REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of September 22, 1997,
(the "Agreement") by and between Danskin Investors, LLC, a Delaware limited
liability company (the "Buyer") and Danskin, Inc., a Delaware corporation (the
"Company").
WHEREAS, the Buyer and the Company have entered into a
Securities Purchase Agreement (the "Securities Purchase Agreement") dated as of
the date hereof pursuant to which the Buyer has agreed to purchase, subject to
the terms and conditions contained therein, securities of the Company, which
securities are exchangeable or exercisable for or convertible into shares of
Common Stock of the Company; and
WHEREAS, it is a condition precedent to the purchase of such
securities that the Company provide for the registration of the Common Stock of
the Company issuable on the exchange, exercise or conversion of the purchased
securities.
NOW, THEREFORE, in consideration on the foregoing premises and
for other good and valuable consideration, the adequacy and receipt of which are
hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE I.
DEFINITIONS
SECTION 1.1. Definitions. The following terms shall have the
meanings ascribed to them below:
"Commission" means the United States Securities and Exchange
Commission, or any other federal agency at the time administering the Securities
Act.
"Common Stock" means the common stock, par value $.01 per
share, of Danskin, Inc., as it may exist from time to time.
"Convertible Preferred Stock" means the Company's Series D
Cumulative Convertible Preferred Stock.
"Demand Registration" means a Demand Registration as defined
in Section 2.1.
"Exchange Act" means the Securities Exchange Act of 1934 or
any similar Federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Holder" means any person who now holds or shall hereafter
acquire and hold Registrable Securities.
"Investor Preferred Stock" means the Company's Series C
Convertible Preferred Stock.
"Note" means the $15,000,000 promissory note of the Company
issued to the Buyer pursuant to the Securities Purchase Agreement.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or other agency or political subdivision thereof.
"Piggy-Back Registration" means a Piggy-Back Registration as
defined in Section 2.2.
"Prospectus" means the prospectus included in any Registration
Statement (including without limitation, a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the securities covered by such Registration
Statement, and all other amendments and supplements to the prospectus, including
post-effective amendments, and all material incorporated by reference or deemed
to be incorporated by reference in such prospectus.
"Registrable Securities" means (a) the shares of Common Stock
issued or issuable upon conversion of the Convertible Preferred Stock, (b) the
shares of Common Stock issued or issuable upon conversion of the Investor
Preferred Stock, (c) the shares of Common Stock issued to the Buyer pursuant to
the Rights Offering, (d) the shares of Common Stock issued or issuable upon
exercise of the Warrant and (e) the shares of Common Stock issued or issuable
upon conversion of the Note, in each case until (i) a Registration Statement
covering such shares of Common Stock has been declared effective by the
Commission and such shares of Common Stock have been disposed of pursuant to
such effective Registration Statement, or (ii) such shares of Common Stock are
sold under circumstances in which all of the applicable conditions of Rule 144
(or any similar provisions then in force) under the Securities Act are met, or
(iii) such shares of Common Stock have been otherwise transferred and the
Company has delivered a new certificate or other evidence of ownership for such
Common Stock not bearing a restrictive legend and not subject to any stop order
and such Common Stock may be resold by the person receiving such certificate
without complying with the registration requirements of the Securities Act.
"Registration Statement" means any registration statement of
the Company which covers any of the Registrable Securities pursuant to the
provisions of this Agreement, including
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the Prospectus, amendments and supplements to such Registration Statement,
including post-effective amendments, all exhibits and all material incorporated
by reference in such Registration Statement.
"Rights Offering" means the offer by the Company to its
stockholders of the right to subscribe for Common Stock with respect to each
share of Common Stock owned by such stockholders as contemplated by the
Securities Purchase Agreement.
"Securities Act" means the Securities Act of 1933 or any
similar Federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Selling Holder" means a Holder who is selling Registrable
Securities pursuant to a Registration Statement under the Securities Act.
"Underwriter" means a securities dealer who purchases any
Registrable Securities as principal in an underwritten offering and not as part
of such dealer's market-making activities.
"Warrant" means that certain common stock purchase warrant
exercisable at $.30 per share of Common Stock issued to the Buyer pursuant to
the Securities Purchase Agreement.
ARTICLE II.
REGISTRATION RIGHTS
SECTION 2.1. Demand Registration.
(a) Request for Registration. At any time and from time to
time any Holder or Holders may make written requests (individually, a "Request")
on the Company for the registration of the offer and sale of the Registrable
Securities under the Securities Act (such registration being hereinafter
referred to as a "Demand Registration"). The Company shall not effect Demand
Registrations on Forms S-1 or S-2 (or any substitute form that may be adopted by
the Commission) unless (i) the Request is made by Holders who, alone or together
with other Holders making the Request, hold in the aggregate not less than 6.5%
of the outstanding Registrable Securities (on a fully diluted basis) and (ii)
the minimum offered amount of Registrable Securities shall be at least
$1,000,000. Subject to the penultimate sentence of Section 2.1(b), the Company
shall have no obligation to effect more than two Demand Registrations on Form
S-1 or S-2 (or any substitute form that may be adopted by the Commission);
provided, further, that the Company shall not be required to effect a Demand
Registration on Form S-3 unless (i) the Request is made by Holders who, alone or
together with other Holders making the Request, hold in the aggregate not less
than 6.5% of the outstanding Registrable Securities (on a fully diluted basis)
and (ii) the minimum offered amount of Registrable Securities thereunder shall
be at least $500,000 and the Company shall not be required to effect more than
two Demand Registrations on Form S-3 in any twelve month period.
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Any Request will specify the number of Registrable Securities proposed to be
sold and the intended method(s) of disposition thereof and shall also state the
firm intent of the Holder to offer Registrable Securities for sale. The Company
shall give written notice of such Request within 10 days after the receipt
thereof to all other Holders. Within 20 days after receipt of such notice by any
such Holder, such Holder may request in writing that all or any portion of its
Registrable Securities be included in such Registration Statement and the
Company shall include in the Registration Statement for such Demand Registration
the Registrable Securities of all Holders that requested to be so included. Each
such request by such other Holders shall specify the number of Registrable
Securities proposed to be sold and the intended method(s) of disposition thereof
and shall also state the firm intent of the Holder to offer Registrable
Securities for sale.
(b) Effective Registration. A registration will not be deemed
to have been effected as a Demand Registration unless the Registration Statement
relating thereto has been declared effective by the Commission and the Company
has complied in all material respects with its obligations under this Agreement
with respect thereto; provided that if, after the Registration Statement has
become effective, the offering and/or sale of Registrable Securities pursuant to
such Registration Statement is or becomes the subject of any stop order,
injunction or other order or requirement of the Commission or any other
governmental or administrative agency, or if any court prevents or otherwise
limits the offer and/or sale of the Registrable Securities pursuant to the
Registration Statement, other than in each case primarily as a result of acts or
omissions of the Holder or any agent thereof, such registration will be deemed
not to have been effected. If (i) a registration requested pursuant to this
Section 2.1 is deemed not to have been effected or (ii) the Registration
Statement relating to a Demand Registration requested pursuant to this Section
2.1 does not remain effective for a period of at least 120 days beyond the
effective date thereof or, with respect to an underwritten offering of
Registrable Securities, until 45 days after the commencement of the distribution
by the Holders of the Registrable Securities included in such Registration
Statement, then the Company shall continue to be obligated to effect such
Registration pursuant to this Section 2.1. The Holders shall be permitted to
withdraw all or any part of the Registrable Securities from a Registration
Statement at any time prior to the effective date of such Demand Registration
Statement; provided that in the event of such withdrawal, such Holders shall be
responsible for the fees and expenses referred to in Section 3.2(viii) hereof
incurred by such Holders with respect to such Demand Registration prior to such
withdrawal.
(c) Selection of Underwriter. If the Holders of a majority of
the Registrable Securities participating in a Demand Registration so elect, the
offering of such Registrable Securities pursuant to such Demand Registration
shall be in the form of an underwritten offering. The Holders making such Demand
Registration shall select one or more nationally recognized firms of investment
bankers to act as the lead managing Underwriter or Underwriters in connection
with such offering and shall select any additional investment bankers and
managers to be used in connection with the offering; provided that such
Underwriter or Underwriters are reasonably acceptable to the Company.
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SECTION 2.2. Piggy-Back Registration. If at any time the
Company proposes to file a Registration Statement under the Securities Act with
respect to an offering by the Company for its own account or for the account of
any of its respective security holders (other than (x) a Registration Statement
on Form S-4 or S-8 (or any substitute form that may be adopted by the
Commission), (y) a Registration Statement pursuant to a Demand Registration
pursuant to Section 2.1 or (z) the Registration Statement relating to the Rights
Offering), then the Company shall give written notice of such proposed filing to
the Holders as soon as practicable (but in no event less than 30 days before the
anticipated filing date), and such notice shall offer such Holders the
opportunity to register such number of Registrable Securities as each such
Holder may request (which request shall specify the Registrable Securities
intended to be disposed of by such Holder and the intended method(s) of
distribution thereof and shall also state the firm intent of the Holder to offer
Registrable Securities for sale) (a "Piggy-Back Registration"). The Company
shall use all reasonable efforts to cause the managing Underwriter or
Underwriters of a proposed underwritten offering to permit the Registrable
Securities requested to be included in a Piggy-Back Registration to be included
on the same terms and conditions as any similar securities of the Company or any
other security holder included therein and to permit the sale or other
disposition of such Registrable Securities in accordance with the intended
method of distribution thereof. Any Holder shall have the right to withdraw its
request for inclusion of its Registrable Securities in any Registration
Statement pursuant to this Section 2.2 by giving written notice to the Company
of its request to withdraw, provided that in the event of such withdrawal (other
than pursuant to Section 2.3(c) hereof), such Holder shall be responsible for
the fees and expenses referred to in Section 3.2(viii) hereof incurred by such
Holder prior to such withdrawal relating to such Registration Statement. The
Company may withdraw a Piggy-Back Registration at any time prior to the time it
becomes effective.
No registration effected under this Section 2.2, and no
failure to effect a registration under this Section 2.2, shall relieve the
Company of its obligation to effect a registration upon the request of Holders
pursuant to Section 2.1, and no failure to effect a registration under this
Section 2.2 and to complete the sale of Registrable Securities in connection
therewith shall relieve the Company of any other obligation under this Agreement
(including, without limitation, the Company's obligations under Sections 3.2 and
4.1).
SECTION 2.3. Reduction of Offering.
(a) Demand Registration. The Company may include in a Demand
Registration pursuant to Section 2.1 securities of the same class as the
Registrable Securities for the account of the Company and any other Persons who
hold securities of the same class as the Registrable Securities on the same
terms and conditions as the Registrable Securities to be included therein;
provided, however, that (i) if the managing Underwriter or Underwriters of any
underwritten offering described in Section 2.1 have informed the Company in
writing that it is their opinion that the total number of Registrable
Securities, and securities of the same class as the Registrable Securities which
Holders, the Company and any other Persons desiring to participate in such
registration intend to include in such offering is such as to materially and
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adversely affect the success of such offering, then the number of shares to be
offered for the account of the Company and for the account of all such other
Persons (other than the Holders) participating in such registration shall be
reduced or limited pro rata in proportion to the respective number of shares
requested to be registered to the extent necessary to reduce the total number of
shares requested to be included in such offering to the number of shares, if
any, recommended by such managing Underwriter or Underwriters, and (ii) if the
offering is not underwritten, no other Person, including the Company, shall be
permitted to offer securities under any such Demand Registration unless the
Holders of a majority of the Registrable Securities participating in the
offering consent to the inclusion of such shares therein.
(b) Piggy-Back Registration. (i) Notwithstanding anything
contained herein, if the managing Underwriter or Underwriters of any
underwritten offering described in Section 2.2 have informed, in writing, the
Holders requesting inclusion in such offering that it is their opinion that the
total number of shares which the Company, Holders and any other Persons holding
securities of the same class as the Registrable Securities desiring to
participate in such registration intend to include in such offering is such as
to materially and adversely affect the success of such offering, then, the
number of shares to be offered shall be reduced or limited in the following
order of priority: first, the number of shares to be offered by all other
holders of securities of the same class as the Registrable Securities other than
the Holders or other holders who demanded such registration ("Demand Holders")
to the extent necessary to reduce the total number of shares as recommended by
such managing Underwriter or Underwriters; and second, if further reduction or
limitation is required, the number of shares to be offered for the account of
the Holders shall be reduced or limited on a pro rata basis in proportion to the
relative number of Registrable Securities of the Holders participating in such
registration.
(ii) If the managing Underwriter or Underwriters of
any underwritten offering described in Section 2.2 notify the Holders requesting
inclusion in such offering that the kind of securities that the Holders, the
Company and any other Persons desiring to participate in such registration
intend to include in such offering is such as to materially and adversely affect
the success of such offering, (x) the Registrable Securities to be included in
such offering shall be reduced as described in clause (i) above or (y) if such
reduction would, in the judgment of the managing Underwriter or Underwriters, be
insufficient to substantially eliminate the adverse effect that inclusion of the
Registrable Securities requested to be included would have on such offering,
such Registrable Securities will be excluded from such offering.
(c) If, as a result of the proration provisions of this
Section 2.3, any Holder shall not be entitled to include all Registrable
Securities in a Demand Registration or Piggy-Back Registration that such Holder
has requested to be included, such Holder may elect to withdraw his request to
include Registrable Securities in such registration.
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ARTICLE III.
REGISTRATION PROCEDURES
SECTION 3.1. Filings; Information. Whenever the Company is
required to effect or cause the registration of the offer and sale of
Registrable Securities pursuant to Section 2.1 or 2.2 hereof, the Company will
use its best efforts to effect the registration of the offer and the sale of
such Registrable Securities in accordance with the intended method(s) of
disposition thereof as quickly as practicable, and in connection with any such
request:
(a) The Company promptly will prepare and file with the
Commission a Registration Statement with respect to the offer and sale of such
securities and use its best efforts to cause such Registration Statement to
become and remain effective until the completion of the distribution
contemplated thereby; provided, however, the Company shall not be required to
keep such Registration Statement effective for more than 120 days (or such
shorter period which will terminate when all Registrable Securities covered by
such Registration Statement have been sold, but not prior to the expiration of
the applicable period referred to in Section 4(3) of the Securities Act and Rule
174 thereunder, if applicable).
(b) The Company promptly will prepare and file with the
Commission such amendments and post-effective amendments to the Registration
Statement as may be necessary to keep such Registration Statement effective for
as long as such registration is required to remain effective pursuant to the
terms hereof; cause the Prospectus to be supplemented by any required Prospectus
supplement, and, as so supplemented, to be filed pursuant to Rule 424 under the
Securities Act; and comply with the provisions of the Securities Act applicable
to it with respect to the disposition of all Registrable Securities covered by
such Registration Statement during the applicable period in accordance with the
intended methods of disposition by the Selling Holders set forth in such
Registration Statement or supplement to the Prospectus.
(c) The Company, at least ten (10) days prior to filing a
Registration Statement or at least five (5) days prior to filing a Prospectus or
any amendment or supplement to such Registration Statement or Prospectus, will
furnish to (i) each Selling Holder, (ii) not more than one counsel representing
all Selling Holders, to be selected by a majority-in-interest of such Selling
Holders, and (iii) each Underwriter, if any, of the Registrable Securities
covered by such Registration Statement copies of such Registration Statement as
proposed to be filed, together with exhibits thereto, which documents will be
subject to review and approval by each of the foregoing within five (5) days
after delivery (except that such review and approval of any Prospectus or any
amendment or supplement to such Registration Statement or Prospectus must be
within three (3) days after delivery), and thereafter, furnish to such Selling
Holders, counsel and Underwriters, if any, for their review and comment such
number of copies of such Registration Statement, each amendment and supplement
thereto (in each case including all exhibits thereto and documents incorporated
by reference therein), the Prospectus included in such Registration Statement
(including each preliminary Prospectus) and such other documents or information
as such Selling Holders, counsel or Underwriters may reasonably request in order
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to facilitate the disposition of the Registrable Securities; provided, however,
that notwithstanding the foregoing, if the Company intends to file any
Prospectus, Prospectus supplement or Prospectus sticker which does not make any
material changes in the documents already filed (including, without limitation,
any Prospectus under Rule 430A or 424(b)), then the counsel for the Selling
Holders will be afforded such opportunity to review such documents prior to
filing consistent with the time constraints involved in filing such document,
but in any event no less than one day.
(d) The Company promptly will notify each Selling Holder of
(and in any event within 24 hours of the receipt of) any stop order issued or
threatened by the Commission and take all reasonable actions required to prevent
the entry of such stop order or to remove it at the earliest possible moment if
entered.
(e) On or prior to the date on which the Registration
Statement is declared effective by the Commission, the Company will use all
reasonable efforts to (i) register or qualify the Registrable Securities under
such other securities or blue sky laws of such jurisdictions in the United
States as any Selling Holder reasonably (in light of such Selling Holder's
intended plan of distribution) requests, and (ii) file documents required to
register such Registrable Securities with or approved by such other governmental
agencies or authorities in the United States as may be necessary by virtue of
the business and operations of the Company and do any and all other acts and
things that may be reasonably necessary or advisable to enable such Selling
Holder to consummate the disposition of the Registrable Securities owned by such
Selling Holder; provided that the Company will not be required to (A) qualify
generally to do business in any jurisdiction where it would not otherwise be
required to qualify but for this paragraph (e), (B) subject itself to taxation
in any such jurisdiction or (C) consent to general service of process in any
such jurisdiction.
(f) The Company will notify each Selling Holder, Selling
Holders' counsel and any Underwriter promptly (and in any event within 24 hours)
and (if requested by any such Person) confirm such notice in writing, (i) when a
Prospectus or any Prospectus supplement or post-effective amendment has been
filed and, with respect to a Registration Statement or any post-effective
amendment, when the same has become effective, (ii) of any request by the
Commission or any other federal or state governmental authority for amendments
or supplements to a Registration Statement or Prospectus or for additional
information to be included in any Registration Statement or Prospectus or
otherwise, (iii) of the issuance by the Commission of any stop order suspending
the effectiveness of a Registration Statement or the initiation or threatening
of any proceedings for that purpose, (iv) of the issuance by any state
securities commission or other regulatory authority of any order suspending the
qualification or exemption from qualification of any of the Registrable
Securities under state securities or "blue sky" laws or the initiation of any
proceedings for that purpose, and (v) of the happening of any event which makes
any statement made in a Registration Statement or related Prospectus or any
document incorporated or deemed to be incorporated by reference therein untrue
or which requires the making of any changes in such Registration Statement,
Prospectus or documents so that they will
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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
in the Registration Statement and Prospectus not misleading in light of the
circumstances in which they were made; and, as promptly as practicable
thereafter, prepare and file with the Commission and furnish a supplement or
amendment to such Prospectus so that, as thereafter deliverable to the Buyers of
such Registrable Securities, such Prospectus will not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading.
(g) The Company will make generally available an earnings
statement satisfying the provisions of Section 11(a) of the Securities Act no
later than 90 days after the end of the 12-month period beginning with the first
day of the Company's first fiscal quarter commencing after the effective date of
a Registration Statement, which earnings statement shall cover said 12-month
period, and which requirement will be deemed to be satisfied if the Company
timely files complete and accurate information on Forms 10-Q, 10-K and 8-K under
the Securities Exchange Act of 1934, as amended (the "Exchange Act") and
otherwise complies with Rule 158 under the Securities Act.
(h) If requested by the managing Underwriter or Underwriters,
Selling Holders' counsel, or any Selling Holder, the Company will, unless
otherwise advised by counsel, promptly incorporate in a Prospectus supplement or
post-effective amendment such information as the managing Underwriter or
Underwriters requests, or Selling Holders' counsel requests, to be included
therein, including, without limitation, with respect to the Registrable
Securities being sold by such Selling Holder to such Underwriter or
Underwriters, the purchase price being paid therefor by such Underwriter or
Underwriters and with respect to any other terms of the underwritten offering of
the Registrable Securities to be sold in such offering, and promptly make all
required filings of such Prospectus supplement or post-effective amendment.
(i) The Company will enter into customary agreements
reasonably satisfactory to the Company (including, if applicable, an
underwriting agreement in customary form and which is reasonably satisfactory to
the Company) and take such other actions as are reasonably required in order to
expedite or facilitate the disposition of such Registrable Securities (the
Selling Holders, at their option, may require that any or all of the
representations, warranties and covenants of the Company to or for the benefit
of such Underwriters also be made to and for the benefit of such Selling
Holders).
(j) The Company will make available to each Selling Holder
(and will deliver to their counsel) and each Underwriter, if any, subject to
restrictions imposed by the United States federal government or any agency or
instrumentality thereof, copies of all correspondence between the Commission and
the Company, its counsel or auditors and will also make available for inspection
at reasonable times at the Company's offices by any Selling Holder of such
Registrable Securities, any Underwriter participating in any disposition
pursuant to such Registration Statement and any attorney, accountant or other
professional retained by any such
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Selling Holder or Underwriter (collectively, the "Inspectors"), all financial
and other records, pertinent corporate documents and properties of the Company
as shall be reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company's officers and employees to supply all
information reasonably requested by any Inspectors in connection with such
registration statement.
(k) In connection with an underwritten offering, the Company
will participate, to the extent reasonably requested by the managing Underwriter
or Underwriters for the offering or the Selling Holders, in customary efforts to
sell the securities under the offering, including, without limitation,
participating in "road shows"; provided that the Company shall not be obligated
to participate in more than two such selling efforts in any 12-month period.
(l) The Company, during the period when the Prospectus is
required to be delivered under the Securities Act, promptly will file all
documents required to be filed with the Commission pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act.
(m) The Company will use all reasonable efforts to obtain a
cold comfort letter from the Company's independent public accountants in
customary form and covering such matters of the type customarily covered by cold
comfort letters, as the Selling Holders may request.
The Company may require each Selling Holder to promptly
furnish in writing to the Company such information regarding the distribution of
the Registrable Securities as the Company may from time to time reasonably
request and such other information as may be legally required in connection with
such registration including, without limitation, all such information as may be
requested by the Commission or the National Association of Securities Dealers,
Inc. The Company may exclude from such Registration Statement any Holder who
fails to provide such information.
Each Selling Holder agrees that, upon receipt of any notice
from the Company of the happening of any event of the kind described in Section
3.1(f) hereof, such Selling Holder will forthwith discontinue disposition of
Registrable Securities pursuant to the Registration Statement covering such
Registrable Securities until such Selling Holder's receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 3.1(f) hereof, and,
if so directed by the Company, such Selling Holder will deliver to the Company
all copies, other than permanent file copies then in such Selling Holder's
possession, of the most recent prospectus covering such Registrable Securities
at the time of receipt of such notice. In the event the Company shall give such
notice, the Company shall extend the period during which such Registration
Statement shall be maintained effective (including the period referred to in
Section 3.1(a) hereof) by the number of days during the period from and
including the date of the giving of notice pursuant to Section 3.1(f) hereof to
the date when the Company shall make available to the Selling Holders covered by
such Registration Statement a Prospectus supplemented or amended to conform with
the requirements of Section 3.1(f) hereof.
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SECTION 3.2. Registration Expenses. The Company shall pay all
expenses incident to the Company's performance of or compliance with this
Agreement including, without limitation: (i) all registration and filing fees,
(ii) the fees and expenses of compliance with securities or blue sky laws
(including fees and disbursements of counsel in connection with blue sky
qualifications of the Registrable Securities), (iii) all printing, messenger and
delivery expenses, (iv) the Company's internal expenses (including, without
limitation, all salaries and expenses of its officers and employees performing
legal or accounting duties), (v) the fees and expenses incurred in connection
with the listing or quotation, as appropriate, of the Registrable Securities,
(vi) the fees and disbursements of counsel for the Company and the fees and
expenses for independent certified public accountants retained by the Company
(including the expenses of any special audit or cold comfort letters), (vii) the
fees and expenses of any special experts retained by the Company in connection
with such registration, and (viii) the fees and expenses of one firm of counsel
for the Selling Holders. The Company shall have no obligation to pay any
underwriting fees, discounts or commissions attributable to the sale of
Registrable Securities and any of the expenses incurred by Selling Holders which
are not payable by the Company, such costs to be borne by the Selling Holder or
Selling Holders.
ARTICLE IV.
INDEMNIFICATION AND CONTRIBUTION
SECTION 4.1. Indemnification by the Company. The Company
agrees to indemnify and hold harmless, to the fullest extent permitted by law,
each Selling Holder, its partners, officers, directors, employees and agents,
and each Person, if any, who controls such Selling Holder within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, together
with the partners, officers, directors, employees and agents of such controlling
Person (collectively, the "Controlling Persons"), from and against any loss,
claim, damage, liability, attorneys' fees, cost or expense and costs and
expenses of investigating and defending any such claim (collectively, the
"Damages") and any action in respect thereof to which such Selling Holder, its
partners, officers, directors, employees and agents, and any such Controlling
Person may become subject under the Securities Act or otherwise, insofar as such
Damages (or proceedings in respect thereof) arise out of, or are based upon, any
untrue statement or alleged untrue statement of a material fact contained in any
Registration Statement or Prospectus or any preliminary Prospectus, or arise out
of, or are based upon, 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 in light of the circumstances in which they were made,
except insofar as the same are based upon information furnished in writing to
the Company by a Selling Holder expressly for use therein, and shall reimburse
each Selling Holder, its partners, officers, directors, employees and agents,
and each such Controlling Person for any legal and other expenses reasonably
incurred by that Selling Holder, its partners, officers, directors, employees
and agents, or any such Controlling Person in investigating or defending or
preparing to defend against any such Damages or proceedings; provided, however,
that the Company shall not be liable to any Holder or other indemnitee to the
extent that any such Damages arise out of
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or are based upon an untrue statement or omission made in any preliminary
prospectus if (i) such Holder failed to send or deliver a copy of the final
Prospectus with or prior to the delivery of written confirmation of the sale by
such Holder to the Person asserting the claim from which such Damages arise, and
(ii) the final prospectus would have corrected such untrue statement or such
omission; and provided further, however, that the Company shall not be liable in
any such case to the extent that any such Damages arise out of or are based upon
an untrue statement or omission in any Prospectus if (x) such untrue statement
or omission is corrected in an amendment or supplement to such Prospectus, (y)
having previously been furnished by or on behalf of the Company with copies of
such Prospectus as so amended or supplemented, and (z) after being notified by
the Company pursuant to Section 3.1(f) hereof of the happening of any event
which would make any statement in the Registration Statement or related
Prospectus or any document incorporated or deemed to be incorporated by
reference therein untrue or misleading, the Holder continues to offer for sale
the Registrable Securities pursuant to the Registration Statement or Prospectus
which is the subject of such notice, such Holder thereafter fails to deliver
such Prospectus as so amended or supplemented prior to or concurrently with the
sale of a Registrable Security to the Person asserting the claim from which such
Damages arise; provided further, that the Company shall not be liable in any
case to the extent that any such Damages arise out of or are based upon an
untrue statement or omission in any Prospectus, even if an amended and corrected
Prospectus is not furnished to the Holder, but only to the extent that the
Holder, after being notified by the Company pursuant to Section 3.1(f) hereof,
continues to use such Prospectus and in such case and to the extent of, and with
respect to, Damages which arise after the Holder receives the Section 3.1(f)
notice. The Company also agrees to indemnify any Underwriters of the Registrable
Securities, their officers and directors and each Person who controls such
Underwriters on substantially the same basis as that of the indemnification of
the Selling Holders provided in this Section 4.1.
SECTION 4.2. Indemnification by Selling Holders. Each Selling
Holder agrees, severally but not jointly, to indemnify and hold harmless the
Company, its officers, directors, employees and agents and each Person, if any,
who controls the Company within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act, together with the partners, officers,
directors, employees and agents of such controlling Person, to the same extent
as the foregoing indemnity from the Company to such Selling Holder, but only
with reference to information related to such Selling Holder, or its plan of
distribution, furnished in writing by such Selling Holder expressly for use in
any Registration Statement or Prospectus, or any amendment or supplement
thereto, or any preliminary Prospectus. In case any action or proceeding shall
be brought against the Company or its officers, directors, employees or agents
or any such controlling Person or its officers, directors, employees or agents,
in respect of which indemnity may be sought against such Selling Holder, such
Selling Holder shall have the rights and duties given to the Company, and the
Company or its officers, directors, employees or agents, or such controlling
Person, or its officers, directors, employees or agents, shall have the rights
and duties given to such Selling Holder, by the preceding paragraph. Each
Selling Holder also agrees to indemnify and hold harmless any Underwriters of
the Registrable Securities, their
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officers and directors and each Person who controls such Underwriters on
substantially the same basis as that of the indemnification of the Company
provided in this Section 4.2.
SECTION 4.3. Conduct of Indemnification Proceedings. Promptly
after receipt by any person in respect of which indemnity may be sought pursuant
to Section 4.1 or 4.2 (an "Indemnified Party") of notice of any claim or the
commencement of any action, the Indemnified Party shall, if a claim in respect
thereof is to be made against the Person against whom such indemnity may be
sought (an "Indemnifying Party"), notify the Indemnifying Party in writing of
the claim or the commencement of such action; provided that the failure to
notify the Indemnifying Party shall not relieve it from any liability which it
may have to an Indemnified Party otherwise than under Section 4.1 or 4.2 except
to the extent of any actual prejudice resulting therefrom. If any such claim or
action shall be brought against an Indemnified Party, and it shall notify the
Indemnifying Party thereof, the Indemnifying Party shall be entitled to
participate therein, and, to the extent that it wishes, jointly with any other
similarly notified Indemnifying Party, to assume the defense thereof with
counsel reasonably satisfactory to the Indemnified Party. After notice from the
Indemnifying Party to the Indemnified Party of its election to assume 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 that the Indemnified Party shall
have the right to employ 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, but the fees and expenses of such counsel shall be for the
account of such Indemnified Party unless (i) the Indemnifying Party and the
Indemnified Party shall have mutually agreed to the retention of such counsel or
(ii) in the opinion of counsel to such Indemnified Party, representation of both
parties by the same counsel would be inappropriate due to actual or potential
conflicts of interest between them, it being understood, however, that the
Indemnifying Party shall not, in connection with any one such claim or action or
separate but substantially similar or related claims or actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of attorneys
(together with appropriate local counsel) at any time for all Indemnified
Parties. No Indemnifying Party shall, without the prior written consent of the
Indemnified Party, 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 settlement includes an unconditional release of such Indemnified
Party from all liability arising out of such claim or proceeding. Whether or not
the defense of any claim or action is assumed by the Indemnifying Party, such
Indemnifying Party will not be subject to any liability for any settlement made
without its consent, which consent will not be unreasonably withheld.
SECTION 4.4. Contribution. If the indemnification provided for
in this Article 4 is unavailable to the Indemnified Parties in respect of any
Damages referred to herein, then each Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall contribute to
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the amount paid or payable by such Indemnified Party as a result of such Damages
in such proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Selling Holders on the other from the
offering of the Registrable Securities, or if such allocation is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits but also the relative fault of the Company on the one hand and
the Selling Holders on the other in connection with the statements or omissions
which resulted in such Damages, as well as any other relevant equitable
considerations. The relative fault of the Company on the one hand and of each
Selling Holder on the other 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 such party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Selling Holders agree that it would not be
just and equitable if contribution pursuant to this Section 4.4 were determined
by pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an Indemnified Party as a result of the
Damages referred to in the immediately preceding paragraph shall be deemed to
include, subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such Indemnified Party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 4.4, no Selling Holder shall be required to contribute any amount in
excess of the amount by which the total price at which the Registrable
Securities of such Selling Holder were offered to the public exceeds the amount
of any damages which such Selling Holder has otherwise paid 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 Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation. Each Selling Holder's
obligations to contribute pursuant to this Section 4.4 is several in the
proportion that the proceeds of the offering received by such Selling Holder
bears to the total proceeds of the offering received by all the Selling Holders
and not joint.
ARTICLE V.
MISCELLANEOUS
SECTION 5.1. Participation in Underwritten Registrations. No
Person may participate in any underwritten registration hereunder unless such
Person (a) agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved by the Persons entitled hereunder to approve
such arrangements, and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements and these
registration rights.
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SECTION 5.2. Rule 144. The Company agrees and will use its
best efforts to file any reports required to be filed by it under the Securities
Act and the Exchange Act and that it will take such further action as any Holder
may reasonably request, all to the extent required from time to time to enable
Holders to sell Registrable Securities without registration under the Securities
Act within the limitation of the exemptions provided by (a) Rule 144 under the
Securities Act, as such Rules may be amended from time to time, or (b) any
similar rule or regulation hereafter adopted by the Commission. Upon the request
of any Holder, the Company will deliver to such Holder a written statement as to
whether it has complied with such requirements.
SECTION 5.3. Amendment and Modification. Any provision of this
Agreement may be waived, provided that such waiver is set forth in a writing
executed by the party against whom the enforcement of such waiver is sought.
This Agreement may not be amended, modified or supplemented other than by a
written instrument signed by Holders of a majority of the Registrable
Securities; provided, however, that without the consent of all the Holders, no
amendment or modification which materially and adversely affects the ability of
such Holders to have the offer and sale of securities registered hereunder may
be effected. No course of dealing between or among any Persons having any
interest in this Agreement will be deemed effective to modify, amend or
discharge any part of this Agreement or any rights or obligations of any Person
under or by reason of this Agreement.
SECTION 5.4. Successors and Assigns; Third Party
Beneficiaries; Entire Agreement. This Agreement and all of the provisions hereof
shall be binding upon and inure to the benefit of the parties hereto, each
subsequent Holder and their respective successors and assigns and executors,
administrators and heirs. Holders are intended third party beneficiaries of this
Agreement and this Agreement may be enforced by such Holders. This Agreement
sets forth the entire agreement and understanding between the parties as to the
subject matter hereof and merges and supersedes all prior discussions,
agreements and understandings of any and every nature among them.
SECTION 5.5. Headings. Subject headings are included for
convenience only and shall not affect the interpretation of any provisions of
this Agreement.
SECTION 5.6. Notices. Any notice, demand, request, waiver, or
other communication under this Agreement shall be in writing and shall be deemed
to have been duly given on the date of service if personally served or sent by
telecopy, on the business day after notice is delivered to a courier or mailed
by express mail if sent by courier delivery service or express mail for next day
delivery and on the third day after mailing if mailed to the party to whom
notice is to be given, by first class mail, registered, return receipt
requested, postage prepaid and addressed as follows:
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If to the Company to:
Chief Executive Officer
Danskin, Inc.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx
Fax: (000) 000-0000
Phone: (000) 000-0000
with a copy to:
Xxxxxx X. Xxxxxxxxxxx III, Esq.
Xxxxxx, Xxxxx & Bockius
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
Phone: (000) 000-0000
If to the Buyer or the Holder, to the Holder at the most
current address given by such Holder to the Company in
writing, and to:
Xxxxxx Xxxxxxxxx
Danskin Investors, LLC
c/o Onyx Partners, Inc.
0000 Xxxxxxxx Xxxx.
Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
Fax: (000) 000-0000
Phone: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxxxx, Esq.
Shereff, Friedman, Xxxxxxx & Xxxxxxx, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Phone: (000) 000-0000
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SECTION 5.7. Governing Law; Forum; Process. This Agreement shall be
construed in accordance with, and governed by, the laws of the State of New York
as applied to contracts made and to be performed entirely in the State of New
York without regard to principles of conflicts of law. Each of the parties
hereto hereby irrevocably and unconditionally submits to the exclusive
jurisdiction of any court of the State of New York or any federal court sitting
in the State of New York for purposes of any suit, action or other proceeding
arising out of this Agreement (and agrees not to commence any action, suit or
proceedings relating hereto except in such courts). Each of the parties hereto
agrees that service of any process, summons, notice or document by U.S.
registered mail at its address set forth herein shall be effective service of
process for any action, suit or proceeding brought against it in any such court.
Each of the parties hereto hereby irrevocably and unconditionally waives any
objection to the laying of venue of any action, suit or proceeding arising out
of this Agreement, which is brought by or against it, in the courts of the State
of New York or any federal court sitting in the State of New York and hereby
further irrevocably and unconditionally waives and agrees not to plead or claim
in any such court that any such action, suit or proceeding brought in any such
court has been brought in an inconvenient forum.
SECTION 5.8. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, and all of which
together shall constitute a single agreement.
SECTION 5.9. Severability. In the event that any one or more of the
immaterial provisions contained in this Agreement shall for any reason be held
to be invalid, illegal or unenforceable, the same shall not affect any other
provision of this Agreement, but this Agreement shall be construed in a manner
which, as nearly as possible, reflects the original intent of the parties.
SECTION 5.10. No Prejudice. The terms of this Agreement shall not be
construed in favor of or against any party on account of its participation in
the preparation hereof.
SECTION 5.11. Words in Singular and Plural Form. Words used in the
singular form in this Agreement shall be deemed to import the plural, and vice
versa, as the sense may require.
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SECTION 5.12. Remedy for Breach. The Company hereby acknowledges that
in the event of any breach or threatened breach by the Company of any of the
provisions of this Agreement, the Holder would have no adequate remedy at law
and could suffer substantial and irreparable damage. Accordingly, the Company
hereby agrees that, in such event, the Holder shall be entitled, without the
necessity of proving damages or posting bond, and notwithstanding any election
by any Holder to claim damages, to obtain a temporary and/or permanent
injunction, without proving a breach therefor, to restrain any such breach or
threatened breach or to obtain specific performance of any such provisions, all
without prejudice to any and all other remedies which any Holder may have at law
or in equity.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
DANSKIN, INC.
By:
------------------------
Name:
Title:
DANSKIN INVESTORS, LLC
By: Onyx Partners, Inc.,
its manager
By:
------------------------
Name:
Title:
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