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EXHIBIT 4.1
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (the "Agreement") made as of this 10th day of
September, 1998 by and among ▇▇▇▇▇ APPAREL GROUP, INC., a Pennsylvania
corporation (the "Company"), and the Shareholders (defined below).
RECITALS
WHEREAS, concurrently with the execution of this Agreement, the Company,
SAI Acquisition Corp., a Delaware corporation, Sun Apparel, Inc., a Texas
corporation ("Sun") and the shareholders of Sun (the "Shareholders") entered
into an Agreement and Plan of Merger (the "Merger Agreement");
WHEREAS, pursuant to the Merger Agreement, the Shareholders will receive on
the Closing Date (as defined in the Merger Agreement) shares of the Company's
Common Stock, par value $.01 per share (the "Common Stock"), constituting the
Stock Merger Consideration (as defined in the Merger Agreement) (the "Closing
Shares" or, collectively with the Contingent Shares (defined below), the
"Shares");
WHEREAS, pursuant to the Merger Agreement, the Shareholders will receive
additional shares of the Common Stock upon the occurrence of the events
specified in the Merger Agreement (the "Contingent Shares" or, collectively with
the Closing Shares, the "Shares");
WHEREAS, the Company and the Shareholders desire to execute and deliver
this Agreement in order to provide the Shareholders with certain registration
rights with respect to the Shares;
NOW, THEREFORE, in consideration of the premises and mutual covenants and
agreements and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged the parties hereto agree as follows:
1. CERTAIN DEFINITIONS. As used herein, the following terms shall have
the following respective meanings:
"Closing Date" shall have the same meaning herein as in the Merger
Agreement.
"Commission" shall mean the Securities and Exchange Commission or any
other Federal agency at the time administering the Securities Act.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, or any successor Federal statute, and the rules and regulations of
the Commission thereunder, all as the same shall from time to time be in
effect.
"Holder" shall mean any holder of the Registrable Securities.
The terms "register", "registered" and "registration" shall refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act and applicable rules and regulations
thereunder, and the declaration or ordering of the effectiveness of such
registration statement.
"Registrable Securities" shall mean the Shares and any shares of the
Common Stock or other securities issued in respect of the Shares upon any
stock split, stock dividend, merger, consolidation, recapitalization or
similar event. Such securities shall cease to be Registrable Securities
when (i) a registration statement registering such securities shall have
become effective under the Securities Act and such securities have been
sold pursuant thereto, (ii) such securities shall have been sold under Rule
144 (or successor provision) under the Securities Act, (iii) such
securities shall have been otherwise transferred and new certificates for
them not bearing a legend restricting further transfer shall have been
delivered by the Company or (iv) such securities shall have ceased to be
outstanding.
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"Registration Expenses" shall mean all reasonable fees and expenses
incurred by the Company in compliance with Section 3 hereof, including,
without limitation, all registration and NASD fees, filing fees, printing
expenses, reasonable fees and disbursements of counsel for the Company,
blue sky fees and expenses, and the expense of any special audits or "cold
comfort" letters incident to or required by any such registration (but
excluding the compensation of regular employees of the Company, which shall
be paid in any event by the Company).
"Securities Act" shall mean the Securities Act of 1933, as amended, or
any successor Federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall from time to time be in
effect.
"Selling Expenses" shall mean all underwriting discounts and selling
commissions applicable to the sale of Registrable Securities, all fees and
disbursements of counsel for any Holder and all "road show" and other
marketing expenses incurred by the Company or any underwriters which are
not otherwise paid for by the underwriters.
2. RESTRICTIVE LEGEND. Each certificate representing the Shares held by
the Shareholders and any other securities issued in respect of the foregoing
securities upon any stock split, stock dividend, recapitalization, merger,
consolidation or similar event shall (unless otherwise permitted or unless the
securities evidenced by such certificate shall have been registered under the
Securities Act) be stamped or otherwise imprinted with a legend in the following
form (in addition to any legend required under applicable state securities
laws):
The securities represented by this Certificate have not been registered
under the Securities Act of 1933, as amended, nor the laws of any state.
Accordingly, these securities may not be offered, sold, transferred,
pledged or hypothecated in the absence of registration, or the
availability, in the opinion of counsel for the issuer, of an exemption
from registration under the Securities Act of 1933, as amended, or the
laws of any state. Therefore, the stock transfer agent will effect
transfer of this Certificate only in accordance with the above
instructions.
Upon request of a holder of such a certificate, the Company shall remove
the foregoing legend from the certificate or issue to such holder a new
certificate therefor free of any transfer legend if, with such request, the
Company shall have received an opinion of counsel reasonably satisfactory to the
Company to the effect that the securities represented by such certificate have
been registered under the Securities Act or may be sold publicly without
registration under the Securities Act.
3. REGISTRATION RIGHTS.
3.1 (a) Shelf Registration. Within thirty (30) days from the Closing
Date, the Company shall file a registration statement on Form S-3 or any
successor thereto (or other form of registration statement if Form S-3 is not
available) for public sale of all of the Registrable Securities (the "Shelf
Registration Statement"), and thereafter shall use its reasonable best efforts
to have the Shelf Registration Statement declared effective by the Commission
From time to time thereafter, but not later than thirty (30) days after each
issuance of Contingent Shares, if any, the Company shall amend the Shelf
Registration Statement (or file a new Shelf Registration Statement, if required,
in which case all references herein to the Shelf Registration Statement shall
include such new Shelf Registration Statement) to include such Contingent
Shares. The Company shall use its reasonable best efforts to keep the Shelf
Registration Statement continuously effective (subject to Section 4 below) for a
period of five (5) years or until the selling Holders shall have completed the
distribution of all Registrable Securities as described in the Shelf
Registration Statement, whichever occurs first.
(B) UNDERWRITING.
(i) Each of (A) ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and the ▇▇▇▇▇▇▇▇ Family Trust, who
for purposes of this Section 3.1 (b) shall be deemed to be a single
"Selling Shareholder" and (B) Vestar/Sun Holding Company, L.L.C. (also a
"Selling Shareholder"), on not more than one occasion during the five year
period described in the foregoing paragraph, shall have the right to
distribute all or any portion of the Registrable Securities owned by it
which are covered by the Shelf Registration Statement by means of an
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underwritten offering. Any Selling Shareholder who desires to sell its
Registrable Securities by means of an underwritten offering shall so advise
the Company and each other Holder by written notice, and the Company shall
select an underwriter or representative of underwriters reasonably
acceptable to the Selling Shareholder; provided, however, that the
Registrable Securities requested to be underwritten, including any
Registrable Securities included in such underwritten offering pursuant to
the next sentence, shall have a gross market value (as of the time of the
request for underwriting) of not less than $25,000,000. The Company and the
Selling Shareholder shall, upon the written request of any other Holder
delivered to the Company and the Selling Shareholder within 10 business
days after receipt of such notice (which request shall specify the
Registrable Securities intended to be disposed of by such Holder and the
intended method of disposition thereof), use its reasonable best efforts to
include in the underwritten offering all Registrable Securities which such
other Holder has requested to be included.
(ii) If a Selling Shareholder proposes to sell Registrable Securities
in an underwritten offering pursuant to this Section 3.1(b), and the
underwriter of such offering shall inform the Company that the inclusion of
all or a specified number of such Registrable Securities requested to be
included (including, if applicable, the Registrable Securities of the other
Holders) would interfere with the successful marketing or pricing of such
Registrable Securities, then the Company shall first reduce the number of
the other Holder's Registrable Securities requested to be included in the
offering to the extent necessary to eliminate such effect and, if a
limitation is still required, the Company will reduce the number of the
Selling Shareholder's Registrable Securities requested to be included to
the extent necessary to eliminate such effect. In the event that the number
of shares of Registrable Securities of the Selling Shareholder included in
such underwritten offering is reduced below 75% of the Registrable
Securities requested by such Selling Shareholder to be included in such
offering, then such offering shall not be deemed to have satisfied the
requirement for the one underwritten offering to which each Selling
Shareholder is entitled under this Section 3.1(b).
(iii) The Company shall file such amendments and supplements to the
Shelf Registration Statement as it deems necessary and use its reasonable
best efforts to cause such underwritten offering to comply with all
applicable rules and regulations of the Commission. In addition, the
Company shall assist the Holders in marketing the Registrable Securities to
be sold pursuant to such underwritten offering, including by participating
in "road shows" and similar marketing efforts as reasonably requested by
the Holders or the underwriters, subject in all events to the reasonable
availability of the Company's officers and personnel. No Holder may
participate in any underwritten registration hereunder unless such Holder
(A) agrees to sell such Holder's Registrable Securities on the basis
provided in customary underwriting arrangements entered into in connection
therewith and (B) completes and executes a customary underwriting agreement
and all reasonable questionnaires, powers of attorney, and other documents
required under the terms of such underwriting arrangements.
3.2 EXPENSES OF REGISTRATION. The Company shall bear all Registration
Expenses and the selling Holders shall bear all Selling Expenses (in proportion,
as nearly as practicable, to the securities of each Holder being registered)
incurred in connection with any registration, qualification or compliance
pursuant to the provisions of Section 3.
3.3 REGISTRATION PROCEDURES. In the case of a registration statement to
be effected by the Company pursuant to this Agreement, the Company will:
(i) Furnish each Shareholder, as updated from time to time, prior to
the filing thereof with the Commission, a copy of any Shelf Registration
Statement (including any preliminary prospectus contained therein), and
each amendment thereto and each amendment or supplement, if any, to the
prospectus included therein and shall reflect in each such document, when
so filed with the Commission, such comments pertaining to each Shareholder
as such Shareholder reasonably may propose;
(ii) Prepare and file with the Commission such amendments and
supplements (including post-effective amendments and supplements) to such
registration statement and the prospectus used in connection therewith as
may be necessary to comply with the provisions of the Securities Act with
respect to the disposition of securities covered by such registration
statement;
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(iii) Furnish such number of copies of the prospectus and other
documents incident thereto, including any amendment of or supplement
thereto, as a selling Holder from time to time may reasonably request;
(iv) Notify each selling Holder, at its last known address as set
forth in the Company's books and records, of Registrable Securities covered
by such registration statement at any time when a prospectus relating
thereto is required to be delivered under the Securities Act of the
happening of any event as a result of which the prospectus included in such
registration statement, as then in effect, includes an untrue statement of
a material fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or
incomplete in the light of the circumstances then existing, and at the
request of any such selling Holder, prepare and furnish to such selling
Holder as promptly as practicable a reasonable number of copies of a
supplement to or an amendment of such prospectus as may be necessary so
that, as thereafter delivered to the purchaser of such shares, such
prospectus shall not include an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make
the statements therein not misleading or incomplete in the light of the
circumstances then existing;
(v) Cause all such Registrable Securities to be listed on each, if
any, securities exchange on which similar securities issued by the Company
are then listed and use its reasonable efforts to register or qualify such
Registrable Securities under all applicable state securities or blue sky
laws; provided, however, that the Company shall not be required for any
such purpose to (A) qualify generally to do business as a foreign company,
entity or a broker-dealer in any jurisdiction wherein it would not
otherwise be required to qualify but for the requirements of this
Agreement, (B) subject itself to taxation in any such jurisdiction or (C)
consent to general service of process in any such jurisdiction;
(vi) Provide a transfer agent and registrar for all Registrable
Securities and a CUSIP number for all such Registrable Securities, in each
case not later than the effective date of such registration;
(vii) Upon appropriate prior written notice by a selling Holder of
Registrable Securities, make reasonably available for inspection by such
selling Holder, any underwriter participating in any disposition pursuant
to such registration statement, and any attorney or accountant retained by
any such selling Holder or underwriter, reasonable financial and other
records, pertinent corporate documents and properties of the Company, and
use its reasonable efforts to cause the Company's officers and directors to
supply all information reasonably requested by any such selling Holder,
underwriter, attorney or accountant in connection with such registration
statement; provided, however, that such selling Holder, underwriter,
attorney or accountant shall agree to hold in the strictest confidence and
trust all information so provided except as required by law;
(viii) To the extent applicable, furnish to each selling Holder a
signed counterpart, addressed to the selling Holder, of an opinion of
counsel for the Company, dated the effective date of such registration
statement, and "comfort" letters signed by the Company's independent public
accountants who have examined and reported on the Company's financial
statements included in such registration statement, to the extent permitted
by the standards of the AICPA or other relevant authorities, covering
substantially the same matters with respect to such registration statement
(and the prospectus included therein) and (in the case of the accountants'
"comfort" letters) with respect to events subsequent to the date of the
financial statements, as are customarily covered in opinions of issuer's
counsel and in accountants' "comfort" letters delivered to the underwriters
in underwritten public offerings of securities;
(ix) Furnish to each selling Holder a copy of all material documents
filed with and all material correspondence from or to the Commission in
connection with any such offering;
(x) Otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the Commission; and
(xi) In connection with any underwritten offering pursuant to such
registration statement, the Company will enter into any underwriting
agreement reasonably necessary to effect the offer and sale of Common
Stock, provided such underwriting agreement contains customary underwriting
provisions and
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provided further that if the underwriter so requests the underwriting
agreement will contain customary indemnification and contribution
provisions.
4. RESTRICTIONS ON HOLDERS. Notwithstanding Section 3:
(a) Company Offerings. If the Company shall register its securities under
the Securities Act for sale to the public in an underwritten offering and the
underwriter of such offering shall inform the Company that the availability of
the Holders' registered Registrable Securities for public sale pursuant to the
Shelf Registration Statement would adversely interfere with the successful
marketing or pricing of the securities proposed to be registered by the Company,
then
(i) the Company shall promptly give to each Holder written notice of
the Company's intended offering (which notice shall include a list of the
jurisdictions in which the Company intends to attempt to qualify such
securities under the applicable blue sky or other state securities laws);
(ii) the Holders shall not sell, transfer or otherwise dispose of
their Registrable Securities without the prior written consent of the
Company for a period designated by the Company, which period shall not
begin more than fifteen (15) days prior to and not last more than 90 days
after the effective date of the registration statement relating to the
Company's securities, and
(iii) the Company shall include in such registration (and any related
qualification under blue sky laws or other compliance), and in any
underwriting involved therein, all the Registrable Securities specified in
a written request or requests made by any Holder within ten (10) days after
receipt of the written notice from the Company described above, subject to
the following:
(A) all Holders proposing to distribute their securities through
such offering by the Company shall (together with the Company
distributing its securities for its own account through such offering)
enter into an underwriting agreement in customary form, with the
underwriter or representative of the underwriters selected by the
Company; and
(B) notwithstanding any of the foregoing, if the underwriter or the
representative of the underwriters informs the Company that inclusion of
all or part of the Registrable Securities requested to be registered in
the underwriting would adversely interfere with the successful marketing
or pricing of the securities proposed to be registered by the Company,
the underwriter or representative may limit or altogether exclude the
number of Registrable Securities to be included in the registration and
underwriting. If only a limitation is required, the Registrable
Securities permitted to be included shall be allocated among the Holders
in proportion, as nearly as practicable, to the respective amounts of
Registrable Securities which the Holders had requested to be included in
such registration.
(b) Amendments or Supplements; Filing Delay. If, after the Shelf
Registration Statement (or any other registration statement effected pursuant to
this Agreement) becomes effective, the Company advises the Holders in writing
that the Company considers it necessary or appropriate for such registration
statement to be amended or supplemented in order for sales thereunder to be made
in compliance with the Commission's applicable rules and regulations, the
Holders shall suspend any further sale, transfer or other disposition of their
Registrable Securities until the Company advises them that such registration
statement has been amended or supplemented and declared effective. The Company
may delay filing any amendment or supplement to the registration statement, and
may cause its effectiveness to be delayed, if the Company advises the Holders in
its written notice that the Company has determined in good faith that the filing
of such amendment or supplement (or the declaration of its effectiveness) will
(i) interfere with or adversely affect the negotiation or completion of any
transaction that is being contemplated by the Company (whether or not a final
decision has been made to undertake such a transaction) at the time the right to
delay is exercised, or (ii) involve initial or continuing disclosure obligations
not in the best interest of the Company and the Company's stockholders;
provided, however, that (i) the Company shall not exercise its right to delay on
more than two (2) occasions during any calendar year, (ii) the period of any
such delay shall not exceed 120 days from the date of the Company's written
notice to the Holders, and (iii) with respect to each such delay, the Company
shall use its reasonable best efforts to minimize the period of such delay to
the fullest extent practicable.
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5. LOCK-UP. Shareholders acknowledge and agree that notwithstanding the
registration rights granted to the Holders in Section 3, and notwithstanding
that some or all the Shares may from time to time be registered pursuant
thereto:
(i) none of the Shares may be sold, assigned or transferred except in
compliance with the restriction on sale ("lock-up") provisions and schedule
set forth in Section 4.7(a), (b) and (c) of the Merger Agreement; and
(ii) the certificates representing the Shares shall bear appropriate
restrictive legends making reference to such "lock-up" provisions.
6. INDEMNIFICATION.
(a) The Company will indemnify each Holder, each of its officers, directors
and partners, and each person controlling such Holder, with respect to which
registration, qualification or compliance has been effected pursuant to Section
3, and each underwriter, if any, and each person who controls any underwriter,
against all claims, losses, damages and liabilities (or actions, proceedings or
settlements in respect thereof) arising out of or based on any untrue statement
(or alleged untrue statement) of a material fact contained in any prospectus,
offering circular or other document (including any related registration
statement, notification or the like) incident to any such registration,
qualification or compliance, or any omission (or alleged omission) to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, or any violation by the Company of the
Securities Act or any rule or regulation thereunder applicable to the Company
and relating to action or inaction required of the Company in connection with
any such registration, qualification or compliance, and will reimburse each such
Holder, each of its officers, directors and partners, and each person
controlling such Holder, each such underwriter and each person who controls any
such underwriter, for any legal and any other expenses as they are reasonably
incurred in connection with investigating and defending any such claim, loss,
damage, liability or action, provided that the Company will not be liable in any
such case to the extent that any such claim, loss, damage, liability or expense
arises out of or is based on written information furnished to (or material
information withheld from) the Company by such Holder or underwriter
specifically for inclusion therein or any grossly negligent or fraudulent action
or inaction of such Holder or underwriter.
(b) Each Holder will indemnify the Company, each of its directors and
officers and each underwriter, if any, of the Company's securities covered by
any registration statement filed pursuant to this Agreement, each person who
controls the Company or such underwriter within the meaning of the Securities
Act, each other Holder and each of their officers, directors and partners, and
each person controlling such other Holder, against all claims, losses, damages
and liabilities (or actions, proceedings or settlements in respect thereof)
arising out of or based on any untrue statement (or alleged untrue statement) of
a material fact contained in any prospectus, offering circular or other document
(including any related registration statement, notification or the like)
incident to any such registration, qualification or compliance, or any omission
(or alleged omission) to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, or any
violation by the Company of the Securities Act or any rule or regulation
thereunder applicable to the Company and relating to action or inaction required
of the Company in connection with any such registration, qualification or
compliance, and will reimburse the Company and such Holders, directors,
officers, partners, persons, underwriters or control persons for any legal or
any other expenses reasonably incurred in connection with investigating or
defending any such claim, loss, damage, liability or action, in each case to the
extent that such untrue statement (or alleged untrue statement), omission (or
alleged omission) or violation arises out of or is based upon written
information furnished to (or material information withheld from) the Company by
such Holder specifically for inclusion therein or any grossly negligent or
fraudulent action or inaction of such Holder.
(c) Each party entitled to indemnification under this Section 6 (the
"Indemnified Party") shall give notice in writing to the party required to
provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may be
sought, and shall permit the Indemnifying Party to assume the defense of any
such claim or any litigation resulting therefrom, provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or any
litigation
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resulting therefrom, shall be approved by the Indemnified Party (whose approval
shall not unreasonably be withheld), and the Indemnified Party may participate
in such defense at such party's expense, and provided further that the failure
of any Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Section 6. Notwithstanding the
foregoing, if the defendants in any such claim or litigation include both the
Indemnifying Party and the Indemnified Party, and counsel for the Indemnified
Party shall have reasonably concluded that in such counsel's opinion, there is a
conflict of interest involved in the representation by counsel for the
Indemnifying Party of both the Indemnified Party and the Indemnifying Party, the
Indemnified Party shall have the right to select separate counsel, reasonably
satisfactory to the Indemnifying Party, at the Indemnifying Party's expense, and
to participate in the defense of such claim or litigation on behalf of such
Indemnified Party (it being understood, however, that Indemnifying Party shall
not be obligated to pay the fees and the expenses of more than one counsel (plus
local counsel if reasonably necessary) for all parties who may be indemnified by
such Indemnifying Party with respect to such claim or litigation, unless in the
reasonable judgment of any Indemnified Party a conflict of interest exists
between such Indemnified Party and any other Indemnified Party with respect to
such matter). No Indemnifying Party, in the defense of any such claim or
litigation, shall, except with the consent of each Indemnified Party, consent to
entry of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation. An Indemnifying Party who elects not to, or who has not appointed
counsel reasonably satisfactory to the Indemnified Party within a reasonable
time to assume the defense of an action shall be obligated to pay the fees and
expenses of counsel for the Indemnified Party; provided that the Indemnifying
Party shall not be obligated to pay the fees and the expenses of more than one
counsel (plus local counsel if reasonably necessary) for all parties who may be
indemnified by such Indemnifying Party with respect to such claim or litigation,
except in the circumstances set forth in the second preceding sentence. If the
Indemnifying Party does not assume the defense of any claim or litigation, it
shall be bound by any settlement to which the Indemnified Party agrees,
irrespective of whether the Indemnifying Party consents thereto. Each
Indemnified Party shall furnish such information regarding itself or the claim
in question as an Indemnifying Party may reasonably request in writing and as
shall be reasonably required in connection with the defense of such claim and
litigation resulting therefrom.
(d) If the indemnification provided for in this Section 6 is unavailable to
an Indemnified Party in respect of any losses, claims, damages or liabilities
referred to therein, then each Indemnifying Party, in lieu of indemnifying such
Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such losses, claims, damages or liabilities in
such proportion as is appropriate to reflect the relative fault of the Company
on the one hand and the Shareholders offering securities in the offering (the
"Selling Shareholders") on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative fault of the
Company on the one hand and the Selling Shareholders on the other shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company or by the Selling
Shareholders and the parties' relevant intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Company
and the Selling Shareholders agree that it would not be just and equitable if
contribution pursuant to this Section 6(d) were based solely upon the number of
entities from whom contribution was requested or by any other method of
allocation which does not take account of the equitable considerations referred
to above in this Section 6(d). The amount paid or payable by an Indemnified
Party as a result of the losses, claims, damages and liabilities referred to
above in this Section 6(d) shall be deemed to include any legal or other
expenses reasonably incurred by such Indemnified Party in connection with
investigating or defending any such action or claim, subject to the provisions
of Section 6(d) hereof. No person guilty of fraudulent misrepresentation (within
the meaning of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
(e) Other Indemnification. Indemnification similar to that specified in
the preceding subdivisions of this Section 6 (with appropriate modifications)
shall be given by the Company and each seller of Registrable
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Securities with respect to any required registration or other qualification of
securities under any Federal or state law or regulation of any governmental
authority, other than the Securities Act.
(f) Indemnification Payments. The indemnification required by this Section
6 shall be made by periodic payments of the amount thereof during the course of
the investigation or defense, as and when bills are received or expense, loss,
damage or liability is incurred.
7. INFORMATION BY HOLDER. Each Holder of Registrable Securities shall
furnish to the Company such information regarding such Holder and the
distribution proposed by such Holder as the Company may reasonably request in
writing and as shall be reasonably required in connection with any registration,
qualification or compliance referred to in this Agreement.
8. RULE 144 REPORTING. With a view to making available the benefits of
certain rules and regulations of the Commission which may permit the sale of the
Registrable Securities to the public without registration, the Company agrees to
use its reasonable efforts to (i) make available and keep public information as
those terms are understood and defined in Rule 144 under the Securities Act and
(ii) file with the Commission in a timely manner all reports and other documents
required of the Company under the Securities Act and the Exchange Act.
9. TRANSFER OR ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the
Company to register securities granted to the Holders by the Company under
Section 3 may be transferred or assigned only (i) in the case of ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇ and the ▇▇▇▇▇▇▇▇ Family Trust, to their affiliates or to any member of
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇'▇ family or to any trust or other entity for the benefit of any
member of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇'▇ family for estate planning purposes, (ii) in the
case of Vestar/Sun Holding Company, L.L.C., to its affiliates or limited
partners, (iii) in connection with the death or disability or liquidation or
dissolution of a Holder, or (iv) as part of a bona fide gift or if at least 75%
of the Shares originally held by a Holder are transferred, sold or otherwise
disposed of to a third party (except that, in the case of such transfer, sale or
other disposition, the rights set forth in Section 3 may be assigned on one (1)
occasion only, subject in any event to the conditions set forth in Section 5
above), provided that the Company is given written notice at the time of or
within a reasonable time after said transfer or assignment, stating the name and
address of said transferee or assignee and identifying the Registrable
Securities with respect to which such registration rights are being transferred
or assigned, and provided further that the transferee or assignee of such rights
assumes the obligations of the transferring Holder under this Agreement.
10. ENTIRE AGREEMENT; AMENDMENT; WAIVER. This Agreement and the Merger
Agreement constitute the entire agreement between the parties hereto with
respect to the subject matter hereof. No amendment, alteration or modification
of this Agreement shall be valid unless in each instance such amendment,
alteration or modification is expressed in a written instrument executed by the
Company and the Holders of at least 50% of the outstanding Registrable
Securities (the "Majority Holders"); provided, however, that any amendment that
would adversely affects the Holders other than the Majority Holders shall
require the consent in writing by each other Holder. No waiver of any provision
of this Agreement shall be valid unless it is expressed in a written instrument
duly executed by the party or parties making such waiver. The failure of any
party to insist, in any one or more instances, on performance of any of the
terms and conditions of this Agreement shall not be construed as a waiver or
relinquishment of any rights granted hereunder or of the future performance of
any such term, covenant or condition but the obligation of any party with
respect thereto shall continue in full force and effect.
11. SPECIFIC PERFORMANCE. The parties hereby declare that it is
impossible to measure in money the damages which will accrue to a party hereto
by reason of a failure to perform any of the obligations under this Agreement.
Therefore, all parties hereto shall have the right to specific performance of
the obligations of the other parties under this Agreement, and if any party
hereto shall institute an action or proceeding to enforce the provisions hereof,
any person (including the Company) against whom such action or proceeding is
brought hereby waives the claim or defense therein that such party has an
adequate remedy at law, and such person shall not urge in any such action or
proceeding the claim or defense that such remedy at law exists.
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12. NOTICES. All notices and other communications required or permitted
hereunder shall be in writing and shall be mailed by first-class mail, postage
prepaid, return receipt requested, or transmitted by facsimile or delivered
either by hand, by messenger or by nationally recognized overnight courier,
addressed:
(a) if to the holders of the Registrable Securities, at the addresses
set forth on Schedules I hereto or at such other address as they shall have
furnished to the Company in writing, with a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
and:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
and:
Boies & ▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
and
(b) if to the Company, to the following address, or at such other
address as the Company shall have furnished to the holders of the
Registrable Securities and each such other holder in writing,
▇▇▇▇▇ Apparel Group, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ & Ballon LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Alternatively, to such other address as a party hereto supplies to each other
party in writing.
13. SUCCESSORS AND ASSIGNS. Subject to Section 9, all the terms and
provisions of this Agreement shall be binding upon and inure to the benefit of
and be enforceable by the respective transferees, successors and assigns of the
parties hereto, whether so expressed or not.
14. GOVERNING LAW. This Agreement is to be governed by and interpreted
under the laws of the State of New York without giving effect to the principles
of conflicts of laws thereof.
15. TITLES AND SUBTITLES. The titles of the sections of this Agreement
are for the convenience of reference only and are not to be considered in
construing this Agreement.
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16. SEVERABILITY. The invalidity or unenforceability of any provisions of
this Agreement shall not be deemed to affect the validity or enforceability of
any other provision of this Agreement.
17. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
▇▇▇▇▇ APPAREL GROUP, INC.
By:
--------------------------------------
Name:
--------------------------------------
Title:
--------------------------------------
--------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ FAMILY TRUST
--------------------------------------
--------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
VESTAR/SUN HOLDING COMPANY, L.L.C.
By:
--------------------------------------
Name:
--------------------------------------
Title:
--------------------------------------
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SCHEDULE I
SHAREHOLDERS
▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇ Family Trust
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Ms. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Vestar/Sun Holding Company, L.L.C.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
