
Fiscal 1995 High Low
First Quarter. . . . . . . . $ 11 7/8 $ 9 3/8
Second Quarter . . . . . . . 12 3/4 10 5/8
Third Quarter. . . . . . . . 12 1/8 8 7/8
Fourth Quarter . . . . . . . 10 5/8 8 1/8
Fiscal 1996 High Low
First Quarter. . . . . . . . $ 8 1/4 $ 6 1/8
Second Quarter
(through January 31, 1996). 7 1/4 6 5/8
</TABLE>
On January 31, 1996, the last reported sale price of the Common Stock was
$6 7/8. As of December 31, 1995, there were approximately 200 holders of record.
The number of holders of record excludes beneficial holders whose Shares are
held in the name of nominees.
No cash dividends have been paid since the Company's initial public
offering. Under the Company's new credit facility, the Company is not permitted
to pay cash dividends.
DETERMINATION OF SUBSCRIPTION PRICE
The Subscription Price was determined by negotiations between the Company
and the Standby Purchasers. The Company's objective in establishing the
Subscription Price was the achievement of the targeted proceeds from this
offering while providing Record Date Holders with an opportunity to make an
additional investment in the Company, and thus avoid involuntary dilution of
their proportionate ownership position in the Company.
In approving the Subscription Price, the Board of Directors considered such
factors as the alternatives available to the Company for raising capital, the
Company's long and short term loan obligations, the market price of the Common
<PAGE>
Stock, the business prospects for the Company and the general condition of the
securities markets. There can be no assurance, however, that the market price of
the Common Stock will not decline during the subscription period, or that,
following the issuance of the Rights and of the Common Stock upon exercise of
the Rights, a subscribing Rights Holder will be able to sell shares of Common
Stock purchased in the Rights Offering at a price equal to or greater than the
Subscription Price.
Further, in approving the Subscription Price, the Board of Directors acted
upon the recommendation of a committee of disinterested directors of the Board
of Directors of the Company (the "Independent Committee"), which has received an
opinion from Butler, Chapman & Co., Inc., financial advisors to the Independent
Committee ("Butler, Chapman"), to the effect that, based upon the procedures
followed, factors considered and assumptions made by Butler, Chapman as set
forth in its opinion, the transactions contemplated by the Note Purchase
Agreement described under "Recent Developments - The Company's Financial
Restructuring", including the Rights Offering, are fair from a financial point
of view to the Company and the holders of the Common Stock of the Company other
than Mr. Gintel and his affiliates. This opinion does not constitute a
recommendation or advice to stockholders as to whether they should exercise any
Rights pursuant to this offering.
RECENT DEVELOPMENTS
Industry Climate
In mid 1995, the impact of high wholesale prices, large inventories at the
distributor level, excess capacities and a slowing retail sales environment
began to adversely impact the sales volumes of the Company and other
manufacturers of imprinted T-shirts and other activewear products, as customers
began to postpone and cancel deliveries. As a result, the Company's sales
decreased significantly and its inventories increased dramatically. In light of
these events, the Company instituted production curtailments and price
concessions, including a new rebate program and price decreases. These events
have had a material adverse affect on the Company's operating results and
financial performance.
The Company's Financial Restructuring
The Board of Directors of the Company has concluded that in order for the
Company to implement its operational initiatives, meet its working capital needs
and maintain profitability, it is necessary to financially restructure the
Company. Accordingly, the Board has voted upon, and approved, the following
transactions.
The financial restructuring being pursued by the Company (the "Financial
Restructuring") consists of three elements: (i) 10% subordinated loans in the
principal amount of $15,000,000 from Robert M. Gintel, the Company's Chairman of
the Board, and Avondale Mills, Inc. ("Avondale"), the Company's largest yarn
supplier; (ii) a new $60 million secured long-term revolving credit facility
("the New Credit Facility"), and (iii) this Rights Offering. The Financial
Restructuring is intended to provide additional capital resources to allow the
Company to implement its strategic and operational initiatives, to permit the
Company to fund any shortfalls in working capital and to make necessary capital
expenditures.
The 10% Subordinated Loans - The Company has entered into a Note Purchase
Agreement (the "Note Purchase Agreement") with Robert M. Gintel and Avondale
pursuant to which Mr. Gintel and Avondale have made an aggregate of $15,000,000
principal amount of 10% subordinated loans (the "Loans") to the Company. The
proceeds of the Loans have been used for working capital and capital expenditure
purposes. The Loans are unsecured, bear interest at the rate of ten percent
(10%) per annum, and mature on February 26, 1999. The Loans are subordinate to
the New Credit Facility and the Company's indebtedness to The Prudential
Insurance Company of America. In connection with the Loans, the Company has
issued a 10% subordinated note in the principal amount of $7,500,000 to Avondale
and two 10% subordinated notes in the principal amount of $3,750,000 each to
Robert M. Gintel. In addition, in connection with the $3,750,000 Loan which will
remain outstanding after this offering, the Company will, subject to stockholder
approval, issue to Robert M. Gintel a warrant (the "Warrant") to purchase up to
125,000 shares of Common Stock at an exercise price of $7.00 per share. The Note
Purchase Agreement provides that upon the completion of this offering, the
$11,250,000 aggregate proceeds received by the Company in connection with this
offering will be used to repay the $7,500,000 10% subordinated note held by
Avondale and one of the $3,750,000 10% subordinated notes held by Robert M.
Gintel. Pursuant to the terms of both the Note Purchase Agreement and the
Standby Agreement entered into by Mr. Gintel, Avondale and the Company, Mr.
<PAGE>
Gintel and Avondale may satisfy their respective obligations to purchase all
Unsubscribed Shares in the Rights Offering by tendering the outstanding amount
of all principal and accrued and unpaid interest under their subordinated notes
from the Company. See "Standby Agreements". The Note Purchase Agreement further
provides that if this offering is not consummated by May 31, 1996, Avondale will
have the right, for thirty (30) days, to convert and exchange its $7,500,000 10%
subordinated note for a 10% convertible note, convertible, for a period of sixty
(60) days, into shares of Common Stock at the rate of $7.00 per share. Robert M.
Gintel also has the same exchange and conversion rights for his $3,750,000
subordinated note which is intended to be repaid with the proceeds of this
offering.
New Credit Facility - The Company has entered into a secured $60 million
revolving line of credit with its existing banks. The proceeds obtained by the
Company under the New Credit Facility have been used to pay off the Company's
pre-existing $25 million bank credit facility and its pre-existing short-term
bank credit lines ($25 million at December 31, 1995). The remaining $10 million
of the New Credit Facility will be used for working capital and capital
expenditures. The New Credit Facility is collateralized by inventory and
accounts receivable, will bear interest at approximately the banks' prime rate
plus 3/4% per annum and will mature on January 26, 1999.
The Rights Offering - The third element of the Financial Restructuring is
this offering, pursuant to which the Company is seeking to raise gross proceeds
of $11,250,000. The proceeds of the Rights Offering will be used to repay
$11,250,000 principal amount of the Loans.
Mr. Jack R. Altherr, Jr., Vice President and Chief Financial Officer of
Avondale Mills, Inc., has been nominated for election as a director of the
Company at the Company's 1996 annual meeting of stockholders.
<PAGE>
SELECTED FINANCIAL INFORMATION
The following summary sets forth selected consolidated financial data of
the Company which should be read in conjunction with, and is qualified in its
entirety by reference to, the more detailed information and consolidated
financial statements and notes thereto included in the Company's annual report
on Form 10-K for the year ended September 30, 1995, which is incorporated herein
by reference. The year-end data is derived from consolidated financial
statements of the Company, which have been audited by Arthur Andersen, LLP
independent accountants.
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
1995 1994 1993 1992 1991
Operations
Net sales . . . . . . $175,036 $193,459 $177,610 $203,517 $150,995
Cost of goods sold. . 146,820 166,051 152,776 168,512 126,767
Interest expense net. 3,006 3,868 4,388 4,179 3,481
Income (loss) before
income taxes . . 4,372 (6,794) (4,609) 13,174 6,597
Income taxes. . . . . 1,552 27 (1,632) 5,348 2,780
Net income (loss) . . 2,820 (6,821) (2,977) 7,826 3,817
Financial data
Inventories . . . . . $79,968 $44,720 $63,086 $60,078 $43,735
Accounts receivable . 29,438 35,757 28,718 39,957 23,220
Depreciation, amortization and
goodwill write-off (see note below) 4,649 11,443 4,266 4,150 3,509
Working capital . . . 72,904 60,885 84,361 69,623 54,026
Long-term debt and
capital lease obligations. 37,404 17,133 47,228 27,338 31,838
Shareholders' equity. 77,840 76,022 82,822 85,016 62,091
Total assets. . . . . 165,017 120,917 149,266 148,818 115,813
Common stock data
Net income (loss) per share. . $.40 $(.98) $(.43) $1.24 $.68
Book value per share. . $11.32 $10.92 $11.09 $13.06 $12.25
Number of common
shares outstanding. . 6,879 6,961 6,957 6,508 5,070
<FN>
Net loss for fiscal 1994 and 1993 includes after-tax amounts of $2,519 and
$4,700, respectively, for restructuring charges. Net loss for fiscal 1994 also
includes a $6,651 write-off of goodwill.
</FN>
</TABLE>
<PAGE>
THE RIGHTS OFFERING
The Rights
The Company is hereby issuing Rights to each Record Date Holder as of the
close of business on February __, 1996 (the "Record Date") at no charge to such
Record Date Holders. The Company will issue one Right for each share of Common
Stock held on the Record Date. Each Right will entitle the Rights Holder to
subscribe for one-quarter (1/4) of one share of Common Stock. The Rights will be
evidenced by non-transferable Subscription Rights Certificates, which are being
distributed to each Record Date Holder contemporaneously with the delivery of
this Prospectus. If all of the Rights were to be exercised in full, the number
of shares (and the aggregate purchase price therefor) obtainable upon exercise
of each Right will be proportionately reduced so that the maximum number of
shares issuable pursuant to this offering will be 1,607,143. In this connection,
Robert M. Gintel, the beneficial owner of 2,075,000 shares, or approximately
twenty-nine percent (29%), of the outstanding shares of Common Stock, has agreed
not to exercise his Rights. The proceeds of this offering will be used to repay
one-half of the Company's $7,500,000 short term borrowing from Robert M. Gintel
and all of the Company's $7,500,000 borrowing from Avondale Mills, Inc.
No fractional Rights or cash in lieu thereof will be issued or paid.
Instead, the number of shares of Common Stock subject to Rights issued to a
Record Date Holder will be rounded down to the nearest whole number. A
depository, bank, trust company, or securities broker or dealer holding shares
of Common Stock on the Record Date for more than one beneficial owner may, upon
delivery to the Subscription Agent of the Certification and Request for
Additional Rights form available from the Subscription Agent, exchange its
Subscription Rights Certificate to obtain a Subscription Rights Certificate for
the number of Rights to which all such beneficial owners in the aggregate would
have been entitled had each been a holder on the Record Date; no other
Subscription Rights Certificate may be so divided as to increase the number of
Rights to which its original recipient was entitled. The Company reserves the
right to refuse to issue any Subscription Rights Certificate if such issuance
would be inconsistent with the principle that each beneficial owner's holdings
will be rounded down to the nearest whole number of Rights. The Subscription
Agent must receive the Certification and Request for Additional Rights no later
than 5:00 p.m., Eastern time, on March __, 1996, after which time no new
Subscription Rights Certificates will be issued to nominees in lieu of
fractional shares.
Because the number of shares of Common Stock subject to Rights issued to
each Record Date Holder will be rounded down to the nearest whole number,
beneficial owners of Common Stock who are also the Record Date Holders of their
shares will receive more Rights under certain circumstances than beneficial
owners of Common Stock who are not the Record Date Holders of their shares and
who do not obtain (or cause the Record Date Holder of their shares of Common
Stock to obtain) a separate Subscription Rights Certificate with respect to the
shares beneficially owned by them, including shares held in an investment
advisory or similar account. To the extent that Record Date Holders or
beneficial owners of Common Stock who obtain a separate Subscription Rights
Certificate receive more Rights, they will be able to subscribe for more shares
pursuant to the Basic Subscription Privilege. Beneficial owners of Common Stock
who are not also Record Date Holders may obtain a separate Subscription Rights
Certificate upon request to the nominee Record Date Holder. See "Exercise of
Rights", below.
Expiration Time
The Rights will expire at the Expiration Time, 5:00 p.m., Eastern time, on
March __, 1996, subject to extension at the discretion of the Company. After the
Expiration Time, unexercised Rights will be null and void. The Company will not
be obligated to honor any purported exercise of Rights received by the
Subscription Agent after the Expiration Time, regardless of when the documents
relating to that exercise were sent, except pursuant to the Guaranteed Delivery
Procedures described below. The Company may extend the Expiration Time by giving
oral or written notice to the Subscription Agent on or before the Expiration
Time, followed by a press release no later than 9:00 a.m. Eastern time on the
next business day after the previously scheduled Expiration Time. The Offering
will not be extended to a time later than 5:00 p.m., Eastern time, on May 31,
1996.
Subscription Privileges
Basic Subscription Privilege. Each Right will entitle the holder thereof to
purchase, at the Subscription Price, one-quarter of one Underlying Share (the
"Basic Subscription Privilege"). Each Rights Holder is entitled to subscribe for
<PAGE>
all, or any portion of, the Underlying Shares which may be acquired through the
exercise of his or its Rights. Certificates representing Underlying Shares
purchased pursuant to the Basic Subscription Privilege will be delivered to
subscribers as soon as practicable after the corresponding Rights have been
validly exercised.
Subscription Price
The Subscription Price is $7.00 per Underlying Share subscribed for
pursuant to the Basic Subscription Privilege, payable in cash.
Exercise of Rights
Rights Holders may exercise their Rights by delivering to American Stock
Transfer & Trust Company (the "Subscription Agent"), at the address specified
below, at or prior to the Expiration Time, the properly completed and executed
Subscription Rights Certificate(s) evidencing those Rights, with any signatures
guaranteed as required, together with payment in full of the Subscription Price
for each Underlying Share subscribed for pursuant to the Basic Subscription
Privilege. Payment may be made only (i) by check or cashier's check drawn upon a
U.S. bank, or postal, telegraphic or express money order, in each case, payable
to American Stock Transfer & Trust Company, as Subscription Agent or (ii) by
wire transfer of funds to the account maintained by the Subscription Agent for
the purpose of accepting subscriptions at Chemical Bank, account number
610093045. The Subscription Price will be deemed to have been received by the
Subscription Agent only upon (i) clearance of any uncertified check, (ii)
receipt by the Subscription Agent of any certified check or cashier's check
drawn upon a U.S. bank or of any postal, telegraphic or express money order or
(iii) receipt of collected funds in the Subscription Agent's account designated
above. Funds paid by uncertified personal check may take at least five business
days to clear. Accordingly, Rights Holders who wish to pay the Subscription
Price by means of uncertified personal check are urged to make payment
sufficiently in advance of the Expiration Time to ensure that such payment is
received and clears by such time and are urged to consider, in the alternative,
payment by means of certified or cashier's check, money order or wire transfer
of funds. All funds received in payment of the Subscription Price shall be held
by the Subscription Agent and invested at the direction of the Company in
short-term certificates of deposit, short-term obligations of the United States
or any state or any agency thereof, or money market mutual funds investing in
the foregoing instruments. The account in which such funds will be held may not
be insured by the FDIC. Any interest earned on such funds will be retained by
the Company.
The Subscription Rights Certificates and payment of the Subscription Price
or, if applicable, the Notices of Guaranteed Delivery, must be delivered by
mail, by hand or by overnight courier to the Subscription Agent at the following
address:
American Stock Transfer & Trust Company
40 Wall Street, 46th Floor
New York, New York 10005
The Subscription Agent's telephone number is (718) 921-8200.
The Company will pay the fees and expenses of the Subscription Agent and
has also agreed to indemnify the Subscription Agent from certain liabilities
which it may incur in connection with this offering.
If a Rights Holder wishes to exercise Rights, but time will not permit such
holder to cause the Subscription Rights Certificate(s) evidencing those Rights
to reach the Subscription Agent prior to the Expiration Time, such Rights may
nevertheless be exercised if all of the following conditions (the "Guaranteed
Delivery Procedures") are met:
(i) the Rights Holder has caused payment in full of the Subscription Price
for each Underlying Share being subscribed for pursuant to the Basic
Subscription Privilege to be received (in the manner set forth above) by the
Subscription Agent at or prior to the Expiration Time:
(ii) the Subscription Agent receives, at or prior to the Expiration Time, a
guarantee notice (a "Notice of Guaranteed Delivery"), substantially in the form
provided with the Instructions as to Use of Subscription Rights Certificates
(the "Instructions") distributed with the Subscription Rights Certificates, from
<PAGE>
a member firm of a registered national securities exchange or a member of the
National Association of Securities Dealers, Inc. (the "NASD"), or from a
commercial bank or trust company having an office or correspondent in the United
States (each, an "Eligible Institution"), stating the name of the exercising
Rights Holder, the number of Underlying Shares being subscribed for pursuant to
the Basic Subscription Privilege and guaranteeing the delivery to the
Subscription Agent of the Subscription Rights Certificate(s) evidencing those
Rights within five NYSE trading days following the date of the Notice of
Guaranteed Delivery; and
(iii) the properly completed Subscription Rights Certificate(s) evidencing
the Rights being exercised, with any signatures guaranteed as required, is
received by the Subscription Agent within five NYSE trading days following the
date of the Notice of Guaranteed Delivery relating thereto. The Notice of
Guaranteed Delivery may be delivered to the Subscription Agent in the same
manner as Subscription Rights Certificates at the address set forth above, or
may be transmitted to the Subscription Agent by telegram or facsimile
transmission (telecopier number (718) 234-5001). Additional copies of the form
of Notice of Guaranteed Delivery are available upon request from the
Subscription Agent.
If an exercising Rights Holder does not indicate the number of Rights being
exercised, or does not forward full payment of the aggregate Subscription Price
for the number of Rights that the Rights Holder indicates are being exercised,
then the Rights Holder will be deemed to have exercised the Basic Subscription
Privilege with respect to the maximum number of Rights that may be exercised for
the aggregate payment delivered by the Rights Holder. A Rights Holder who
subscribes for fewer than all of the shares represented by its Subscription
Rights Certificates shall be deemed to have elected not to subscribe for the
remaining shares represented by its Subscription Rights Certificates, after
which such remaining shares shall be purchased by the Standby Purchasers.
Certificates representing shares of Common Stock subscribed for and issued
pursuant to the Basic Subscription Privilege will be mailed as soon as
practicable after the corresponding Rights have been validly exercised and
payment has been received.
Unless a Subscription Rights Certificate (i) provides that the Underlying
Shares to be issued pursuant to the exercise of the Rights represented thereby
are to be issued to the holder of such Rights or (ii) is submitted for the
account of an Eligible Institution, signatures on each Subscription Rights
Certificate must be guaranteed by a bank, broker, dealer, credit union, national
securities exchange, registered securities association, clearing agency or
savings association.
Record Date Holders who hold shares of Common Stock for the account of
others, such as brokers, trustees or depositories for securities, should contact
the respective beneficial owners of such shares as soon as possible to ascertain
those beneficial owners' intentions and to obtain instructions with respect to
their Rights. If a beneficial owner so instructs, the Record Date Holder of that
beneficial owners' Rights should complete appropriate Subscription Rights
Certificates and submit them to the Subscription Agent with the proper payment.
In addition, beneficial owners of Rights through such a nominee holder should
contact the nominee holder and request the nominee holder to effect transactions
in accordance with the beneficial owners' instructions. If a beneficial owner
wishes to obtain a separate Subscription Rights Certificate, he, she or it
should contact the nominee as soon as possible and request that a separate
Subscription Rights Certificate be issued. A Nominee may request any
Subscription Rights Certificate held by it to be split into such smaller
denominations as it wishes, provided that the Subscription Rights Certificate is
received by the Subscription Agent, properly endorsed, no later than 5:00 p.m.,
Eastern time, on March __,1996.
The Instructions accompanying the Subscription Rights Certificates should
be read carefully and followed in detail. SUBSCRIPTION RIGHTS CERTIFICATES
SHOULD BE SENT WITH PAYMENT TO THE SUBSCRIPTION AGENT. DO NOT SEND SUBSCRIPTION
RIGHTS CERTIFICATES TO THE COMPANY.
THE METHOD OF DELIVERY OF SUBSCRIPTION RIGHTS CERTIFICATES AND PAYMENT OF
THE SUBSCRIPTION PRICE TO THE SUBSCRIPTION AGENT WILL BE AT THE ELECTION AND
RISK OF THE RIGHTS HOLDERS. IF SUBSCRIPTION RIGHTS CERTIFICATES AND PAYMENTS ARE
SENT BY MAIL, RIGHTS HOLDERS ARE URGED TO SEND SUCH MATERIALS BY REGISTERED
MAIL, PROPERLY INSURED, WITH RETURN RECEIPT REQUESTED, AND ARE URGED TO ALLOW A
SUFFICIENT NUMBER OF DAYS TO ENSURE DELIVERY TO THE SUBSCRIPTION AGENT AND
CLEARANCE OF PAYMENT PRIOR TO THE EXPIRATION TIME. BECAUSE UNCERTIFIED CHECKS
MAY TAKE AT LEAST FIVE BUSINESS DAYS TO CLEAR, RIGHTS HOLDERS ARE STRONGLY URGED
TO PAY, OR ARRANGE FOR PAYMENT, BY MEANS OF CERTIFIED OR CASHIER'S CHECK, MONEY
ORDER OR WIRE TRANSFER OF FUNDS.
<PAGE>
All questions concerning the timeliness, validity, form and eligibility of
any exercise of Rights will be determined by the Company, whose determination
will be final and binding. The Company, in its sole discretion, may waive any
defect or irregularity, or permit a defect or irregularity to be corrected
within such time as it may determine, or reject the purported exercise of any
Right. Subscription Rights Certificates will not be deemed to have been received
or accepted until all irregularities have been waived or cured within such time
as the Company determines, in its sole discretion. Neither the Company nor the
Subscription Agent will be under any duty to give notification of any defect or
irregularity in connection with the submission of Subscription Rights
Certificates or incur any liability for failure to give such notification. The
Company reserves the right to reject any exercise if such exercise is not in
accordance with the terms of the Offering or not in proper form or if the
acceptance thereof or the issuance of shares of Common Stock pursuant thereto
could be deemed unlawful.
Any questions or requests for assistance concerning the method of
exercising Rights or requests for additional copies of this Prospectus, the
Instructions or the Notice of Guaranteed Delivery should be directed to the
Subscription Agent at its addresses set forth under "Exercise of Rights", above
(telephone (800) 937-5449 or call collect (718) 921-8200.
No Revocation
ONCE A RIGHTS HOLDER HAS PROPERLY EXERCISED THE BASIC SUBSCRIPTION
PRIVILEGE, SUCH EXERCISE MAY NOT BE REVOKED.
No Transfer
THE RIGHTS ARE NON-TRANSFERABLE AND MAY ONLY BE EXERCISED BY THE ORIGINAL
RIGHTS HOLDER. THERE WILL BE NO TRADING MARKET FOR THE RIGHTS.
Determination of Subscription Price
The Subscription Price was determined by negotiations between the Company
and the Standby Purchasers. The Company's objective in establishing the
Subscription Price was the achievement of the targeted proceeds from the
Offering while providing Record Date Holders with an opportunity to make an
additional investment in the Company, and thus avoid an involuntary dilution of
their proportionate ownership position in the Company.
In approving the Subscription Price, the Board of Directors considered such
factors as the alternatives available to the Company for raising capital, the
Company's long and short term loan obligations, the market price of the Common
Stock, the business prospects for the Company and the general condition of the
securities markets. There can be no assurance, however, that the market price of
the Common Stock will not decline during the subscription period, or that,
following the issuance of the Rights and of the Common Stock upon exercise of
Rights, a subscribing Rights Holder will be able to sell shares of Common Stock
purchased in the Rights Offering at a price equal to or greater than the
Subscription Price.
Further, in approving the Subscription Price, the Board of Directors acted
upon the recommendation of the Independent Committee, which has received an
opinion from Butler, Chapman to the effect that, based upon the procedures
followed, factors considered and assumptions made by Butler, Chapman as set
forth in its opinion, the transactions contemplated by the Note Purchase
Agreement described under "Recent Developments - The Company's Financial
Restructuring", including the Rights Offering, are fair from a financial point
of view to the Company and the holders of the Common Stock of the Company other
than Mr. Gintel and his affiliates. This opinion does not constitute a
recommendation or advice to stockholders as to whether they should exercise any
Rights pursuant to this offering.
PLAN OF DISTRIBUTION
The Common Stock offered pursuant to the Rights Offering is being offered
by the Company directly to holders of its Common Stock.
The Company has not employed any brokers, dealers or underwriters to
solicit the exercise of Rights in this offering and no commissions, fees or
discounts will be paid in connection with this offering. Certain employees of
<PAGE>
the Company may solicit responses from shareholders and Rights Holders, but such
employees will not receive any commissions or compensation for such services
other than their normal employment compensation.
The Company maintains four stock option plans, under which adjustments to
outstanding options may be made to reflect the impact of the Offering. No
decision as to the type or amount of any such adjustment has yet been made.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following summary of the general principal federal income tax
considerations relevant to holders of Common Stock upon the issuance
("Issuance") of Rights and to Rights Holders upon the exercise of the Rights is
based upon the opinion of Feldman & Ellenoff, special tax counsel to the
Company. This summary is qualified in its entirety by reference to, and is based
upon, laws, regulations, rulings and decisions in effect on the date of this
Prospectus and as those laws, regulations, rulings, and decisions were
interpreted on such date. This summary does not discuss all aspects of federal
income taxation that may be relevant to a particular investor or to certain
types of investors subject to special treatment under the federal income tax
laws (for example, banks, dealers in securities, life insurance companies,
tax-exempt organizations and foreign taxpayers), or any aspect of state, local
or foreign tax laws. RIGHTS HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS TO
DETERMINE THE TAX CONSEQUENCES OF THE OFFERING FOR THE HOLDER.
Issuance of the Rights
Record Date Holders of Common Stock will not recognize taxable income upon
the receipt of the Rights.
Basis and Holding Period of the Rights
Except as provided in the following sentence, the basis of the Rights
received by a Record Date Holder with respect to that Record Date Holder's
Common Stock will be zero. If either (i) the fair market value of the Rights on
the date of Issuance is 15% or more of the fair market value (on the date of
Issuance) of the Common Stock with respect to which they are received, or (ii)
the Record Date Holder elects under Section 307 of the Internal Revenue Code, on
the Record Date Holder's federal income tax return for the taxable year in which
the Rights are received, to allocate part of the basis of the Record Date
Holder's basis in that Common Stock, the Record Date Holder's basis in the
Common Stock will be allocated between the Common Stock and the Rights in
proportion to the fair market values of each on the date of Issuance.
Expiration of the Rights
Record Date Holders who allow the Rights received by them on the date of
isuance to expire unexercised will not recognize any gain or loss, and no
adjustment will be made to the basis of their Common Stock.
Exercise of the Rights; Basis and Holding Period of Acquired Shares
Rights Holders will not recognize any gain or loss upon the exercise of
their Rights. The basis of each share of Common Stock acquired through exercise
of the Rights will be equal to the sum of the Subscription Price paid therefor
and the basis, if any, of the Rights at the time of exercise. The holding period
for the Common Stock acquired through exercise of the Rights will begin on the
date the Rights are exercised.
DESCRIPTION OF CAPITAL STOCK
Common Stock
The Company has 15,000,000 authorized shares of Common Stock, of which
6,787,506 shares were issued and outstanding as of September 30, 1995 and an
additional 433,367 shares were subject to outstanding stock options. The Common
Stock is traded on the New York Stock Exchange under the symbol "ONA". On
January 31, 1996, the last reported sales price of the Common Stock was $6 7/8
per share.
The holders of the Common Stock are entitled to one vote per share on all
matters requiring stockholder action. The Certificate of Incorporation of the
Company does not permit cumulative voting for directors. The holders of Common
<PAGE>
Stock have no preemptive or other subscription rights and there are no
redemption, sinking fund or conversion privileges applicable thereto. The
holders of Common Stock are entitled to receive dividends as and when declared
by the Board of Directors out of funds legally available therefor. The Company
has not paid any dividends on the Common Stock since the Company's initial
public offering. The Company is restricted from paying dividends pursuant to the
terms of the New Credit Facility and does not expect to pay dividends on the
Common Stock in the foreseeable future. Upon liquidation, dissolution or winding
up of the Company, holders of Common Stock are entitled to share ratably in all
assets remaining after payment of liabilities. All outstanding shares of Common
Stock are fully paid and nonassessable and the shares of Common Stock to be
issued in this offering will, upon delivery and payment therefor in accordance
with the terms of this offering, be fully paid and nonassessable.
The registrar and transfer agent for the Company's Common Stock is American
Stock Transfer & Trust Company.
Preferred Stock
The Company has 2,000,000 authorized shares of Preferred Stock, par value
$1.00 per share, of which none were issued and outstanding as of September 30,
1995. The Company's Certificate of Incorporation provides that the terms, rights
and preferences of any preferred stock issued in the future, including dividend
rates, conversion prices, voting rights, redemption prices, maturity dates,
liquidation preference and similar matters, are to be determined by the
Company's Board of Directors at the time such issuance is approved. The Company
does not presently know whether any shares of preferred stock will actually be
issued or, if issued, what the terms, rights and preferences thereof will be.
Depending on the terms, rights and preferences thereof, the issuance of any
shares of preferred stock may have the effect of diluting the percentage of
stock ownership and voting rights of other shareholders of the Company.
Section 203 of the Delaware General Corporation Law
Section 203 ("Section 203") of the Delaware General Corporation Law (the
"DGCL") prevents a Delaware corporation from engaging in a "Business
Combination" (defined to include a variety of transactions, including mergers,
as set forth below) with an "Interested Stockholder" (generally defined as a
person with 15% or more of a corporations's outstanding voting stock) for three
years following the date such person became an Interested Stockholder unless:
(i) before such person became an Interested Stockholder, the board of directors
of the corporation approved either the Business Combination or the transaction
in which the Interested Stockholder became an Interested Stockholder, (ii) upon
consummation of the transaction which resulted in the Interested Stockholder
becoming an Interested Stockholder, the Interested Stockholder owned at least
85% of the voting stock of the corporation outstanding at the time the
transaction commenced (excluding stock held by directors who are also officers
and employee stock ownership plans in which employee participants do not have
the right to determine confidentially whether shares held subject to the plan
will be tendered in a tender or exchange offer); or (iii) following the date on
which such person became an Interested Stockholder, the Business Combination is
(x) approved by the board of directors of the corporation and (y) authorized at
a meeting of stockholders by the affirmative vote of at least 66 2/3% of the
outstanding voting stock of the corporation not owned by the Interested
Stockholder.
Under Section 203, the restrictions described above apply to the Company
unless, among other things, (i) by the affirmative vote of a majority of shares
entitled to vote, it adopts an amendment to its certificate of incorporation or
bylaws expressly electing not to be governed by Section 203 (such an amendment
would not be effective until 12 months after its adoption and would not apply to
any Business Combination between the Company and any person who became an
Interested Stockholder on or prior to such adoption); or (ii) no class of the
Company's voting stock is (x) listed on a national securities exchange, (y)
authorized for quotation on an inter-dealer quotation system of a registered
national securities association or (z) held of record by more than 2,000
stockholders (unless any of the foregoing results from action taken, directly or
indirectly, by an Interested Stockholder or from a transaction in which a person
becomes an Interested Stockholder).
A Business Combination is defined in Section 203 as (i) a merger or
consolidation; (ii) any sale, lease, exchange, mortgage, pledge , transfer or
other disposition of assets having an aggregate market value equal to 10% or
more of the aggregate market value of either all assets of the corporation
determined on a consolidated basis or all the outstanding stock of a
corporation; (iii) any transaction which results in the issuance or transfer by
the corporation, or by certain subsidiaries thereof, of any of its stock to the
Interested Stockholder, except pursuant to (x) the exercise, exchange or
conversion of securities exercisable for, exchangeable for or convertible into
stock of the corporation or any subsidiary which were outstanding prior to the
time the stockholder became an Interested Stockholder or (y) a transaction which
effects a pro rata distribution to all stockholders of the corporation; (iv) any
transaction involving the corporation or certain subsidiaries thereof which has
the effect of increasing the proportionate share of the stock of any class or
series, or securities convertible into the stock of any class or series, of the
corporation or any such subsidiary which is owned directly or indirectly by the
Interested Stockholder (except as a result of immaterial changes due to
fractional share adjustment); or (v) any receipt by the Interested Stockholder
of the benefit (except proportionately as a stockholder of such corporation) of
any loans, advances, guarantees, pledges or other financial benefits provided by
or through the corporation.
STANDBY AGREEMENT
Prior to the commencement of the Rights Offering, the Company has entered
into a Standby Agreement pursuant to which Robert M. Gintel, the chairman of the
Company's Board of Directors and Avondale, the Company's largest supplier of
yarn, as Standby Purchasers, have severally agreed, subject to certain
conditions, to acquire from the Company all of the underlying shares (the
"Unsubscribed Shares") remaining after the exercise of the Basic Subscription
Privilege by all of the Rights Holders. If all of the Rights were to be
exercised in full, the number of shares (and the aggregate purchase price
therefor) obtainable upon exercise of each Right will be proportionately reduced
so that the maximum number of shares issuable pursuant to this offering will be
1,607,143. In this connection, Robert M. Gintel, the beneficial owner of
2,075,000 shares, or approximately 29%, of the outstanding shares of Common
Stock, has agreed not to exercise his Rights with respect to the 1,100,000
shares of Common Stock directly owned of record by him. See "The Rights
Offering".
Robert M. Gintel and Avondale(collectively, the "Standby Purchasers"), have
severally agreed to purchase all of the Unsubscribed Shares at a purchase price
of $7.00 per share for an aggregate purchase price amount obtained by
subtracting from $11,250,000 (the proceeds payable to the Company upon the sale
of all of the Underlying Shares) the aggregate of all subscription proceeds
received by the Company from stockholders in the Rights Offering. Robert M.
Gintel's and Avondale's individual maximum standby commitments shall not exceed
$3,750,000 and $7,500,000, respectively.
The Unsubscribed Shares will be purchased by the Standby Purchasers as
follows. The first 750,000 Unsubscribed Shares will be purchased by Avondale.
The remaining number of Unsubscribed Shares will be purchased by the Standby
Purchasers in equal amounts, subject to each Standby Purchasers' respective
maximum standby commitment.
Pursuant to the terms of the Standby Agreement, Avondale and Robert M.
Gintel may tender the then outstanding amount of all principal and accrued and
unpaid interest under the $7,500,000 subordinated note issued to Avondale and
one of the $3,750,000 subordinated notes issued to Robert M. Gintel, in
satisfaction of their subscription price obligations under the Standby
Agreement. See "Recent Development - The Company's Financial Restructuring" -
"The 10% Subordinated Loans". The Standby Agreement further provides that the
obligations of the Standby Purchasers are conditioned upon the consummation of
the Rights Offering prior to May 31, 1996.
The Company has also entered into a Registration Rights Agreement with
Avondale and Robert M. Gintel pursuant to which the Company has granted
registration rights to the Standby Purchasers with respect to (i) the shares of
Common Stock acquired by the Standby Purchasers pursuant to the Standby
Agreement; (ii) the shares of Common Stock acquired by the Standby Purchasers
upon conversion of their respective convertible notes, as provided by the Note
Purchase Agreement; and (iii) the shares of Common Stock purchased by Robert M.
Gintel upon his exercise of the Warrant. The Company's registration obligation
may be initiated by either Mr. Gintel or Avondale, or their successors or
assigns, provided either party makes request to register at least thirty percent
(30%) of the shares of the Company's Common Stock collectively held by Mr.
Gintel and Avondale, or their successors or assigns, or the entire amount of the
shares of the Company's Common Stock held by such requesting holder. Upon
receipt of a request to register the shares, the Company shall offer the
non-requesting holders of the shares of Common Stock purchased pursuant to the
Standby Agreement the right to participate in such registration. The Company's
registration obligations under this Agreement are limited to six registration
statements, three of which may be requested by Avondale and three of which may
be requested by Mr. Gintel.
<PAGE>
LEGAL MATTERS
Certain legal matters in connection with this offering will be passed upon
for the Company by Blau, Kramer, Wactlar & Lieberman, P.C., Jericho, New York
11753. Edward I. Kramer, a member of the firm, is the Secretary of the Company.
Mr. Kramer owns 862 shares of the Company's Common Stock and options presently
exercisable or exercisable within sixty (60) days to purchase 6,510 shares of
the Company's Common Stock. Certain tax matters relating to this offering will
be passed upon for the Company by Feldman & Ellenoff, special tax counsel to the
Company.
EXPERTS
The consolidated financial statements incorporated by reference in this
Prospectus and elsewhere in the Registration Statement, to the extent and for
the periods indicated in their reports, have been audited by Arthur Andersen
LLP, independent public accountants, and are included herein in reliance upon
the authority of said firm as experts in accounting and auditing in giving said
Reports.
<PAGE>
No dealer, salesperson, or other person has been authorized by the Company
to give any information or to make any representations other than those
contained in this Prospectus and, if given or made, such other information or
representations must not be relied upon as having been so authorized by the
Company. This Prospectus does not constitute an offer to sell, or a solicitation
of an offer to buy, any securities other than the securities to which it
relates, or an offer to sell or solicitation to buy of any person in any
jurisdiction in which such offer or solicitation would be unlawful. Neither
delivery of this Prospectus nor any sale made hereunder shall, under any
circumstances, create any implication that the information herein is correct as
of any time subsequent to the date hereof.
TABLE OF CONTENTS
Page
Available Information. . . 2
Incorporation of Certain Documents
by Reference. . . 2
Prospectus Summary . . 3
Risk Factors . . 5
Use of Proceeds. . . 6
Price Range of Common Stock . .
and Dividends . . 6
Determination of Subscription Price. . . 6
Recent Developments. . . 7
Selected Financial Information . . 9
The Rights Offering. . . 10
Plan of Distribution . . 13
Certain Federal Income Tax
Considerations . . 14
Description of Capital Stock. . . 14
Standby Agreement. . . 16
Legal Matters. . . 16
Experts. . . 17
ONEITA INDUSTRIES, INC.
1,607,143 Common Shares
--------------
PROSPECTUS
--------------
Dated: February ___, 1996
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
Oneita Industries, Inc. (the "Company") estimates that the expenses in
connection with the offering described in this Registration Statement will be as
follows:
<TABLE>
<S> <C>
Securities and Exchange Commission
Filing Fee. . . . . . . . . . . . . . $ 3,879
Printing Fees and Expenses. . . . . . . . 10,000
Accounting Fees and Expenses. . . . . . . 2,000
Subscription Agent Fees and Expenses. . . 35,000
Legal Fees. . . . . . . . . . . . . . . . 35,000
Miscellaneous Expenses. . . . . . . . . . 14,121
Total . . . . . . . . . . . . . . . . $100,000
</TABLE>
Item 15. Indemnification of Directors and Officers
Under provisions of the By-Laws of the Company, each person who is or was a
director or officer of the Company shall be indemnified by the Company as of
right to the full extent permitted or authorized by the General Corporation Law
of Delaware.
Under such law, to the extent that such person is successful on the merits
of defense of a suit or proceeding brought against him by reason of the fact
that he is a director or officer of the Company, he shall be indemnified against
expenses (including attorneys' fees) reasonably incurred in connection with such
action. If unsuccessful in defense of a third-party civil suit or a criminal
suit is settled, such a person shall be indemnified under such law against both
(1) expenses (including attorneys' fees) and (2) judgements, fines and amounts
paid in settlement if he acted in good faith and in a manner he reasonably
believed to be in, or not opposed to, the best interests of the Company, and
with respect to any criminal action, had no reasonable cause to believe his
conduct was unlawful.
If unsuccessful in defense of a suit brought by or in the right of the
Company, or if such suit is settled, such a person shall be indemnified under
such law only against expenses (including attorneys' fees) incurred in the
defense or settlement of such suit if he acted in good faith and in a manner he
reasonably believed to be in, or not opposed to, the best interests of the
Company except that if such a person is adjudged to be liable in such suit for
negligence or misconduct in the performance of his duty to the Company, he
cannot be made whole even for expenses unless the court determines that he is
fairly and reasonably entitled to indemnity for such expenses.
The officers and directors of the Company are covered by officers and
directors liability insurance. The policy coverage is $10,000,000, which
includes reimbursement for costs and fees. There is a maximum deductible for
officers and directors under the policy of $200,000 for each claim. The Company
has entered into Indemnification Agreements with each of its officers and
directors. The Agreements provide for reimbursement for all direct and indirect
costs of any type or nature whatsoever (including attorneys' fees and related
disbursements) actually and reasonably incurred in connection with either the
investigation, defense or appeal of a Proceeding, as defined, including amounts
paid in settlement by or on behalf of an Indemnitee.
<PAGE>
Item 16. Exhibits
Exhibit No. Description
1.01 Form of Standby Agreement among the Company, Robert M.
Gintel and Avondale Mills, Inc.
5.01 Opinion of Blau, Kramer, Wactlar & Lieberman, P.C.
23.01 Consent of Arthur Anderson LLP
23.02 Consent of Blau, Kramer Wactlar & Lieberman, P.C.
(See Exhibit 5.01)
23.03 Consent of Feldman & Ellenoff
24.01 Powers of Attorney (See signature pages)
99.01 Form of Subscription Rights Certificate
99.02 Form of Transmittal Letter for Subscription Rights
Certificates.
99.03 Form of Subscription Agent Agreement between the Company
and American Stock Transfer & Trust Company.
99.04 Form of Notice of Guaranteed Delivery of Subscription
Rights Certificates.
Item 17. Undertakings
a. The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the Registration
Statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed
by the Registrant pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference
in the Registration Statement.
(2) That, for the purposes of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new Registration Statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
b. The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, as amended (the
"Act"), each filing of the registrant's annual report pursuant to section 13(a)
or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to Section
15(d) of the Securities Exchange Act of 1934) that is incorporated by reference
in the registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
c. The undersigned registrant hereby undertakes to supplement the
prospectus, after the expiration of the subscription period, to set forth the
results of the subscription offer, the transactions by the underwriters during
the subscription period, the amount of unsubscribed securities to be purchased
by the underwriters, and the terms of any subsequent reoffering thereof. If any
public offering by the underwriters is to be made on terms differing from those
<PAGE>
set forth on the cover page of the prospectus, a post-effective amendment will
be filed to set forth the terms of such offering.
d. Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the registrant
pursuant to the provisions described in Item 15 above, or otherwise, the
registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
e. The undersigned Registrant hereby undertakes:
(1) For purposes of determining any liability under the Act, the
information omitted from the form of prospectus filed as part of a
registration statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4)
or 497(h) under the Act shall be deemed to be part of the registration
statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Act, each
post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Charleston, South Carolina on the 31st day of January, 1996.
ONEITA INDUSTRIES, INC.
By: /s/ Herbert J. Fleming
Herbert J. Fleming
President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Robert M. Gintel and Herbert J. Fleming, and each
of them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments (including post-effective
amentdments) to this Registration Statement and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done, as fully to all intents
and purposes as he might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents or any of them, or their or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed on January 31, 1996 by the following
persons in the capacities indicated.
Signature Title
/s/ Robert M. Gintel Chairman of the Board
Robert M. Gintel
/s/ Albert Fried, Jr. Vice Chairman of the Board
Albert Fried, Jr.
/s/ Herbert J. Fleming President and Director
Herbert J. Fleming (Principal Executive Officer)
/s/James L. Ford Executive Vice President-Finance
James L. Ford (Principal Financial and Accounting Officer)
/s/Meyer A. Gross Director
Meyer A. Gross
/s/ Lewis Rubin Director
Lewis Rubin
/s/ John G. Hudson Director
John G. Hudson
/s/ H. Varnell Moore Director
H. Varnell Moore
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
ONEITA INDUSTRIES, INC.
Form S-3
Registration Statement
E X H I B I T I N D E X
<TABLE>
<CAPTION>
Exhibit
Number Exhibit Description
<S> <C>
1.01 Form of Standby Agreement among the Company,
Robert M. Gintel and Avondale Mills, Inc.
5.01 Opinion of Blau, Kramer, Wactlar & Lieberman, P.C.
23.01 Consent of Arthur Anderson LLP
23.02 Consent of Blau, Kramer, Wactlar & Lieberman, P.C. (See Exhibit 5.01)
23.03 Consent of Feldman & Ellenoff
24.01 Powers of Attorney (See signature pages)
99.01 Form of Subscription Rights Certificate
99.02 Form of Transmittal Letter for Subscription Rights Certificates.
99.03 Form of Subscription Agent Agreement between the Company
and American Stock Transfer & Trust Company.
99.04 Form of Notice of Guaranteed Delivery of Subscription Rights
Certificates.
</TABLE>
ONEITA INDUSTRIES, INC.
Common Stock,
Par Value $.25 per share
STANDBY AGREEMENT
New York, New York
__________ __, 1996
Robert M. Gintel
6 Greenwich Office Park
Greenwich, Connecticut 06831
Avondale Mills, Inc.
506 South Broad Street
Monroe, Georgia 30655
Dear Sirs:
Oneita Industries, Inc., a Delaware corporation (the "Company") proposes to
issue (the "Rights Offering"), upon the terms and subject to the conditions set
forth in the Prospectus (as hereinafter defined), rights (the "Rights") to
purchase 1,607,143 shares of its Common Stock, $.25 par value per share (the
"Common Stock"), exercisable at $ 7.00 per share and evidenced by
non-transferable certificates (the "Rights Certificates"). Such Rights will be
exercisable during the period from the date hereof through 5:00 p.m., New York
City time, on ________, 1996. The date on which the Rights Offering expires is
referred to as the "Expiration Date." The offer of Common Stock pursuant to the
Rights is hereinafter referred to as the "Rights Offering." The Rights and the
Common Stock issuable and issued upon exercise thereof are hereinafter sometimes
collectively referred to as the "Securities."
The Securities are described in the Prospectus referred to below. You have
advised us that you desire to purchase from the Company that number of shares of
Common Stock which equals the excess, if any, of 1,607,143 shares [$11,250,000
in value] over that number of shares subscribed for in the Rights Offering upon
the expiration thereof (the "Unsubscribed Securities" or the "Shares"). You are
each sometimes hereinafter individually referred to as a Standby Purchaser and
collectively as the Standby Purchasers and the Company hereby confirms its
agreement with each of you as follows:
1. Purchase and Sale of Unsubscribed Securities. On the basis of the
representations and warranties herein contained, but subject to the terms and
conditions herein set forth, the Company hereby agrees to sell the Unsubscribed
<PAGE>
Securities to the Standby Purchasers in the proportion set forth in Schedule A
hereto, and each Standby Purchaser severally agrees to purchase the Unsubscribed
Securities from the Company in the proportion set forth in Schedule A hereto, at
a purchase price of $7.00 per share. Notwithstanding the foregoing, the parties
acknowledge that the Company will not issue more than 1,607,143 shares of Common
Stock in the Rights Offering, that the Standby Purchasers' maximum aggregate
standby commitment will not exceed the difference obtained by subtracting from
$11,250,000 the aggregate of all subscription proceeds received by the Company
from stockholders in the Rights Offering and that Robert M. Gintel's and
Avondale Mills, Inc.'s individual maximum standby commitments shall not exceed
$3,750,000 and $7,500,000, respectively.
2. Payment and Delivery. Payment for the Unsubscribed Securities shall be
made by the Standby Purchasers to the Company, at the election of the Standby
Purchasers, either by (a) tendering to the Company for credit against the
subscription price (to the extent of the then outstanding principal amount of,
and any accrued and unpaid interest on), those certain 10% Subordinated Notes of
the Company dated January 26, 1996 issued to the Standby Purchasers or (b) wire
transfer to an account designated by the Company. Such payment and delivery
shall be made at 10:00 A.M., New York City Time, on the fifth business day
following the Expiration Date, the date and time of such payment and delivery
being herein called the "Closing Date". The Securities so to be delivered will
be in such denominations and registered in such names as the Standby Purchasers
request, and will be made available to the Standby Purchasers for inspection not
less than one full business day prior to the Closing Date.
3. Registration Statement and Prospectus; Public Offering. The
Company will file with the Securities and Exchange Commission (the
"Commission"), pursuant to the Securities Act of 1933, as amended (the
"Securities Act"), and the published rules and regulations adopted by the
Commission under it (the "Rules"), a registration statement, including a
preliminary prospectus, relating to the Securities, and such amendments to such
registration statement as may have been required to the date of this Agreement.
The term "preliminary prospectus" means any preliminary prospectus (as referred
to in Rule 430 of the Rules) included at any time as a part of the registration
statement and any preliminary prospectus included in the registration statement
at the Effective Date (as defined below) that omits information with respect to
the Securities and the offering of the Securities permitted to be omitted from
the registration statement when it becomes effective pursuant to Rule 430A of
the Rules ("Rule 430A Information"). If a further amendment to the registration
statement is required to be filed pursuant to Rule 424(b) of the Rules, such
further amendment (the "Final Amendment") to the registration statement,
including a form of prospectus, necessary to permit such registration statement
to become effective will be prepared by the Company and submitted to the Standby
Purchasers and will promptly be filed by the Company with the Commission. The
registration statement as amended at the time it becomes effective (the
"Effective Date"), including financial statements and all exhibits, is called
the "Registration Statement." The term "Prospectus" means the prospectus
containing the Rule 430A Information as first filed with the Commission pursuant
to Rule 424(b) of the Rules or, if no such filing pursuant to Rule 424(b) of the
Rules is required, means the form of final prospectus included in the
Registration Statement at the Effective Date.
<PAGE>
4. Representations and Warranties. The Company represents and warrants to
and agrees with the Standby Purchasers that:
(a) On the Effective Date and the date the Prospectus is first filed (if
required) with the Commission pursuant to Rule 424(b) and, if the Prospectus is
not filed pursuant to Rule 424(b) of the Rules, on the date of any filing
pursuant to Rule 424(b) of the Rules, when any post-effective amendment to the
Registration Statement becomes effective or any amendment or supplement to the
Prospectus is filed with the Commission and at the Closing Date, the
Registration Statement, the Prospectus and any such amendment or supplement will
comply in all material respects, with the requirements of the Securities Act and
the Rules, and no part of the Registration Statement, the Prospectus or any such
amendment or supplement will include any untrue statement of a material fact or
omit to state a material fact required to be stated in it or necessary to make
the statements in it not misleading; except that this representation does not
apply to statements or omissions made in reliance on and in conformity with
information relating to the Standby Purchasers furnished in writing to the
Company by the Standby Purchasers expressly for use in the Registration
Statement, Prospectus, amendment or supplement.
(b) The holders of outstanding shares of capital stock of the Company and
warrants, options or other securities to purchase shares of capital stock of the
Company are not entitled to any preemptive rights to subscribe for the Shares.
All holders, if any, of shares of common stock or other securities of the
Company having rights to have such securities registered in the Registration
Statement have waived such rights or such rights have expired by reason of lapse
of time following notification of the Company's intent to file the Registration
Statement.
(c) The Company is a corporation duly organized and validly existing, is in
good standing under the laws of the State of Delaware, and has all requisite
corporate power and authority to carry on its business as described in the
Prospectus. The Company is duly qualified as a foreign corporation and is in
good standing in all other jurisdictions in which such qualification is
required, provided however, that the Company need not be qualified in a
jurisdiction in which its failure to qualify would not have a material adverse
effect on its operations or financial condition. Each "significant" subsidiary
of the Company (as defined in Rule 1.02 of the Commission's Regulation S-X, the
"Subsidiaries") is duly organized and validly existing, is in good standing
under the laws of its state of incorporation, has all requisite power and
authority to duly carry on its business as described in the Prospectus and is
duly qualified as a foreign corporation and is in good standing in all other
jurisdictions in which such qualification is required, provided, however, that
such Subsidiary need not be qualified in a jurisdiction in which its failure to
qualify would not have a material adverse effect on its operations or financial
condition.
(d) The Company has a duly authorized and outstanding capitalization as set
forth in the Prospectus and the Securities conform to the description thereof
contained therein and such description conforms with the rights set forth in the
instruments defining the same.
(e) The financial statements and schedules filed with and as part of the
Registration Statement present fairly the financial position of the Company and
the Subsidiaries as of the respective dates thereof and the results of
<PAGE>
operations of the Company and the Subsidiaries for the respective periods
covered thereby, all in conformity with generally accepted principles of
accounting applied on a consistent basis throughout the entire period involved
and from period to period. Since the respective dates of such financial
statements there has been no material adverse change in the condition or general
affairs of the Company or of any of the Subsidiaries, financial or otherwise,
other than as referred to in the Prospectus.
(f) The Rights Certificates, Rights and Common Stock issuable upon exercise
of the Rights have been duly authorized and, when issued and paid for, will be
validly issued, fully paid and non-assessable and the holders thereof will not
be subject to personal liability by reason of being such holders; such
securities are not subject to the preemptive rights of any stockholder of the
Company; and the Common Stock has been duly authorized for listing on the New
York Stock Exchange upon official notice of issuance.
(g) Arthur Andersen LLP, who are certifying the financial statements filed
with the Commission as a part of the Registration Statement, are independent
public accountants as required by the Securities Act and the Rules.
(h) The issuance of the Rights Certificates and the Securities and the
execution and delivery of this Agreement, the consummation of the transactions
herein contemplated and the compliance with the terms of the Rights Certificates
and this Agreement will not conflict with or result in a breach of any of the
terms or provisions of, or constitute a default under, or give rise to rights of
termination under, any deed of trust, lease, sublease, the Certificate of
Incorporation or by-laws of the Company or of any of the Subsidiaries, or any
indenture, mortgage, or other agreement or instrument to which the Company or
any of the Subsidiaries is a party or by which the Company or any of the
Subsidiaries, or the property of any of them, is bound, or any applicable law,
rule, regulation, judgment, order or decree of any government, governmental
instrumentality or court, domestic or foreign, having jurisdiction over the
Company or any of the Subsidiaries, or the properties or operations of any of
them.
Each of the Standby Purchasers represents and warrants to the Company that
he or it (as the case may be), as of the date of this Agreement, has the
financial wherewithal to honor his or its respective commitments hereunder.
5. Subscription Offer. The Company will offer to holders of its Common
Stock of record at the close of business on _____________, 1996 the right to
purchase shares of Common Stock at a price of $7.00 per share on the basis of
one right to purchase one-quarter of one share of Common Stock for every share
of Common Stock held. The Company will, or will cause its Transfer Agent to,
mail Rights Certificates to such holders of Common Stock as promptly as
practicable after the Registration Statement becomes effective, and in any event
will complete such mailing not later than midnight on the day next succeeding
the effective date of the Registration Statement, unless you shall consent to a
later time in writing.
At the time of the commencement of the mailing ("Time of Mailing") of the
Rights Certificates to such holders, the Company will notify each of the Standby
Purchasers of such mailing, and the Company will advise each of the Standby
<PAGE>
Purchasers daily during the period of such offer of the subscriptions received
and of sales. Not later than 10 A.M., New York City Time, on the first full
business day following the Expiration Date, the Company will notify each Standby
Purchaser by telephone of the total number of shares of Common Stock subscribed
for by holders of Rights Certificates and the resulting amount of Unsubscribed
Securities and will confirm such notice in writing. The Standby Purchasers shall
be entitled to rely on such notice as to the amount of Unsubscribed Securities
to be purchased by them in accordance with Schedule A hereto.
6. Restricted Nature of Unsubscribed Securities. Each of the Standby
Purchasers acknowledges that the Unsubscribed Securities, in its or his hands,
as the case may be, will be restricted securities which may not be sold or
offered for sale in the absence of an effective registration statement as to
such Unsubscribed Securities under the Securities Act or an opinion of counsel
satisfactory to the Company that such registration is not required. In this
regard, the parties hereto have entered into a Registration Rights Agreement,
substantially in the form of Schedule B hereto, pursuant to which, among other
things, the Company granted the Standby Purchasers certain registration rights
with respect to the Unsubscribed Securities.
7. Certain Covenants of the Company. In further consideration of the
agreements of the Standby Purchasers herein contained, the Company covenants as
follows:
(a) The Company will not at any time, whether before or after the
Registration Statement shall have become effective, file or make any amendment
or supplement to the Registration Statement or Prospectus of which you shall not
have previously been advised and furnished a copy, or to which you shall
reasonably object in writing.
(b) The Company will use its best efforts to cause the Registration
Statement to become effective and will advise you immediately, and confirm the
advice in writing, (i) when the Registration Statement, or any post-effective
amendment to the Registration Statement, shall have become effective, or any
supplement to the Prospectus or any amended Prospectus shall have been filed,
(ii) of the necessity of amending or supplementing the Prospectus or any amended
Prospectus in order to then meet the requirements of the Securities Act, (iii)
of any request of the Commission for amendment or supplementation of the
Registration Statement or Prospectus or for additional information, and (iv) of
the issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement or of any order preventing or suspending the use of
any preliminary or amended preliminary prospectus, or of the suspension of the
qualification of the Securities for offering or sale in any jurisdiction, or of
the institution of any proceedings for any of such purposes. The Company will
use its best efforts to prevent the issuance of any such stop order or of any
order preventing or suspending such use and to obtain as soon as possible the
lifting thereof, if issued.
(c) The Company will deliver to the Standby Purchasers, without charge,
from time to time until the effective date of the Registration Statement, as
many copies of each preliminary or amended preliminary prospectus as the Standby
Purchasers may reasonably request, and the Company hereby consents to the use of
such copies for purposes permitted by the Securities Act. The Company will
deliver to the Standby Purchasers, without charge, as soon as the Registration
<PAGE>
Statement shall have become effective and thereafter from time to time as
requested, such number of copies of the Prospectus (as supplemented or amended,
if the Company shall have made any supplements or amendments to the Prospectus)
as the Standby Purchasers may reasonably request. The Company has furnished or
will furnish to you two signed copies of the Registration Statement as
originally filed and of all amendments thereto, whether filed before or after
the Registration Statement becomes effective, and three copies of all exhibits
filed therewith or incorporated therein by reference and signed copies of all
consents and certificates of experts.
(d) The Company will comply to the best of its ability with the Securities
Act and the Rules and the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the rules and regulations thereunder so as to permit the
continuance of sales of, and dealings in, the Securities under the Securities
Act and the Exchange Act. Subject to the provisions of subsection (a) of this
Section 7, if at any time when a Prospectus is required to be delivered under
the Securities Act (i) an event shall have occurred as a result of which it is
necessary to amend or supplement the Prospectus in order to make the statements
therein not untrue or misleading or to make the Prospectus comply with the
Securities Act or (ii) the proposed offering of the Securities makes it
necessary to amend or supplement the Prospectus, the Company promptly will amend
or supplement the Prospectus (and if a Post-Effective Amendment to the
Registration Statement is necessary in connection therewith, will promptly
prepare and file the same and will use its best efforts to cause the same to
become effective) as necessary to permit the lawful use of the Prospectus in
connection with the distribution of the Securities.
(e) The Company will comply to the best of its ability with blue sky laws
so as to permit the continuance of sales of and dealings in the Unsubscribed
Securities thereunder. The Company, however, shall not be obligated to qualify
as a foreign corporation or file any general consent to service of process under
the laws of any such jurisdiction or subject itself to taxation as doing
business in any such jurisdiction. The Company will take the necessary action to
qualify the Securities (and, to the extent necessary, the Rights Certificates)
in connection with the offer and sale thereof by the Company, under the laws of
such jurisdictions as may be deemed advisable by the Company in respect of the
offer of the Securities to the holders of its Common Stock and Rights
Certificates.
(f) The Company will make generally available to its security holders, by
mailing to its then security holders, as soon as practicable and in no event
later than the 15th full calendar month following the calendar quarter in which
the Effective Date falls, an earnings statement satisfying the provisions of
Section 11 (a) of the Securities Act and Rule 158 of the Rules.
(g) The Company will pay and bear all costs and expenses in connection with
(i) the preparation, printing and filing with the Commission of the Registration
Statement (including financial statements and exhibits), preliminary
prospectuses and Prospectus and any amendments or supplements thereto, (ii) the
printing of this Agreement and the agreements and other printed matter used by
you in connection with the marketing of the Securities and the publication of
any related advertisements, (iii) the issue and delivery of the Unsubscribed
Securities hereunder to the Standby Purchasers, including all Federal and other
taxes on the issue by or any transfer of the Unsubscribed Securities from the
<PAGE>
Company to the Standby Purchasers (but not on any transfer by the Standby
Purchasers of the Unsubscribed Securities or of the right to receive the same),
(iv) the qualifying of the Securities and the Rights Certificates under the laws
of certain jurisdictions as aforesaid, including filing fees and fees and
disbursements of counsel (who may be counsel for the Standby Purchasers) in
connection therewith, (v) the cost of furnishing to the Standby Purchasers
copies of the Registration Statement, preliminary and amended preliminary
prospectuses and Prospectus and all supplements and amendments thereto, as
herein provided and (vi) the legal expenses of the Standby Purchasers incidental
to the preparation of, and the consummation by the Standby Purchasers of the
transactions contemplated by, this Agreement.
(h) The Company will do all things necessary to maintain the
exerciseability of the Rights, including, but not limited to, maintaining at all
times sufficient reserved, authorized but unissued shares of Common Stock for
issuance upon exercise thereof.
(i) The Company will use its best efforts to add the Standby Purchasers as
additional insureds on any insurance policy which provides insurance against
liabilities which may be asserted in connection with the Rights Offerings.
8. Conditions of Obligations of the Standby Purchasers and of Company. The
obligations of the Standby Purchasers to purchase and pay for the Unsubscribed
Securities which they have agreed to purchase hereunder are subject to the
accuracy (as of the date hereof and the Closing Date) of and compliance with the
representations and warranties of the Company herein, to the accuracy of the
statements of officers of the Company made pursuant to the provisions hereof, to
the performance by the Company of its obligations hereunder, and to the
following additional conditions.
(a) The Registration Statement shall have become effective not later than
5:30 P.M., New York City Time, on __________, 1996 or at such later time on such
later date as you may agree to in writing; and prior to the Closing Date, no
stop order suspending the effectiveness of the Registration Statement shall have
been issued and no proceedings for that purpose shall have been instituted or
shall be pending, or, to your knowledge or the knowledge of the Company, shall
be contemplated by the Commission, and any request on the part of the Commission
for additional information shall have been complied with.
(b) The Time of Mailing shall have occurred not later than 5:30 P.M., New
York City Time, on ___________, 1996 or at such later time on such date as you
may agree to in writing; prior to the Time of Mailing, the issuance and sale of
the Securities shall have been approved by all requisite corporate action.
(c) At the Time of Mailing, and at the Closing Date, there shall have been
delivered to you a signed opinion of Blau Kramer Wactlar & Lieberman, P.C., as
counsel for the Company, dated as of the Time of Mailing and the Closing Date,
respectively, in form and substance satisfactory to Reid & Priest LLP, counsel
for the Standby Purchasers.
<PAGE>
(d) At the Time of Mailing, and at the Closing Date, there shall have been
delivered to you a signed letter of Arthur Andersen LLP, in form and substance
reasonably satisfactory to you, dated as of the Time of Mailing and the Closing
Date, respectively.
(e) At the Time of Mailing, (i) the Registration Statement and the
Prospectus and any amendments or supplements thereto shall contain all
statements which are required to be stated therein in accordance with the
Securities Act and the Rules and in all material respects shall conform to the
requirements of the Securities Act and the Rules, and neither the Registration
Statement nor the Prospectus nor any amendment or supplement thereto shall
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading, (ii) since the respective dates as of which information is given
there shall have been no material adverse change in the business, properties or
financial condition of the Company from that set forth in the Registration
Statement and the Prospectus, except changes which the Registration Statement
indicates might occur after the effective date of the Registration Statement,
and since September 30, 1995 there shall have been no material transaction,
contract or agreement entered into by the Company other than in the ordinary
course of business which is not referred to in the Registration Statement, and
(iii) no action, suit or proceeding at law or in equity shall be pending or, to
the knowledge of the Company, threatened against the Company or any Subsidiary
which would be required to be set forth in the Registration Statement other than
as set forth therein, and no proceeding shall be pending or, to the knowledge of
the Company, threatened against the Company or any Subsidiary before or by any
Federal, state or other commission, board or administrative agency wherein an
unfavorable decision, ruling or finding would materially adversely affect the
business, property, financial condition or income of the Company, other than as
set forth in the Registration Statement; and the Standby Purchasers shall have
received, at the Time of Mailing, certificates of the President or a
Vice-President, and the Treasurer or an Assistant Treasurer, of the Company,
dated as of the Time of Mailing, evidencing compliance with the provisions of
this subsection (e).
(f) All proceedings taken at or prior to the Time of Mailing and the
Closing Date, respectively, in connection with the authorization, issue and sale
of the Securities and the authorization and issue of the Rights Certificates
shall be reasonably satisfactory in form and substance to you and to your
counsel, and such counsel shall have been furnished with all such documents,
certificates and opinions as it reasonably requests to verify the accuracy and
completeness of any of the representations, warranties, or statements, the
performance of any covenants of the Company, or the compliance with any of the
conditions, herein contained.
(g) At the Closing Date, the Company shall have delivered to the Standby
Purchasers a certificate of the President of the Company dated the Closing Date
certifying that the representations and warranties of the Company set forth
herein are true and correct as of the Closing Date.
In case any of the conditions specified above in this Section 8 shall
not have been fulfilled, this Agreement may be terminated by either of you on
notice to the Company.
<PAGE>
The obligation of the Company to sell and deliver the Unsubscribed
Securities is subject to the following conditions: The Registration Statement
shall have become effective not later than 5:30 P.M., New York City Time, on
___________, 1996, or at such later time or on such later date as the Company
may agree to in writing; and prior to the Closing Date, no stop order suspending
the effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or shall be pending, or,
to your knowledge or the knowledge of the Company, shall be contemplated by the
Commission. In case any of the conditions specified in this paragraph shall not
have been fulfilled, this Agreement, upon notice to you, may be terminated by
the Company.
9. Indemnification. (a) The Company will indemnify and hold harmless each
of the Standby Purchasers and its respective directors, officers, employees and
agents, and each person, if any, who controls each Standby Purchaser within the
meaning of Section 15 of the Securities Act against any and all losses, claims,
damages and liabilities, joint or several (including any investigation, legal
and other expenses reasonably incurred in connection with, and any amount paid
in settlement of, any action, suit or proceeding or any claim asserted)
(collectively, the "Losses"), 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 arise out of or are based on any untrue statement or
alleged untrue statement of a material fact contained in any preliminary
prospectus, the Registration Statement or the Prospectus or any amendment or
supplement thereto, or the omission or alleged omission to state in such
document a material fact required to be stated in it or necessary to make the
statements in it not misleading, provided that the Company will not be liable to
the extent that such loss, claim, damage or liability is based on an untrue
statement or omission or alleged untrue statement or omission (i) made in
reliance on and in conformity with information furnished in writing to the
Company by or on behalf of the Standby Purchaser expressly for use in the
document or (ii) in a preliminary prospectus if the Prospectus corrects the
untrue statement or omission or alleged untrue statement or omission which is
the basis of the loss, claim, damage or liability for which indemnification is
sought and a copy of the Prospectus was not sent or given to such person at or
before the confirmation of the sale to such person in any case where such
delivery is required by the Securities Act, unless such failure to deliver the
Prospectus was a result of noncompliance by the Company with Section 7(c). This
indemnity agreement will be in addition to any liability that the Company might
otherwise have.
(b) The Standby Purchasers will indemnify and hold harmless the Company and
its directors, officers, employees and agents, and each person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act, to
the same extent as the foregoing indemnity from the Company to the Standby
Purchasers, but only insofar as Losses arise out of or are based on any untrue
statement or omission or alleged untrue statement or omission made in or in
reliance on and in conformity with information furnished in writing to the
Company by or on behalf of the Standby Purchasers expressly for use in
preparation of the documents in which the statement or omission is made or
alleged to be made. This indemnity agreement will be in addition to any
liability that the Standby Purchasers might otherwise have.
(c) Any party that proposes to assert the right to be indemnified under
this Section will, promptly after receipt of notice of commencement of any
action against such party in respect of which a claim is to be made against an
<PAGE>
indemnifying party or parties under this Section, notify each such indemnifying
party of the commencement of such action, enclosing a copy of all papers served,
but the omission so to notify such indemnifying party will not relieve it from
any liability that it may have to any indemnified party otherwise than under
this Section. If any such action is brought against any indemnified party and it
notifies the indemnifying party of its commencement, the indemnifying party will
be entitled to participate in, and, to the extent that it elects by delivering
written notice to the indemnified party promptly after receiving notice of the
commencement of the action from the indemnified party, jointly with any other
indemnifying party similarly notified, to assume the defense of the action, with
counsel reasonably satisfactory to the indemnified party, and, after notice from
the indemnifying party to the indemnified party of its election to assume the
defense, the indemnifying party will not be liable to the indemnified party for
any legal or other expenses except as provided below and except for the
reasonable costs of investigation previously incurred by the indemnified party
in connection with the defense. The indemnified party will have the right to
employ its counsel in any such action, but the fees and expenses of such counsel
will be at the expense of such indemnified party unless (i) the employment of
counsel by the indemnified party has been authorized in writing by the
indemnifying party, (ii) the indemnified party has reasonably concluded that
there may be a conflict of interest between the indemnifying party and the
indemnified party in the conduct of the defense of such action (in which case
the indemnifying party will not have the right to direct the defense of such
action on behalf of the indemnified party) or (iii) the indemnifying party has
not in fact employed counsel to assume the defense of such action within a
reasonable time after receiving notice of the commencement of the action, in
each of which cases the fees and expenses of counsel will be at the expense of
the indemnifying party or parties. All such fees and expenses will be reimbursed
promptly as they are incurred. An indemnifying party will not be liable for any
settlement of any action or claim effected without its written consent or, in
connection with any proceeding or related proceeding in the same jurisdiction,
for the fees and expenses of more than one separate counsel for all indemnified
parties.
10. Representations, Warranties and Agreements to Survive Delivery. The
representations, warranties, indemnities and agreements of the Company and the
Standby Purchasers made in this Agreement will remain operative and in full
force and effect regardless of any investigation made by or on behalf of the
Company, or any Standby Purchaser or controlling person and will survive
delivery of and payment for the Unsubscribed Securities.
11. Termination. Notwithstanding any provision to the contrary contained
herein, either of the Standby Purchasers shall have the right to terminate this
Agreement, by written notice addressed to the Company, if the Rights Offering is
not consummated by May 31, 1996.
12. Obligations. The parties hereto acknowledge that the obligations of the
Standby Purchasers under this Agreement are several and not joint.
13. Miscellaneous. (a) This Agreement contains the entire agreement among
the parties hereto with respect to the subject matter herein, and cannot be
modified, changed, discharged or terminated except by an instrument in writing
signed by the party against whom the enforcement of any modification, change,
discharge or termination is sought.
<PAGE>
(b) Any notice, request, instruction or other document to be given
hereunder shall be in writing and shall be delivered personally or sent by
registered or certified mail or overnight courier as follows:
(i) If to the Company:
4130 Faber Place
Suite 200
Ashley Corporate Center
Charleston, South Carolina 29405
Attn: President
with a copy to:
Blau, Kramer, Wactlar & Lieberman, P.C.
100 Jericho Quadrangle
Jericho, New York 11753
Attn: Edward I. Kramer
(ii) If to the Standby Purchasers, at their respective addresses specified
on page one hereof or to such other address as any party hereto hereinafter
designates in writing to any other party hereto, with a copy, in the case of
Robert M. Gintel, to:
Reid & Priest LLP
40 West 57th Street
New York, New York 10019
Attn: Leonard Gubar
and with a copy, in the case of Avondale Mills, Inc. to:
King & Spalding
191 Peachtree Street
Atlanta, Georgia 30303
Attn: Michael J. Egan III
(c) The captions herein are inserted for convenience only and shall not
affect the construction of this Agreement.
(d) This Agreement is executed and delivered in, and shall be construed in
accordance with, and governed by, the laws of the State of New York, without
giving effect to the conflicts of law principles thereof.
<PAGE>
(e) This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original, but all of which taken together shall
constitute one and the same instrument.
Very truly yours,
ONEITA INDUSTRIES, INC.
By: ______________________
Title: President
Accepted and Agreed to as of
the Date First Above Written:
- ----------------------------
Robert M. Gintel
AVONDALE MILLS, INC.
By: ______________________
Title:
<PAGE>
SCHEDULE A
ALLOCATION OF UNSUBSCRIBED SECURITIES
The first 750,000 shares of Unsubscribed Securities will be purchased by
Avondale Mills, Inc.
The next block of Unsubscribed Securities will be purchased by the Standby
Purchasers as follows, subject to Avondale Mills, Inc.'s maximum cumulative
Standby Commitment of $7,500,000:
Robert M. Gintel - 50%
Avondale Mills, Inc. - 50%
The balance of the Unsubscribed Securities will be purchased by Mr. Gintel,
subject to his maximum cumulative Standby Commitment of $3,750,000.
February 7 1996
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Oneita Industries, Inc.
Registration Statement on Form S-3
Gentlemen:
Reference is made to the filing by Oneita Industries, Inc. (the "Company")
of a Registration Statement (the "Registration Statement") on Form S-3 with the
Securities and Exchange Commission pursuant to the provisions of the Securities
Act of 1933, as amended, covering the registration of 1,607,143 shares of the
Company's Common Stock, $.25 par value per share (the "Common Stock").
As counsel for the Corporation, we have examined its corporate records,
including its Certificate of Incorporation, as amended, By-laws, as amended, its
corporate minutes, the form of its Common Stock certificate and such other
documents as we have deemed necessary or relevant under the circumstances.
We are not admitted to practice in any jurisdiction other than the State of
New York. We do not purport to be experts in the laws of any jurisdiction other
than the laws of the State of New York, the General Corporation Law of the State
of Delaware and the laws of the United States of America.
Based upon our examination, we are of the opinion that:
1. The Company is duly organized and validly existing under the laws of the
State of Delaware.
<PAGE>
Securities and Exchange Commission
February 7 1996
Page Two
2. The shares of Common Stock covered by the Registration Statement when
issued and sold and proceeds received by the Company, all in the manner
contemplated by the Registration Statement, will be duly and validly issued,
fully paid and are non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and the reference to us under the caption "Legal Matters"
in the Prospectus. In giving this consent, we do not thereby admit that we are
within the category of persons whose consent is required under Section 7 of the
Securities Act of 1933 and the rules and regulations of the Commission
thereunder.
Very truly yours,
BLAU, KRAMER, WACTLAR &
LIEBERMAN, P.C.
ARTHUR ANDERSEN LLP
Suite 2300
1201 Main street
Columbia, South Carolina 29201
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this Form S-3 registration statement of our report, dated
November 17, 1995, included in Oneita Industries, Inc.'s Form 10-K for the year
ended September 30, 1995, and to all references to our Firm included in this
registration statement.
/s/ Arthur Andersen LLP
Columbia, South Carolina,
February 2, 1996.
FELDMAN & ELLENOFF
Counselors at Law
200 Madison Avenue
New York, New York 10016-3903
The consent of Feldman & Ellenoff, special tax counsel to Oneita
Industries, Inc., to the reference to their name under the caption "Certain
Federal Income Tax Considerations" and "Legal Matters" in the Oneita Industries,
Inc. Registration Statement (Form S-3) for the registration of 1,607,143 shares
of common stock and 6,878,506 rights to purchase such shares, is hereby granted.
/s/ Feldman & Ellenoff
Feldman & Ellenoff
New York, New York
February 2, 1996
No. of Rights ____
Certificate No.
ONEITA INDUSTRIES, INC.
Subscription Rights Certificate for Common Stock
The Registered Owner of this Subscription Rights Certificate is entitled to
subscribe, at a Subscription Price of $7.00 per share, for one quarter of one
share of Common Stock (the "Common Stock") of Oneita Industries, Inc. for each
Right stated hereon pursuant to the Basic Subscription Right. All subscriptions
are subject to the terms and conditions set forth herein and in the Prospectus,
dated ________, 1996.
This Subscription Rights Certificate is not transferable and may not be
combined.
Full written instructions for the use of this Subscription Rights Certificate
and additional copies of the Prospectus are available from the following
Subscription Agent, to which this Subscription Rights Certificate, when
completed and signed on the reverse side hereof, should be delivered together
with payment in full of the Subscription Price in order to exercise the Rights:
Subscription Agent
American Stock Transfer & Trust Company
By, Mail , Hand or Overnight Courier
40 Wall Street
46th Floor
New York, New York 10005
ONEITA INDUSTRIES, INC.
By: American Stock Transfer & Trust Company,
Subscription Agent
Authorized Officer
- ------------------------------------------------------------------------------
The Subscription Offer expires at 5:00 p.m., local time in New York on
__________, 1996 and this certificate is void thereafter
- ------------------------------------------------------------------------------
FOUR (4) RIGHTS AND PAYMENT OF THE SUBSCRIPTION PRICE SHOWN HEREON
ARE NEEDED TO
SUBSCRIBE FOR EACH SHARE OF COMMON STOCK PURSUANT TO THE BASIC
SUBSCRIPTION
RIGHT.
<PAGE>
FORM A - SUBSCRIPTION TO PURCHASE SHARES:
__________
Number of
Rights
FOUR RIGHTS AND THE SUBSCRIPTION PRICE SHOWN HEREON ARE REQUIRED TO SUBSCRIBE
FOR EACH SHARE OF COMMON STOCK PURSUANT TO THE BASIC SUBSCRIPTION RIGHT.
BOX 1A-BASIC SUBSCRIPTION RIGHT BOX 1B- AMOUNT AND SIGNATURE
Total Payment Enclosed $___________
No. of Shares Subscription Payment SIGNATURE-I hereby subscribe for
Subscribed Price Enclosed shares of Common Stock of Oneita
Industries, Inc. upon the terms
____________ x $7.00 = $______ specified in the Prospectus.
Subscribers Telephone No.( )_______
Subscribers Signature ______________
EXPIRATION: 5:00 P.M., NEW YORK CITY TIME ____________________, 1996.
FORM B - DIVISION OF THIS CERTIFICATE
The undersigned hereby represents that it is holding this certificate and the
Rights evidenced hereby for the benefit of the persons listed below and you are
hereby instructed to divide this Subscription Rights Certificate and the Rights
indicated hereon into Subscription Rights Certificates in the name of the
undersigned in number equal to the number of persons listed below and in the
amounts set forth opposite their names:
NAME NUMBER OF RIGHTS
- ---------------------------------- ------------------------------------
- ---------------------------------- ------------------------------------
- ---------------------------------- ------------------------------------
(If necessary, continue on another page or pages and be sure to sign each such
additional page.)
Signature ____________________________________________
Oneita Industries, Inc.
4130 Faber Place Drive
Suite 200
Charleston, South Carolina 29405
(803) 529-5225
Inquiries:
Call Subscription Agent
(718) 921-8200
_______________, 1996
PLEASE GIVE THIS LETTER AND INSTRUCTIONS YOUR PROMPT ATTENTION
THE ENCLOSED SUBSCRIPTION RIGHTS CERTIFICATE HAS VALUE. PLEASE DO NOT LOSE
OR MUTILATE IT. YOUR SUBSCRIPTION RIGHTS CERTIFICATE IS NON-TRANSFERABLE AND
EXPIRES AT 5:00 P.M., NEW YORK CITY TIME, ON ___________, 1996. IT IS VALUELESS
THEREAFTER.
DEAR STOCKHOLDER:
Oneita Industries, Inc. (the "Company") is offering to its Common
Stockholders non-transferable rights to subscribe for shares of the Company's
Common Stock, par value $.25 per share (the "Common Stock"). The offering is
made by, and described in, the enclosed Prospectus. YOU ARE URGED TO READ THE
PROSPECTUS CAREFULLY. Instructions for completing the form on the back of your
Subscription Rights Certificate, with examples, appear in the following pages.
Some important features of this offering include:
SUBSCRIPTION RIGHTS: All Stockholders who owned common stock, par value
$.25 per share (the "Common Stock"), of the Company on the Record Date
(________, 1996) are entitled to one Subscription Right ("Right") for each share
of Common Stock they owned on the Record Date. The enclosed Subscription Rights
Certificate evidences the Rights issued to you. The number of Rights you were
issued appears on the face of the Subscription Rights Certificate at the top
right.
TO SUBSCRIBE: Four (4) Rights and a payment of $7.00 are required for
each share of Common Stock for which you subscribe pursuant to the Basic
Subscription Right.
FRACTIONAL SHARES: No fractional shares will be issued to holders of
Rights, and the Rights are not transferable. Any holder of a number of Rights
not evenly divisible by 4 will not be entitled to subscribe pursuant to the
Basic Subscription Right for more than the number of shares of Common Stock
equal to the number obtained by dividing the number of Rights owned by such
holder by 4 and rounding down to the next lower whole number. [Example: If you
have received 115 Rights, you may subscribe for a maximum of 28 shares of Common
Stock pursuant to the Basic Subscription Right (115 divided by 4 equals 28.75,
which is rounded down to 28).]
PARTIAL SUBSCRIPTION: Stockholders may subscribe for less than the full
amount of shares of Common Stock to which they are entitled pursuant to the
Basic Subscription Right.
STANDBY PURCHASE: Robert M. Gintel, the Chairman of the Board of Directors
of the Company and Avondale Mills, Inc., the Company's largest supplier of yarn,
have agreed to subscribe for and purchase all shares of Common Stock (the
"Unsubscribed Shares") which have not been purchased by the remaining
Stockholders of the Company pursuant to such Stockholders' Basic Subscription
Privilege. Therefore, sale of all of the shares of Common Stock offered pursuant
to the Rights Offering is assured. Mr. Gintel and Avondale Mills, Inc. have
agreed to purchase the Unsubscribed Shares for a purchase price of $7.00 per
share. Mr. Gintel has agreed not to subscribe for and purchase any shares of the
Common Stock to which he is entitled to purchase as a result of his Basic
Subscription Rights with respect to the 1,100,000 shares of Common Stock he owns
directly of record. The first 750,000 Unsubscribed Shares will be purchased by
Avondale Mills, Inc. The remaining Unsubscribed Shares will be purchased by Mr.
Gintel and Avondale Mills, Inc. in equal amounts subject to the $3,750,000 and
$7,500,000 respective maximum commitments to purchase Unsubscribed Shares by Mr.
Gintel and Avondale Mills, Inc. The relationship among the Company, Mr. Gintel
and Avondale Mills, Inc. and a description of certain transactions among Mr.
Gintel, Avondale Mills, Inc. and the Company are further described in the
Prospectus.
SALE: You may NOT sell or otherwise transfer your Rights.
TAXES: General information as to the tax status of Rights for United
States Federal Income Tax purposes is provided in the Prospectus; you should,
however, consult your own tax advisor.
SUBSCRIPTION: IF YOU WISH TO SUBSCRIBE, YOU SHOULD SEND THE SUBSCRIPTION
RIGHTS CERTIFICATE AND PAYMENT TO THE SUBSCRIPTION AGENT, AMERICAN STOCK
TRANSFER & TRUST COMPANY, AS QUICKLY AS POSSIBLE. THEY MUST BE RECEIVED BY THE
SUBSCRIPTION AGENT AT OR BEFORE 5:00 P.M., NEW YORK CITY TIME, ON __________,
1996, UNLESS YOU USE THE LATE DELIVERY PROCEDURE DESCRIBED BELOW. YOU SHOULD ACT
PROMPTLY. Full payment must accompany your Subscription Rights Certificate for
all shares of Common Stock for which you subscribe. Payment must be made by
certified bank cashier's check or postal or express money order, payable to the
order of American Stock Transfer & Trust Company.
If the Subscription Agent has received at or before 5:00 P.M., New York
City time, on _________, 1996, full payment for the total number of shares of
Common Stock subscribed for, together with a letter or telegram, substantially
in the form enclosed entitled "Notice of Guaranteed Delivery", from a commercial
bank or trust company or a member of a national securities exchange in the
United States or a member of the National Association of Securities Dealers,
stating your name, the number of Rights represented by your Subscription Rights
Certificate and the number of shares of Common Stock subscribed for and
guaranteeing that your Subscription Rights Certificate will be delivered before
12:00 Noon, New York City time, on _________, 1996, to the Subscription Agent,
such subscription will be accepted by the Subscription Agent, subject to
withholding of the stock certificate representing the shares of Common Stock
subscribed for pending receipt of the duly executed Subscription Rights
Certificate.
If you send the executed Subscription Rights Certificate and payment to the
Subscription Agent by mail, you must allow adequate time for actual receipt
prior to the dates and times specified above.
ASSISTANCE: If you require assistance, you may call the Subscription Agent
at (718) 921-8200.
Yours very truly,
Herbert J. Fleming
President
<PAGE>
Instructions
The total number of Rights you own is printed on your Subscription Rights
Certificate on the top right of the face of such Subscription Rights
Certificate. Four (4) Rights and payment of $7.00 are required to subscribe for
each share of Common Stock (the "Common Stock") under the Basic Subscription
Right. You may NOT sell or transfer all or any portion of your Rights.
If you wish to subscribe pursuant to your Basic Subscription Right, use the
instructions for completing BOX 1A and BOX 1B.
After completing BOX 1A and BOX 1B on your Subscription Rights Certificate
you should promptly send it in the return envelope provided to the Subscription
Agent, American Stock Transfer & Trust Company, 40 Wall Street, 46th Floor, New
York, New York 10005. If you return it in person, do so at the Subscription
Agent's Office, American Stock Transfer & Trust Company, 40 Wall Street, 46th
Floor, New York, New York 10005. If you use the late delivery procedure
described below, be sure your Subscription Rights Certificate reaches the
Subscription Agent at or before 5:00 P.M., New York City time, on
______________, 1996. DO NOT SEND EITHER YOUR SUBSCRIPTION RIGHTS CERTIFICATE OR
FUNDS TO ONEITA INDUSTRIES, INC.
If the Subscription Rights Certificate is signed and executed by an
attorney, executor, administrator, guarantor or other fiduciary, or by an
officer of a corporation and the Subscription Rights Certificate is not
registered in such manner, the person so executing must give his full title in
such capacity and proper evidence of authority to act in such capacity must be
furnished.
If the Subscription Agent has received at or before 5:00 p.m., New York
City time, on ________, 1996, full payment for the total number of shares of
Common Stock subscribed for, together with a letter or telegram, substantially
in the form enclosed entitled "Notice of Guaranteed Delivery" from a commercial
bank or trust company or a member of a national securities exchange in the
United States or a member of the National Association of Securities Dealers,
stating your name, the number of Rights represented by your Subscription Rights
Certificate and the number of shares of Common Stock subscribed for and
guaranteeing that your Subscription Rights Certificate will be delivered before
12:00 Noon, New York City time, on _________, 1996 to the Subscription Agent,
such subscription will be accepted by the Subscription Agent, subject to the
withholding of the stock certificate representing the shares of Common Stock
subscribed for pending the receipt of the duly executed Subscription Rights
Certificate.
To subscribe for shares of Common Stock pursuant to your Basic Subscription
Right, fill in BOX 1A and 1B on your Subscription Rights Certificate and sign on
the line marked "Subscriber's Signature". You may determine the number of shares
for which you may subscribe as follows:
Four Rights are required to subscribe for one share of Common Stock
pursuant to the Basic Subscription Right. If the number of Rights shown on your
Certificate is not evenly divisible by 4, you may subscribe pursuant to the
Basic Subscription Right for not more than the number of shares of Common Stock
equal to the number obtained by dividing the number of Rights shown on your
Subscription Rights Certificates by 4 and rounding down to the next lower whole
number. No fractional shares will be issued, and your Rights are not
transferable.
Enter in BOX 1A the number of shares of Common Stock for which you wish to
subscribe. Calculate the payment to be enclosed by multiplying such number of
shares by $7.00. Enter in Box 1A the amount of the payment being enclosed. Full
payment for such number of shares of Common Stock must be made with such
subscription.
Complete BOX 1B by entering your total payment for all shares of Common
Stock for which you are subscribing and by signing on the line marked
"Subscribers Signature".
Full payment of the Subscription Price for all shares of Common Stock for
which you subscribe must accompany the Subscription Rights Certificate or the
Guaranty of Delivery of the Subscription Rights Certificate and may be by
certified bank or cashier's check, postal or express money order, payable in
United States dollars to the order of American Stock Transfer & Trust Company.
Subscription Rights Certificates received for subscriptions without any payment
will be returned.
The signature of the subscriber must appear in BOX 1B.
NOTE:
You may elect to subscribe for fewer than your maximum number of shares of
Common Stock under the Basic Subscription Right.
ATTENTION NOMINEES AND BROKER-DEALERS
If you hold shares of common stock, par value $.25 per share (the "Common
Stock"), of Oneita Industries, Inc. as an institutional nominee or broker-dealer
for other persons, you may fill out and sign Form B on the reverse side of the
Subscription Rights Certificate in order to afford each beneficial owner of
Common Stock the ability to exercise their Basic Subscription Right.
EXAMPLE
For example, a stockholder with 115 Rights may subscribe for 28 shares of
Common Stock pursuant to the Basic Subscription Right. In this example, BOX 1A
would be completed by entering 28 as the number of shares subscribed and $196.00
as the payment. The completed BOX 1A would look like this:
BOX 1A-BASIC SUBSCRIPTION RIGHT
No. of Shares Subscription Payment
Subscribed Price Enclosed
28 x $7.00 = $ 196.00
BOX 1B would look like this:
BOX 1B - Total Payment Enclosed $196
SIGNATURE - I hereby subscribe for shares of
Common Stock of Oneita Industries, Inc. upon the
terms specified in the Prospectus.
Subscriber's Telephone No. (123) 456-7890
Subscriber's Signature Sample Stockholder
Oneita Industries, Inc.
4130 Faber Place Drive
Suite 200
Charleston, South Carolina 29405
(803) 529-5225
Inquiries:
Call Subscription Agent
(718) 921-8200
February __, 1996
American Stock Transfer & Trust Company
40 Wall Street
46th Floor
New York, New York 10005
Attn: George Karfunkel
Gentlemen:
Pursuant to the resolutions adopted by the Board of Directors on February
__, 1996 (the "Resolutions") appointing American Stock Transfer & Trust Company
as subscription agent for the Rights to purchase shares of Common Stock, par
value $.25 per share (the "Common Stock"), of Oneita Industries, Inc., a
Delaware corporation (the "Company"), we herewith deliver to you the following:
1. Certified copy of the prospectus dated February __, 1996 relating to the
Rights (the "Prospectus")
2. Certified copy of the Resolutions
3. Certified specimen of the subscription rights certificate
4. Certified copy of stockholder transmittal letter and instructions
5. Certified copy of notice of guaranteed delivery
You are hereby authorized and directed as subscription agent to:
A. Issue Subscription Rights Certificates to all holders of record of
common stock, par value $.25 (the "Common Stock"), of the Company at the close
of business on February __, 1996, and, upon surrender of Subscription Rights
Certificates by institutional nominees or broker-dealers with instructions to
divide such Subscription Rights Certificates into Subscription Rights
Certificates in smaller denominations in the names of such nominees or
broker-dealers. Subscription Rights Certificates are to be issued at the rate of
one (1) Right for each share of Common Stock held.
<PAGE>
B. Sign Subscription Rights Certificates as Subscription Agent by means of
an authorized facsimile signature.
C. [Intentionally Omitted]
D. Enclose and mail Subscription Rights Certificates on February __, 1996
as follows:
1) To holders residing within the continental United States, mail
Subscription Rights Certificates together with a copy of the Prospectus, a
notice to shareholders and a return envelope by first class mail in zip code
order.
2) To holders residing outside the continental United States, mail
Subscription Rights Certificates together with a copy of the Prospectus and a
notice to shareholders by air-mail.
E. Furnish to the following persons:
James L. Ford
William H. Boyd
a copy of a report showing the number of Subscription Rights Certificates
issued.
Acceptance
F. Accept subscriptions upon the receipt of Subscription Rights
Certificates duly executed in accordance with the terms thereof, accompanied by
proper payment.
G. Accept subscriptions from holders whose Subscription Rights Certificates
are alleged to have been lost, stolen, destroyed or not received, upon receipt
by you of a properly executed Affidavit and Indemnity undertaking, accompanied
by proper payment. Place stops on said Subscription Rights Certificates and
withhold delivery of the shares subscribed for until after the expiration of the
Subscription Rights Certificates and determination that said Subscription Rights
Certificates have not been exercised or otherwise surrendered.
H. Accept subscriptions unaccompanied by appropriate Subscription Rights
Certificates if submitted in the manner stipulated in the section of the
Prospectus relating to guaranteed delivery and accompanied by proper payment.
I. Accept subscriptions from holders whose Subscription Rights Certificates
cannot be surrendered from some meritorious reason but withhold delivery of the
shares as specified in instruction G, above.
<PAGE>
J. Accept subscriptions accompanied by proper payment provisionally upon
the receipt of Subscription Rights Certificates evidencing some deficiency in
the execution thereof. You will make a reasonable attempt to contact the holders
of such Subscription Rights Certificates and will make such Subscription Rights
Certificates available on February __, 1996 for review by the Company. You will
act in accordance with the Company's instructions in the disposition of such
Subscription Rights Certificates.
K. Accept subscriptions accompanied by proper payment executed, as Agent
for the subscriber, by a firm having membership in the New York or another
national securities exchange or the National Association of Securities Dealers
or by a bank or trust company.
L. Accept subscriptions even though the subscriber fails to execute Boxes
1A or 1B on his Subscription Rights Certificate if he has indicated on the
Subscription Rights Certificate or by letter the manner in which he wishes to
subscribe and has made proper payment.
M. Accept a company check in payment of a subscription entered for the
account of said company or for an account other than said company, but do not
accept a company check for a subscription entered for the account of any person
signing or counter-signing such check.
N. Accept individual subscriptions in cases in which the subscription is
accompanied by a bank or cashier's certified check drawn by some individual
other than the subscriber, provided:
1. the subscription form is properly executed by the subscriber,
2. the check tendered is payable to American Stock Transfer & Trust
Company and is otherwise in order, and
3. there is no evidence that the bank or cashier's certified
check was delivered to the subscriber by the drawer thereof
for any purpose other than payment of the accompanying
subscription.
O. Accept subscriptions signed by one of the persons in whose name the
Subscription Rights Certificate is issued, in cases where Subscription Rights
Certificates are issued in the names of two persons as joint tenants or are
issued in the names of co-fiduciaries, if the certificates representing the new
shares are issued in the names of, and are to be delivered to, the joint tenants
or co-fiduciaries.
Processing
P. Waive legal documentation if:
1. Subscription Rights Certificates registered in fiduciary name are
executed by such fiduciary and share certificates are to be
issued with exactly the same registration.
<PAGE>
2. Subscription Rights Certificates registered in corporate name are
executed by a person purporting to be an officer thereof and
shares are to be issued in the corporate name.
3. Subscription Rights Certificates registered in the name of a
decedent are executed by a subscriber purporting to be the
decedent's executor or administrator, the subscription does not
exceed $25,000 in value, the stock is to be issued either in the
estate name or in the subscriber's name as executor or
administrator of the estate and there is no evidence present that
the subscriber is not the duly authorized representative he
claims to be.
Q. Deposit into a bank account for the benefit of the Company on a daily
basis all funds received and collected in respect of the exercise of Basic
Subscription Rights.
R. Compute, upon the termination of the Rights Offering and the period
allowed for the guaranteed delivery of Subscription Rights Certificates on March
__, 1996, the number of shares of Common Stock subscribed for pursuant to all
Basic Subscription Rights, as described in the Prospectus.
Certificate Issuance
S. Requisition from yourselves, as transfer agent, the necessary
certificates for shares of Common Stock subscribed for and issue to subscribers
and deliver such certificates as promptly as practicable after the expiration
date of the Rights Offering. Delivery of certificates shall be made by first
class mail under your blanket surety bond, protecting yourself and the Company
from any loss or liability arising out of the non-receipt or non-delivery of
such certificates or by registered mail insured separately for the replacement
value of such certificates for shares of Common Stock subscribed for.
T. Prepare transfer journals reflecting the issuance of all shares of
Common Stock subscribed for and deliver the daily journals to Oneita Industries,
Inc., 4130 Faber Place Drive, Charleston, South Carolina 29405, Attention:
Corporate Secretary.
General
U. Deliver to each of the persons named below on each business day during
the subscription period commencing February __, 1996, a report showing the
number of shares of Common Stock subscribed for (both Subscription Rights
Certificates actually received and pledges), the dollar amount received in
payment of the subscription (each of these categories to show daily and
cumulative totals), as well as the current number of shares of Common Stock for
which subscriptions have been accepted on a provisional basis:
James L. Ford
William H. Boyd
<PAGE>
V. Return all Subscription Rights Certificates received after expiration
date to presenters with a copy of the rejection notice.
You are hereby authorized and directed as Subscription Agent to:
A. Act upon any subscription, statement, request, consent, agreement or
other instrument whatsoever not only as to its due execution and validity and
effectiveness of its provisions, but also as to the truth and accuracy of any
information contained therein, which you shall in good faith believe to be
genuine or to have been signed or represented by a proper person or persons.
B. Accept directions from the following officers of the Company who are
authorized to give any further necessary instructions to you in connection with
this matter:
Chairman: Robert M. Gintel
President: Herbert J. Fleming
Executive Vice President: James L. Ford
Secretary: Edward I. Kramer
Treasurer: William H. Boyd
General Counsel: Edward I. Kramer or
Neil M. Kaufman
In addition to the foregoing, you are hereby advised that counsel for the
Company is Blau, Kramer, Wactlar & Lieberman, P.C. and that you are also
authorized to accept from them appropriate and necessary instructions and
directions in connection with this matter.
<PAGE>
C. Consult counsel in respect to any questions relating to your duties and
responsibilities. You shall not be held liable for any advice taken or omitted
by you in good faith upon advice of counsel. You shall be under no obligation to
institute or defend any action, suit or legal proceeding in connection herewith
or to take any other action likely to involve you in expense, unless first
indemnified to your satisfaction.
D. Be entitled to receive fees for your services hereunder pursuant to the
schedule of fees attached hereto as Attachment I and be reimbursed for all costs
and expenses. Such funds will be paid to you as soon as practicable after
receipt of your invoice.
E. Disposition of materials and funds:
1. Unissued Subscription Rights Certificates -- Return to Oneita
Industries, Inc., 4130 Faber Place Drive, Charleston, South
Carolina 29405, Attention: Corporate Secretary.
2. Unissued Common Stock certificates -- Return to yourselves as
Transfer Agent.
<PAGE>
3. Surplus materials (notices, envelopes) -- Return to Oneita
Industries, Inc., 4130 Faber Place Drive, Charleston, South
Carolina 29405, Attention: Corporate Secretary.
You are hereby agree not to advise any person as to the wisdom of
subscribing or as to the market value or decline or increase in the market value
of the Common Stock.
The Company covenants and agrees to indemnify and hold you harmless against
any costs, expenses (including reasonable fees for legal counsel), losses or
damages, which may be paid, incurred or suffered by or to which you may become
subject, arising from or out of, directly or indirectly, any claim or liability
resulting from its actions pursuant to this Agreement other than costs,
expenses, losses and damages incurred or suffered by you as a result of, or
arising out of, your gross negligence or willful misconduct in connection with
performance of your duties hereunder. If the indemnification provided for in
this paragraph is applicable, but for any reason is held to be unavailable, the
Company shall contribute such amount as is just and equitable to pay, or to
reimburse you for the aggregate of any and all losses, liabilities, costs,
damages and expenses, including reasonable counsel fees, actually incurred by
you as a result of or in connection with, and any amount paid in settlement of,
any action, claim or proceeding arising out of or relating in any way to any
actions or omissions of the Company. If any action is brought against you in
respect of which indemnity may be sought against the Company pursuant to this
paragraph, you shall promptly notify the Company in writing of the institution
of such action and to the Company may, at its option, assume the defense of such
action, including the employment and fees of counsel (which counsel shall be
reasonably satisfactory to you) and payment of expenses. You shall have the
right to employ your own counsel in any such case, but the fees and expenses of
such counsel shall be at your expense unless the employment of such counsel
shall have been authorized in writing by the Company in connection with the
defense of such action or the Company shall not have employed counsel to have
charge of the defense of the action or you shall have reasonably concluded that
there may be defenses available to you which are different from or additional to
those available to the Company (in which case the Company shall not have the
right to direct the defense of such action on behalf of you), in any of which
events the fees and expenses of not more than one additional firm of attorneys
for you shall be borne by the Company. The provisions of this paragraph shall
survive any termination of this Agreement.
If the foregoing is in accordance with your understanding, please
acknowledge receipt of the documents referred to above and return the enclosed
counterpart of this Letter of Directions to us.
Very truly yours,
ONEITA INDUSTRIES, INC.
By: ____________________________
Name:
Title:
<PAGE>
The undersigned hereby acknowledges receipt this ____ day of February __,
1996 of the documents referred to above, accepts appointment as subscription
agent for the Rights and agrees to perform its duties as such subscription agent
in accordance with the foregoing Letter of Directions and the documents referred
to above.
AMERICAN STOCK TRANSFER &
TRUST COMPANY
By: ____________________________
Name:
Title:
<PAGE>
Attachment I
American Stock Transfer & Trust Company shall be paid a fee equal to $35,000 for
its services as Subscription Agent pursuant to this Agreement.
Out of pocket expenses i.e. postage, stationery, supplies, telephone calls,
counsel fees etc. will be billed on a cost basis.
NOTICE OF GUARANTEED DELIVERY
FOR
ONEITA INDUSTRIES, INC.
Rights to Subscribe for and Purchase Common Stock
This form or one substantially equivalent hereto, must be used to
subscribe for shares of Common Stock, par value $.25 per share (the "Common
Stock") of Oneita Industries, Inc., pursuant to the Rights Offering made
pursuant to the Prospectus dated _______________, 1996 (the "Prospectus") if
Subscription Rights Certificates are not immediately available or if time will
not permit all required documents to reach the Subscription Agent on or prior to
5:00 P.M., New York City time, on _____________, 1996. Such form may be
delivered by hand or transmitted by telegram, telex, facsimile transmission or
letter to the Subscription Agent, accompanied by proper payment.
TO: American Stock Transfer & Trust Company, Subscription Agent
By Mail, Hand or By Overnight Courier:
American Stock Transfer & Trust Company
40 Wall street
46th Floor
New York, New York 10005
By Facsimile: (718) 234-5001
Delivery of this instrument to an address other than as set forth above
does not constitute a valid delivery.
Gentlemen:
The undersigned hereby tenders to American Stock Transfer & Trust Company,
as Subscription Agent, upon the terms and conditions set forth in the Prospectus
and the Transmittal Letter and Instructions, receipt of which is hereby
acknowledged, the number of Rights set forth below which are hereby exercised to
purchase the number of shares of Common Stock set forth below, pursuant to the
guaranteed delivery procedure described in the Prospectus.
Signature(s)___________________________ Address ______________________________
- --------------------------------------- --------------------------------------
Name(s) Zip Code
Area Code and
__________________________________ Tel. No. (s) ____________________________
Please Type or Print
Number of Rights Tendered . . . . . . . . .
Number of shares of Common Stock subscribed
for pursuant to Basic Subscription Rights. . . . . . . . . . . .
Subscription Rights Certificate No. (if available) . . . . . . .
<PAGE>
GUARANTEE
The undersigned, a member of a registered national securities exchange, or
a member of the Natioanl Association of Securities Dealers, Inc. or a commerical
bank or trust company having an office correspondent in the United States,
hereby guarantees that the Subscription Rights Certificate representing the
number of Rights tendered hereby, in proper form for tender together with any
other required documents will be received by the Subscription Agent at its
address set forth above, no later than 12:00 Noon, New York City time, on
___________, 1996.
- --------------------------------- ----------------------------------------
Name of Firm Address
- --------------------------------- ----------------------------------------
Authorized Signature Zip Code
- --------------------------------- ----------------------------------------
Name (Please Print) Area Code and Telephone No.
_________________________________ Dated __________________________________
Title
