REGISTRATION RIGHTS AGREEMENT
Exhibit
10.1
Registration
Rights Agreement
(this
“Agreement”), dated as of March 9, 2007, by and between Iconix Brand Group,
Inc., a Delaware corporation (the “Company”), and Danskin, Inc., a Delaware
corporation (“Danskin” and together with any permitted assignees of Danskin’s
rights hereunder, the “Holder”).
RECITALS
WHEREAS,
the
Company has executed an Asset Purchase Agreement dated as of February 21, 2007
(the “Purchase Agreement”), by and among Danskin, the Company and Danskin Now,
Inc., a Delaware corporation and wholly-owned subsidiary of the Holder (“Danskin
Now”), pursuant to which the Company has purchased certain assets of Danskin and
Danskin Now; and
WHEREAS,
the
Purchase Agreement provides, among other things, that the Company may issue
shares of the Company’s common stock, $.001 par value per share (the “Company
Common Stock”), to Danskin, as more fully described in the Purchase Agreement;
and
WHEREAS,
pursuant
to the Purchase Agreement, the Company has agreed that if it issues any shares
of Company Common Stock to Danskin pursuant to the Purchase Agreement, it shall
grant to the Holder the registration rights set forth below with respect to
the
shares so issued (the “Earn-Out Shares”), together with any securities issued in
exchange for or in replacement of such Earn-Out Shares, and any securities
issued by way of any stock split, reverse stock split, recapitalization, or
other similar transaction affecting such Earn-Out Shares (collectively, the
“Registrable Securities”).
NOW,
THEREFORE,
intending to be legally bound, the parties hereto agree as follows:
1. Registration.
(a) If
(i)
the License Event (as defined in the Purchase Agreement) occurs prior to
September 30, 2007 and (ii) the Company issues Earn-Out Shares as a result
thereof, then as promptly as practicable (but, except as otherwise provided
herein, not later than twenty (20) calendar days) following the issuance of
the
Earn-Out Shares, the Company shall prepare and file with the Securities and
Exchange Commission (the “Commission”), at the sole expense of the Company
(except as hereinafter provided), in respect of the aggregate number of
Registrable Securities issued pursuant to the Purchase Agreement, a registration
statement so as to permit a public offering and resale of such Registrable
Securities until,
subject to the terms and provisions of this Agreement, the earlier of the date
when (i) all the Registrable Securities covered by the registration
statement have been sold pursuant thereto or otherwise or (ii) the
Registrable Securities may be publicly sold without volume restrictions under
Rule 144(k) (or any similar provisions then in force) of the Securities Act
of
1933 as amended (the “Act”), as determined by the counsel to the Company
(collectively, the “Effectiveness Period”). The
registration statement shall be on any form the Company is eligible to use
to
register for resale the Registrable Securities. The Company shall thereafter
use
commercially reasonable efforts to cause such registration statement filed
pursuant to this Section to become effective as soon as reasonably practicable
thereafter.
(b) Subject
to the terms and conditions hereof, if any Registrable Securities are issued
after calendar year 2009 and are not registered for resale pursuant to the
registration statement described in Section 1(a), and the registration statement
described in Section 1(a) has been declared effective by the Commission, then,
within twenty (20) calendar days following the issuance of such additional
Registrable Securities, the Company shall prepare and file with the Commission,
at the sole expense of the Company (except as hereinafter provided), in respect
of the aggregate number of Registrable Securities then issued, as well as any
other Registrable Securities which may thereafter be issued, pursuant to the
Purchase Agreement but not yet registered, a registration statement so as to
permit a public offering and resale of such Registrable Securities for
the
Effectiveness Period for such Registrable Securities. In
the
event a registration statement is filed pursuant to this subparagraph (b) and
then-applicable law or then-current interpretations by the Commission’s staff
prohibit the inclusion therein of any such Registrable Securities not then
issued, then, within twenty (20) calendar days following the issuance of such
additional Registrable Securities, the Company shall prepare and file with
the
Commission, at the sole expense of the Company (except as hereinafter provided),
in respect of the aggregate number of Registrable Securities then issued
pursuant to the Purchase Agreement but not yet registered, a registration
statement so as to permit a public offering and resale of such Registrable
Securities for the Effectiveness Period for such Registrable Securities. Subject
to the terms and conditions hereof, if any Registrable Securities are thereafter
issued and are not registered for resale pursuant to any registration statement
described in this Agreement, then, within twenty (20) calendar days following
the issuance of such additional Registrable Securities, the Company shall
prepare and file with Commission, at the sole expense of the Company (except
as
hereinafter provided), in respect of the aggregate number of Registrable
Securities then issued a registration statement so as to permit a public
offering and resale of such Registrable Securities for the Effectiveness Period
for such Registrable Securities. Any such registration statement shall be on
any
form the Company is eligible to use to register for resale the Registrable
Securities. The Company shall thereafter use commercially reasonable efforts
to
cause any such registration statement filed pursuant to this Section to become
effective as soon as reasonably practicable thereafter.
(c) Notwithstanding
the foregoing, if the Company shall furnish to Holder a certificate signed
by an
officer of the Company stating that in the good faith judgment of the Board
of
Directors of the Company, because of current circumstances (including, but
not
limited to, the unavailability of financial information for an acquired business
or the Company’s most recently ended fiscal year or quarter), it would be
seriously detrimental to the Company and its shareholders for any such
registration statement to be filed and it is therefore essential to defer the
filing of such registration statement, the Company shall have the right to
defer
taking action with respect to such filing for a period of not more than
forty-five (45) days; provided, however, that the Company may not utilize this
right more than once in any twelve (12) month period.
(d) Nothing
herein contained shall require the Company or any Company subsidiary to undergo
an audit, other than in the ordinary course of business.
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2. Covenants
of the Company.
The
Company hereby covenants and agrees as follows:
(a) Not
less
than two business days prior to the filing of any registration statement
contemplated hereby or any related prospectus or any amendment or supplement
thereto, the Company shall furnish to the Holder copies of all such documents
proposed to be filed for review by the Holder and counsel to the Holder prior
to
such proposed date of filing.
(b) The
Company shall use commercially reasonable efforts to prepare and file with
the
Commission such amendments, including post-effective amendments, to any
registration statement and the prospectus used in connection therewith as may
be
necessary to cause the registration statement to become and keep the
registration statement continuously effective as to the applicable Registrable
Securities for the Effectiveness Period.
(c) The
Company shall notify the Holder as promptly as practicable: (A)(1) when a
prospectus or any prospectus supplement or post-effective amendment to any
registration statement is proposed to be filed; and (2) with respect to the
registration statement or any post-effective amendment, when the same has become
effective; (B) of any request by the Commission or any other Federal or
state governmental authority for amendments or supplements to the registration
statement or prospectus; (C) of the issuance by the Commission of any stop
order suspending the effectiveness of the registration statement covering any
or
all of the Registrable Securities or the initiation of any proceedings for
that
purpose; (D) of the receipt by the Company of any notification with respect
to the suspension of the qualification or exemption from qualification of any
of
the Registrable Securities for sale in any jurisdiction, or the initiation
or
threatening of any proceeding for such purpose; and (E) of the occurrence
of any event or passage of time that makes the financial statements included
in
the registration statement ineligible for inclusion therein or any statement
made in the registration statement or prospectus or any document incorporated
or
deemed to be incorporated therein by reference untrue in any material respect
or
that requires any revisions to the registration statement, prospectus or other
documents so that, in the case of the registration statement or the prospectus,
as the case may be, it will not contain any untrue statement of a material
fact
or omit to state any material fact required to be stated therein or necessary
to
make the statements therein, in light of the circumstances under which they
were
made, not misleading.
(d) Prior
to
any public offering of Registrable Securities, the Company shall use
commercially reasonable efforts to register or qualify or cooperate with the
Holder in connection with the registration or qualification (or exemption from
such registration or qualification) of such Registrable Securities for offer
and
resale under the securities or Blue Sky laws of such jurisdiction within the
United States reasonably requested by Holder, to keep each such registration
or
qualification (or exemption therefrom) under Section 1 hereof effective
during the Effectiveness Period and to do any and all other acts or things
necessary or advisable to enable the disposition in such jurisdictions of the
Registrable Securities covered by any registration statement; provided, that
the
Company shall not be required to qualify generally to do business in any
jurisdiction where it is not then so qualified, subject the Company to any
material tax in any such jurisdiction where it is not then so subject or file
a
general consent to service of process in any such jurisdiction.
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(e) The
Company shall cooperate with the Holder to facilitate the timely preparation
and
delivery of certificates representing Registrable Securities to be delivered
to
a transferee pursuant to any registration statement, and to enable such
Registrable Securities to be in such denominations and registered in such names
as any such persons may request.
(f) The
Company will pay all costs, fees and expenses in connection with any
registration statement filed pursuant to Section 1 hereof, including,
without limitation, all registration and filing fees, the Company’s legal and
accounting fees, printing expenses and blue sky fees and expenses; provided,
however, that the Holder shall be solely responsible for the fees of any counsel
and other experts retained by the Holder in connection with such registration
and any transfer taxes or underwriting discounts, selling commissions or selling
fees applicable to the Registrable Securities sold by the Holder pursuant
thereto.
(g) The
Company shall use commercially reasonable efforts to list the Registrable
Securities covered by such registration statement with each securities exchange
or interdealer quotation system or other market on which similar securities
of
the Company are then listed.
3. Acknowledgements
and Covenants of the Holder.
(a) The
Holder, upon receipt of notice from the Company that an event described in
Section 2(c)(B) through (E) occurred which requires a post-effective amendment
to a registration statement or a supplement to the prospectus included therein,
shall promptly discontinue the sale of Registrable Securities until the Holder
receives a copy of a supplemented or amended prospectus from the Company, which
the Company shall provide as soon as practicable after such notice. If such
event occurred during the Effectiveness Period, the Company shall use
commercially reasonable efforts to file and have declared effective any such
post-effective amendment as soon as possible.
(b) The
obligations of the Company under this Agreement with respect to the Registrable
Securities are expressly conditioned on the Holder’s furnishing to the Company
such appropriate information concerning the Holder, the Registrable Securities
and the terms of the Holder’s offering of such Registrable Securities as the
Company may reasonably request.
4. Termination
of Registration Rights.
Notwithstanding the foregoing provisions, the Company’s obligation to register
the Registrable Securities under this Agreement shall terminate as to any
particular Registrable Securities (a) when such Registrable Securities have
been sold in an offering registered under the Act; (b) when such
Registrable Securities shall have been otherwise transferred, new certificates
for them not bearing a legend restricting further transfer shall have been
delivered by the Company and subsequent public distribution of them shall not
require registration under the Act; (c) when such securities shall have ceased
to be outstanding; or (d) when a written opinion, to the effect that such
Registrable Securities may be sold without registration under the Act or
applicable state law and without restriction as to the quantity and manner
of
such sales, shall have been received from counsel for the Company.
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5. Indemnification.
(a) The
Company shall indemnify, defend and hold harmless the Holder, each of its
directors, officers, employees, and any person who controls Holder within the
meaning of Section 15 of the Act from and against any and all losses,
claims, damages and liabilities (including, without limitation, any reasonable
legal fees or other fees or expenses reasonably incurred by them in connection
with investigating or defending any such loss, claim, damage, liability or
action) caused by or arising out of any untrue statement or alleged untrue
statement of a material fact contained in any registration statement or
prospectus or any amendment or supplement thereto included therein or caused
by
or arising out of any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
in light of the circumstances in which they are made not misleading, except
insofar as such losses, claims, damages or liabilities are caused by any such
untrue statement or alleged untrue statement or omission or alleged omission
based upon information furnished or required to be furnished in writing to
the
Company by the Holder expressly for use therein; provided, however, that the
Company shall not be liable to indemnify the Holder insofar as such losses,
claims, damages, liabilities or actions are (i) caused by any such untrue
statement or omission or alleged untrue statement or omission based upon
information relating to the Holder furnished to the Company in writing by Holder
expressly for use therein, (ii) based upon Holder’s failure to provide the
Company with a material fact relating to the Holder which is required to be
included in the registration statement or necessary to make a statement in
the
registration statement not be misleading, (iii) relating to sales of
Registrable Securities by Holder to the person asserting any such losses,
claims, damages, liabilities or actions if such person was not sent or given
a
prospectus by or on behalf of the Holder, if required by law so to have been
delivered, at or prior to the written confirmation of the sale of the
Registrable Securities to such person, and if the prospectus (as so amended
or
supplemented) would have cured the defect giving rise to such losses, claims,
damages or liabilities, unless such failure is the result of noncompliance
by
the Company or (iv) based upon the Holder’s use of a prospectus during a period
when the Holder has been notified that the use of the prospectus has been
suspended. Such indemnity shall remain in full force and effect regardless
of
any investigation made by or on behalf of Holder, and any directors, officers,
participating person, or controlling person thereof, and shall survive the
transfer of such Registrable Securities by Holder. The Holder shall at the
same
time indemnify the Company, its directors, each officer signing a registration
statement and each person who controls the Company within the meaning of Section
15(d) of the Act from and against any and all losses, claims, damages and
liabilities caused by or arising out of related to the matters listed in clauses
(i) - (iv) of the first sentence of this Section 5(a) of the Company’s
indemnification to the Holder above.
(b) If
for
any reason the foregoing indemnity is unavailable, or is insufficient to hold
harmless any indemnitee, then the indemnitor shall contribute to the amount
paid
or payable by the indemnitee as a result of such losses, claims, damages,
liabilities, or expenses (i) in such proportion as is appropriate to
reflect the relative benefits received by the indemnitor on the one hand and
the
indemnitee on the other from the registration, or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, or
provides a lesser sum to the indemnitee than the amount hereinafter calculated,
in such proportion as is appropriate to reflect not only the relative benefits
received by the indemnitor on the one hand and the indemnitee on the other
but
also the relative fault of the indemnitor and the indemnitee as well as any
other relevant equitable considerations. The relative fault of the Company
and
the Holder shall be determined by reference to, among other things, whether
the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
or by the Holder and the parties’ relative intent, knowledge, access to
information, and opportunity to correct or prevent such statement or omission.
Notwithstanding the provisions of this Section 5(b), in no event shall the
Company be required to contribute any amount of any damages that the Holder
has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation.
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(c) Conduct
of Indemnification Proceedings.
Promptly after receipt by any person of any notice of any loss, claim, damage
or
liability or any action in respect of which indemnity may be sought pursuant
to
Section 5(a), such person (the “Indemnified Party”) shall, if a claim in respect
thereof is to be made against any other person for indemnification hereunder,
notify such other person (the “Indemnifying Party”) in writing of the loss,
claim, judgment, damage, liability or action; provided, however, that the
failure by the Indemnified Party to notify the Indemnifying Party shall not
relieve the Indemnifying Party from any liability which the Indemnifying Party
may have to such Indemnified Party hereunder, except and solely to the extent
the Indemnifying Party is actually prejudiced by such failure. If the
Indemnified Party is seeking indemnification with respect to any claim or action
brought against the Indemnified Party, then the Indemnifying Party shall be
entitled to participate in such claim or action, and, to the extent that it
wishes, jointly with all other Indemnifying Parties, to assume control of the
defense thereof with counsel satisfactory to the Indemnified Party. After notice
from the Indemnifying Party to the Indemnified Party of its election to assume
control of the defense of such claim or action, the Indemnifying Party shall
not
be liable to the Indemnified Party for any legal or other expenses subsequently
incurred by the Indemnified Party in connection with the defense thereof other
than reasonable costs of investigation; provided, however, that in any action
in
which both the Indemnified Party and the Indemnifying Party are named as
defendants, the Indemnified Party shall have the right to employ separate
counsel (but no more than one such separate counsel) to represent the
Indemnified Party and its controlling persons who may be subject to liability
arising out of any claim in respect of which indemnity may be sought by the
Indemnified Party against the Indemnifying Party, with the fees and expenses
of
such counsel to be paid by such Indemnifying Party if, based upon the written
opinion of counsel of such Indemnified Party, representation of both parties
by
the same counsel would be inappropriate due to actual or potential differing
interests between them. No Indemnifying Party shall, without the prior written
consent of the Indemnified Party, consent to entry of judgment or effect any
settlement of any claim or pending or threatened proceeding in respect of which
the Indemnified Party is or could have been a party and indemnity could have
been sought hereunder by such Indemnified Party, unless such judgment or
settlement includes an unconditional release of such Indemnified Party from
all
liability arising out of such claim or proceeding.
6. Governing
Law.
(a) This
Agreement shall be governed by and interpreted and enforced in accordance with
the laws of the State of New York, without giving effect to any choice of law
or
conflict of laws rules or provisions (whether of the State of New York or any
other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of New York.
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(b) Each
of
the Company and the Holder hereby irrevocably and unconditionally consents
to
submit to the exclusive jurisdiction of the courts of the State of New York
and
of the United States of America located in the County of New York, State of
New
York (the “New York Courts”) for any litigation arising out of or relating to
this Agreement and the transactions contemplated hereby (and agrees not to
commence any litigation relating thereto except in such courts), waives any
objection to the laying of venue of any such litigation in the New York Courts
and agrees not to plead or claim that such litigation brought in any New York
Courts has been brought in an inconvenient forum.
7. Notices.
All
notices, requests, demands and other communications hereunder shall be in
writing and shall be deemed duly given when delivered by hand or mailed by
express, registered or certified mail, postage prepaid, return receipt
requested, as follows:
|
If
to the Company, at:
|
|
|
Iconix
Brand Group Inc.
0000
Xxxxxxxx, 0xx
Xxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attn:
Xxxx Xxxx, CEO
|
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with
a copy of the same to:
|
|
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Blank
Rome LLP
000
Xxxxxxxxx Xxxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attn:
Xxxxxx X. Xxxxxxx, Esq.
|
|
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If
to the Holder, at:
|
|
|
Danskin,
Inc.
000
Xxxxx Xxxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attn:
Xxxxxx X. Xxxxxxxxx, Esq.
|
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with
a copy of the same to:
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Dechert,
LLP
00
Xxxxxxxxxxx Xxxxx
Xxx
Xxxx, XX 00000
Att:
Xxxxxx Xxxxx, Esq.
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or
such
other address as has been indicated by either party in accordance with a notice
duly given in accordance with the provisions of this Section.
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8. Amendment.
This
Agreement may only be amended by a written instrument executed by the Company
and the Holder.
9. Entire
Agreement.
This
Agreement constitutes the entire agreement of the parties hereto with respect
to
the subject matter hereof, and supersedes all prior agreements and
understandings of the parties, oral and written, with respect to the subject
matter hereof.
10. Assignment;
Benefits.
The
Holder may not assign it rights hereunder without the prior written consent
of
the Company.
11. Headings.
The
headings contained herein are for the sole purpose of convenience of reference,
and shall not in any way limit or affect the meaning or interpretation of any
of
the terms or provisions of this Agreement.
12. Severability.
Any
provision of this Agreement which is held by a court of competent jurisdiction
to be prohibited or unenforceable in any jurisdiction(s) shall be, as to such
jurisdiction(s), ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this Agreement
or affecting the validity or enforceability of such provision in any other
jurisdiction.
13. Execution
in Counterparts.
This
Agreement may be executed in counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
document.
[SIGNATURE
PAGE FOLLOWS]
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IN
WITNESS WHEREOF, this Agreement has been executed and delivered by the parties
hereto on the date first above written.
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| By: | /s/ Xxxx Xxxx | |
| Name: |
Xxxx
Xxxx
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| Title: | President and CEO | |
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DANSKIN,
INC.
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| By: | /s/ Xxxxxx Xxxxxxx | |
| Name: |
Xxxxxx
Xxxxxxx
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| Title: | Chairman | |
[SIGNATURE
PAGE TO REGISTRATION RIGHTS AGREEMENT]
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