<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 3)*
Danskin, Inc.
----------------
(Name of Issuer)
Common Stock
------------------------------
(Title of Class of Securities)
236 365 102
--------------
(CUSIP Number)
Mr. Keith Honig, Associate Counsel
SunAmerica Inc.
1 SunAmerica Center, Century City
Los Angeles, CA 90067
(310) 772-6000
--------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized
to Receive Notice and Communications)
June 7, 1996
-------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following
box / /.
Check the following box if a fee is being paid with the statement / /. (A
fee is not required only if the reporting person: (1) has a previous
statement on file reporting beneficial ownership of more than five percent of
the class of securities described in Item 1; and (2) has filed no amendment
subsequent thereto reporting beneficial ownership of five percent or less of
such class.) (See Rule 13d-7.)
Page 1 of 11
Exhibit Index is on page 11
<PAGE> 2
Schedule 13D
CUSIP No. 236 365 102
-----------
1. Names of Reporting Persons S.S. or I.R.S. Identification No. of
above persons: SunAmerica Life Insurance Company
2. Check Appropriate Box if a member of a group: (a) / /
(b) / /
3. SEC use only:
4. Source of funds: OO
5. Check box if disclosure of legal proceedings is required pursuant to
items 2(d) or 2(e): / /
6. Citizenship or place of organization: Arizona
7. Sole voting power: 2,010,000
8. Shared voting power: 0
9. Sole dispositive power: 2,010,000
10. Shared dispositive power: 0
11. Aggregate amount beneficially owned by each reporting
person: 2,010,000
12. Check box if the aggregate amount in Row (11) excludes certain
shares: / /
13. Percent of Class represented by amount in Row (11): 33.7%
14. Type of reporting person: IC
Page 2 of 11
<PAGE> 3
Schedule 13D
CUSIP No. 236 365 102
-----------
1. Names of Reporting Persons S.S. or I.R.S. Identification No. of
above persons: SunAmerica Inc.
2. Check Appropriate Box if a member of a group: (a) / /
(b) / /
3. SEC use only:
4. Source of funds: OO
5. Check box if disclosure of legal proceedings is required pursuant
to items 2(d) or 2(e): / /
6. Citizenship or place of organization: Maryland
7. Sole voting power: 2,010,000
8. Shared voting power: 0
9. Sole dispositive power: 2,010,000
10. Shared dispositive power: 0
11. Aggregate amount beneficially owned by each reporting
person: 2,010,000
12. Check box if the aggregate amount in Row (11) excludes certain
shares: / /
13. Percent of Class represented by amount in Row (11): 33.7%
14. Type of reporting person: CO/HC
Page 3 of 11
<PAGE> 4
SunAmerica Life Insurance Company ("SunAmerica") and
SunAmerica Inc. hereby amend their Schedule 13D, originally filed on
September 29, 1994 ("the Schedule 13D") and as subsequently amended by
Amendment No. 1 filed on February 3, 1995 ("Amendment No. 1") and Amendment
No. 2 filed on January 4, 1996 ("Amendment No. 2"), relating to SunAmerica's
acquisition of all right, title and interest in and to 2,010,000 shares (the
"Shares") from Esmark, Inc. ("Esmark"), representing approximately 33.7% of
the common stock, par value $.01 per share (the "Common Stock"), of Danskin,
Inc. (the "Issuer"), as follows:
Item 1. Security and Issuer
-------------------
Common Stock with $.01 par value
Danskin, Inc.
111 West 40th Street
New York, New York 10018
Item 2. Identity and Background
-----------------------
SunAmerica Life Insurance Company
1 SunAmerica Center
Century City
Los Angeles, California 90067
SunAmerica is an Arizona Stock Life Insurance Company. The
principal business of SunAmerica is issuing annuities and guaranteed
investment contracts.
SunAmerica Inc.
1 SunAmerica Center
Century City
Los Angeles, California 90067
SunAmerica Inc. is the parent company of SunAmerica. The
principal business of SunAmerica Inc. is to act as a holding company.
During the past five years neither SunAmerica nor SunAmerica
Inc. has been convicted in a criminal proceeding or has been a party to a
civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding been made subject to a
judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, Federal or State securities
laws or been found to be in violation of any such laws.
The executive officers, directors and control persons of
SunAmerica and SunAmerica Inc. are listed in Exhibits A and B, respectively
along with their principal occupations, the address where their principal
occupation is conducted, and their business addresses. See Item 7, Exhibits
A and B. All of the persons listed in Exhibits A and B are U.S. citizens.
None of the
Page 4 of 11
<PAGE> 5
persons listed in Exhibit A or B has been a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction and as a result of
such proceeding been made subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities
subject to, Federal or State securities laws or been found to be in violation
of any such laws.
Item 3. Source and Amount of Funds or Other Consideration
-------------------------------------------------
See Items 4 and 6.
Item 4. Purpose of Transaction
----------------------
The information set forth in Item 4 of the Schedule 13D, as
supplemented by Amendment No. 1 and Amendment No. 2, is hereby amended to
read as follows:
On March 12, 1996, the United States Bankruptcy Court for
the Southern District of New York entered an order, effective May 1,
1996, see Item 7, Exhibit G, terminating, vacating and annulling the
automatic stay of 11 U.S.C. Section 362 in the chapter 7 involuntary
bankruptcy case of Esmark, Inc., Case No. 95-43781 (BRL), insofar as
such automatic stay prohibited or prevented SunAmerica from
enforcing its state law rights and remedies under the Notes Purchase
Agreement and Pledge Agreement (as defined in Item 6, below) and
related loan documents, including the foreclosure sale of the Shares
in partial satisfaction of Esmark's obligations to SunAmerica.
Notice of a public foreclosure sale of the Shares (the "Foreclosure
Sale") was published in the Wall Street Journal, New York Times and
Womens Wear Daily on May 7, 1996. See Item 7, Exhibit H. On June
7, 1996, the Foreclosure Sale was conducted at which SunAmerica
submitted the highest conforming bid and purchased the Shares, by
crediting its bid against its secured claim, at a price of $3.00 per
share for an aggregate purchase price of $6,030,000.
The purpose of the purchase by SunAmerica of the Shares is
to maximize the value of its interest in the Shares. SunAmerica
does not consider itself a passive investor and should not be
regarded as such. SunAmerica has not, however, formulated any
specific plan or proposal with respect to influencing, affecting or
acquiring control of the Issuer and, as indicated below, there can
be no assurance that any such plan or proposal will be developed or
as to the terms or the timing of any such plan or proposal. Subject
to applicable legal requirements and the factors referred to below,
SunAmerica may purchase additional shares of Common Stock from time
to time in open market or privately negotiated transactions.
Page 5 of 11
<PAGE> 6
In determining whether to purchase additional shares of
Common Stock and in formulating any plan or proposal with respect to
control of the Issuer, SunAmerica intends to consider and review
various factors on a continuous basis, including the Issuer's
financial condition, business and prospects, other developments
concerning the Issuer, the reaction of the Issuer and of the other
stockholders to SunAmerica's ownership of Common Stock, SunAmerica's
ability to influence or seek control of the Issuer, the price and
availability of shares of Common Stock, other investment and
business opportunities available to SunAmerica, developments with
respect to SunAmerica's business, and general economic, money and
stock market conditions. In addition, depending upon, among other
things, the matters referred to above, SunAmerica may determine at
any time to dispose of all or a portion of its shares of Common
Stock.
Any plan or proposal that may be formulated by SunAmerica
could involve seeking representation on the Board of Directors of
the Issuer (including by seeking to change the number and/or term of
the directors and to fill vacancies resulting therefrom) by means of
a solicitation of consents and/or proxies from stockholders, making
a tender or exchange offer for some or all of the Common Stock
and/or proposing a business combination transaction with the Issuer.
In connection with any plan or proposal formulated by
SunAmerica with respect to the Issuer, SunAmerica may seek
redemption or judicial invalidation of the Issuer's Series A Junior
Participating Preferred Stock Rights (the "Rights"). The Rights
provide, among other things, that if a person or group becomes the
beneficial owner of 35% or more of the outstanding Common Stock, the
Rights (other than those beneficially owned by such person or group)
become exercisable for additional shares of Common Stock at a
significant discount to the market value of the shares and become no
longer subject to redemption. In light of the adverse economic
consequences to the value of SunAmerica's investment in the Issuer
that would arise as a result of the Rights in the event that
SunAmerica were to acquire beneficial ownership of 35% or more of
the outstanding Common Stock, the existence of the Rights, unless
they are redeemed or judicially invalidated, may effectively limit
SunAmerica's ability to purchase additional shares of Common Stock
or to consummate a tender offer for outstanding shares of Common
Stock. Although, as indicated above, SunAmerica has not yet
formulated any specific plans or proposals with respect to the
Issuer, SunAmerica may seek as a part of or in connection with any
such plan or proposal to publicly solicit consents or
Page 6 of 11
<PAGE> 7
proxies from stockholders with respect to a non-binding resolution
directing the Board of Directors to redeem the Rights or may
publicly solicit consents or proxies from stockholders to gain
representation on the Board of Directors of the Issuer with a view
towards, among other things, causing the Board of Directors to
redeem the Rights.
SunAmerica may file with the Federal Trade Commission (the
"FTC") and the Antitrust Division of the Department of Justice (the
"Antitrust Division") a Notification and Report Form under the Hart-
Scott-Rodino Antitrust Improvements Act of 1976 (the "Hart-Scott
Act") to facilitate additional purchases of Common Stock and to
permit SunAmerica to acquire in excess of 50 percent of the
outstanding Common Stock. In such event, the Issuer would also be
obligated to make a filing under the Hart-Scott Act. Under the
Hart-Scott Act, SunAmerica is obligated to observe a specified
waiting period following SunAmerica's filing prior to consummating
any further purchases of Common Stock to the extent such purchases
would cause it to have acquired shares in excess of a specified
threshold, unless such waiting period is terminated earlier by the
FTC or the Antitrust Division.
Other than as indicated above, SunAmerica has no present
plans or proposals which relate to or would result in any of the
following (although SunAmerica reserves the right to develop such
plans or proposals): (i) the acquisition of additional securities
of the Issuer, or the disposition of securities of the Issuer; (ii)
an extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Issuer or any of its
subsidiaries; (iii) a sale or transfer of a material amount of
assets of the Issuer or any of its subsidiaries; (iv) any change in
the present Board of Directors or management of the Issuer,
including any plans or proposals to change the number or term of
directors or to fill any existing vacancies on the Issuer's Board of
Directors; (v) any material change in the present capitalization or
dividend policy of the Issuer; (vi) any other material change in the
Issuer's charter or bylaws or other actions which may impede the
acquisition of control of the Issuer or any person; (vii) causing a
class of securities of the Issuer to be delisted from a national
securities exchange or to cease to be authorized to be quoted in an
inter-dealer quotation system of a registered national securities
association; (viii) a class of equity securities of the Issuer
becoming eligible for termination of registration pursuant to
Section 12(g)(4) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"); or (ix) any action similar to any of those
enumerated above.
Page 7 of 11
<PAGE> 8
Item 5. Interest in Securities of the Issuer
------------------------------------
The information set forth in Item 5 of the Schedule 13D, as
supplemented by Amendment No. 1 and Amendment No. 2, is hereby amended to
read:
(a) The aggregate number of shares of Common Stock that
SunAmerica owns beneficially, as that term is defined pursuant to Rule 13d-3
of the Exchange Act, is 2,010,000, which constitutes approximately 33.7% of
the outstanding shares of Common Stock as of April 30, 1996, as reported by
the Issuer in its Form 10-Q for the period ending March 30, 1996, filed on
May 14, 1996.
(b) SunAmerica has the sole power to vote or to direct
the vote and dispose or to direct the disposition of all of the shares of
Common Stock owned by it.
(c) Except as set forth in Item 4 hereof, to the best
knowledge of SunAmerica and SunAmerica Inc., none of the persons named in
Item 2 has effected any transactions in shares of the Common Stock during the
past sixty days.
(d) Not applicable.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings and
Relationships with Respect to Securities of the Issuer
------------------------------------------------------
The information set forth in Item 6 of the Schedule 13D, as
supplemented by Amendment No. 1 and Amendment No. 2, is hereby amended to
read:
SunAmerica gained the right to foreclose upon the Shares
pursuant to the terms of a Guaranty and Pledge Agreement (the
"Pledge Agreement"), dated as of September 3, 1993, by and between
Esmark and SunAmerica Inc. Esmark pledged the Shares to SunAmerica
Inc., as collateral agent for SunAmerica, as security for its
obligations under the Pledge Agreement and all of the obligations of
Nautech Incorporated ("Nautech") to SunAmerica, however arising,
including but not limited to those arising under that certain Notes
Purchase Agreement (the "Notes Purchase Agreement"), dated as of
September 3, 1993, by and among, Nautech, SunAmerica, SunAmerica
Inc., Esmark and the other guarantors named therein. As a result of
a default continuing under the Notes Purchase Agreement and pursuant
to the terms of the Pledge Agreement, SunAmerica, through SunAmerica
Inc. as collateral agent, obtained the power to foreclose upon the
Shares and obtain all right, title and interest thereto in partial
satisfaction of Esmark's obligations to SunAmerica.
Page 8 of 11
<PAGE> 9
Item 7. Material to be Filed as Exhibits
---------------------------------
The information set forth in Item 7 of Schedule 13D, as
supplemented by Amendment No. 1 and Amendment No. 2, is hereby amended to
read:
(a) Names, principal occupations and business addresses of
directors, executive officers and control persons of Sun Life of
America is attached hereto as Exhibit A.
(b) Names, principal occupations and business addresses of
directors, executive officers and control persons of SunAmerica is
attached hereto as Exhibit B.
(c) Agreement for Joint Filing, incorporated by reference to
Exhibit C attached to Schedule 13D.
(d) Guaranty and Pledge Agreement, dated as of September 3,
1993, by and between Esmark, Inc. and SunAmerica Inc. as Collateral
Agent, incorporated by reference to Exhibit D attached to Schedule
13D.
(e) Notice of Foreclosure Sale, published as of February 1, 1995
by SunAmerica Inc., as Collateral Agent, incorporated by reference
to Exhibit E attached to Amendment No. 1 to the Schedule 13D.
(f) The Letter Agreement, dated November 28, 1995, among
SunAmerica, Derby Partners and Esmark, incorporated by reference to
Exhibit F attached to Amendment No. 2 to the Schedule 13D.
(g) Stipulation for Relief From the Automatic Stay; Order
Thereon, in In re Esmark, Inc., Chapter 7 Case No. 95-43781 (BRL),
dated March 7, 1996, entered on the docket of the United States
Bankruptcy Court for the Southern District of New York on March 12,
1996, is attached hereto as Exhibit G.
(h) Notice of Foreclosure Sale, published on May 7, 1996 in the
New York Times, Wall Street Journal and Womens Wear Daily, is
attached hereto as Exhibit H.
Page 9 of 11
<PAGE> 10
SIGNATURES
After due inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct and that the parties listed below have entered into a
Joint Filing Agreement pursuant to Rule 13d-1(f)(1).
Dated: June ___, 1996
SunAmerica Life Insurance Company
By: _____________________________
Jay S. Wintrob
Executive Vice President
SunAmerica Inc.
By: _____________________________
Jay S. Wintrob
Vice Chairman
Page 10 of 11
<PAGE> 11
Exhibit Index
Exhibit Description
- ------- -----------
* A. Names, principal occupations and business
addresses of directors, executive officers
and control persons of Sun Life of America
* B. Names, principal occupations and business
addresses of directors, executive officers
and control persons of SunAmerica
(P) C. Agreement for Joint Filing
(P) D. Guaranty and Pledge Agreement, dated as of
September 3, 1993, by and between Esmark,
Inc. and SunAmerica Inc. as Collateral Agent
(P) E. Notice of Foreclosure Sale, published as of
February 1, 1995 by SunAmerica Inc., as
Collateral Agent
(P) F. The Letter Agreement, dated November 28,
1995, among SunAmerica, Derby Partners and
Esmark
* G. Stipulation for Relief From the Automatic
Stay; Order Thereon, in In re Esmark,
Inc., Chapter 7 Case No. 95-43781 (BRL),
dated March 7, 1996, entered on the docket
of the United States Bankruptcy Court
for the Southern District of New York on
March 12, 1996
* H. Notice of Foreclosure Sale, published on
May 7, 1996 in the New York Times, Wall
Street Journal and Womens Wear Daily
____________________
* Filed herewith.
(P) Previously filed in paper format and incorporated herein by
reference pursuant to Rule 13d-2(c) of the Securities Exchange Act
of 1934 and Rule 101(a)(2)(ii) of Regulation S-T.
Page 11 of 11
<PAGE> 1
SunAmerica Life Insurance Company (AZ) Exhibit A
- -------------------------------------- ---------
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATION
---- --------------------
<S> <C>
Directors: Eli Broad, Chairman (1) see below
James R. Belardi(1) see below
Lorin M. Fife(1) see below
Jana W. Greer(1) see below
Susan L. Harris(1) see below
Gary W. Krat(1) see below
Peter McMillan(1) Executive Vice President &
Chief Investment Officer of
SunAmerica Investments, Inc.
Scott L. Robinson(1) see below
James W. Rowan(1) see below
Joseph M. Tumbler(1) see below
Jay S. Wintrob(1) see below
Officers: Victor E. Aiken Vice President for SunAmerica Life
Insurance Company ("SunAmerica")
Eli Broad(1) President and Chief Executive
Officer of SunAmerica
Jay S. Wintrob(1) Executive Vice President of SunAmerica
Joseph M. Tumbler(1) Executive Vice President of SunAmerica
James R. Belardi(1) Senior Vice President and Treasurer of
SunAmerica and SunAmerica Inc.
Lorin M. Fife(1) Senior Vice President, General Counsel and
Assistant Secretary for SunAmerica
Jana W. Greer(1) Senior Vice President of SunAmerica
Franklin J. Grey Vice President for SunAmerica
Susan L. Harris (1) Senior Vice President and Secretary
of SunAmerica
Gary W. Krat(1) Senior Vice President of SunAmerica
Keith B. Jones(1) Vice President SunAmerica
Edward P. Nolan(1) Vice President for SunAmerica
Edwin Reoliquo(1) Senior Vice President and Chief Actuary
for SunAmerica
Michael Lindquist(1) Vice President for SunAmerica
Greg Outcalt(1) Vice President for SunAmerica
Scott L. Robinson(1) Senior Vice President of SunAmerica
James W. Rowan(1) Senior Vice President of SunAmerica
N. Scott Gillis(1) Vice President and Controller of SunAmerica
Scott H. Richland (1) Vice President and Treasurer of SunAmerica
</TABLE>
(1) Business address and address where principal occupation is located
is 1 SunAmerica Center, Century City, Los Angeles, California 90067.
<PAGE> 1
Exhibit B
---------
SunAmerica Inc. (MD)
- --------------------
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATION
---- --------------------
<S> <C>
Director: Eli Broad, Chairman(1) see below
Ronald J. Arnault(2) Executive Vice President and Chief Financial
Officer of Atlantic Richfield Company
David O. Maxwell(3) Retired
Barry Munitz(4) Chancellor of the California State University
and Colleges
Lester Pollack(5) Chief Executive Officer, Centre Partners, L.P.
Richard D. Rohr(6) see below
Sanford C. Sigoloff(7) Chairman, President and Chief Executive Officer
of Sigoloff & Associates
Harold M. Williams(8) President and Chief Executive Officer, J. Paul
Getty Trust
Karen Hastie Williams(9) Attorney with Crowell & Maring
Carl E. Reichardt(10) Retired Chairman, Wells Fargo Bank
Officers:
Eli Broad(1) Chief Executive Officer and President of
SunAmerica Inc.
Jay S. Wintrob(1) Vice Chairman of SunAmerica Inc.
Jana W. Greer(1) Senior Vice President of SunAmerica Inc.
Gary W. Krat(1) Senior Vice President of SunAmerica Inc.
Scott L. Robinson(1) Senior Vice President of SunAmerica Inc. and
Controller of SunAmerica Inc.
James R. Belardi(1) Executive Vice President for SunAmerica Inc.
Lorin M. Fife(1) Senior Vice President, General
Counsel - Regulatory Affairs and Assistant
Secretary for SunAmerica Inc.
Michael L. Fowler(1) Vice President of SunAmerica Inc.
Susan L. Harris(1) Senior Vice President, General
Counsel - Corporate Affairs and Secretary for
SunAmerica Inc.
Scott H. Richland(1) Vice President and Treasurer of SunAmerica Inc.
</TABLE>
<PAGE> 2
<TABLE>
<S> <C>
James W. Rowan(1) Senior Vice President of SunAmerica Inc.
Richard D. Rohr(6) Assistant Secretary of SunAmerica Inc. and
Attorney with Bodman, Longley and Darling
George Holdridge(1) Vice President of SunAmerica Inc.
Joseph Tumbler(1) Vice Chairman of SunAmerica Inc.
Karel Carnohan(1) Vice President of SunAmerica Inc.
</TABLE>
(1) Business address and address where principal occupation is located
is 1 SunAmerica Center, Century City, Los Angeles, California 90067.
(2) Business address and address where principal occupation is located
is 515 South Flower Street, 51st Floor, Los Angeles, California
90071.
(3) Business address and address where principal occupation is located
is 5335 Wisconsin Avenue, NW, Suite 440, Washington, D.C. 20015-
2003.
(4) Business address and address where principal occupation is located
is 400 Golden Shore, Suite 324, Long Beach, CA 90802-4275.
(5) Business address and address where principal occupation is located
is One Rockefeller Plaza, Suite 1025, New York, New York 10020.
(6) Business address and address where principal occupation is located
is 100 Renaissance Center, 34th Floor, Detroit, Michigan 48243.
(7) Business address and address where principal occupation is located
is 3340 Ocean Park Boulevard, Suite 3050, Santa Monica, CA 90405.
(8) Business address and address where principal occupation is located
is 401 Wilshire Boulevard, Suite 900, Santa Monica, California
90401.
(9) Business address and address where principal occupation is located
is Suite 1100, 1001 Pennsylvania Avenue, N.W., Washington, D.C.
20004-2505.
(10) Business address and address where principal occupation is located
is 420 Montgomery Street, San Francisco, California 94104
<PAGE> 1
Exhibit G
----------
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK CONFORMED COPY
- - - - - - - - - - - - - - - - - - -x
In re :
Chapter 7
ESMARK, INC., :
Case No. 95-43781 (BRL)
Debtor. :
- - - - - - - - - - - - - - - - - - -x
STIPULATION FOR RELIEF FROM THE AUTOMATIC STAY; ORDER THEREON
Esmark, Inc., debtor in the above captioned chapter 7 case
("Esmark"), and secured creditor SunAmerica Life Insurance Company
("SunAmerica") f/k/a Sun Life Insurance Company of America, by and through
their counsel of record, hereby enter into this stipulation ("Stipulation")
pursuant to Federal Rule of Bankruptcy Procedure 4001(d) for an order
terminating, vacating and annulling the automatic stay of 11 U.S.C. Section 362
in this case effective May 1, 1996, insofar as that stay affects in any manner
the rights of SunAmerica to enforce its claims under the SunAmerica Loan
Documents (defined below) and to sell by foreclose sale and recover the
proceeds of the collateral securing such claims, including, without
limitation, the right of SunAmerica to enforce its security interest in, sell
by foreclosure sale and recover the proceeds of 2,010,000 shares of common
stock of Danskin, Inc. -- which stock SunAmerica holds as collateral for
Esmark's obligations under the
<PAGE> 2
SunAmerica Loan Documents. In support of this Stipulation, Esmark and
SunAmerica hereby stipulate and agree as follows:
The SunAmerica Loan Documents
-----------------------------
A. Pursuant to a Guaranty (the "Esmark Guaranty") and
Guaranty and Pledge Agreement (the "Esmark Pledge"), both dated as of
September 3, 1993, Esmark guaranteed to SunAmerica the prompt payment when
due of the principal of and interest on the 14% Senior Secured Bridge Notes
due March 3, 1995 ("Notes") issued by Nautech, Incorporated ("Nautech"), a
wholly owned subsidiary of Esmark, in the original aggregate principal amount
of $14,500,000. The Notes were issued pursuant to a Notes Purchase
Agreement, dated September 3, 1993, entered into by Nautech as issuer, Esmark
and a number of other affiliates as guarantors, and SunAmerica as purchaser.
True and correct copies of the Esmark Guaranty, the Esmark Pledge and the
Notes Purchase Agreement are attached hereto as Exhibits 1, 2 and 3,
respectively.
B. Pursuant to the Esmark Guaranty, Esmark pledged to
SunAmerica as collateral security for Esmark's obligations under the
SunAmerica Loan Documents, inter alia:
(i) 2,010,000 shares of common stock of Danskin, Inc. ("Danskin") (the
"Danskin Stock"); and (ii) 10,000 shares of common stock of Nautech,
constituting all of the issued and outstanding capital stock of Nautech (the
"Nautech Stock"). SunAmerica holds valid and enforceable first priority
security interests in the Danskin Stock and the Nautech Stock.
C. Pursuant to a Security and Pledge Agreement, dated
September 3, 1993 (the "Nautech Guaranty"), and to secure Nautech's
<PAGE> 3
obligations to SunAmerica under the SunAmerica Loan Documents, Nautech
pledged to SunAmerica, inter alia, 900 shares of the common stock of Fanatic
Holdings, Inc. ("Fanatic") (the "Fanatic Stock"), constituting all of the
shares of Fanatic owned by Nautech. A true and correct copy of the Nautech
Guaranty is attached hereto as Exhibit 4.
D. The Notes, Notes Purchase Agreement, the Esmark
Guaranty, the Esmark Pledge and the Nautech Guaranty are referred to in this
Stipulation collectively as the SunAmerica Loan Documents. The SunAmerica
Loan Documents and the debt and other obligations owing to SunAmerica
thereunder are referred to collectively hereinafter as the Esmark Loan.
The Prepetition Defaults and Foreclosure Sales
----------------------------------------------
E. On September 29, 1994, SunAmerica gave written
notice to Esmark and Nautech of a default under the SunAmerica Loan Documents
and of SunAmerica's intent to conduct a foreclosure sale of the collateral
pledged to secure the obligations under the SunAmerica Loan Documents,
including the foreclosure sale of the Danskin Stock and the Fanatic Stock.
Pursuant to two letter agreements, SunAmerica agreed to forbear until January
30, 1995 from conducting the foreclosure sales.
F. Pursuant to a letter dated January 30, 1995,
SunAmerica gave notice to Esmark and Nautech of its intent to conduct a
foreclosure sale on March 3, 1995 of the collateral pledged by Esmark and
Nautech. The sales subsequently were adjourned until April 7, 1995. On
April 7, 1995, SunAmerica conducted a foreclosure sale of the Fanatic Stock
and credit bid
<PAGE> 4
$2,000,000 to acquire the shares, thereby reducing the debt of Esmark to
SunAmerica in like amount.
G. The Nautech Stock has no realizable value.
The Involuntary Chapter 7 Bankruptcy Petition
---------------------------------------------
H. On April 7, 1995, an involuntary chapter 7 petition
was filed against Esmark in the United States Bankruptcy Court for the
Western District of Washington by several unsecured creditors of Esmark. As
a result, SunAmerica was unable to sell the Danskin Stock by foreclosure sale
on April 7, 1995. Pursuant to an order entered on August 19, 1995, venue
of the Esmark chapter 7 case was transferred to this United States Bankruptcy
Court for the Southern District of New York ("Court").
SunAmerica's Motion for Relief from the Automatic Stay
------------------------------------------------------
I. On September 12, 1995, SunAmerica petitioned the
Court for relief from the automatic stay to enable SunAmerica to conclude the
foreclosure sale of the Danskin stock that was stayed by the filing of the
involuntary chapter 7 petition against Esmark. In response to SunAmerica's
motion, Esmark asked the Court to adjourn the motion for a relatively short
period of time to enable Esmark to bring to fruition its efforts to obtain
investors to satisfy its creditors. A hearing on the motion was held on
October 11, 1995. At the hearing, Esmark presented into evidence several
offers or expressions of interest to purchase the Esmark Loan from
SunAmerica. The Court denied SunAmerica's motion for relief from stay.
<PAGE> 5
Esmark's Efforts at Raising New Financing
-----------------------------------------
J. After the denial of SunAmerica's motion for relief
from the stay, Sunamerica, Esmark and Derby Partners ("Derby") entered into
negotiations for the sale of the Esmark Loan to Derby. Two separate
agreements for the sale of the Esmark Loan to Derby were reached amongst the
parties, in November 1995 and January 1996. Derby was unable, however, to
close either deal.
K. Esmark now has agreed to consent to relief from the
automatic stay effective May 1, 1996 to enable SunAmerica to enforce its
remedies under the Esmark Loan, in exchange for an agreement from SunAmerica
that grants to Derby an exclusive option to purchase the Esmark Loan from
SunAmerica through April 30, 1996. A true and correct copy of such third
agreement between Derby and SunAmerica is attached hereto as Exhibit 5.
Pursuant to this new agreement, SunAmerica will sell the Esmark Loan to Derby
for $9,100,000 (the "Purchase Price") on or before April 30, 1996 (the
"Closing Date"). If on the Closing Date Derby does not tender the Purchase
Price, it is the intent of the parties hereto that relief from stay would
become effective immediately on May 1, 1996.
Value of the Danskin Stock
--------------------------
L. Based upon the per share price of the Danskin Stock
as it traded in the NASDAQ market over the past 12 months, the value of
SunAmerica's collateral has ranged between $6-11.5 million. The Danskin
Stock secures a debt under the SunAmerica Loan Documents in the original
principal amount of $14.5 million, and, with accrued interest to date, of
$17.5 million.
<PAGE> 6
NOW THEREFORE, ESMARK AND SUNAMERICA HEREBY STIPULATE FOR AND PETITION THE
COURT TO APPROVE THIS STIPULATION AND ENTER AN ORDER PROVIDING AS FOLLOWS:
1. If on April 30, 1996, Derby has not complied with
the contractual requirements for closing of the sale of the Esmark Loan from
SunAmerica to Derby, including without limitation the payment of the
$9,1000,000 Purchase Price, then the automatic stay provisions of 11 U.S.C.
Section 362 shall be terminated, vacated and annulled on May 1, 1996 (without
the necessity of further order of the Court), insofar as such automatic stay
provisions prohibit or prevent SunAmerica from enforcing its state law rights
and remedies under the Esmark Loan, including without limitation the
foreclosure sale of the Danskin Stock.
2. On May 1, 1996, SunAmerica shall be, among other
things, free to take all steps available to it under applicable non-
bankruptcy law to commence and complete the foreclosure sale of the Danskin
Stock.
3. Esmark shall not, directly or indirectly, seek to
block, enjoin, stay, delay, frustrate or stop SunAmerica's foreclosure sale
of the Danskin Stock or the disposition of any other collateral securing the
obligations to SunAmerica under the SunAmerica Loan Documents.
4. This Stipulation and the order approving the
Stipulation shall be binding upon and inure to the benefit of the parties
hereto and their successors and assigns, including any trustee appointed in
this bankruptcy case, and shall remain in full force and effect
notwithstanding that this involuntary chapter 7
<PAGE> 7
case converts to a voluntary case under chapter 7 or chapter 11 of the
Bankruptcy Code.
Dated: New York, New York
February 15, 1996
ROBINSON SILVERMAN PEARCE ARONSOHN
& BERMAN
By: /s/ Susan Power Johnston
-----------------------------
Susan Power Johnston
1290 Avenue of the Americas
New York, N.Y. 10104
(212) 541-2000
Attorneys for Esmark, Inc.
MILBANK, TWEED, HADLEY & McCLOY
By: /s/ David C. L. Frauman
-----------------------------
A member of the Firm
David C. L. Frauman (D.F.7686)
601 S. Figueroa St., 30th Fl.
Los Angeles, CA 90017
(213) 892-4000
Attorneys for SunAmerica Life
Insurance Company
IT IS SO ORDERED.
Dated: March 7, 1996
/s/ Burton R. Lifland
----------------------------------
THE HONORABLE BURTON R. LIFLAND,
CHIEF UNITED STATES BANKRUPTCY
JUDGE
<PAGE> 1
Exhibit H
---------
NOTICE OF FORECLOSURE SALE
Notice Is Hereby Given That By Virtue Of Certain Defaults
under that certain Notes Purchase Agreement (the "Notes Purchase Agreement"),
dated as of September 3, 1993, by and among Nautech Incorporated ("Nautech"),
SunAmerica Life Insurance Company f/k/a Sun Life Insurance Company of America
("Sun Life"), SunAmerica, Inc., as Agent (the "Agent"), and the guarantors
named therein; that certain Guaranty and Pledge Agreement (the "Esmark
Guaranty"), dated as of September 3, 1993, between the Agent and Esmark, Inc.
("Esmark") the Agent will foreclose and sell, at public auction, for cash,
all of Esmark's right, title and interest in and to the following collateral
(the "Collateral"): (a) 2,010,000 shares of common stock of Danskin, Inc.
("Danskin"), par value $.01 per share, evidenced by stock certificate no.
6,207 and all other shares of capital stock of whatever class of Danskin
owned by Esmark as of the date of the sale, in each case together with the
certificates evidencing the same (the "Pledged Stock"); (b) all shares,
securities, moneys or property representing a dividend on any of the Pledged
Stock, or representing a distribution or return of capital upon or in respect
of the Pledged Stock, or resulting from a split-up revision, reclassification
or other like change of the Pledged Stock or otherwise received in exchange
therefor, and any subscription warrants, rights or options issued to the
holders of, or otherwise in respect of, the Pledged Stock; (c) in the event
of any consolidation or merger, involving Danskin, all shares of the capital
stock issued in respect of the pledged Stock and (d) all proceeds of any of
the property described in clauses (a) through (c) above and, to the extent
related to any property described in said clauses or such proceeds, all
books, correspondence, credit files, records, invoices and other papers.
The public sale will take place on June 7, 1996 at 10:00
a.m. at the offices of Milbank, Tweed, Hadley & McCloy, 601 S. Figueroa
Street, 30th Floor, Los Angeles, CA 90017.
Conduct of the sale is authorized pursuant to the
"Stipulation For Relief From The Automatic Stay; Order Thereon", signed by
the Honorable Burton R. Lifland, Chief United States Bankruptcy Judge, United
States Bankruptcy Court for the Southern District of New York, on March 7,
1996 and entered on the Court's docket on March 12, 1996 in the case of In re
Esmark, Inc., Case No. 95-43781 (BRL).
<PAGE> 2
Said sale is subject to the payment of all expenses and fees
of the Agent and Sun Life, expenses of sale and the terms of the sale.
Requests for information concerning the terms of the sale or the Collateral
should be addressed to Milbank, Tweed, Hadley & McCloy, 601 South Figueroa
Street, 31st Floor, Los Angeles, California, 90017, Tel: (213) 892-4000, Fax:
(213) 629-5063, Attention: Fred Neufeld, Esq.
A bidder will be required, upon acceptance of its bid, to
provide written representations addressed to the Agent stating that: (a)
such bidder either alone or with such bidder's attorneys, accountants or
other advisors possesses the requisite business and investment knowledge and
experience to effectively evaluate the potential risks and merits of the
purchase of the Pledged Stock and any other Collateral consisting of
securities (the "Securities"); (b) such bidder has sufficient financial
ability and net worth to bear the economic risk of the purchase of the
Securities for an indefinite period of time and to withstand total loss of
such purchaser's investment in the Securities; (c) such bidder is acquiring
the Securities for investment purposes, solely for the bidder's own account,
and not with a view to a distribution or resale of the Securities; and (d)
such bidder will not resell the Securities without a valid registration under
applicable federal or state laws, including the Securities Act of 1933 or an
available exemption therefrom. In order to be eligible as a purchaser of the
Securities, a person will be required to satisfy the Agent and its counsel
that the offering and sale of the Securities to such person will be exempt
from the requirements of the Securities Act of 1933, as amended (the "Act").
The Agent may require the ultimate purchaser to provide an opinion of counsel
satisfactory to the Agent to the foregoing effect.
The certificates representing the Securities may bear a
legend to the effect that the Securities are restricted securities and may
not be sold or transferred without registration under the Act unless pursuant
to a valid exemption from the registration requirements of the Act.
Although the highest conforming bid from a qualified bidder
is expected to be accepted at the auction, the Agent has the sole discretion
to determine which conforming bid is the highest or best bid, and to reject
any offer which it deems to be insufficient or non-conforming.
The successful bidder shall demonstrate to the Agent's
satisfaction that the purchase of the Collateral will be in compliance with
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, or that a valid
exemption is available under such Act.
The Agent may adjourn the auction hereby advertised or cause
the auction to be adjourned from time to time, without notice or further
publication, by announcement at the time and place appointed for such sale,
or any adjournment, and, without further
<PAGE> 3
notice or publication, such auction may be held at the time and place to
which the auction may have been so adjourned.
The auction shall be an auction with reserve. The Agent
shall not be obligated to make any sale pursuant to this notice, and reserves
the right at all times and for any reason to reject all bids and/or cancel
the auction. The Agent also reserves the right at any time and without
further publication or notice prior to the date of the auction to change the
portion of the Collateral available for purchase at the auction due to prior
sale or for any other reason.
The sale shall not be complete until the successful bidder
completes its purchase as provided herein, and in case of failure to complete
the purchase, the Collateral may thereupon again be put up for sale without
further publication or notice.
The terms and conditions of sale set forth herein may be
subject to additional or amended terms and conditions to be announced at or
before the time of sale.
The Agent and/or Sun Life reserve the right to bid at the
sale and to credit their bid against their secured claims and also reserve
the right of any affiliate of the Agent or Sun Life to bid at the sale and to
credit its bid against any secured claim such affiliate might have. The
Agent also reserves the right to adjourn, delay or terminate the sale without
further notice or publication.
Sun America, Inc., as Agent under the
Notes Purchase Agreement
1 SunAmerica Center, 38th Floor
Los Angeles, CA 90067
Milbank, Tweed, Hadley & McCloy
601 South Figueroa Street, 30th Floor
Los Angeles, CA 90017
Counsel for SunAmerica Life Insurance Company f/k/a
Sun Life Insurance Company of America
