EXHIBIT 10.2
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EXHIBIT F
FORM OF REGISTRATION RIGHTS AGREEMENT
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REGISTRATION RIGHTS AGREEMENT
between
UNIFI, INC.
and
DILLON YARN CORPORATION
___________________________________________
_________________, 200_
___________________________________________
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TABLE OF CONTENTS
Page
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1.
Definitions and
Interpretation.........................................1
(a)
Certain
Definitions...........................................1
(b)
Interpretation................................................5
2.
Restrictive
Legend.....................................................5
(a)
Legend........................................................5
(b)
Stop
Transfer Instructions....................................6
(c)
Legending.....................................................6
(d)
Restrictions on Transfer......................................6
3.
General; Securities Subject to this
Agreement..........................6
(a)
Grant of
Rights...............................................6
(b)
Registrable Securities........................................6
(c)
Holders of
Registrable Securities.............................7
4. Shelf
Registration.....................................................7
(a)
Filing of
Shelf Registration..................................7
(b)
Underwriting Procedures.......................................7
(c)
Expenses......................................................7
(d)
Form
S-3......................................................7
5.
Incidental or "Piggy-Back"
Registration................................8
(a)
Request
for Incidental or "Piggy-Back" Registration...........8
(b)
Expenses......................................................8
(c)
Confidentiality...............................................9
6.
Restrictions on
Transfer...............................................9
(a)
Lock-Up.......................................................9
(b)
Holder
Lock-Up Agreements....................................10
(c)
Company
Lock-Up Agreements...................................10
(d)
Third
Party Beneficiaries of Lock-Up Agreements..............10
(e)
Further
Actions..............................................11
7.
Registration
Procedures...............................................11
(a)
Obligations of the Company...................................11
(b)
Seller
Obligations...........................................15
(c)
Notice to
Discontinue........................................16
(d)
Valid
Business Reason........................................16
(e)
Registration Expenses........................................16
8.
Indemnification;
Contribution.........................................17
(a)
Indemnification by the Company...............................17
(b)
Indemnification by the Holders...............................17
-i-
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(c)
Conduct of
Indemnification Proceedings.......................18
(d)
Contribution.................................................19
9.
Exchange Act Reporting and Rule
144...................................19
10.
Miscellaneous.........................................................19
(a)
Assumption
of Agreement......................................19
(b)
Amendments
and Waivers.......................................20
(c)
Notices......................................................20
(d)
Successors
and Assigns.......................................21
(e)
Headings.....................................................21
(f)
Governing
Law................................................21
(g)
Dispute
Resolution...........................................21
(h)
Severability.................................................22
(i)
Rules of
Construction........................................22
(j)
Entire
Agreement.............................................22
(k)
Counterparts.................................................22
-ii-
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REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS
AGREEMENT,
dated ______________, 200_, by and
between Unifi, Inc., a
New York corporation
(the "COMPANY") and Dillon Yarn
Corporation, a South
Carolina corporation
("Dillon").
Capitalized terms used
but not otherwise defined herein shall have the respective meanings
ascribed to
such terms in Section 1.
R E C I T A L S:
A. Pursuant
to the Asset Purchase
Agreement,
dated October 25,
2006 (the "PURCHASE
AGREEMENT"), by and
between Unifi Manufacturing, Inc., a
North Carolina
corporation
("UNIFI") and a wholly owned subsidiary of the
Company, and Dillon,
as partial
consideration
for the purchase by Unifi of
certain assets of Dillon, Dillon has received 8,333,333 shares of
Common Stock,
par value $0.10 per share, of the Company.
B. The
Company has agreed to grant registration rights with
respect to the Registrable Securities as set forth in this
Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements
set forth herein and
for good and valuable
consideration,
the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree
as follows:
1.
DEFINITIONS AND INTERPRETATION.
(a)
CERTAIN DEFINITIONS.
As used in this
Agreement,
and
unless the context requires a different meaning, the following terms have the
meanings indicated:
"AFFILIATE" means any
Person who is an
"affiliate" as defined in Rule
12b-2 of the General Rules and Regulations promulgated under the
Exchange Act.
"AGREEMENT"
means this
Agreement
as the same may be amended,
supplemented or modified in accordance with the terms hereof.
"APPROVED UNDERWRITER" has the meaning set forth in Section
4(b).
"BOARD OF DIRECTORS" means the Board of Directors of the
Company.
"BUSINESS DAY" means any day other than a Saturday, Sunday or other
day
on which commercial
banks in the
States of North
Carolina and New York are
authorized or required by law or executive order to close.
"CLOSING PRICE" means, with respect to the Registrable Securities, as
of the date of determination, (i) if the Registrable Securities are
listed on a
national securities
exchange, the closing price per share of a Registrable
Security on such date published in THE WALL STREET JOURNAL
(NATIONAL EDITION)
or, if no such closing
price on such
date is published in THE WALL STREET
JOURNAL (NATIONAL EDITION), the average of the closing bid and
asked prices on
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2
such date, as officially reported on the principal national
securities exchange
on which the Registrable Securities are then listed or
admitted to trading; or
(ii) if the
Registrable Securities
are not then listed or admitted to trading
on any national
securities exchange
but are designated as national market
system securities
by the NASD, the last trading price per share of a
Registrable Security on such date; or (iii) if there shall have
been no trading
on such date or if the
Registrable Securities
are not designated as
national
market system
securities by the NASD, the average of the reported closing bid
and asked prices of
the Registrable
Securities
on such date as shown
by The
Nasdaq Stock Market, Inc. and reported by any member firm of The
New York Stock
Exchange, Inc.
selected by the Company; or (iv) if none of clause (i), (ii) or
(iii) is applicable, a
market price per share
determined in good faith by the
Board of Directors or, if such determination is not satisfactory to the
Majority Holders, by a nationally recognized investment banking firm
mutually
selected by the Company and the Majority Holders, the expenses for which shall
be borne equally
by the Company and the Majority Holders. If trading is
conducted on a continuous basis on any exchange,
then the closing price
shall
be at 4:00 P.M. New York City time.
"COMMISSION" means the Securities and Exchange Commission.
"COMMON STOCK" means
the Common Stock, par
value $0.10 per share,
of
the Company or any other capital stock of the Company into
which such stock is
reclassified or reconstituted and any other common stock of the
Company.
"COMMON STOCK EQUIVALENTS" means any security or obligation which
is by
its terms,
directly or indirectly, convertible into or exchangeable or
exercisable for shares of Common Stock, including any option, warrant or
other
subscription or
purchase right with
respect to shares of
Common Stock or any
Common Stock Equivalent.
"COMPANY" has the meaning set forth in the preamble to this
Agreement.
"COMPANY UNDERWRITER" has the meaning set forth in Section
5(a).
"DILLON" has the meaning set forth in the preamble to this
Agreement.
"DISCLOSURE PACKAGE" means, with respect to any offering of
securities,
(i) the preliminary Prospectus, and (ii) all other information,
in each case,
that is deemed, under
Rule 159 under the Securities Act, to have been conveyed
to purchasers of securities at the time of sale of such securities
(including a
contract of sale).
"EXCHANGE ACT" means the Securities Exchange Act of 1934 and the
rules
and regulations of the Commission promulgated thereunder.
"FREE WRITING
PROSPECTUS"
means any "free writing prospectus" as
defined in Rule 405 of the General Rules and Regulations
promulgated under
the
Securities Act.
"HEDGING COUNTERPARTY"
means a broker-dealer
registered under Section
15(b) of the Exchange Act or an Affiliate thereof.
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3
"HEDGING TRANSACTION" means any transaction involving a security
linked
to the Registrable
Class Securities or any security that would be deemed to be
a "derivative
security" (as defined
in Rule 16a-1(c) under
the Exchange Act)
with respect to the Registrable Class Securities or transaction
(even if not a
security) which would
(were it a security)
be considered
such a derivative
security, or which
transfers some or all
of the economic risk of ownership of
the Registrable Class Securities, including any forward contract,
equity swap,
put or call, put or call equivalent position, collar, non-recourse loan, sale
of exchangeable
security or similar
transaction. For the
avoidance of doubt,
the following transactions shall be deemed to be Hedging
Transactions:
(a)
transactions by
a Holder in which a Hedging
Counterparty engages in short sales of the Registrable Securities
pursuant to a
Prospectus and may use Registrable Securities to close out its
short position;
(b)
transactions pursuant
to which a Holder
sells short
Registrable Securities
pursuant to a Prospectus and delivers Registrable
Securities to close out its short position;
(c)
transactions by a Holder in which such Holder delivers,
in a transaction exempt from registration under the Securities Act,
Registrable
Securities to the
Hedging Counterparty who will then publicly resell or
otherwise transfer such Registrable Securities pursuant to a Prospectus or an
exemption from registration under the Securities Act; and
(d)
a loan or pledge of Registrable Securities to a Hedging
Counterparty who may
then become a selling
stockholder
and sell the
loaned
shares or,
in an event of
default in the case of a pledge, then sell the
pledged shares, in each case, in a public transaction pursuant to a
Prospectus.
"HOLDER" means Dillon and any Permitted Transferee.
"HOLDERS' COUNSEL" has the meaning set forth in Section
7(a)(i).
"INCIDENTAL REGISTRATION" has the meaning set forth in Section
5(a).
"INDEMNIFIED PARTY" has the meaning set forth in Section 8(c).
"INDEMNIFYING PARTY" has the meaning set forth in Section 8(c).
"INSPECTORS" has the meaning set forth in Section 7(a)(viii).
"LIABILITY" has the meaning set forth in Section 8(a).
"LOCK-UP AGREEMENTS" has the meaning set forth in Section 6(b).
"LOCK-UP PERIOD"
has the meaning set forth in Section 6(a).
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"MAJORITY HOLDERS"
means Holders of a majority of the outstanding
Registrable Securities.
"MARKET PRICE" means, on any date of determination, the average of the
daily Closing Price of the Registrable Securities for the
immediately preceding
30 days on which the national securities exchanges are open for
trading.
"NASD" means the National Association of Securities Dealers,
Inc.
"OFFERING CONFIDENTIAL
INFORMATION"
has the meaning set forth in
Section 5(c).
"PERMITTED TRANSFEREE" has the meaning set forth in Section
6(a).
"PERSON" means any individual, firm, corporation, partnership, limited
liability company,
trust, incorporated or
unincorporated
association, joint
venture, joint stock
company, limited
liability company, government (or an
agency or political subdivision thereof) or other entity of any
kind, and shall
include any successor (by merger or otherwise) of such entity.
"PROSPECTUS" means
any "prospectus" as defined in Rule 405 of the
Securities Act.
"PURCHASE AGREEMENT" has the meaning set forth in Recital A.
"RECORDS" has the meaning set forth in Section 7(a)(viii).
"REGISTRABLE CLASS SECURITIES" means securities of the Company that
are
of the same class as the Registrable Securities.
"REGISTRABLE
SECURITIES" means each of the following: (i) any and all
shares of Common Stock
issued to Dillon at the closing of the transaction
contemplated by the
Purchase Agreement; and (ii) any shares of Common
Stock
issued or issuable to a Holder with respect to the Registrable Securities by
way of stock dividend
or stock split or in connection with a combination of
shares,
recapitalization,
merger, consolidation
or other
reorganization or
otherwise and any shares of Common Stock or voting common stock issuable upon
conversion, exercise or exchange thereof.
"REGISTRATION EXPENSES" has the meaning set forth in Section
7(e).
"REGISTRATION
STATEMENT" means a registration statement filed pursuant
to the Securities Act.
"SECTION 5(A) NOTICE" has the meaning set forth in Section
5(a).
"SECURITIES ACT"
means the Securities Act of 1933 and the rules and
regulations of the Commission promulgated thereunder.
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5
"SHELF REGISTRATION" has the meaning set forth in Section 4(a).
"TRANSFER" means,
with respect to any
security, the offer for sale,
sale, pledge, transfer
or other disposition or encumbrance (or any transaction
or device that is designed to or could be expected to result in the
transfer or
the disposition by any Person at any time in the future) of such
security, and
includes any Hedging Transaction.
"UNDERWRITTEN PUBLIC OFFERING" of securities means a public
offering of
such securities
registered
under the Securities
Act in which an underwriter,
placement agent or other intermediary participates in the distribution
of such
securities.
"UNIFI" has the meaning set forth in Recital A.
(b)
INTERPRETATION. Unless otherwise expressly provided:
(i)
All references to laws, rules, regulations and
forms in this Agreement shall be deemed to be references
to such laws,
rules,
regulations and forms, as amended from time to time or, to the
extent replaced,
the comparable successor thereto in effect at the time.
(ii) All
references
to agencies, self-regulatory
organizations or governmental entities in this Agreement shall
be deemed to be
references to the comparable successor thereto.
(iii) All
references
to agreements and other
contractual
instruments shall be deemed to be references to such agreements
or
other instruments as they may be amended from time to time.
(iv) The
words "include," "includes" and "including"
do not limit the preceding words or terms and shall be deemed to be
followed by
the words "without limitation".
"VALID BUSINESS REASON" has the meaning set forth in Section
7(d).
2.
RESTRICTIVE LEGEND.
(a)
LEGEND. Each
certificate
representing
shares
of
Registrable Securities
issued pursuant to the Purchase Agreement shall, unless
otherwise permitted by the provisions of Section 2(c), be marked by
the Company
with legends (together
with any other legend
with which such
certificate is
required to be marked) in substantially the following form:
THE SHARES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF
1933, AS AMENDED (THE
"ACT"). SUCH
SHARES
MAY NOT BE TRANSFERRED
UNLESS A REGISTRATION
STATEMENT UNDER
THE ACT IS IN EFFECT AS TO SUCH TRANSFER OR, IN THE OPINION OF
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6
COUNSEL FOR THE COMPANY, SUCH TRANSFER MAY BE MADE PURSUANT TO
RULE 144 OR REGISTRATION UNDER THE ACT IS OTHERWISE
UNNECESSARY IN ORDER FOR SUCH TRANSFER TO COMPLY WITH THE ACT.
THE SHARES EVIDENCED HEREBY ARE SUBJECT TO A LOCK-UP PERIOD AS
DESCRIBED IN
THAT CERTAIN REGISTRATION RIGHTS AGREEMENT
ENTERED INTO BY THE ISSUER AND THE HOLDER (A COPY OF WHICH MAY
BE OBTAINED FROM THE ISSUER).
(b)
STOP TRANSFER
INSTRUCTIONS.
In order to ensure
compliance with the
restrictions referred
to herein, each Holder
agrees that
the Company may issue appropriate "stop transfer" certificates or instructions
and that, if the Company transfers its own securities, it may make appropriate
notations to the same effect in its records.
(c)
LEGENDING. Each
certificate
evidencing
Registrable
Securities shall
not bear the
legend set forth in Section 2(a) if in the
opinion of counsel for a Holder and counsel for the Company
such legend is not
required in order to establish compliance with any provision of
the Securities
Act.
(d)
RESTRICTIONS ON
TRANSFER. Notwithstanding any other
provision of this
Agreement,
no Transfer may be made of any Registrable
Securities to a
shareholder of Dillon
as described in Section 6(a) unless the
Transfer complies in all respects with applicable federal and state securities
laws, including
the Securities Act and any "blue sky" laws.
If reasonably
requested by the Company, in its sole discretion, Dillon shall also
provide, at
Dillon's expense,
a written opinion of legal counsel who shall
be, and whose
legal opinion shall be, reasonably satisfactory to the Company,
addressed to
the Company,
to the effect
that the proposed transfer of the Registrable
Securities may be
effected without
registration
under the Securities Act,
whereupon Dillon
shall be entitled to Transfer all or a portion of its
Registrable Securities
to such shareholder,
subject to and in compliance with
the other provisions of this Agreement.
3. GENERAL;
SECURITIES SUBJECT TO THIS AGREEMENT.
(a)
GRANT OF RIGHTS. The Company hereby grants registration
rights to the
Holders upon the terms and conditions set forth in this
Agreement.
(b)
REGISTRABLE
SECURITIES. For
the purposes of this
Agreement, Registrable
Securities will cease to be Registrable Securities when
(i) a Registration
Statement covering such Registrable Securities has been
declared effective
under the Securities Act by the Commission and such
Registrable Securities
have been disposed of pursuant to such effective
Registration
Statement, (ii)
(x) the entire amount of the Registrable
Securities owned by
the Holder thereof may
be sold in a single
sale, in the
opinion of counsel
satisfactory to the Company and such Holder, each in their
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7
reasonable judgment,
without any limitation
as to volume pursuant to Rule 144
under the Securities Act and (y) such Holder owns less than 1.0% of the
outstanding shares
of Common Stock on a fully diluted basis, or (iii) the
Registrable Securities
are proposed to be
sold or distributed by a Person not
entitled to the registration rights granted by this Agreement.
(c)
HOLDERS OF REGISTRABLE
SECURITIES. A Person
is deemed
to be a holder of
Registrable Securities
whenever such Person
owns of record
Registrable
Securities, or
holds an option to purchase, or a security
convertible into, or
exercisable or exchangeable for, Registrable Securities
whether or not such
purchase, conversion,
exercise or exchange
has actually
been effected. If the
Company receives
conflicting
instructions, notices
or
elections from
two or more
Persons with respect to the same Registrable
Securities, the
Company may act upon the basis of the instructions, notice or
election received from
the registered owner
of such Registrable
Securities.
Registrable Securities
issuable upon exercise of an option or upon conversion,
exercise or exchange of another security shall be deemed
outstanding
for the
purposes of this Agreement.
4. SHELF
REGISTRATION.
(a)
FILING OF SHELF REGISTRATION. Within 45 days following
the date hereof, the Company shall file a Registration Statement on an
appropriate form (the "SHELF REGISTRATION") registering the sale of all of
the
Registrable Securities
offering on a delayed
or continuous basis
pursuant to
Rule 415 under the Securities Act. The Company shall use its
reasonable efforts
to cause such Registration Statement filed pursuant to this
Section 4(a) to be
declared effective as soon as practicable, and remain effective
until there are
no longer any Registrable Securities.
(b)
UNDERWRITING
PROCEDURES. Upon the
written request of
the Majority Holders, the Company shall use its reasonable efforts
to cause the
sale of Registrable Securities that such Majority Holders wish to
be sold to be
in the form
of a firm commitment underwritten offering (unless otherwise
consented to by such Majority Holders) if the anticipated
aggregate offering
price (calculated based upon the Market Price of the Registrable
Securities on
the date of such
written request and
including any Registrable Securities
subject to any
applicable
over-allotment
option) to the public equals or
exceeds $7,500,000
(including
causing to be produced
and filed any necessary
Prospectuses or
Prospectus supplements
with respect to such
offering).
The
managing underwriter
or underwriters selected for such offering shall be
selected by the Company and shall be reasonably acceptable to such Majority
Holders (an "APPROVED UNDERWRITER"). In no event shall the Holders be
entitled
to request more than one underwritten public offering.
(c)
EXPENSES. The
Company shall bear all Registration
Expenses in connection with the Shelf Registration pursuant to this
Section 4.
(d)
FORM S-3. If the
Company is
eligible to use Form
S-3
for secondary offerings of Registrable Class Securities, the Shelf
Registration
shall be on Form S-3.
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8
5. INCIDENTAL
OR "PIGGY-BACK" REGISTRATION.
(a)
REQUEST FOR INCIDENTAL OR "PIGGY-BACK" REGISTRATION. If
the Company
proposes to file a Registration Statement with respect to an
offering by the Company of equity securities for its own account
(other than a
Registration Statement
on Form S-4 or S-8 or a Registration Statement
registering the
issuance of equity securities as consideration in an
acquisition
transaction) or for
the account of any stockholder of the Company
other than the
Holders, then the
Company shall give written notice (the
"SECTION 5(A) NOTICE") of such proposed filing to the Holders at least 10
days
before the anticipated filing date, and such notice shall describe
the proposed
registration, offering
price (or reasonable
range thereof) and
distribution
arrangements, and
offer the Holders the
opportunity to register the number of
Registrable
Securities as
the Holders may request (an "INCIDENTAL
REGISTRATION"). The
Company shall use commercially reasonable efforts to cause
the managing underwriter or underwriters in the case of a proposed
underwritten
offering (the
"COMPANY UNDERWRITER") to permit the Holders to include the
number of the Holders' Registrable Securities specified by the
Holders in such
offering on the same terms and conditions as the securities of the Company or
for the account
of such other stockholder, as the case may be, included
therein. In connection with any Incidental Registration under this
Section 5(a)
involving an
underwritten
offering, the Company shall not be required to
include any
Registrable Securities
in such underwritten
offering unless
the
Holder thereof accepts
the terms of the
underwritten offering
as agreed upon
between the
Company, such other stockholders, if any, and the Company
Underwriter, and then only in such quantity as the Company
Underwriter believes
will not jeopardize the success of the offering by the Company.
If the Company
Underwriter determines
that the registration of all or part of the Registrable
Securities which the
Holders have requested
to be included would
materially
adversely affect the
success of such offering, then the Company shall include
in such Incidental
Registration
only the aggregate amount of Registrable
Securities that the Company Underwriter believes may be sold without any
such
material adverse
effect and shall reduce the amount of Registrable Securities
to be included
in such registration, (i) in the case of an offering by the
Company for its own account, FIRST, as to the Registrable Securities to be
offered for the account of the Holders pursuant to this Section 5(a);
SECOND,
as to the securities
requested to be included in such offering by stockholders
other than the Holders; and THIRD, as to all of the securities to be offered
for the account of the
Company, and (ii) in the case of an
offering by the
Company for the
account of any stockholder of the Company other than the
Holders, FIRST, as to
the Registrable Securities to be offered for the account
of the Holders pursuant to this Section 5(a); SECOND, as to the securities to
be offered
for the account of the Company; THIRD, as to the securities
requested to be
included in such offering by stockholders other than the
Holders who have
incidental or "piggy-back" registration rights with respect
thereto; and
FOURTH, as to the securities to be offered for the account
of
stockholders who made the initial request for registration.
(b)
EXPENSES. The
Company shall bear all Registration
Expenses in
connection
with any Incidental Registration pursuant to this
Section 5, whether or not such Incidental Registration becomes
effective.
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9
(c)
CONFIDENTIALITY.
(i)
The following
shall be deemed to be
"OFFERING
CONFIDENTIAL
INFORMATION": (1)
the Company's plan to file the relevant
Registration Statement
and engage in the offering so registered, (2) any
information regarding
the offering being registered (including, without
limitation, the
potential timing,
price, number of shares, underwriters or
other counterparties, selling stockholders or plan of distribution)
and (3) any
other information
(including
information
contained in draft
supplements or
amendments to offering materials) provided to the Holders by the
Company (or by
third parties)
in connection with the Incidental Registration. Offering
Confidential
Information shall not include information that (x) was or
becomes
generally available to
the public (including
as a result of the filing of the
relevant Registration
Statement) other than as a result of a disclosure by any
Holder, (y) was or
becomes available to
any Holder from a source not known to
such Holder to be bound by any confidentiality agreement or (z) was otherwise
in any Holder's
possession prior to it
being furnished to
such Holder by the
Company or on the
Company's behalf.
Information
shall cease to be Offering
Confidential
Information upon the
earliest to occur of (X) the completion of
the relevant offering
and (Y) if the relevant Registration Statement has not
been filed,
30 days after the
intended filing date set forth in the
Section
5(a) Notice.
(ii) After
a Holder has been notified of its
opportunity to include
securities in an Incidental Registration, such Holder
shall treat the Offering Confidential Information as confidential
information
and shall not use the Offering Confidential Information for any purpose
other
than to evaluate whether to include its Registrable Securities in such
Incidental
Registration and
agrees to disclose the Offering Confidential
Information only to such of its agents, employees, advisors and
counsel as have
a need to know such Offering Confidential Information and to cause
such agents,
employees, advisors and counsel to comply with the requirements of
this Section
5(c); PROVIDED that such Holder may disclose Offering Confidential
Information
if it determines,
in good fa
