SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report: January 23, 1998
(Date of earliest event reported)
ONEITA INDUSTRIES, INC.
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(Exact name of registrant as specified in its charter)
Delaware 1-9734 57-0351045
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) Number)
4130 Faber Place Dr., Suite 200, Ashley Corporate Center, Charleston, S.C. 29405
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code (803) 264-5225
-------------
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(Former name or former address, if changed since last report.)
<PAGE>
Item 3. Bankruptcy or Receivership
On January 23, 1998, the Company filed a voluntary petition in the United
States Bankruptcy Court, District of Delaware, commencing a case (Case No.
98-153(JJF)) under Chapter 11 of the United States Bankruptcy Code. Pursuant to
a motion of the Company as debtor and debtor-in-possession, the Company was
authorized to obtain secured superpriority post-petition financing. In addition,
the Company proposes, pursuant to its Plan of Reorganization, to (i) amend the
terms of certain of its indebtedness and (ii) restructure its outstanding common
stock.
Item 5. Other Events
On February 2, 1998, the Company's common stock, $.25 par value, commenced
trading in a dealer market through the NASDAQ Electronic Bulletin Board under
the symbol ONET. The Company's common stock was formerly traded on the New York
Stock Exchange.
Item 7: Financial Statements, Pro Forma Financial Information and Exhibits
Exhibits
--------
4.1 Interim Order Authorizing Debtor to Obtain Emergency Secured
Superpriority Post-Petition Financing, Scheduling a Hearing to Consider Final
Authorization to Obtain Secured Post-Petition Financing Pursuant to 11 U.S.C.
Section 364(c) and Bankruptcy Rule 4001
4.2 Proposed Plan of Reorganization
Signatures
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
ONEITA INDUSTRIES, INC.
By: /s/ William H. Boyd
------------------------
William H. Boyd
Vice President Administration
and Treasurer
Dated: February 6, 1998
UNITED STATES BANKRUPTCY COURT
DISTRICT OF DELAWARE
- -----------------------------------x
:
In re :
: Case No. 98-153 (JJF)
ONEITA INDUSTRIES, INC., :
: Chapter 11
Debtor. :
:
- -----------------------------------x
INTERIM ORDER AUTHORIZING DEBTOR TO OBTAIN
EMERGENCY SECURED SUPERPRIORITY POST-PETITION
FINANCING, SCHEDULING A HEARING TO CONSIDER
FINAL AUTHORIZATION TO OBTAIN SECURED POST-PETITION
FINANCING PURSUANT TO 11 U.S.C. SECTION 364(c)
AND BANKRUPTCY RULE 4001
- --------------------------------------------------------------------------------
Upon the motion dated January 23, 1998 (the "Motion") of Oneita Industries,
Inc., the above-captioned debtor and debtor-in-possession (the "Debtor"),
seeking, among other things, (i) pursuant to Sections 364(c)(1), (2) and (3) of
Title 11, United States Code (the "Bankruptcy Code"), and Bankruptcy Rule 4001
of the Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules") interim
approval of, and interim authorization to obtain emergency secured post-petition
financing on a superpriority basis under, an agreement (together with all
related loan documents, collectively, the "Foothill Agreement") with Foothill
Capital Corporation ("Foothill"), a copy of which is attached as Exhibit A to
the Motion, and (ii) the scheduling of a hearing to consider final approval of
the Foothill Agreement; and sufficient notice of the Motion and the emergency
relief sought thereunder having been given, and no other notice being necessary;
and it appearing that authorizing the Debtor to obtain emergency interim
post-petition financing as provided for under the Foothill Agreement, including
the granting of security interests and superpriority administrative expense
status, is in the best interests of the Debtor, its creditors and its estate;
and upon the interim hearing with respect to the emergency relief sought held on
January 23, 1998; and for good cause shown;
The Court hereby finds as follows:
I. The Debtor is unable to obtain post-petition financing other than on a
secured, superpriority basis;
A. No other source of financing exists on terms more favorable to the
Debtor and its estate than those offered by Foothill under the Foothill
Agreement;
B. The emergency relief sought is required to avoid immediate and
irreparable harm to the Debtor's estate;
<PAGE>
C. The Foothill Agreement is the result of good faith negotiations and
arms-length bargaining between the Debtor and Foothill; and
D. Good and sufficient notice of the Motion and of the Debtor's request for
interim approval of the Foothill Agreement, a copy of which is attached hereto
as Exhibit A and incorporated herein by reference, and the interim hearing
thereon has been provided, and any requirement for other and further notice is
hereby dispensed with and waived.
Accordingly, IT IS this 23 day of January, 1998, hereby ORDERED as follows:
1. The emergency relief sought in the Motion is hereby GRANTED.
2. The Debtor is authorized to obtain up to $5 million in the aggregate at
any one time outstanding of revolving secured post-petition financing on an
emergency basis pursuant to the terms of the Foothill Agreement and is
authorized to use such financing in accordance with the terms of the Foothill
Agreement (the "Emergency Financing").
3. The Debtor is authorized to do all acts and execute all documents
necessary to obtain the Emergency Financing, including paying all interest, fees
and expenses payable with respect to the Emergency Financing under the Foothill
Agreement.
4. In exchange for extending the Emergency Financing, Foothill is hereby
granted a first priority lien on the Debtor's Collateral (as described and
defined in the Foothill Agreement which Collateral includes certain real
property and equipment and related books and records and proceeds), subject only
to the Permitted Priority Liens identified in the Foothill Agreement.
5. The collateral, liens and security interests granted to Foothill
hereunder shall not be (i) subject to any lien or security interest that is
avoided and preserved for the benefit of the Debtor's estate under Section 551
of the Bankruptcy Code, (ii) surcharged under Section 506(c) of the Bankruptcy
Code, or (iii) subordinated to or pari passu with any other lien or security
interest under Section 364(d) of the Bankruptcy Code or otherwise; provided,
however, that such liens and security interests granted to Foothill shall be
subject and subordinate only to Permitted Priority Liens.
<PAGE>
6. (a) The liens and security interests granted in favor of Foothill
described herein shall be deemed valid, binding, enforceable and perfected upon
entry of this Order;
(b) Foothill shall not be required to file any financing statements,
mortgages, notices of liens or similar instruments in any jurisdiction or filing
office, or to take possession of any item of Collateral securing the
indebtedness hereby approved, or to take any other action in order to validate
or perfect the liens and security interests granted by or pursuant to this Order
or pursuant to the Foothill Agreement;
(c) To the extent that any applicable non- bankruptcy law otherwise would
restrict the granting, scope, enforceability, attachment, or perfection of the
security interests and liens authorized or created hereby, or otherwise would
impose filing or registration requirements with respect thereto, such law hereby
is preempted to the maximum extent permitted by the United States Constitution,
the Bankruptcy Code, otherwise applicable federal law, and the judicial power of
the Bankruptcy Court;
(d) Should Foothill, in its sole discretion, from time to time, choose to
file such financing statements, mortgages, notices of liens or similar
instruments, or take any other action to validate or perfect any such security
interests or liens, the Debtor is authorized and directed to execute and deliver
same, and all such documents shall be deemed to have been filed or recorded at
the time and on the date of entry of this Order; and
(e) A certified photocopy of this Order may, in the discretion of Foothill,
be filed with or recorded in filing or recording offices in addition to or in
lieu of such financing statements, mortgages, notices of lien or similar
instruments, and all filing offices are hereby directed to accept such certified
copy of this Order for filing and recording.
7. In exchange for extending the Emergency Financing, Foothill is also
granted an allowed, superpriority, administrative claim pursuant to Section
364(c)(1) of the Bankruptcy Code in the amount of any Emergency Financing
actually extended by Foothill to the Debtor and any related obligations of the
Debtor under the Foothill Agreement, including any interest, fees and expenses
incurred in connection with the Emergency Financing which are due under the
terms of the Foothill Agreement, which claim shall have priority over any and
all administrative expenses of the kind specified in Sections 105, 326, 330,
331, 503(b), 507(a), or 507(b) of the Bankruptcy Code, subject only to (a)(i)
administrative expenses up to an aggregate amount of $300,000 (subject to
reduction as provided below) at any one time outstanding and unpaid, for fees
<PAGE>
and expenses owed to professionals ("Professionals") that were incurred by the
Debtor or any statutory creditors' committee appointed in this case (the
"Chapter 11 Case") and expenses of the members thereof, in each case to the
extent that they are allowed pursuant to Sections 330 and/or 331 of the
Bankruptcy Code, which such administrative claims, up to an aggregate amount of
$300,000 (subject to reduction as provided below) at any one time outstanding
and unpaid shall rank ahead of and shall be entitled in the event of a
liquidation of the Debtor to payment prior to payment of the administrative
claims of Foothill (collectively, the "Professional Fees Exception"), but which
such $300,000 amount shall be reduced, on a dollar-for-dollar basis, by the
aggregate amount of payments made, after the occurrence of any event described
in clauses (A) through (E) of the following proviso, on account of claims for
professional fees and expenses incurred in the Chapter 11 Case, and (ii) fees of
the United States Trustee (the "U.S. Trustee") and the Clerk of the Court in the
Chapter 11 Case of the Debtor payable pursuant to 28 U.S.C. Section 1930(a) (the
"U.S. Trustee's Fees Exception"); provided, however, that the Professional Fees
Exception shall not apply prospectively with respect to claims for fees and
expenses owed to Professionals that first arise following (A) conversion of the
Chapter 11 Case to a proceeding pursuant to Chapter 7 of the Bankruptcy Code,
(B) appointment of a trustee in the Chapter 11 Case, (C) dismissal of the
Chapter 11 Case, (D) Foothill's commencement and diligent prosecution of
foreclosure or disposition of at least a substantial portion of the Collateral
after the occurrence of a Default or an Event of Default (as such terms are
defined in the Foothill Agreement), or (E) the effective date of a confirmed
plan of reorganization in the Chapter 11 Case; and (b) so long as no Event of
Default (as such term is defined in the Foothill Agreement) has occurred and is
continuing, any payments actually made in the ordinary course of business or
administrative claims (other than any such claims that have been disallowed)
owed by the Debtor not relating to fees or expenses of Professionals or the U.S.
Trustee, including, without limitation, expenses and fees referred to in
Sections 503(b), 365(d)(3), and 365(d)(10) of the Bankruptcy Code (the "Ordinary
Administrative Claims Exception"). Except as aforesaid, absent Foothill's prior
written consent, no
<PAGE>
other claim shall be granted a priority superior or pari passu to that of the
claim of Foothill described in this paragraph 7 so long as any portion of the
Emergency Financing remains outstanding or committed. The Professional Fees
Exception and the Ordinary Administrative Claims Exception relate only to the
administrative priority of Foothill's administrative claim, and do not affect,
diminish or prime the priority of Foothill's security interest in and lien on
the Collateral which shall not be subject to surcharge; except that the Debtor
may make payments under the Professional Fees Exception, the U.S. Trustee's Fees
Exception or, so long as no Event of Default (as such term is defined in the
Foothill Agreement) has occurred or is continuing, the Ordinary Administrative
Claims Exception, and such payments may be made from cash or cash equivalents of
the Debtor notwithstanding the existence of any lien and security interest of
Foothill therein, if any, and Foothill authorizes the making of such payments in
such circumstances free of its administrative claim and/or lien and security
interest, if any.
8. Notwithstanding anything herein to the contrary, nothing herein or in
the Foothill Agreement shall preclude the Debtor from using, regardless of
whether a Default or an Event of Default (as such terms are defined in the
Foothill Agreement) has occurred or is occurring, the cash proceeds of the
collection of its accounts receivable or the sale of its inventory (the "Cash
Collateral") subject to the prepetition liens of the Revolving Credit Lenders
and The Prudential Insurance Company of America ("Prudential") on the terms and
conditions set forth in the Stipulation governing the use of such Cash
Collateral, as the same may be amended, (the "Cash Collateral Stipulation")
being entered into with Prudential and the holders of claims under the Revolving
Credit Agreement dated as of January 26, 1996 by and among the Debtor and
Suntrust Bank, Atlanta, individually, and as Agent and Administrative Agent,
First Union National Bank of South Carolina, individually and as Agent and
NatWest Bank N.A. (the "Revolving Credit Lenders"), or affect or impair in any
way the security interests (or the replacement lien and superpriority
administrative claim granted under the Cash Collateral Stipulation pursuant to
Sections 361, 503(b) and 507 of the Bankruptcy Code, subject to the
superpriority administrative claim of Foothill and the Allowed Chapter 11
<PAGE>
Professional Fees and Expenses (as defined in the Cash Collateral Stipulation))
of Prudential and the Revolving Credit Lenders in the Debtor's accounts
receivable or inventory or the proceeds thereof.
9. The provisions of this Order shall be binding upon and inure to the
benefit of Foothill and the Debtor and their respective successors and assigns
(including, without limitation, any Chapter 11 or Chapter 7 trustee or other
fiduciary hereafter appointed for the estate of the Debtor or with respect to
the Debtor's properties or assets and any purchaser of an assignment of or
participation in all or a portion of Foothill's interest or commitment under the
Foothill Agreement to the extent such assignment or participation was purchased
in accordance with the terms of the Foothill Agreement).
10. Except as otherwise provided for in the Foothill Agreement, no order
dismissing the Chapter 11 Case of the Debtor under Sections 303, 305 or 1112 of
the Bankruptcy Code or otherwise shall be entered unless prior to the entry
thereof all obligations and indebtedness owing to Foothill under the Foothill
Agreement shall have been paid in full and all outstanding Letters of Credit
shall have been terminated or cash collateralized in accordance with the
provisions of the Foothill Agreement. The provisions of this Order shall be
immediately effective upon entry of this Order by the Court and any actions
taken pursuant hereto shall survive entry of, and shall govern the rights of
Foothill and the obligations of the Debtor created hereby or arising hereunder
with respect to any conflict with, any Order which may be entered confirming any
plan of reorganization or which may be entered converting the Chapter 11 Case of
the Debtor from Chapter 11 to Chapter 7. The terms and provisions of this Order
as well as the claims, liens and security interests, and all rights of Foothill
and obligations of the Debtor created or arising pursuant hereto, shall continue
in the Chapter 11 Case of the Debtor and in any superseding case under the
Bankruptcy Code, and such claims, liens and security interests shall maintain
their priority as provided by this Order until satisfied and discharged in
accordance with the terms of the Foothill Agreement.
11. Consistent with Section 364(e) of the Bankruptcy Code, if any or all of
the provisions of this Order are hereafter modified, vacated or stayed:
(a) such stay, modification or vacation shall not affect the validity of
any obligation, indebtedness, liability, security interest or lien granted or
incurred by the Debtor to Foothill prior to the effective date of such stay,
<PAGE>
modification or vacation, or the validity and enforceability of any security
interest, lien, priority or right authorized or created hereby or pursuant to
the Foothill Agreement; and
(b) any indebtedness, obligation or liability incurred by the Debtor to
Foothill or any trustee under the Foothill Agreement prior to the effective date
of such stay, modification or vacation shall be governed in all respects by the
original provisions of this Order, and Foothill and any trustee under the
Foothill Agreement shall be entitled to all of the rights, remedies, privileges
and benefits, including the security interests, liens and priorities granted
herein and pursuant to the Foothill Agreement, with respect to any such
indebtedness, obligation or liability. All advances under the Foothill Agreement
(including the issuance of Letters of Credit, as that term is defined in the
Foothill Agreement, by Foothill or other letter of credit issuers) are made in
reliance upon this Order, and, therefore, the indebtedness evidenced by such
advances (and reimbursement obligations relating to such Letters of Credit)
prior to the effective date of any stay, modification or vacation of this Order
cannot (i) be subordinated (except as otherwise expressly provided in this Order
as to the payment of Professional Fees pursuant to the Professional Fees
Exception, United States Trustee Fees and the fees of the Clerk of the Court
under 28 U.S.C. Section 1930(a)) and payments pursuant to the Ordinary
Administrative Claims Exception), (ii) lose its priority lien or superpriority
administrative expense claim status, or (iii) be deprived of the benefit of the
status of the liens, security interests and claims granted to Foothill under
this Order or the Foothill Agreement, as a result of any subsequent order in the
Chapter 11 Case, or any superseding case, of the Debtor.
12. Except as otherwise provided in the Foothill Agreement, so long as
Foothill's commitment or any obligation, liability or indebtedness under the
Foothill Agreement and this Order shall remain outstanding, the Debtor shall
not, directly or indirectly, create, incur, assume or permit to exist any
security interest, encumbrance, lien or other security arrangement of any kind,
on or with respect to the Collateral (other than Permitted Liens, as such term
is defined in the Foothill Agreement) or take or fail to take any action which
<PAGE>
would grant or create a lien or security interest in favor of any person (other
than Foothill) in the Collateral (other than Permitted Liens).
13. In the event that Collateral is sold anytime during the Chapter 11 Case
and the net proceeds thereof are not applied to pay down the obligations of the
Debtor to Foothill under the Foothill Agreement, such proceeds shall be
deposited by the Debtor into a segregated account which does not contain any
Cash Collateral.
14. Subject only to the provisions of the Foothill Agreement (including any
applicable grace or cure periods or notice requirements expressly set forth
therein), and except as otherwise provided below, the automatic stay provisions
of Section 362 of the Bankruptcy Code are vacated and modified to the extent
necessary to permit Foothill, upon the occurrence and during the continuance of
any Event of Default set forth in the Foothill Agreement to exercise all rights
and remedies provided for in the Foothill Agreement without filing further
pleadings or application to or Order of this Court and the Debtor hereby is
directed to cooperate with Foothill in the exercise of such rights. Without
limiting the foregoing, the Debtor shall have no right, whether at the maturity
of the Foothill Agreement or earlier, if the Foothill Agreement is terminated
because of the occurrence of an Event of Default, as defined in the Foothill
Agreement, to use or seek to use cash collateral, if any, (as that term is
defined in Section 363(a) of the Bankruptcy Code) in which Foothill has an
interest pursuant to the Foothill Agreement. The foregoing notwithstanding,
Foothill shall not exercise any of the rights or remedies provided for in
subsections (c), (f), or (i) of Section 9.1 of the Foothill Agreement, with
respect to any Event of Default referred to in the last paragraph of such
Section 9.1, without first obtaining leave of this Court on five (5) Business
Days hand delivered notice in writing to Debtor's counsel, counsel for any
official committee, counsel for Prudential and lead counsel for the Revolving
Credit Lenders, and this Court, which notice shall be deemed reasonable and
adequate.
15. The Clerk of this Court is hereby directed to forthwith enter this
Order on the docket of this Court maintained with regard to the Chapter 11 Case.
16. A hearing to consider final approval of the Foothill Agreement shall be
held before this Court on February 26, 1998 at 12:30 p.m. (the "Final Hearing").
17. The Debtor is hereby authorized to limit notice of the Final Hearing,
and is hereby directed to give such notice, to the parties to whom the Debtor
<PAGE>
gave notice of the emergency relief sought and this hearing, and to the Debtor's
twenty largest unsecured creditors, excluding any insider of the Debtor, by
serving a copy of this Interim Order along with a copy of the Motion and the
Foothill Agreement by hand, by facsimile or by overnight courier on or before
January 27, 1998.
18. Objections to final approval of the Foothill Agreement, if any, shall
be in writing and shall be filed with this Court and served so as to be received
by 4:00 p.m. on February 19, 1998 on
(a) MOSES & SINGER LLP
Counsel to the Debtor and
Debtor-in-Possession
1301 Avenue of the Americas
New York, New York 10019
Attn: Alan E. Gamza, Esq.;
(b) RICHARDS, LAYTON & FINGER
Local Counsel to the Debtor
and Debtor-in-Possession
One Rodney Square
P.O. Box 551
Wilmington, Delaware 19899
Attn: Thomas L. Ambro, Esq.;
(c) BROBECK PHLEGER & HARRISON LLP
Counsel to Foothill Capital Corporation
550 South Hope Street, Suite 2100
Los Angeles, California 90071-2604
Attn: Jeffrey S. Turner, Esq.;
(d) POTTER, ANDERSON & CORROON
Local Counsel to Foothill
Capital Corporation
Hercules Plaza
1313 Market Street, 6th Floor
Wilmington, Delaware 19801
Attn: Laurie Selber Silverstein, Esq.;
(e) MILBANK TWEED HADLEY & McCLOY
Counsel to the Revolving Credit Lenders
and The Prudential Insurance Company
of America
One Chase Manhattan Plaza
New York, New York 10005
Attn: David C.L. Frauman, Esq.;
(f) KLEHR, HARRISON, HARVEY, BRANZBURG & ELLERS
Local Counsel to the Revolving Credit
Lenders and The Prudential Insurance
Company of America
919 Market Street, Suite 1000
Wilmington, Delaware 19801
Attn: Joanne B. Wills, Esq.;
(g) THE OFFICE OF THE UNITED STATES TRUSTEE
601 Walnut Street Suite 905 West
Philadelphia, Pennsylvania, 19106
Attn: , Esq.
<PAGE>
19. All objections to approval of the Foothill Agreement not timely filed
and served, in accordance with this Order shall be waived.
Dated: January 23, 1998
Wilmington, Delaware
/s/
----------------------------
Judge
UNITED STATES BANKRUPTCY COURT
DISTRICT OF DELAWARE
-----------------------------------x
:
In re : Chapter 11
:
ONEITA INDUSTRIES, INC., : Case No. 98- ( )
:
Debtor. :
:
4130 Faber Place Drive, Suite 200 :
Charleston, South Carolina 29405 :
Tax ID No. 57-0351045 :
-----------------------------------x
PLAN OF REORGANIZATION OF ONEITA INDUSTRIES, INC.
UNDER CHAPTER 11 OF THE BANKRUPTCY CODE
January ___, 1998
1301 Avenue of the Americas
Moses & Singer LLP New York, New York 10019
<PAGE>
(212) 554-7800
Alan Kolod, Esq. Richards, Layton & Finger
Alan E. Gamza, Esq. One Rodney Square
Counsel to Oneita Post Office Box 551
Industries, Inc. Wilmington, Delaware 19899
(302) 658-6541
Thomas L. Ambro, Esq.
Local Counsel to Oneita
Industries, Inc.
<PAGE>
UNITED STATES BANKRUPTCY COURT
DISTRICT OF DELAWARE
-----------------------------------x
:
In re : Chapter 11
:
ONEITA INDUSTRIES, INC., : Case No. 98- ( )
:
Debtor. :
:
4130 Faber Place Drive, Suite 200 :
Charleston, South Carolina 29405 :
Tax ID No. 57-0351045 :
-----------------------------------x
PLAN OF REORGANIZATION OF ONEITA INDUSTRIES, INC.
UNDER CHAPTER 11 OF THE BANKRUPTCY CODE
Oneita Industries, Inc. proposes the following
chapter 11 plan of reorganization pursuant to section
1121(a) of title 11 of the United States Code:
I. Introduction
A. Plan Defined Terms. Unless the context otherwise requires the terms
specified below have the following meanings (such meanings to be equally
applicable to both the singular and plural):
1. "Allowed" when used with respect to an administrative expense, claim, or
Equity Interest, means an administrative expense, claim, or Equity Interest, as
the case may be, that is allowed by Final Order or is deemed allowed pursuant to
sections 502, 503, or 1111 of the Bankruptcy Code, by the Confirmation Order or
the Plan.
2. "Amended and Restated Certificate of Incorporation" means the
certificate of incorporation of Reorganized Oneita dated the Effective Date and
filed with the Secretary of State of the State of Delaware on or about the
Effective Date, in the form attached hereto as Exhibit 6.
3. "Andrews Collective Bargaining Agreement" means the agreement dated
October 19, 1995, as it may have been amended from time to time, between Oneita
and the Union of Needletrades, Industrial and Textile Employees covering
approximately 100 employees at the Andrews Textile Facility.
4. "Andrews Textile Facility" means the textile facility operated by Oneita
in Andrews, South Carolina.
5. "Avondale" means Avondale Mills, Inc.
<PAGE>
6. "Bankruptcy Code" means title 11 of the United States Code, as amended
from time to time, as applicable to the Reorganization Case.
7. "Bankruptcy Rules" mean the Federal Rules of Bankruptcy Procedure, as
amended from time to time, as applicable to the Reorganization Case, including
the Local Rules of this Court.
8. "By-Laws" means the amended by-laws adopted by Oneita on May 17, 1994,
as they may have been amended from time to time.
9. "Business Day" means any day on which commercial banks are open for
business, and not authorized to close, in the City of New York.
10. "Cash Collateral Stipulation" means that certain Cash Collateral
Stipulation entered into between Oneita and the holders of Class 2 Claims
simultaneously with the filing of the Reorganization Case, as it may be amended.
11. "Certificate of Incorporation" means the certificate of incorporation
of Oneita dated August 27, 1987 and filed with the Secretary of State of the
State of Delaware on September 1, 1987, as it may have been amended from time to
time.
12. "Citizens and Southern" means Citizens and Southern National Bank of
South Carolina, as Trustee, under the Georgetown Guaranty Agreement.
13. "Citizens and Southern Claim" means the Allowed claim of Citizens and
Southern, as Trustee, under the Georgetown Guaranty Agreement.
14. "Class 2 Claims" means the claims classified under class 2 of this
Plan.
15. "Confirmation Order" means the order of the Court confirming the Plan,
in accordance with the provisions of chapter 11 of the Bankruptcy Code.
16. "Confirmation Date" means the date that the Confirmation Order is
entered by the Court.
17. "Consent Letter" means the letter agreements executed by each holder of
claims, shortly prior to, or as of, the Petition Date, which claims are to be
classified in classes 2 and 3 under the Plan and returned to Oneita prior to the
commencement of the Reorganization Case with a ballot accepting the Plan
pursuant to which such parties agreed, subject to the terms thereof, inter alia,
to (i) cooperate in implementing the Plan, (ii) if requested, execute a new
ballot accepting the Plan, (iii) not sell or assign its claim against Oneita
unless its assignee also agrees to be bound by the terms of the Consent Letter,
and (iv) execute all necessary documents.
<PAGE>
18. "Court" means (a) the United States Bankruptcy Court for the District
of Delaware, having jurisdiction over the Reorganization Case; (b) to the extent
there is no reference pursuant to section 157 of title 28 of the United States
Code, the United States District Court for the District of Delaware; and (c) any
other court having jurisdiction over the Reorganization Case.
19. "Disputed", when used with respect to an administrative expense, claim,
or Equity Interest, means any administrative expense, claim, or Equity Interest,
to the extent not allowed pursuant to the Plan or a Final Order, and (a) which
is listed on the Schedules as disputed, unliquidated, or contingent and as to
which a proof of such administrative expense, claim, or Equity Interest
designating such administrative expense, claim, or Equity Interest as liquidated
in amount and not disputed or contingent was not timely and properly filed, or
(b) as to which, and to the extent, any party in interest has interposed a
timely objection or request for estimation in accordance with the Plan, the
Bankruptcy Code and the Bankruptcy Rules, which objection or request for
estimation has not been withdrawn or determined by a Final Order.
20. "Effective Date" means the date on which confirmation of the Plan shall
first have legal effect and shall be the first Business Day on which all the
conditions specified in Section V.A. hereof shall have been satisfied or waived
in accordance with Section V.B. hereof.
21. "Employee Related Expense Motion" means the motion which Oneita intends
to file on the Petition Date seeking, among other things, Court authorization to
pay amounts totalling approximately $1,119,000 due to its employees on account
of services performed and reimbursement of expenses incurred before the Petition
Date, and for authority to pay amounts and honor prepetition checks totalling
approximately $1,331,000 due on account of insurance and other benefits provided
by Oneita to its employees before the Petition Date.
22. "Environmental Related Expense Motion" means the motion which Oneita
intends to file on the Petition Date seeking Court authorization to pay amounts
due and honor prepetition checks totalling approximately $127,000 due on account
of Oneita's prepetition environmental compliance and remediation efforts and
seeking Court authorization, to the extent necessary, to continue such
environmental compliance and remediation efforts during the Reorganization Case.
<PAGE>
23. "Equity Interest" means any interest in Oneita represented by Old
Common Stock.
24. "Fayette Facilities" means the apparel and textile plants operated by
Oneita in Fayette, Alabama located at 207 15th Street, Southwest, and 1015
Temple Avenue South, respectively.
25. "Final Order" means an order or judgment of the Court that is in effect
and is not stayed, and that is not subject to reconsideration, vacatur,
reversal, appellate review or other modification by means of appeal, petition
for certiorari, motion for reargument or rehearing or otherwise (except under
Rule 9024 of the Federal Rules of Bankruptcy Procedure).
26. "Foothill" means Foothill Capital Corporation.
27. "Foothill Claims" means all claims held by Foothill or affiliates of
Foothill as of the date of execution by the foregoing of the Consent Letter,
which claims are classified in class 2 of the Plan, regardless of by whom such
claims are held as of any applicable record or distribution date (but not
including the secured administrative claims of Foothill in connection with the
debtor in possession financing provided to Oneita during the Reorganization
Case).
28. "Foothill D-I-P Agreement" means the agreement between Oneita and
Foothill pursuant to which Foothill will be providing up to $10,000,000 of
debtor in possession financing to Oneita in the Reorganization Case.
29. "Georgetown County, South Carolina" means Georgetown County, South
Carolina, the issuer of the Georgetown IRB bonds under the Georgetown Indenture.
30. "Georgetown Guaranty Agreement" means the guaranty agreement dated
December 1, 1977, as it may have been amended from time to time, between Oneita
and Citizens and Southern, as Trustee, pursuant to which Oneita irrevocably and
unconditionally guarantied payment to Citizens and Southern, as Trustee, of the
principal and interest outstanding with respect to the Georgetown IRB bonds
issued under the Georgetown Indenture.
<PAGE>
31. "Georgetown Indenture" means the indenture dated December 1, 1977, as
it may have been amended from time to time, between Georgetown County, South
Carolina and Citizens and Southern, as Trustee, pursuant to which Georgetown
County, South Carolina issued Industrial Revenue Bonds in the amount of
$1,000,000 to finance the acquisition of certain equipment at the Andrews
Textile Facility.
32. "Georgetown Lease Agreement" means the lease agreement dated as of
December 1, 1977, as it may have been amended from time to time, between
Georgetown County, South Carolina and Oneita pursuant to which Oneita leases the
Andrews Textile Facility.
33. "Gintel" means Robert M. Gintel, the former Chairman of the Board of
Directors of Oneita and the current holder of the Old Subordinated Gintel Notes.
34. "Gintel Note Agreement" means the Note Purchase Agreement dated as of
December 28, 1995, as it may have been amended from time to time, between
Oneita, Gintel and Avondale, pursuant to which the Old Subordinated Gintel Notes
were issued.
35. "IBJ Schroder" means IBJ Schroder Bank & Trust Company.
36. "IDB" means the Industrial Development Board of the City of Fayette,
Alabama.
37. "IDB Bonds" means the bonds in the amount of $10,000,000 issued by the
IDB pursuant to the IDB Spindale Indenture.
38. "IDB Spindale Indenture" means the indenture, dated as of October 1,
1989, as it may have been amended from time to time, by and between Trust
Company Bank, as Trustee, and the IDB.
39. "IDB Spindale Lease Agreement" means the lease agreement dated October
1, 1989, as it may have been amended from time to time, between Oneita and the
IDB, pursuant to which Oneita leases the Spindale Facility through October 1,
1999.
40. "IDB Spindale Letter of Credit Agreement" means the agreement dated
October 1, 1989, as it may have been amended from time to time, between Oneita
and the Trust Company Bank pursuant to which an irrevocable letter of credit was
issued to secure payment of principal and interest on the IDB Bonds as they
become due and pursuant to which Oneita agreed to reimburse the Trust Company
Bank for any payments made by the Trust Company Bank under the letter of credit
issued pursuant thereto.
<PAGE>
41. "IDB Spindale Mortgage and Security Agreement" means the agreement
dated October 1, 1989, as it may have been amended from time to time, between
Oneita, the IDB and Trust Company Bank, pursuant to which Oneita granted Trust
Company Bank a lien on and/or security interest in its interest, if any, in the
Spindale Facility and the equipment purchased with the IDB Bonds (which
agreement was later amended to include a lien on Oneita's interest, if any, in
the Sterilon Facility) to secure Oneita's performance of its obligations under
the IDB Spindale Letter of Credit Agreement.
42. "IDB Sterilon Lease Agreement" means the lease agreement dated July 31,
1989, as it may have been amended from time to time, between Oneita and the IDB,
pursuant to which Oneita leases the Sterilon Facility through November 1, 2004
for the sum of $7,594.71 per month.
43. "Initial Holder" means (i) any person who will initially hold 7% or
more of the outstanding shares of New Common Stock on the Effective Date, (ii)
any investment fund for which any thereof acts as manager, (iii) any partnership
or other entity for which any thereof acts directly or indirectly as a general
partner or controlling stockholder, and (iv) any person otherwise affiliated
with any thereof.
44. "Intercompany Account Motion" means the motion which Oneita intends to
file on the Petition Date seeking Court authorization, among other things, to
continue to use its existing bank accounts and cash management systems,
including authorization to continue to maintain its system of intercompany
accounts with its subsidiaries and to adjust balances in those accounts.
45. "Key Supplier Related Expense Motion" means the motion which Oneita
intends to file on the Petition Date seeking Court authorization (i) to pay
prepetition amounts due totalling approximately $3,518,000 and to honor
prepetition checks totalling approximately $351,000 to its suppliers of
essential goods and services, so that it will continue to have access to those
goods and services during the Reorganization Case on the same terms on which
those goods and services were available before the Petition Date, and (ii) to
pay prepetition amounts due totalling approximately $300,000 on account of
invoices of less than $500 for goods and services provided prepetition and to
honor outstanding prepetition checks of less than $500 each, in the aggregate
amount of less than $9,000, in order to ease the administrative burden on Oneita
during the Reorganization Case.
<PAGE>
46. "Kinston" means Oneita-Kinston Corp., a North Carolina corporation
wholly-owned by Oneita.
47. "Kinston/Prudential Guaranty" means the Guaranty Agreement dated as of
January 26, 1996, as it may have been amended from time to time, pursuant to
which Kinston guarantied the obligations of Oneita under the Old Prudential Note
Agreement.
48. "Kinston/Revolving Credit Guaranty" means the Guaranty Agreement dated
as of January 26, 1996, as it may have been amended from time to time, pursuant
to which Kinston guarantied the obligations of Oneita under the Old Revolving
Credit Agreement.
49. "Kinston Security Agreement" means the Security Agreement dated as of
January 26, 1996, as it may have been amended from time to time, made by Kinston
in favor of SunTrust Bank, Atlanta, individually and as collateral agent, First
Union National Bank of South Carolina, NatWest Bank N.A. and Prudential.
50. "Manufacturing Consolidation Related Expense Motion" means the motion
which Oneita intends to file on the Petition Date seeking Court authorization to
continue its manufacturing consolidation program during the Reorganization Case
and to pay any outstanding claims and honor prepetition checks in connection
therewith totalling approximately $277,000 due as of the Petition Date.
51. "New Common Stock" means all the shares of common stock of Reorganized
Oneita, par value $.25 per share, authorized and issued by Reorganized Oneita on
the Effective Date pursuant to Section IV.E. hereof.
52. "New Foothill Security Documents" means collectively, (a) the New
Revolving Credit Agreement, (b) all "Loan Documents" delivered pursuant to the
New Revolving Credit Agreement, in the forms agreed to between Oneita and
Foothill, (c) that certain Intercreditor Agreement dated the Effective Date
between Foothill, the holders of the New Senior Secured Notes and IBJ Schroder,
as collateral agent for the holders of the New Senior Secured Notes, in the form
attached hereto as Exhibit 4, and (d) all UCC and real property lien filings
executed in connection with any of the foregoing agreements.
<PAGE>
53. "New Revolving Credit Agreement" means the Loan and Security Agreement
dated as of the Effective Date between Reorganized Oneita, Kinston and Foothill
pursuant to which Foothill shall provide working capital to Reorganized Oneita
and Kinston, substantially in the form attached hereto as Exhibit 3. The
obligations under the New Revolving Credit Agreement shall be secured by certain
assets of Reorganized Oneita and Kinston as more particularly described in the
New Foothill Security Documents.
54. "New Security Documents" means collectively, (a) that certain Security
and Pledge Agreement dated the Effective Date between Reorganized Oneita and IBJ
Schroder, as collateral agent for the holders of the New Senior Secured Notes,
(b) those certain mortgages dated the Effective Date made by Reorganized Oneita
in favor of IBJ Schroder, as collateral agent for the holders of the New Senior
Secured Notes, (c) that certain Intercreditor Agreement dated the Effective Date
between Foothill, IBJ Schroder, as collateral agent for the holders of the New
Senior Secured Notes, and the holders of the New Senior Secured Notes, in the
form attached hereto as Exhibit 4, (d) that certain Subsidiary Guaranty and
Security Agreement dated the Effective Date between IBJ Schroder, as collateral
agent for the holders of the New Senior Secured Notes, and the subsidiaries of
Oneita that are parties thereto, (e) that certain Trademark Security Agreement
dated the Effective Date between Reorganized Oneita and IBJ Schroder, as
collateral agent for the holders of the New Senior Secured Notes, (f) that
certain Deposit Account Security Agreement dated the Effective Date between
Reorganized Oneita and IBJ Schroder, as collateral agent for the holders of the
New Senior Secured Notes, (g) that certain Agency Agreement dated the Effective
Date between Reorganized Oneita, the holders of the New Senior Secured Notes and
IBJ Schroder, as collateral agent and note agent for the holders of the New
Senior Secured Notes, and (h) all UCC and real property lien filings executed in
connection with any of the foregoing agreements, in each case other than (c)
immediately above in the form to be agreed to by Oneita, the Old Revolving
Credit Lenders and Prudential prior to the Effective Date.
<PAGE>
55. "New Senior Secured Notes" mean the notes issued under the Senior
Secured Note Agreement and Section IV.E. hereof and secured by liens on and
security interests in certain assets of Reorganized Oneita and as more
particularly described in the New Security Documents.
56. "Non-Foothill Class 2 Claims" means all Allowed Class 2 Claims that are
not Foothill Claims.
57. "Old Common Stock" means the common stock, par value $.25 per share,
issued by Oneita and outstanding on the Petition Date.
58. "Old Gintel Claim" means the subordinated claim in the sum of
approximately $8,638,000, including accrued interest through July 31, 1997.
59. "Old Options" means any options, warrants, calls, subscriptions or
similar rights or other agreements or commitments, contractual or otherwise,
obligating Oneita to issue, transfer or sell any shares of Old Common Stock.
60. "Old Prudential Claim" means the claim pursuant to the Old Prudential
Note Agreement in the sum of $6,379,066 as of the Petition Date.
61. "Old Prudential Note" means the note issued pursuant to the Old
Prudential Note Agreement.
62. "Old Prudential Note Agreement" means the Note Agreement dated as of
December 20, 1988, as it may have been amended from time to time, between Oneita
and Prudential.
63. "Old Revolving Credit Agreement" means the Revolving Credit Agreement
dated as of January 26, 1996, as it may have been amended from time to time, by
and among Oneita and SunTrust Bank, Atlanta, individually and as Agent and
Administrative Agent, First Union National Bank of South Carolina, individually
and as Agent, and NatWest Bank N.A.
64. "Old Revolving Credit Lenders" mean the holders of claims under the Old
Revolving Credit Agreement or such holders' participants or assignees as of the
Effective Date.
65. "Old Revolving Credit Lender Claims" mean the claims pursuant to the
Old Revolving Credit Agreement in the aggregate principal amount of $57,000,000
as of the Petition Date.
66. "Old Subordinated Gintel Notes" mean the two subordinated notes, each
dated as of January 26, 1996, issued by Oneita to Gintel, each in the principal
amount of $3,750,000.
<PAGE>
67. "Oneita" means Oneita Industries, Inc., a Delaware corporation.
68. "Oneita Spindale Guaranty" means the guaranty agreement, dated October
1, 1989, as it may have been amended from time to time, between Oneita and Trust
Company Bank, as Trustee, pursuant to which Oneita, inter alia, guaranteed the
payment of the principal and interest due under the IDB Bonds.
69. "Petition Date" means the date of commencement of the Reorganization
Case.
70. "Plan" means this chapter 11 plan of reorganization, confirmed by the
Confirmation Order, or as it may thereafter be altered, amended, or modified.
71. "Priority Tax Claim" means any Allowed unsecured claim held by a
governmental unit entitled to a priority in right of payment under section
507(a)(8) of the Bankruptcy Code.
72. "Pro Rata Share" means a proportionate share, so that the ratio of the
amount of property distributed on account of an Allowed claim or Allowed Equity
Interest in a specified class is the same as the ratio such claim or Equity
Interest bears to the total amount of all claims or Equity Interests (including
Disputed claims or Disputed Equity Interests, until disallowed) in such
specified class.
73. "Prudential" means The Prudential Insurance Company of America.
74. "Registration Rights" means the registration rights described in the
Registration Rights Agreement to be provided by Reorganized Oneita to certain
holders of the New Common Stock.
75. "Registration Rights Agreement" has the meaning set forth in Section
IV.Q. hereof.
76. "Registration Statement" has the meaning set forth in Section IV.Q.
hereof.
77. "Related Documents" mean all documents necessary to consummate the
transactions contemplated by this Plan, including, without limitation, the New
Senior Secured Notes, the Senior Secured Note Agreement, the Subordinated
Foothill Note, the New Security Documents, the New Foothill Security Documents
and the Amended and Restated Certificate of Incorporation of Reorganized Oneita,
each substantially in the form attached as an Exhibit hereto or, if not attached
hereto as an Exhibit, to be agreed to by the parties thereto prior to the
Effective Date.
<PAGE>
78. "Reorganization Case" means the above-captioned chapter 11 case.
79. "Reorganized Oneita" means Oneita or any successor thereto by merger,
consolidation, or otherwise, on and after the Effective Date.
80. "Reverse Stock Split" means the reverse stock split of the outstanding
Old Common Stock to occur on the Effective Date under Section IV.D hereof
immediately prior to the cancellation of the Old Common Stock and the issuance
of the New Common Stock.
81. "Schedules" mean the schedules of assets and liabilities, statements of
financial affairs, and lists of holders of claims and Equity Interests filed
with the Court by Oneita including any amendments and supplements thereto.
82. "Securities Act" means the United States Securities Act of 1933, as
amended, and the rules and regulations thereunder.
83. "Senior Secured Note Agreement" means the agreement, dated on or about
the Effective Date, substantially in the form attached hereto as Exhibit 1,
between Reorganized Oneita and the holders of the Old Revolving Credit Lender
Claims and the Old Prudential Claim pursuant to which the New Senior Secured
Notes in the principal amount of $37,500,000 shall be issued.
84. "Spindale Facility" means the Fayette Facility located at 207 15th
Street Southwest, Fayette, Alabama.
85. "Sterilon Facility" means the Fayette Facility located at 1015 Temple
Avenue South, Fayette, Alabama.
86. "Sterilon Lease Commitment Agreement" means the agreement entered into
on June 20, 1989, as it may have been amended from time to time, by and among
the City of Fayette, Alabama, the IDB and the Southern Development Council, Inc.
in connection with the transaction giving rise to the IDB Sterilon Lease
Agreement.
87. "Subordinated Foothill Note" means the ten-year subordinated note
issued to the holders of Foothill Claims under the Plan in the principal amount
of $1,000,000, bearing interest at the rate of 10% per annum payable in
additional subordinated notes of like tenor, which note shall be substantially
in the form attached hereto as Exhibit 2.
<PAGE>
88. "Trust Company Bank Claim" means the Allowed claim of Trust Company
Bank, individually and as Trustee under the IDB Spindale Indenture, arising from
or related to the IDB Spindale Letter of Credit Agreement, the IDB Spindale
Mortgage and Security Agreement or any other document entered into in connection
with the issuance of the IDB Bonds.
89. "UCC" means the Uniform Commercial Code as the same may, from time to
time, be in effect in the State of New York; provided, however, in the event
that, by reason of mandatory provisions of law, any or all of the attachment,
perfection, or priority of the security interests and liens specified in the New
Security Documents and the New Foothill Security Documents is governed by the
Uniform Commercial Code as in effect in a jurisdiction other than the State of
New York, the term "UCC" shall mean the Uniform Commercial Code as in effect in
such other jurisdiction.
B. "Bankruptcy Code Terms." "Affiliate," "case," "claim," "confirm,"
"confirmation," "debtor," "debtor in possession," "governmental unit,"
"impaired," "unimpaired," and other uncapitalized terms defined (either
explicitly or implicitly) in the Bankruptcy Code are used herein with such
defined meanings.
C. Other Terms. The words "herein", "hereof," "hereto," "hereunder," and
others of similar import refer to the Plan as a whole and not to any particular
section, subsection, or clause contained in the Plan.
D. Exhibits. All Exhibits to the Plan are incorporated into and are a part
of the Plan as if set forth in full herein.
II. Classification and Treatment of Administrative
Expenses, Claims and Equity Interests
A. Summary. The categories of administrative expenses, claims and Equity
Interests listed below classify administrative expenses, claims and Equity
Interests for all purposes, including voting, confirmation, and distribution
pursuant to the Plan. Except as otherwise provided in the Plan, Confirmation
Order, or as required by sections 506(b) or 1124 of the Bankruptcy Code, Allowed
claims do not include interest accrued on such claims after the Petition Date.
<PAGE>
<TABLE>
<CAPTION>
Class Type Status
----- ---- ------
<S> <C> <C>
Unclassified Administrative Paid in full
Expenses
Unclassified Priority Tax Unaffected by the
Claims Plan
Class 1 Priority Non-Tax Unimpaired - Not
Claims entitled to vote
Class 2 Old Revolving Impaired -
Credit Lender Entitled to vote
Claims and Old
Prudential Claim
Class 3 Old Gintel Claim Impaired -
Entitled to vote
Class 4 Citizens and Unimpaired - Not
Southern Claim and entitled to vote
Trust Company Bank
Claim
Class 5 General Unsecured Unimpaired - Not
Claims entitled to vote
Class 6 Old Common Stock Impaired -
Entitled to vote
</TABLE>
B. Administrative Expenses. Oneita shall pay Allowed administrative
expenses in full in cash, except to the extent that the holder of an Allowed
administrative expense agrees to different treatment; provided, however, that
Allowed administrative expenses representing obligations incurred in the
ordinary course of business (consistent with past practice) shall be paid in
full or performed by Oneita or by Reorganized Oneita in the ordinary course of
business (consistent with past practice); provided further, however, that (i)
any sums owed to Foothill on the Effective Date under the Foothill D-I-P
Agreement for sums actually extended by Foothill to Oneita and related
obligations of Oneita, including any interest, fees and expenses which are due
under the terms of the Foothill D-I-P Agreement shall be allowed administrative
expenses, and (ii) any superpriority administrative claims of the Old Revolving
Credit Lenders and Prudential granted by the Court as adequate protection during
the Reorganization Case pursuant to the Cash Collateral Stipulation, shall be
Allowed administrative expenses.
<PAGE>
C. Priority Tax Claims. Allowed Priority Tax Claims due and payable on or
before the Effective Date shall be paid in full in cash and all others shall (i)
survive confirmation of the Plan, (ii) remain unaffected thereby, and (iii) be
paid as and when due, except to the extent any holder of such a claim agrees to
a different treatment.
D. Classification, Treatment, and Voting. The claims against and Equity
Interests in Oneita shall be classified and receive the treatment specified
below.
1. Class 1: Priority Non-Tax Claims.
a. Classification: Class 1 consists of claims entitled to priority pursuant
to section 507(a) of the Bankruptcy Code, other than administrative expenses and
Priority Tax Claims which are unclassified.
b. Treatment: Each Allowed claim in class 1 shall be paid in full in cash
except to the extent that any holder of an Allowed claim agrees to a different
treatment.
c. Voting: Class 1 is unimpaired, and the holders of claims in class 1 are
not entitled to vote to accept or reject the Plan.
2. Class 2: Old Revolving Credit Lender Claims and Old Prudential
Claim.
a. Classification: Class 2 consists of the Old Prudential Claim and the Old
Revolving Credit Lender Claims.
b. Treatment: The Old Prudential Claim and the Old Revolving Credit Lender
Claims shall be deemed Allowed pursuant to Section 502(a) of the Bankruptcy
Code. Each holder of an Allowed Class 2 Claim shall receive under this Plan (i)
its Pro Rata Share of $15,000,000 in cash; (ii) its Pro Rata Share of the New
Senior Secured Notes; (iii) its Pro Rata Share of 72% of the New Common Stock
<PAGE>
which Pro Rata Share shall be determined as follows: the New Common Stock shall
be allocated among the holders of Non-Foothill Class 2 Claims as if class 2 were
receiving 75% of the New Common Stock, and the holders of the Foothill Claims
will receive their Pro Rata Share of the balance of the New Common Stock
actually distributed to class 2; and (iv) cash in an amount equal to the
reasonable fees and expenses (a) incurred from the Petition Date through the
Effective Date by Milbank, Tweed, Hadley & McCloy and Klehr, Harrison, Harvey,
Branzburg & Ellers as primary and Delaware counsel, respectively, to Prudential
and the holders of the Old Revolving Credit Lender Claims during the
Reorganization Case which may remain outstanding on the Effective Date, and (b)
if any, incurred by Milbank, Tweed, Hadley & McCloy and Baker & Botts LLP acting
as counsel to the Old Revolving Lenders and Prudential, respectively, for
services rendered prior to the Petition Date and remaining unpaid as of the
Petition Date. In consideration of the adjustment set forth in (iii) above, each
holder of a Foothill Claim will receive its Pro Rata Share of the Subordinated
Foothill Note.
c. Voting: Class 2 is impaired, and the holders of claims in class 2 are
entitled to vote to accept or reject the Plan.
3. Class 3: Old Gintel Claim.
a. Classification: Class 3 consists of the Old Gintel Claim.
b. Treatment: The Old Gintel Claim shall be deemed Allowed pursuant to
Section 502(a) of the Bankruptcy Code. The holder(s) of the Allowed Old Gintel
Claim shall receive 7.75% of the New Common Stock.
c. Voting: Class 3 is impaired and the
holders of claims in class 3 are entitled to vote to accept
or reject the Plan.
4. Class 4: Citizens and Southern Claim and Trust Company Bank
Claim.
a. Classification: Class 4 consists of the Allowed Citizens and Southern
Claim and Trust Company Bank Claim.
b. Treatment: The Citizens and Southern Claim and Trust Company Bank Claim
shall be unimpaired under Bankruptcy Code Section 1124 and shall not be affected
by the Plan or the Reorganization Case.
<PAGE>
c. Voting: Class 4 is unimpaired and the holders of claims in class 4 are
not entitled to vote to accept or reject the Plan.
5. Class 5: General Unsecured Claims.
a. Classification: Class 5 consists of all Allowed unsecured claims that
are not priority or administrative claims and that are not otherwise classified
herein.
b. Treatment: The Allowed claims in class 5 shall be rendered unimpaired
under Bankruptcy Code Section 1124, except to the extent that the holder of any
such claim agrees to a different treatment.
c. Voting: Class 5 is unimpaired and the holders of claims in class 5 are
not entitled to vote to accept or reject the Plan.
6. Class 6: Old Common Stock.
a. Classification: Class 6 consists of the Equity Interests evidenced by
all the issued and outstanding Old Common Stock.
b. Treatment: The Reverse Stock Split and cancellation of the Old Common
Stock shall be effected and each holder of an Allowed Equity Interest in class 6
shall receive its Pro Rata Share of 20.25% of the New Common Stock.
c. Voting: Class 6 is impaired and the holders of Equity Interests in class
6 are entitled to vote to accept or reject the Plan.
E. Disputed Administrative Expenses, Claims, and Equity Interests.
1. Resolution of Disputed Administrative Expenses, Claims and Equity
Interests. Except with respect to claims expressly Allowed pursuant to this
Plan, Oneita may object to the allowance of administrative expenses, claims or
Equity Interests filed with the Bankruptcy Court. From and after the Effective
Date, Reorganized Oneita, or any entity chosen by Reorganized Oneita, shall have
the exclusive responsibility for reviewing and objecting to the allowance of
such administrative expenses, claims and Equity Interests. Unless otherwise
ordered by the Court, all objections to administrative expenses, claims and
Equity Interests must be filed and served by Reorganized Oneita upon the holders
thereof on or before 120 days after the Effective Date or after the
administrative expense, claim or Equity Interest is filed, whichever is later.
All objections shall be litigated to a Final Order, provided, however, that
Oneita or Reorganized Oneita may compromise and settle any objections to
administrative expenses, claims or Equity Interests, subject to the approval of
the Court, and may seek Court estimation of Disputed administrative expenses,
claims or Equity Interests pursuant to section 502(c) of the Bankruptcy Code.
<PAGE>
2. Reserve for Disputed Administrative Expenses, Claims and Equity
Interests. Reorganized Oneita shall hold distributions with respect to Disputed
administrative expenses, claims, or Equity Interests in escrow pending
resolution of such Disputed administrative expenses, claims or Equity Interests
by Final Order. Once a Disputed administrative expense, claim or Equity Interest
becomes an Allowed administrative expense, claim or Equity Interest by Final
Order, Reorganized Oneita shall make an appropriate distribution to the holder
of such Allowed administrative expense, claim or Equity Interest from the
escrow. With respect to such Disputed administrative expenses, claims and Equity
Interests and except as otherwise ordered by the Court, each distribution to be
made shall be deemed to have been made on the Effective Date if made as soon as
practicable after the date on which such administrative expense, claim, or
Equity Interest is Allowed by Final Order.
III. Acceptance or Rejection of the Plan
A. Unimpaired Classes not Entitled to Vote on Plan. Classes 1, 4 and 5 are
unimpaired under this Plan and are conclusively deemed to have accepted the
Plan.
B. Impaired Classes Entitled to Vote on Plan. Classes 2, 3, and 6 are
impaired under the Plan and are entitled to vote on the Plan.
C. Nonconsensual Confirmation/Cramdown. In the event that a class fails to
accept this Plan in accordance with Section 1129(a)(8) of the Bankruptcy Code,
Oneita shall seek to have the Court confirm the Plan in accordance with Section
1129(b) of the Bankruptcy Code.
IV. Implementation of the Plan
A. Continued Corporate Existence and Vesting of
Assets in Reorganized Oneita. Oneita, as Reorganized Oneita, shall continue
to exist after the Effective Date with all powers of a corporation under
the laws of the State of Delaware and without prejudice to any right to
alter or terminate such existence (whether by merger or otherwise) under
<PAGE>
such applicable state law. Except as otherwise expressly provided in the
Plan, on the Effective Date, Reorganized Oneita shall be vested with all of
the property of the estate free and clear of all claims, liens,
encumbrances, charges and other interests of creditors and equity security
holders, provided that (i) the liens of Foothill that secure Foothill's
Allowed administrative claims for debtor in possession financing under the
Foothill D-I-P Agreement during the Reorganization Case shall not be
terminated or discharged until such claims are repaid, and (ii) the
replacement liens granted by Oneita to the Old Revolving Credit Lenders and
Prudential pursuant to the Cash Collateral Stipulation shall not be
terminated or discharged until Reorganized Oneita shall have executed the
Senior Secured Note Agreement; and Oneita may operate its businesses free
of any restrictions imposed by the Bankruptcy Code, the Bankruptcy Rules or
by the Court, subject only to the terms and conditions of the Plan;
provided, however, that Oneita shall continue as a debtor in possession
under the Bankruptcy Code until the Effective Date.
B. Agents. Oneita may retain or designate third parties to serve as its
agent or agents to implement the Plan.
C. New Agreements. Prior to the Effective Date, Reorganized Oneita shall
enter into the Senior Secured Note Agreement, the New Revolving Credit
Agreement, the Subordinated Foothill Note, the New Security Documents and the
New Foothill Security Documents, each substantially in the form attached as an
Exhibit hereto or, if not attached hereto as an Exhibit, to be agreed to by the
parties thereto prior to the Effective Date.
D. Reverse Stock Split. Upon the Effective Date prior to cancellation of
the Old Common Stock and the issuance of the New Common Stock, Oneita shall
effect a 1-for-5 combination of the shares of its Old Common Stock, $.25 par
value, pursuant to which each one (1) share of Old Common Stock of Oneita shall
be deemed converted into one-fifth (.2) of a share of Old Common Stock par value
$.25, with any fractional share held by a stockholder after giving effect to
such conversion to be rounded up to the next greater whole share. The Reverse
Stock Split shall be automatically implemented on the Effective Date without the
need for any further corporate action.
<PAGE>
E. Issuance of New Securities. The issuance of the New Senior Secured
Notes, the Subordinated Foothill Note and the New Common Stock by Reorganized
Oneita are hereby authorized as of the Effective Date without the need for any
further corporate action.
F. Cancellation of Existing Securities and Agreements. As of the Effective
Date, the Old Revolving Credit Agreement, the Old Prudential Note Agreement, the
Old Prudential Note, the Gintel Note Agreement, the Old Subordinated Gintel
Notes, the Kinston Security Agreement, the Kinston/Revolving Credit Guaranty and
the Kinston/Prudential Guaranty shall be deemed canceled and such agreements,
together with all security interests, liens and instruments issued pursuant
thereto, shall have no further legal effect other than as evidence of any right
to receive distributions under the Plan.
G. Surrender of Existing Securities. Notwithstanding any other provision of
the Plan, as a condition precedent to receiving any distribution under the Plan,
each holder of a promissory note, share certificate, or other instrument or
security evidencing a claim or Equity Interest must surrender such promissory
note, share certificate, or other instrument or security to Reorganized Oneita
or its designee or must execute and deliver an affidavit of loss and furnish an
indemnity or bond in substance and amount reasonably satisfactory to Reorganized
Oneita. Any holder of a claim or Equity Interest that fails to surrender such
instrument or security or to provide the affidavit and indemnity or bond, before
the later to occur of (i) the second anniversary of the Effective Date, and (ii)
six months following the date such holder's claim becomes an Allowed claim or
interest shall be deemed to have forfeited all rights, claims, and/or Equity
Interests and may not receive or participate in any distribution under the Plan.
H. Satisfaction of Subordination. In accordance with Section 510 of the
Bankruptcy Code, the Plan takes into account the relative priority of the claims
in each class after giving effect to any contractual subordination provisions
relating to such claims; provided, however, that so long as the requisite number
of holders of claims in classes 2 and 3 (in terms of both amount and number)
accept the Plan, (i) the distribution to the holders of the Old Gintel Claim
shall not be subject to levy, garnishment, attachment, or other legal process by
any holder of a Class 2 Claim, and (ii) on the Effective Date all holders of
Class 2 Claims shall be (a) deemed to have waived any and all contractual
subordination rights which they otherwise may have had with respect to such
distribution to holders of class 3 claims pursuant to the Plan, and (b)
permanently enjoined from enforcing or attempting to enforce any such rights
with respect to the distributions under the Plan to the holders of claims in
class 3.
<PAGE>
I. Corporate Action.
1. Amended and Restated Certificate of Incorporation. The adoption of the
Amended and Restated Certificate of Incorporation shall be deemed to have
occurred and be effective without any further action by the directors or
stockholders of Oneita or Reorganized Oneita. On the Effective Date or as soon
thereafter as is practicable, Reorganized Oneita shall file with the Secretary
of State of the State of Delaware, in accordance with sections 103 and 303 of
the Delaware General Corporation Law, the Amended and Restated Certificate of
Incorporation and such certificate shall be the certificate of incorporation for
Reorganized Oneita. The Amended and Restated Certificate of Incorporation,
provides, among other things, for the Reverse Stock Split, the elimination of
certain anti-takeover provisions and a prohibition on the issuance of non-voting
equity securities.
2. Board of Directors of Reorganized Oneita. On the Effective Date, the
Board of Directors of Reorganized Oneita shall consist of the individuals
identified on Exhibit 7 hereto. Such directors shall be appointed pursuant to
the Confirmation Order, but shall not take office or be deemed to be elected or
appointed until the Effective Date. Those directors and officers of Oneita not
continuing in office shall be deemed removed therefrom as of the Effective Date.
J. Method of Distribution Under the Plan.
1. Each distribution provided under the Plan with respect to an Allowed
administrative expense, claim or Equity Interest shall be made as soon as
practicable after the later of the Effective Date and the date on which such
administrative expense, claim or Equity Interest is Allowed.
2. In General. Distributions under the Plan shall be made by Reorganized
Oneita or its designee to the holders of administrative expenses, claims or
Equity Interests at the addresses set forth on the Schedules, unless such
addresses are superseded by proofs of claims or transfers of claims filed
pursuant to Bankruptcy Rule 3001 (or at the last known addresses of such holders
if Oneita or Reorganized Oneita has been notified in writing of a change of
address).
<PAGE>
3. Setoffs and Recoupments. Except for distributions to holders of claims
in classes 2 and 3 (as to which Oneita and Reorganized Oneita shall have no
right of setoff or recoupment), Oneita and Reorganized Oneita may, but shall not
be required to, set off against or recoup from any claim and the payments to be
made pursuant to the Plan in respect of such claim, any claims of any nature
whatsoever which Oneita or Reorganized Oneita may have against the claimant, but
neither the failure to do so nor the allowance of any claim hereunder shall
constitute a waiver or release by Oneita or Reorganized Oneita of any such claim
they may have against such claimant.
4. Distribution of Unclaimed Property. Any distribution of property (cash
or otherwise) under the Plan which is unclaimed after the later to occur of (a)
two years following the Effective Date or (b) six months after the date on which
such claimant's claim is Allowed shall be transferred to Reorganized Oneita
notwithstanding state or other escheat or similar laws to the contrary. In the
event that any securities are returned to Reorganized Oneita as unclaimed
property, then such securities shall be canceled.
5. Saturday, Sunday, or Legal Holiday. If any payment or act under the Plan
is required to be made or performed on a date that is not a Business Day, then
the making of such payment or the performance of such act may be completed on
the next succeeding Business Day, and shall be deemed to have been completed as
of the required date.
6. Fractional Shares. No fractional shares of New Common Stock or cash in
lieu thereof shall be distributed. For purposes of distribution, fractional
shares of New Common Stock shall be rounded up to the next whole number of
shares.
K. Allocation of Consideration. The aggregate consideration to be
distributed to the holders of Allowed claims in each class under the Plan shall
be treated as first satisfying an amount equal to the stated principal amount of
the Allowed claim for such holders and any remaining consideration as satisfying
accrued, but unpaid, interest, if any, and attorneys' fees where applicable.
<PAGE>
L. Executory Contracts and Unexpired Leases. The Old Options, if not
previously rejected by an order of the Court, are hereby rejected by Oneita.
Other than (i) executory contracts or unexpired leases which are the subject of
a motion to reject pending on the date the Plan is confirmed, and (ii) the Old
Options, all of the executory contracts and unexpired leases that exist between
Oneita and any person, are hereby specifically assumed as of the Effective Date.
All claims for damages arising from the rejection of executory contracts or
unexpired leases, including the Old Options, must be filed with the Court in
accordance with the terms of the order authorizing such rejection or, if not
rejected by separate order, within thirty (30) days from the date of the entry
of the Confirmation Order. Any claims not filed within such time will be forever
barred from assertion against Oneita, its estate and Reorganized Oneita. All
Allowed claims arising from the rejection of executory contracts or unexpired
leases shall be treated as class 5 claims.
M. Retiree Benefits. After the Effective Date, the payment of retiree
benefits (as defined in section 1114 of the Bankruptcy Code), at the level
established pursuant to section 1114 of the Bankruptcy Code, shall continue for
the duration of the period Oneita has obligated itself to provide such benefits,
if any.
N. Employee Benefit Plans. All employee benefit plans, policies and
programs of Oneita and Oneita's obligations thereunder (to the extent not
executory contracts assumed under the Plan), shall survive confirmation of the
Plan, shall remain unaffected thereby, and shall not be discharged. Employee
benefit plans, policies, and programs shall include, without limitation, all
savings plans, health care plans, disability plans, severance benefit plans,
life, accidental death, and dismemberment insurance plans, if any, but shall
exclude any employee equity or equity-based incentive plans.
O. Indemnification of Officers and Directors. The obligations of Oneita to
indemnify the officers and directors of Oneita pursuant to Delaware law, the
Certificate of Incorporation and the By-Laws in effect prior to the Effective
Date shall survive confirmation of the Plan, shall remain unaffected thereby,
and shall not be discharged.
<PAGE>
P. Limited Release. On the Effective Date, Oneita on behalf of itself, its
nondebtor subsidiaries and their estates, shall be deemed to release
unconditionally all present and former officers and directors of all such
corporations holding office at any time after January 1, 1996 from any and all
claims, obligations, suits, judgments, damages, rights, causes of action and
liabilities whatsoever, whether known or unknown, foreseen or unforeseen,
existing or hereafter arising, in law, equity or otherwise, based in whole or in
part upon any actions taken in their respective capacities described above or
any omission, transaction, event or other occurrence taking place prior to the
Effective Date in any way relating to Oneita, the Reorganization Case or this
Plan, except that no individual shall be released from any act or omission that
constitutes actual fraud or criminal behavior.
Q. Listing of New Common Stock; Registration of Securities. Reorganized
Oneita shall (i) maintain its status as a reporting company under the Securities
and Exchange Act of 1934, as amended, and (ii) use its best efforts to cause, on
the Effective Date, the shares of New Common Stock issued hereunder to be listed
on a national securities exchange or quoted in the NASDAQ National Market
System. Oneita shall (i) prior to February 28, 1998 file with the Securities and
Exchange Commission a registration statement or registration statements (on any
form which Oneita is eligible to use) under the Securities Act for the offering
on a continuous or delayed basis in the future of all of the shares of New
Common Stock that Oneita reasonably anticipates (based on information provided
by the holders of claims or otherwise) will be held by Initial Holders as of the
Effective Date (the "Registration Statement"), (ii) use its best efforts to
cause the Registration Statement to become effective under the Securities Act on
the Effective Date or as promptly as practicable thereafter, (iii) effective as
of the Effective Date, enter into a registration rights agreement with all of
the Initial Holders, in the form attached hereto as Exhibit 5 (the "Registration
Rights Agreement"), and (iv) from and after the Effective Date, comply with the
provisions of the Registration Rights Agreement, as the same may be supplemented
or amended from time to time in accordance with the terms thereof.
V. Effectiveness of the Plan
A. Conditions Precedent. The Plan shall not become effective unless and
until it has been confirmed and the following conditions shall have been
satisfied in full or waived in accordance with the provisions specified below:
1. The Confirmation Order shall have become a Final Order;
2. The Effective Date shall have occurred within one year following the
Petition Date;
<PAGE>
3. Reorganized Oneita shall have executed and shall have caused each of its
Subsidiaries (as defined in the Senior Secured Note Agreement) which are parties
thereto to have executed the Senior Secured Note Agreement, the Subordinated
Foothill Note, the New Security Documents, the New Foothill Security Documents,
the Registration Rights Agreement and the New Revolving Credit Agreement and all
other agreements and instruments related or ancillary to such agreements;
4. The Amended and Restated Certificate of Incorporation for Oneita in the
form of Exhibit 6 hereto, shall have been properly filed with the Secretary of
State of the State of Delaware;
5. All authorizations, consents, and regulatory approvals required (if any)
for the Plan's effectiveness shall have been obtained; and
6. The aggregate amount of claims in Class 5 hereof that are due and
payable in cash on the Effective Date does not exceed $1,000,000, with no single
claim exceeding $250,000. This aggregate claim ceiling shall not include sums
relating to claims arising prior to the Petition Date which Oneita obtained
authority to pay pursuant to Final Orders granting the Employee Related Expense
Motion, the Environmental Related Expense Motion, the Intercompany Account
Motion, the Manufacturing Consolidation Related Expense Motion, the Key Supplier
Related Expense Motion, any claims included on the List of Creditors Holding
Twenty Largest Unsecured Claims filed by Oneita on the Petition Date and any
claims included on the Schedule of Other Known Claims provided by Oneita to
Milbank, Tweed, Hadley & McCloy prior to the Petition Date.
7. The Registration Statement shall be effective under the Securities Act
on the Effective Date or shall have been on file with the Securities and
Exchange Commission for no less than thirty (30) days before the Effective Date.
<PAGE>
B. Waiver of Conditions.
1. Oneita may waive the condition set forth in Section V.A.1. above at any
time, without leave of or order of the Court and without any formal action so
long as there is no stay in effect enjoining the consummation of the Plan.
2. Oneita and the holders of 100% of the Class 2 Claims may waive any or
all of the conditions set forth in Sections V.A.2., V.A.3., V.A.4, V.A.5, V.A.6
and V.A.7 above at any time, without leave of or order of the Court and without
any formal action.
C. Effect of Failure of Conditions. In the event that the Effective Date
shall not have occurred on or before thirty (30) days after the Confirmation
Date, upon notification submitted by Oneita to the Court: (a) the Confirmation
Order shall be vacated, (b) no distributions under the Plan shall be made, (c)
Oneita and all holders of claims and Equity Interests shall be restored to the
status quo ante as of the day immediately preceding the Confirmation Date as
though the Confirmation Date had never occurred, and (d) Oneita's obligations
with respect to the claims and Equity Interests shall remain unchanged and
nothing contained in the Plan shall constitute or be deemed a waiver or release
of any claims or Equity Interests by or against Oneita or any other person or to
prejudice in any manner the rights of Oneita or any person in any further
proceedings involving Oneita.
D. Vacatur of Confirmation Order. If an order denying confirmation of the
Plan is entered or if the Confirmation Order is entered and thereafter modified
without the consent of 100% of the holders of Class 2 Claims or vacated, then
the Plan shall be null and void in all respects, and nothing contained in the
Plan shall (a) constitute a waiver or release of any claims against or Equity
Interests in Oneita; or (b) prejudice in any manner the rights of the holder of
any claim against or Equity Interest in Oneita.
VI. Administrative Provisions
A. Discharge and Injunction
1. Discharge. Except as otherwise expressly specified in the Plan, once the
Confirmation Order becomes a Final Order, the Confirmation Order shall act as of
the Effective Date as a discharge of all debts of, claims against, liens on, and
Equity Interests in Oneita, its assets and properties, arising at any time
before the entry of the Confirmation Order, regardless of whether a proof of
claim or Equity Interest therefor was filed, whether the claim or Equity
Interest is allowed, or whether the holder thereof votes to accept the Plan or
is entitled to receive a distribution thereunder. After the Effective Date, any
holder of such discharged claim or Equity Interest shall be precluded from
asserting against Oneita, Reorganized Oneita, or any of its assets or
properties, any other or further claim or Equity Interest based on any document,
instrument, act, omission, transaction, or other activity of any kind or nature
that occurred before the entry of the Confirmation Order.
<PAGE>
2. Injunction. In accordance with section 524 of the Bankruptcy
Code, Oneita's discharge, inter alia, operates as an injunction against the
commencement or continuation of any action, the employment of process, or
an act to collect, recover or offset the claims discharged hereby.
B. Preservation of Causes of Action.
1. (a) Oneita and Reorganized Oneita hereby retain all rights and all
causes of action arising out of or in connection with any claim or interest
belonging to Oneita, or to the estate or to Reorganized Oneita, including,
without limitation, (i) the avoidance of any transfer of an interest of Oneita
in property or any obligation incurred by Oneita, or (ii) the turnover of any
property to the estate, and except as expressly noted below, nothing contained
in this Plan or the Confirmation Order shall be deemed to be a waiver or
relinquishment of any such rights or causes of action.
(b) Oneita pursuant to this Plan waives any rights or causes of action it
may have against the holders of the Old Revolving Credit Lender Claims, the Old
Prudential Claim and the Old Gintel Claim.
2. Nothing contained in this Plan or the Confirmation Order shall
be deemed to be a waiver or relinquishment of any claim, cause of action,
right of setoff, or other legal or equitable defense which Oneita had
immediately prior to the Petition Date, against or with respect to any
claim left unaltered or unimpaired by the Plan. Reorganized Oneita shall
have, retain, reserve and be entitled to assert all such claims, causes of
action, rights of setoff and other legal or equitable defenses which Oneita
had immediately prior to the Petition Date as fully as if the Reorganized
Case had not been commenced; and all of Reorganized Oneita's legal and
equitable rights respecting any claim left unaltered or unimpaired by the
Plan may be asserted after the Effective Date to the same extent as if the
Reorganization Case had not been commenced.
<PAGE>
C. Administrative Expenses Incurred After the Confirmation Date.
Administrative expenses incurred by Reorganized Oneita, after the date and time
of the entry of the Confirmation Order, including (without limitation) claims
for professionals' fees and expenses, shall not be subject to application and
may be paid by Reorganized Oneita in the ordinary course of business and without
application for or Court approval.
D. Retention of Jurisdiction. The Court shall have exclusive jurisdiction
of all matters arising out of, and related to, the Reorganization Case and the
Plan pursuant to, and for the purposes of, section 105(a) and section 1142 of
the Bankruptcy Code and for, among other things, the following purposes:
1. To hear and determine applications for the assumption or rejection of
executory contracts or unexpired leases pending on the date the Plan is
confirmed, and the allowance of claims resulting therefrom;
2. To determine any other applications, adversary proceedings, and
contested matters pending on the Effective Date;
3. To ensure that distributions to holders of Allowed claims and Allowed
Equity Interests are accomplished as provided herein;
4. To resolve disputes as to the ownership of any claim or Equity Interest;
5. To hear and determine timely objections to administrative expenses,
claims and Equity Interests;
6. To enter and implement such orders as may be appropriate in the event
the Confirmation Order is for any reason stayed, revoked, modified or vacated;
7. To issue such orders in aid of execution of the Plan, to the extent
authorized by section 1142 of the Bankruptcy Code;
8. To consider any modifications of the Plan, to cure any defect or
omission, or to reconcile any inconsistency in any order of the Court,
including, without limitation, the Confirmation Order;
<PAGE>
9. To resolve disputes concerning nondebtor releases, exculpations, and
injunctions contained herein;
10. To hear and determine all applications for compensation and
reimbursement of expenses of professionals under sections 330, 331, and 503(b)
of the Bankruptcy Code;
11. To hear and determine disputes arising in connection with the
interpretation, implementation, or enforcement of the Plan;
12. To hear and determine any issue for which the Plan requires a Final
Order;
13. To hear and determine matters concerning state, local, and federal
taxes in accordance with sections 346, 505, and 1146 of the Bankruptcy Code;
14. To hear any other matter not inconsistent with the Bankruptcy Code; and
15. To enter a final decree closing the Reorganization Case; provided,
however, that the Court shall not have exclusive jurisdiction with respect to
(i) any disputes between Foothill and Reorganized Oneita after the Effective
Date under the New Foothill Security Documents, and (ii) any disputes between
the holders of the New Senior Secured Notes and Reorganized Oneita after the
Effective Date under the Senior Secured Note Agreement or the New Security
Documents.
E. Payment of Statutory Fees. All fees payable pursuant to section 1930 of
title 28 of the United States Code, as determined by the Court at the hearing
pursuant to section 1128 of the Bankruptcy Code, shall be paid on or before the
Effective Date.
F. Exculpation. Oneita and Reorganized Oneita and their respective
officers, directors, employees, advisors, representatives and agents (including
any professionals retained by such persons) shall have no liability whatsoever
to any holder of an administrative expense, claim, or Equity Interest for any
act or omission in connection with, or arising out of, the pursuit of approval
of the disclosure statement for the Plan or the solicitation of votes for or
confirmation of the Plan, the consummation of the Plan, or the administration of
the Plan or the property to be distributed under the Plan, except for willful
misconduct or gross negligence as determined by a Final Order, and, in all
respects, shall be entitled to rely upon the advice of counsel with respect to
their duties and responsibilities under the Plan. This exculpation shall be in
addition to, and not in limitation of, all other releases, indemnities,
exculpations and any other applicable law or rules protecting such parties from
liability.
<PAGE>
G. Dissolution of Creditors Committee. All committees appointed or serving
in the Reorganization Case pursuant to section 1102 of the Bankruptcy Code shall
be dissolved on the Effective Date.
H. Headings. Headings are used in the Plan for convenience and reference
only, and shall not constitute a part of the Plan for any other purpose.
I. Binding Effect. The Plan shall be binding upon and inure to the benefit
of Oneita, Reorganized Oneita, Oneita's creditors, the holders of Oneita's
Equity Interests, and each of their respective successors and assigns.
J. Modification of the Plan. Oneita reserves the right, in accordance with
the Bankruptcy Code, to amend or to modify the Plan prior to the entry of the
Confirmation Order. In accordance with Section 1127(b) of the Bankruptcy Code,
after entry of the Confirmation Order, Oneita may amend or modify the Plan, or
remedy any defect or omission or reconcile any inconsistency in the Plan in such
a manner as may be necessary to carry out the purpose and intent of the Plan.
K. Notices. Any notice required or permitted to be provided under the Plan
shall be in writing and served by either (a) certified mail, return receipt
requested, postage prepaid, (b) hand delivery, or (c) reputable overnight
delivery service, freight prepaid, to be addressed as follows: To Oneita or
Reorganized Oneita:
Oneita Industries, Inc.
4130 Faber Place Drive
Suite 200
Charleston, South Carolina 29405
Attn: Mr. William Boyd
with a copy to:
Moses & Singer LLP
1301 Avenue of the Americas
New York, New York 10019-6076
Attn: Alan Kolod, Esq.
Alan E. Gamza, Esq.
L. Governing Law. Unless a rule of law or procedure is supplied by federal
law (including the Bankruptcy Code and Bankruptcy Rules) or the Delaware General
Corporation Law, the laws of the State of New York shall govern the construction
and implementation of the Plan and any agreements, documents, and instruments
executed in connection with the Plan.
<PAGE>
M. Filing or Execution of Additional Documents. On or before the Effective
Date, Oneita or Reorganized Oneita, shall file with the Court or execute, as
appropriate, such agreements and other documents as may be necessary or
appropriate to effectuate and further evidence the terms and conditions of the
Plan.
N. Withholding and Reporting Requirements. In connection with the Plan and
all instruments issued in connection therewith and distributions thereon,
Reorganized Oneita shall comply with all withholding and reporting requirements
imposed by any federal, state, local, or foreign taxing authority and all
distributions hereunder shall be subject to any such withholding and reporting
requirements.
O. Section 1125(e) of the Bankruptcy Code. (i) Oneita has, and upon
confirmation of the Plan shall be deemed to have, solicited acceptances of the
Plan in good faith and in compliance with the applicable provisions of the
Bankruptcy Code and (ii) Oneita (and each of its respective affiliates, agents,
directors, officers, employees, advisors, and attorneys) have participated in
good faith and in compliance with the applicable provisions of the Bankruptcy
Code in the offer, issuance, sale, and purchase of the securities offered and
sold under the Plan and therefore is not, and on account of such offer,
issuance, sale, solicitation, and/ or purchase will not be, liable at any time
for the violation of any applicable law, rule, or regulation governing the
solicitation of acceptances or rejections of the Plan or the offer, issuance,
sale, or purchase of the securities offered and sold under the Plan.
Dated: New York, New York
January __, 1998
Respectfully submitted,
ONEITA INDUSTRIES, INC.
Debtor and Debtor in Possession
By:________________________________
William H. Boyd
Vice President-Administration and
Treasurer
<PAGE>
MOSES & SINGER LLP Counsel to Oneita Industries,
Inc.
By:________________________________
Alan E. Gamza
1301 Avenue of the Americas
New York, New York 10019-6076
(212) 554-7800
- and -
RICHARDS, LAYTON & FINGER
Local Counsel to Oneita Industries, Inc.
By:________________________________
Thomas L. Ambro (# 677)
One Rodney Square
P.O. Box 551
Wilmington, Delaware 19899
(302) 658-6541
<PAGE>
EXHIBITS TO THE PLAN
1. Senior Secured Note Agreement
2. Subordinated Foothill Note
3. New Revolving Credit Agreement
4. The Intercreditor Agreement
5. Registration Rights Agreement
6. Certificate of Incorporation of Reorganized Oneita
7. List of Initial Board of Directors of Reorganized Oneita
