Execution Copy
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REGISTRATION RIGHTS AGREEMENT
Between
THE WARNACO GROUP, INC.
and
CALVIN KLEIN, INC.
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Class A Common Stock, par value $.01 per share
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Dated as of March 14, 1994
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TABLE OF CONTENTS
Page
1. Definitions...................................... 1
2. Shelf Registration............................... 5
2.1 Shelf Registration........................ 5
2.2 Limited Sales Under Shelf Registration.... 6
3. Demand Registration.............................. 7
3.1 Demand.................................... 7
3.2 Registration Statement Form............... 9
3.3 Restrictions on Demand Registration....... 9
4. Piggy-Back Rights................................ 9
5. Registration Procedures.......................... 12
6. Registration Expenses............................ 20
7. Underwritten Offerings........................... 20
7.1 Underwritten Offerings Exclusive.......... 20
7.2 Selection of Underwriters................. 20
7.3 Underwriting Agreement.................... 21
7.4 Holdback Agreements....................... 22
8. Preparation; Reasonable Investigation............ 23
9. Restrictions on Sale............................. 25
10. Indemnification.................................. 27
10.1 Indemnification by Group.................. 27
10.2 Indemnification by the Sellers............ 29
10.3 Notices of Claims, etc................... 30
10.4 Contribution............................... 32
10.5 Other Indemnification...................... 33
10.6 Indemnification Payments................... 33
11. Rule 144......................................... 33
12. Miscellaneous.................................... 34
12.1 Amendments and Waivers..................... 34
12.2 Nominees for Beneficial Owners............. 34
12.3 Notices.................................... 35
12.4 Assignment................................. 36
12.5 No Inconsistent Agreements................. 37
12.6 Remedies................................... 37
12.7 Severability............................... 37
12.8 Entire Agreement........................... 38
12.9 Descriptive Headings....................... 38
12.10 Governing Law............................. 38
12.11 Counterparts.............................. 38
REGISTRATION RIGHTS AGREEMENT ("Agreement"), dated as of March
14, 1994, between CALVIN KLEIN, INC., a New York corporation ("CKI"), and
THE WARNACO GROUP, INC., a Delaware corporation ("Group").
WHEREAS, pursuant to an Acquisition Agreement, dated as of the
date hereof (the "Acquisition Agreement"), among CKI, Group and Warnaco
Inc. (the "Purchaser"), a Delaware corporation and a wholly owned
subsidiary of Group, Purchaser is acquiring the initial issuance of stock
of a newly formed subsidiary of CKI in return for an amount of
consideration which will include 849,746 shares of the Class A Common
Stock, par value $.01 per share, of Group (the "Class A Common Stock");
WHEREAS, Group has agreed to provide the registration rights
with respect to the Class A Common Stock to be received by CKI in
connection with the Acquisition Agreement as set forth herein.
NOW, THEREFORE, the parties hereby agree as follows:
1. Definitions. As used herein, unless the context otherwise
requires, the following terms have the following respective meanings:
"Class A Common Stock" has the meaning set forth in the recitals
of this Agreement.
"Closing" has the meaning set forth in the Acquisition Agreement.
"Commission" means the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act.
"Exchange Act" means 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 be in effect at the time.
References to a particular section of the Securities Exchange Act of 1934,
as amended, shall include a reference to the comparable section, if any, of
any such successor federal statute.
"Initiating Holders" means any holder or holders of Registrable
Shares holding at least 25% of Registrable Shares outstanding at the time
of any request which is made pursuant to Section 3 hereof.
"Majority Holders" has the meaning set forth in Section 2.1 of
this Agreement.
"NASDAQ" has the meaning set forth in Section 5(m) of this
Agreement.
"NYSE" means The New York Stock Exchange, Inc.
"Person" means any individual, corporation, partnership, trust,
incorporated or unincorporated association, joint venture, joint stock
company, government (or an agency or political subdivision thereof) or
other entity of any kind.
"Piqqyback Sales" has the meaning set forth in Section 9 of this
Agreement.
"Pledgee" has the meaning set forth in Section 2.2 of this
Agreement.
"Registrable Shares" means the shares of Class A Common Stock
issued to CKI pursuant to the Acquisition Agreement and any Related
Registrable Shares. As to any particular Registrable Shares, once issued
such securities shall cease to be Registrable Shares when (a) a
registration statement with respect to the sale of such securities shall
have become effective under the Securities Act and such shares shall have
been disposed of in accordance with such registration statement, (b) they
shall have been distributed to the public pursuant to Rule 144 (or any
successor provision) under the Securities Act, (c) they shall have been
otherwise transferred, new certificates evidencing them not bearing a
legend restricting further transfer shall have been delivered by Group and
subsequent public distribution of them shall not, in the opinion of counsel
to the holders, require registration of them under the Securities Act or
(d) they shall have ceased to be outstanding.
"Registration Expenses" means all expenses incident to Group's
performance of or compliance with Sections 2 and 3, including, without
limitation, all registration (on Form S-3), filing, NYSE listing and NASD
fees, all fees and expenses of complying with securities or blue sky laws,
all word processing, duplicating and printing expenses, messenger and
delivery expenses incurred by Group, the fees and disbursements of counsel
for Group (but not of counsel for CKI) and of its independent public
accountants, including the expenses of "cold comfort" letters required by
or incident to such performance and compliance (but excluding the costs of
any special audits required solely as a result of Group's compliance with
Sections 2 and 3), and any fees and disbursements of underwriters
customarily paid by issuers of securities (excluding any underwriting
discounts or commissions and transfer taxes, if any, with respect to the
Registrable Shares) to which Group and the underwriter have separately
agreed.
"Related Registrable Shares" means any securities of Group issued
or issuable with respect to the Class A Common Stock identified in the
definition of Registrable Shares by way of a dividend or stock split or in
connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization or otherwise.
"Representatives" has the meaning set forth in Section 8 of this
Agreement.
"Rule 144(e)" has the meaning set forth in Section 9(c) of this
Agreement.
"Securities Act" means the Securities Act of 1933, or any
successor federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time. References to
a particular section of the Securities Act of 1933, as amended, shall
include a reference to the comparable section, if any, of any such
successor federal statute.
"Shelf Registration" has the meaning set forth in Section 2.1 of
this Agreement.
"Total Shares" means the total shares of Class A Common Stock
issued to CKI pursuant to the Acquisition Agreement; provided, that, if any
event occurs pursuant to which Related Registrable Shares are issued, the
number of shares included in "Total Shares" shall be equal to the sum of
(x) number of shares of Class A Common Stock issued to CKI pursuant to the
Acquisition Agreement and (y) the number of Related Registrable Shares
that would have been issued with respect to such amount of Class A Common
Stock issued to CKI at the Closing.
2. Shelf Registration.
2.1 Shelf Registration. Upon the written request of CKI,
Group shall, as soon as practicable, but in no event later than 10 days
after the date on which Group files with the Commission its Annual Report
on Form 10-K for the year ended December 31, 1993, prepare and cause to be
filed with the Commission a "shelf" registration statement with respect to
all of the Registrable Shares, on Form S-3 pursuant to Rule 415 under the
Securities Act (the "Shelf Registration"). Group shall use its best
efforts to have the Shelf Registration declared effective as soon as
reasonably practicable after such tiling and shall use its best efforts to
keep the Shelf Registration continuously effective from the date such Shelf
Registration is declared effective until the earlier of (i) such time as
all of the Registrable Shares shall cease to be Registrable Shares and (ii)
such time as all of the remaining Registrable Shares may be distributed in
a single broker's transaction in accordance with the volume limitations of
Rule 144(e) (or any successor provisions) under the Securities Act.
Group shall supplement or amend, if necessary, the Shelf
Registration, as required by the registration form utilized by Group or by
the instructions applicable to such registration form or by the Securities
Act or the rules and regulations promulgated thereunder or as reasonably
required by CKI or the holder or holders of (or any underwriter for) a
majority of the Registrable Shares (the "Majority Holders"), and Group
shall furnish to the holders of the Registrable Shares to which the Shelf
Registration relates copies of any such supplement or amendment prior to
its being used and/or filed with the Commission. In no event shall the
Shelf Registration include securities other than Registrable Shares, unless
CKI or the Majority Holders consents to such inclusion or Group has a
shelf registration statement in effect covering all Class A Common Stock
whose holders are entitled to registration by Group.
2.2 Limited Sales Under Shelf Registration. Pursuant to
Section 9, until September 14, 1994, CKI shall not be permitted to sell any
Registrable Shares using the Shelf Registration or otherwise.
Notwithstanding the foregoing, CKI may pledge from time to time part or all
of such Registrable Shares to one or more lenders (each a "Pledgee") as
security for a loan and each such Pledgee may sell (a "Permitted
Disposition") any or all of such Registrable Shares pledged to such Pledgee
pursuant to a margin call exercised in good faith in accordance with such
Pledgee's margin maintenance policies; provided, that, if CKI shall pledge
any or all of the Registrable Shares to any such Pledgee, CKI shall cause
such Pledgee to maintain a segregated account in which such Registrable
Shares shall be held to ensure that any market price changes in any other
securities or collateral owned by CKI that may be pledged to or held by
such Pledgee in connection with its loan or any other loan to CKI or its
shareholders shall not provide the basis for a margin call with respect to
the Registrable Shares, and CKI shall provide confirmation from the lender
to Group as to such Pledgee's agreement to hold the Registrable Shares in a
segregated account.
3. Demand Registration.
3.1 Demand. At any time after September 14, 1994, and
subject to Section 3.3 hereof, upon the written request of one or more of
the Initiating Holders that Group effect the registration under the
Securities Act of all or part of the Registrable Shares and specifying the
intended method or methods of disposition thereof, Group shall promptly,
but in any event within 10 days, give written notice of such requested
registration to all holders of Registrable Shares. Within 10 days after
receipt of such notice, each holder of Registrable Shares shall notify
Group in writing as to whether it wishes to have any or all of its
Registrable Shares included in such Registration. Thereupon, Group shall
use its best efforts to effect the registration under the Securities Act of
all Registrable Shares requested to be registered to the extent required to
permit the disposition in accordance with the requested method thereof and
in accordance with the procedures set forth in Section 5; provided, that,
if Group has had a Shelf Registration with respect to all of the
Registrable Shares declared effective by the Commission in accordance with
Section 2 above and such Shelf Registration remains effective on the date
of the demand made pursuant to this Section 3.1, Group shall, if requested
by CKI or such Initiating Holders, promptly file a post-effective amendment
to such Registration Statement (in lieu of the requirement to file a
registration statement set forth in this Section 3.1) to permit the
disposition of all or part of the Registrable Shares included in such Shelf
Registration in accordance with the requested method specified by CKI or
such Initiating Holders and in accordance with the procedures set forth in
Section 5 and Group shall use its best efforts to have such post-effective
amendment declared effective.
3.2 Registration Statement Form. A registration requested
pursuant to this Section 3 shall be effected by the filing of a
registration statement on any form which Group is eligible to use, such
form to be selected by Group after consultation with CKI and its counsel.
3.3 Restrictions on Demand Registration. Notwithstanding
the provisions of Section 3.1 hereof, Group shall not be required to take
action to effect the registration of Registrable Shares pursuant to Section
3.1 hereof, if:
(i) The aggregate market value of the Registrable Shares
for which registration is sought by the Initiating Holders is less than the
lesser of (a) $5 million and (b) the aggregate market value of all
Registrable Shares at such time as registration is requested;
(ii) Group has effected a registration pursuant to Section
3.1 hereof within the prior six months; or
(iii) Group has effected 3 registrations pursuant to
Section 3.1 hereof.
4. Piggy-Back Rights. If Group at any time proposes to file a
registration statement under the Act with respect to an offering by Group
for its own account or for the account of others of any class of security
(other than the Shelf Registration or a registration statement on Form S-4
or S-8, or any successor thereto, or in connection with an acquisition in a
manner which would not permit registration of Registrable Shares for sale
to the public) and if the sale of securities pursuant to such registration
statement is to be effected pursuant to an underwritten offering, then
Group shall in each case give written notice of such proposed filing to the
holders of Registrable Shares at least 15 days prior to the anticipated
filing date, and such notice shall offer each such holder the opportunity
to register all of its Registrable Shares. The failure of any holder to
advise Group in writing of its election to participate in such
registration or offering (which notice shall specify the number of
Registrable Shares sought to be sold by each holder) within 5 days after
such notice is given shall constitute an election not to register or
participate, without prejudice to the holder's right to participate in
subsequent registrations or offerings or to demand registration pursuant to
Section 3. Group shall use its best efforts to cause the managing
underwriter or underwriters of a proposed underwritten offering to permit
the holders of Registrable Shares requested to be included in the
registration for such offering to include such shares in such offering on
the same terms and conditions as any similar securities included therein.
Notwithstanding the foregoing, if Group (as evidenced by the delivery of a
certificate signed by a responsible executive officer of Group to the
holders of Registrable Shares) and the managing underwriter or underwriters
of such offering (as evidenced by the delivery of an opinion to the holders
of Registrable Shares) determines that the inclusion of the Registrable
shares in such registration would be harmful to the prospects of a
successful offering of the securities being offered in such registration,
then the amount of securities to be offered for the account of the holders
of Registrable Shares shall be reduced to the extent necessary to reduce
the total amount of securities to be included in such offering to the
amount which would not be harmful to the prospects of a successful offering
as recommended in good faith by Group (as specified in the certificate from
its executive officer) or by such managing underwriter. If, at any time
after giving written notice of its intention to register any securities and
prior to the effective date of the registration statement, Group shall
determine for any reason either not to register or to delay registration of
such securities, Group may, at its election, give written notice of such
determination to each holder of Registrable Shares and thereupon, (i) in
the case of a determination not to register, shall be relieved of its
obligation to register any Registrable Shares in connection with such
registration (but not from its obligation to pay the Registration Expenses
in connection therewith), without prejudice, however, to the rights of any
holder or holders of Registrable Shares entitled to do so to request that
such registration be effected as a registration under Section 3.1, and (ii)
in the case of a determination to delay registering, shall be permitted to
delay registering any Registrable Shares, for the same period as the delay
in registering such other securities.
5. Registration Procedures. If and whenever Group is required
to use its best efforts to effect the registration of any Registrable
Shares under the Securities Act as provided in Sections 2 and 3 or file a
post-effective amendment to an effective registration statement as provided
in Section 3, Group shall:
(a) promptly prepare and file with the Commission a
registration statement or post-effective amendment, as the case may
be, with respect to such Registrable Shares and use its best efforts
to have such registration statement or post-effective amendment, as
the case may be, declared effective;
(b) prepare and file with the Commission such amendments and
supplements to the registration statement (or post-effective
amendment) being filed or amended, as the case may be, and the
prospectus used in connection therewith as may be necessary to keep
such registration statement effective and to comply with the rules,
regulations or instructions of the registration form utilized by
Group, the Securities Act and the rules and regulations thereunder
with respect to the disposition of all Registrable Shares covered by
such registration statement until such time as all of such Registrable
Shares have been disposed of in accordance with the intended method or
methods of disposition by the seller or sellers thereof set forth in
the registration statement, as amended, and furnish to each such
seller, prior to the filing of a copy thereof, a copy of any amendment
(including, without limitation, the post-effective amendment required
to be filed pursuant to Section 3.1) or supplement to such
registration statement or prospectus;
(c) furnish to each seller of Registrable Shares covered by
such registration statement (or post-effective amendment), such number
of conformed copies of any registration statement as is then in effect
with respect to such shares and of each amendment and supplement
thereto (in each case including all exhibits), such number of copies
of the prospectus contained in such registration statement (or post-
effective amendment) (including each preliminary prospectus and any
summary prospectus), such documents, if any, incorporated by reference
in such registration statement, amendment or supplement and any other
prospectus filed under Rule 424 under the Securities Act, in conformity
with the requirements of the Securities Act, and such other documents,
as such seller may reasonably request;
(d) use its best efforts (i) to register or qualify all
Registrable Shares and other securities covered by such registration
statement or post-effective amendment under such other securities or
blue sky laws of such States of the United States of America where an
exemption is not available and as the sellers of Registrable Shares
covered by such registration statement or post-effective amendment
shall reasonably request, (ii) to keep such registration or qualifica-
tion in effect for so long as such registration statement remains in
effect, and (iii) to take any other action which may be reasonably
necessary or advisable to enable such sellers to consummate the
disposition in such jurisdictions of the securities to be sold by such
sellers; provided, that, Group shall not for any such purpose be
required to qualify generally to do business as a foreign corporation
in any jurisdiction in which it would not, but for the requirements of
this subparagraph (d), be obligated to be so qualified or to consent
to general service of process in any such jurisdiction;
(e) use its best efforts to cause all Registrable Shares
covered by such registration statement or post-effective amendment to
be registered with or approved by such other federal or state
governmental agencies or authorities as may be necessary in the
opinion of counsel to Group or counsel to the seller or sellers of
Registrable Shares to enable the seller or sellers thereof to dispose
of such Registrable Shares;
(f) use its best efforts to furnish at the effective date of
such registration statement or the effective date of a post-effective
amendment filed pursuant to Section 3.1, and the date of the closing
of the sale of the Registrable Shares (whether or not such sale is
underwritten), to each seller of Registrable Shares, and each such
seller's underwriters, if any, a signed counterpart of (i) an opinion
of counsel for Group, dated the effective date of such registration
statement or the effective date of a post-effective amendment filed
pursuant to Section 3.1 (or such date of sale, as applicable) and (ii)
a "comfort" letter signed by the independent public accountants who
have certified the financial statements included or incorporated by
reference in such registration statement or post-effective amendment
covering substantially the same matters with respect to such
registration statement or post-effective amendment (and the
prospectus included therein) and, in the case of the accountants'
comfort letter, with respect to events subsequent to the date of such
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 and, in
the case of the accountants' comfort letter, such other financial
matters, and, in the case of the legal opinion, such other legal
matters, as the sellers of the Registrable Shares covered by such
registration statement or post-effective amendment, or the under-
writers, may reasonably request;
(g) notify each holder of Registrable Shares covered by such
registration statement or post-effective amendment at any time when a
prospectus relating thereto is required to be delivered under the
Securities Act, upon discovery that, or upon the happening of any
event as a result of which, the prospectus included in such
registration statement or post-effective amendment, as then in effect,
includes an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading, in the light of the circumstances
under which they were made, and at the request of any such holder
promptly prepare and furnish to it a reasonable number of copies of a
supplement to or an amendment of such prospectus as may be necessary
so that, as amended or supplemented, 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 in the light of the circumstances under which
they were made;
(h) shall promptly notify such holders and their counsel 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
use its reasonable best efforts to obtain the withdrawal of any order
suspending the effectiveness of the registration statement or post-
effective amendment, as the case may be, at the earliest possible
moment;
(i) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make available
to holders of Registrable Shares, as soon as reasonably practicable,
an earnings statement covering the period of at least twelve months,
but not more than eighteen months, beginning with the first full
calendar month after the effective date of such registration statement
or post-effective amendment, which earnings statement shall
satisfy the provisions of Section 11(a) of the Securities Act and Rule
158 promulgated thereunder;
(j) provide and cause to be maintained transfer agents and
registrars for all Registrable Shares covered by such registration
statement or post-effective amendment from and after a date not later
than the effective date of such registration statement or post-
effective amendment;
(k) keep CKI and its attorneys advised in writing as to the
initiation and progress of any registration statement or amendment
(including, the post-effective amendment filed pursuant to Section
3.1) or supplement thereto filed pursuant to this Agreement;
(l) provide officers' certificates and other customary closing
documents;
(m) use its best efforts to have approved for listing,
subject to official notice of issuance, the Class A Common Stock being
registered pursuant to such registration statement or post-effective
amendment on the NYSE or such other national securities exchange on
which shares of Class A Common Stock are then listed or on the
National Association of Securities Dealers Automated Quotation System
("NASDAQ") if the Class A Common Stock is then quoted on NASDAQ; and
(n) enter into and perform customary agreements (including
the underwriting agreement, if any, referred to in Section 7.3) and
take such other actions as are reasonably required in order to
expedite or facilitate the disposition of Registrable Shares. Group
may (i) require each holder of Registrable Shares as to which any
registration is being effected to furnish Group such information
regarding such holder and the intended method of distribution of such
securities as Group may from time to time reasonably request in
writing and (ii) require each seller of Registrable Shares to agree to
comply with the Securities Act and the Exchange Act in connection with
the registration and distribution of the Registrable Shares.
Each holder of Registrable Shares agrees by acquisition of such
Registrable Shares that, upon receipt of any notice from Group of the
happening of any event of the kind described in subdivision (g) of this
Section 5, such holder will forthwith discontinue such holder's disposition
of Registrable Shares pursuant to Section 2 or 3 until such holder's
receipt of the copies of the supplemented or amended prospectus
contemplated by subdivision (g) of this Section 5 and, if so directed by
Group will deliver to Group (at Group's expense) all copies, other than
permanent file copies, then in such holder's possession of the prospectus
relating to such Registrable Shares current at the time of receipt of such
notice.
6. Registration Expanses. Group shall pay all Registration
Expenses incurred by Group in connection with any registration effected
pursuant to Section 2 or 3 and CKI shall pay all costs, legal fees and
other expenses incurred by it in connection with the registration and sale
of its Registrable Shares.
7. Underwritten Offerings.
7.1 Underwritten Offerings Exclusive. Whenever a
registration requested by CKI or the Initiating Holders pursuant to Section
3, or a post-effective amendment filed pursuant to Section 3.1,
contemplates an underwritten offering, only Registrable Shares designated
by such holders in their sole discretion may be included in such
underwriting agreement relating to such offering, unless CKI or the holders
of a majority of the Registrable Shares shall have permitted (in writing)
other securities to be included in such registration or post-effective
amendment and such underwritten offering.
7.2 Selection of Underwriters. Whenever a registration or
post-effective amendment requested pursuant to Section 3 is for an
underwritten offering, the holders of a majority of Registrable Shares
included in such registration or post-effective amendment shall have the
right to select the managing underwriter(s) to administer the offering,
from a list of five nationally prominent investment banking firms named by
Group as reasonably acceptable to it and delivered to such holders.
7.3 Underwriting Agreement. If requested by the
underwriters for any underwritten offering by holders of Registrable
Shares, Group shall enter into an underwriting agreement with such
underwriters for such offering, such agreement to be reasonably
satisfactory in substance and form to Group and each such holder and the
underwriters and to contain such representations and warranties by Group
and such other terms as are generally prevailing in agreements of that
type, including, without limitation, indemnities by Group to such holders
and the underwriters substantially to the effect and to the extent provided
in Section 10. The holders of the Registrable Shares proposed to be sold
by such underwriters will reasonably cooperate with Group in the
negotiation of the underwriting agreement. Such holders of Registrable
Shares to be sold by such underwriters may be parties to such underwriting
agreement and may, at their option, require that any or all of the
representations and warranties by, and the other agreements on the part of,
Group to and for the benefit of such underwriters shall also be made to and
for the benefit of such holders of Registrable Shares and that any or all
of the conditions precedent to the obligations of such underwriters under
such underwriting agreement be conditions precedent to the obligations of
such holders of Registrable Shares. Any such holder of Registrable Shares
shall not be required to make any representations or warranties to or
agreements with Group other than representations, warranties or agreements
regarding such holder, such holder's Registrable Shares and such holder's
intended method of distribution or any other representations required by
applicable law.
7.4 Holdback Agreements. (a) Each holder of Registrable
Shares whose shares are included in an underwritten registration statement,
agrees, if so required by the managing underwriter not to sell, make any
short sale of, loan, grant any option for the purchase of or effect any
public sale or distribution of Registrable Shares or otherwise dispose of
any equity securities of Group (other than as part of such underwritten
public offering) during the period beginning seven days prior to the
effective date of such registration statement and ending 90 days after the
effective date of such registration statement. In addition, each holder of
Registrable Shares agrees, that in connection with an underwritten
registration statement by Group of Class A Common Stock, if so requested by
the managing underwriter for such registration statement, not to sell, make
any short sale of, loan, grant any option for the purchase of or effect any
public sale or distribution of Registrable Shares or otherwise dispose of
any equity securities of Group during the period beginning seven days prior
to the effective date of such registration statement and ending 90 days
after the effective date of such registration statement; provided, however,
that Group (or the managing underwriter for such registration statement)
may only exercise the right set forth in this sentence once.
(b) Group agrees not to effect any public sale or
distribution of its Class A Common Stock (other than pursuant to a
registration Form S-4 or S-8, or any successor thereto, or in connection
with an acquisition) during the seven days prior to the effective date of
such registration statement or post-effective amendment and ending the
earlier of (a) 90 days after any underwritten registration pursuant to
Section 3 has become effective and (b) the date on which all securities to
which such registration statement or post-effective amendment relates are
sold.
8. Preparation; Reasonable Investigation. In connection with
the preparation and filing of any registration statement, amendment
(including, without limitation, the filing of a post-effective amendment as
required pursuant to Section 3.1) or supplement, as the case may be, filed
with respect to Registrable Shares, Group (i) shall give the holders of
Registrable Shares on whose behalf such Registrable Shares are to be so
registered and their underwriters, if any, and their respective counsel and
accountants (collectively, the "Representatives") an opportunity to
participate in the preparation of and to review such registration statement
or post-effective amendment, as the case may be, each prospectus included
therein or filed with the Commission, and each amendment (including a post-
effective amendment) thereof or supplement thereto for a reasonable period
prior to its filing with the commission and (ii) shall give the holders of
Registrable Securities and their Representatives such access to all
financial books and records, pertinent corporate documents and properties
of Group and such opportunities to discuss the business of Group with its
directors, officers, employees and the independent public accountants who
have certified its financial statements, which in the opinion of such
holders and their Representatives, is necessary to conduct a reasonable
investigation within the meaning of the Securities Act; provided, however,
that Group shall not be required to deliver specified documents or specific
information to the extent that Group reasonably determines that the
delivery of such documents or information would result in (i) the loss of
any attorney-client privilege, (ii) that the specific information sought to
be reviewed is proprietary to Group or (iii) that the disclosure of such
document or information would adversely affect its competitive position
with CKI; provided, further, that notwithstanding clauses (ii) and (iii)
above, Group shall deliver such information or document to the underwriter
for any underwritten offering if such underwriter agrees in writing not to
reveal its contents to CKI.
9. Restrictions on Sale. Notwithstanding any-thing to the
contrary set forth herein, CKI shall not be permitted to sell any
Registrable Shares prior to September 14, 1994, other than in connection
with an underwritten offering pursuant to Section 4 ("Piggyback Sales");
provided, that, CKI may at any time pledge its Registrable Shares
including, as contemplated in Section 2.2 of this Agreement, and in such
event any Pledgee may sell such Shares with the Shelf Registration at any
time in accordance with the provisions of Section 2.2.
From September 14, 1994 until September 14, 1995, CKI shall
be permitted to sell its Registrable Securities as follows:
(a) in Piggyback Sales without any volume limitation,
in accordance with the provisions of Section 4 hereof;
(b) in an underwritten public offering contemplated by
Sections 3 and 7 (an "Underwritten Offering"); provided, that, prior to
March 14, 1995, the number of shares sold by CKI in Underwritten Offerings
may not exceed one-third of the Total Shares, and thereafter CKI may sell
all of its Registrable Shares without regard to any volume limitations
whatsoever in any such Underwritten Offering; and
(c) in accordance with the manner of sale requirements
set forth in Rule 144(f) promulgated under the Securities Act and subject
to the following volume limitations: (i) for the period from September 14,
1994 to March 14, 1995, CKI may sell a number of Registrable Shares equal
to the lesser of (x) one-third of the Total Shares and (y) the number of
shares of Class A Common Stock permitted to be sold in such six-month
period in accordance with the volume limitations set forth in Rule 144(e)
promulgated under the Securities Act ("Rule 144(e)"), and (ii) for the
period March 14, 1995 to September 14, 1995, CKI may sell a number of
Registrable Shares equal to the lesser of (x) two-thirds of the Total
Shares less the number of shares of Class A Common Stock, if any, sold in
the preceding six-month period pursuant to clause (b)(i) above and (y) the
number of shares of Class A Common Stock permitted to be sold during the
preceding 12-month period in accordance with the volume limitations set
forth in Rule 144(e) less the number of shares of Class A Common Stock, if
any, sold in the preceding 6-month period pursuant to clause (b)(i) above.
From and after September 14, 1995 except as explicitly set forth
in Section 7.4, CKI shall have no restrictions whatsoever pursuant to this
Agreement on the sale, disposition or other assignment of any of the
Registrable Shares.
10. Indemnification.
10.1 Indemnification by Group. In the event of any
registration of Registrable Securities under the Securities Act pursuant
hereto, Group will, and hereby does, indemnify and hold harmless, each
seller of any Registrable Shares included in any registration and each
other Person who participates as an underwriter in the offering or sale of
such securities and each other Person, if any, who controls such seller or
any such underwriter within the meaning of the Securities Act, and their
respective directors, officers, partners, employees and affiliates against
any losses, claims, damages or liabilities, joint or several, to which such
seller or underwriter or any such director, officer, partner, employee,
affiliate or controlling person may become subject under the Securities Act
or otherwise, insofar as such losses, claims, damages or liabilities (or
actions or proceedings, whether commenced or threatened, in respect
thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any registration
statement, any preliminary prospectus, final prospectus or summary pros-
pectus contained therein, or any amendment or supplement thereto, or 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 under which they were made not misleading, and Group
will reimburse such seller or underwriter and each such director, officer,
partner, employee, affiliate and controlling person for any legal or any
other expenses reasonably incurred by them in connection with investigating
or defending any such loss, claim, damage, liability, action or proceeding;
provided, that Group shall not be liable in any such case to the extent
that any such loss, claim, damage, liability (or action or proceeding in
respect thereof) or expense arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made
in such registration statement, any such preliminary prospectus, final
prospectus, summary prospectus, amendment, or supplement in reliance upon
and in conformity with written information furnished to Group in the form
of an instrument duly executed by or on behalf of such seller or
underwriter, as the case may be, specifically stating that it is for use in
the preparation thereof and, provided, further, that Group shall not be
liable to any Person who participates as an underwriter in the offering or
sale of Registrable Shares or to any other Person, if any, who controls
such underwriter within the meaning of the Securities Act, in any such case
to the extent that any such loss, claim, damage, liability (or action or
proceeding in respect thereof) or expense arises out of such Person's
failure to send or give a copy of the final prospectus, as the same may be
then supplemented or amended, within the time required by the Securities
Act to the Person asserting the existence of an untrue statement or alleged
untrue statement or omission or alleged omission at or prior to the written
confirmation of the sale of Registrable Shares to such Person if such
statement or omission was corrected in such final prospectus. Such
indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of such seller or any such director,
officer employee, affiliate, partner or controlling person and shall
survive the transfer of such securities by such seller.
10.2 Indemnification by the Sellers. As a condition to
including any Registrable Shares in any registration, Group shall have
received an undertaking reasonably satisfactory to it from the prospective
seller of such Registrable Shares, to indemnify and hold harmless (in the
same manner and to the same extent as set forth in Section 10.1) Group,
and each director of Group, each officer of Group and each other Person who
controls Group within the meaning of the Securities Act, with respect to
any statement or alleged statement in or omission or alleged omission from
the registration statement, any preliminary prospectus, final prospectus or
summary prospectus contained therein, or any amendment or supplement
thereto, if such statement or alleged statement or omission or alleged
omission was made in reliance upon and in conformity with written
information furnished to Group in the form of an instrument duly executed
by or on behalf of such seller or underwriter, as the case may be,
specifically stating that it is for use in the preparation thereof. Such
indemnity shall remain in full force and effect, regardless of any
investigation made by or on behalf of Group or any such director, officer
or controlling person and shall survive the transfer of such securities by
such seller.
10.3 Notices of Claims, etc. Promptly after receipt by an
indemnified party of notice of the commencement of any action or
proceeding involving a claim referred to in the preceding subparagraphs of
this Section 10, such indemnified party will, if a claim in respect thereof
is to be made against an indemnifying party, give written notice to the
latter of the commencement of such action; provided, however, that the
failure of any indemnified party to give notice as provided herein shall
not relieve the indemnifying party of its obligations under the preceding
subparagraphs of this Section 10, except to the extent that the indemni-
fying party is actually materially prejudiced by such failure to give
notice as evidenced by a written opinion of counsel. In case any such
action is brought against an indemnified party, the indemnifying party
shall be entitled to participate in and to assume the defense thereof,
jointly with any other indemnifying party similarly notified to the extent
that it may wish, with counsel reasonably satisfactory to such indemnified
party, and after notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof, the indemnifying
party shall not be liable to such indemnified party for any legal or other
expenses subsequently incurred by the latter in connection with the defense
thereof other than reasonable costs of investigation; provided, however,
that if the indemnified party reasonably believes it is advisable for it to
be represented by separate counsel because there exists or may exist a
conflict of interest between its interests and those of the indemnifying
party with respect to such claim, or there exist defenses available to such
indemnified party which may not be available to the indemnifying party, or
if the indemnifying party shall fail to assume responsibility for such
defense, the indemnified party may retain counsel satisfactory to it and
the indemnifying party shall pay all fees and expenses of such counsel. No
indemnifying party shall be liable for any settlement of any action or
proceeding effected without its written consent, which consent shall not be
unreasonably withheld or delayed. No indemnifying party shall, without the
consent of the indemnified party, consent to entry of any judgment or enter
into any settlement which does not include as an uncondi-tional 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 or
which requires action other than the payment of by the indemnifying party.
10.4 Contribution. If the indemnification provided for in
this Section 10 shall for any reason be held by a court to be unavailable
to an indemnified party under Section 10.1 or 10.2 in respect of any loss,
claim, damage or liability, or any action or proceeding in respect thereof,
then, in lieu of the amount paid or payable under Section 10.1 or 10.2, the
indemnified party and the indemnifying party under Section 10.1 or 10.2
shall contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating the same), (i) in such proportion as is appropriate to
reflect the relative benefit to Group and the sellers of Registrable Shares
covered by the registration which resulted in such loss, claim, damage or
liability, or action in respect thereof, with respect to the statements or
omissions which resulted in such loss, claim, damage or liability, or
action or proceeding in respect thereof, as well as any other relevant
equitable considerations or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as shall be
appropriate to reflect the relative fault of Group and such sellers from
the offering of the securities covered by such registration statement. 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. Such
prospective sellers' obligations to contribute as provided in this Section
10.4 are several in proportion to the relative value of their respective
Registrable Shares covered by such registration statement and not joint.
In addition, no Person shall be obligated to contribute hereunder any
amounts in payment for any settlement of any action or claim effected
without such Person's consent, which consent shall not be unreasonably
withheld or delayed.
10.5 Other Indemnification. Indemnification and
contribution similar to that specified in the preceding Sections of this
Section 10 (with appropriate modifications) shall be given by Group and
each seller of Registrable Shares 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.
10.6 Indemnification Payments. The indemnification and
contribution required by this Section 10 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.
11. Rule 144. Group covenants that it shall take all actions
reasonably necessary (including, without limiting the generality of the
foregoing, filing on a timely basis all reports required to be filed by the
Exchange Act) to enable holders of Registrable Shares to sell such securi-
ties without registration under the Securities Act within the limitation of
the exemptions provided by (a) Rule 144 under the Securities Act, as such
Rule may be amended from time to time, or (b) any similar rules or
regulations hereafter adopted by the Commission. Upon the request of any
holder of Registrable Shares, Group will deliver to such holder a written
certificate signed by its Chief Financial Officer as to whether it has
complied with such requirements.
12. Miscellaneous.
12.1 Amendments and Waivers. This Agreement may be amended
with the written consent of Group and Group may take any action herein
prohibited, or omit to perform any act herein required to be performed by
it, only if Group shall have obtained the written consent to such
amendment, action or omission to act, of the holder or holders of at least
50% of the Registrable Shares affected by such amendment, action or
omission to act. Each holder of any Registrable Shares at the time or
thereafter outstanding shall be bound by any consent authorized by this
Section 12.1, whether or not such Registrable Shares shall have been marked
to indicate such consent.
12.2 Nominees for Beneficial Owners. In the event that any
Registrable Shares are held by a nominee for the beneficial owner thereof,
the beneficial owner thereof may, at its election in writing delivered to
Group, be treated as the holder of such Registrable Shares for purposes of
any request or other action by any holder or holders of Registrable Shares
pursuant to this Agreement or any determination of any number or percentage
of shares of Registrable Shares held by any holder or holders of
Registrable Shares contemplated by this Agreement. If the beneficial owner
of any Registrable Shares so elects, Group may require assurances
reasonably satisfactory to it of such owner's beneficial ownership of such
Registrable Shares.
12.3 Notices. All notices, demands and other communications
provided for or permitted hereunder shall be made in writing and shall be
by registered or certified first-class mail, return receipt requested,
telex, telegram, telecopier, reputable overnight courier service or
personal delivery to the following addresses (or at such other address for
a party as shall be specified by like notice):
(i) if to CKI, to
Calvin Klein, Inc.
205 West 39th Street
New York, New York 10018
Attention: Barry K. Schwartz
Telecopy: (212) 768-8930
with a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, NY 10019-6064
Attention: Robert M. Hirsh, Esq.
Telecopy: (212) 757-3990
(ii) if to Group, to
The Warnaco Group, Inc.
90 Park Avenue
New York, New York 10016
Attention: General Counsel
Telecopy: (212) 687-0480
with a copy to:
Skadden, Arps, Slate, Meagher
& Flom
919 Third Avenue
New York, New York 10022
Attention: Kenneth J. Bialkin
Telecopy: (212) 735-2001
All such notices and communications shall be deemed to have been
duly given: when delivered by hand, if personally delivered; one business
day after being sent by reputable overnight courier service; three business
days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; and when receipt is acknowledged, if telecopied.
12.4 Assignment. This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the parties hereto and any
holder of Registrable Shares, and their respective successors and assigns.
12.5 No Inconsistent Agreements. Group will not hereafter
enter into any agreement with respect to its securities which is
inconsistent with the rights granted to the holders of Registrable Shares
in this Agreement and Group has not previously entered into any agreement
with respect to any of its securities granting any registration rights to
any Person other than as set forth on Schedule 12.5.
12.6 Remedies. Each holder of Registrable Shares, in
addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this Agreement. Group agrees that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by it of
the provisions of this Agreement and hereby agrees to waive the defense in
any action for specific performance that a remedy at law would be adequate.
12.7 Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any
circumstances, is held invalid, illegal or unenforceable in any respect for
any reason, the validity, legality and enforceability of any such provision
in every other respect and of the remaining provisions contained herein
shall not be in any way impaired thereby, it being intended that all of the
rights and privileges of the parties hereto shall be enforceable to the
fullest extent permitted by law.
12.8 Entire Agreement. This Agreement is intended by the
parties as a final expression of their agreement and intended to be a
complete and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein. There
are no restrictions, promises, warranties or undertakings, other than those
set forth or referred to herein and therein. This Agreement supersedes all
prior agreements and understandings between the parties with respect to
such subject matter.
12.9 Descriptive Headings. The descriptive headings of the
several sections and paragraphs of this Agreement are inserted for
reference only and shall not limit or otherwise affect the meaning hereof.
12.10 Governing Law. This Agreement shall be construed and
enforced in accordance with, and the rights of the parties shall be
governed by, the laws of the State of New York applicable to agreements
made and to be performed entirely within such State.
12.11 Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, but all
such counterparts shall together constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their respective officers thereunto duly
authorized as of the date first above written.
THE WARNACO GROUP, INC.
By: /s/ LINDA J. WACHNER
----------------------------
Name: Linda J. Wachner
Title: Chairman of the Board,
President and Chief
Executive Officer
CALVIN KLEIN
By: /s/ RICHARD A. MARTIN
----------------------------
Name: Richard A. Martin
Title: President, Finance and
Administration