EXHIBIT 1
FORM OF UNDERWRITING AGREEMENT
INTER PARFUMS, INC.
4,336,050 SHARES COMMON STOCK
($ 0.000 XXX XXXXX)*
Xxx Xxxx, Xxx Xxxx
[_], 2005
Citigroup Global Markets Inc.
Xxxxxxxxxxx & Co. Inc.
XX Xxxxx & Co., LLC
As Representatives of the several Underwriters,
c/o Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
The persons named in Schedule I hereto (the "Selling
Stockholders") propose to sell to the several underwriters named in Schedule II
hereto (the "Underwriters"), for whom you (the "Representatives") are acting as
representatives, 4,336,050 shares of Common Stock, $ 0.001 par value ("Common
Stock") of Inter Parfums, Inc., a corporation organized under the laws of
Delaware (the "Company") (said shares to be sold by the Selling Stockholders
collectively being hereinafter called the "Underwritten Securities"). Xxxx Xxxxx
and Xxxxxxxx Xxxxxxx (the "Option Stockholders") also propose to grant to the
Underwriters an option to purchase up to 650,408 additional shares of Common
Stock to cover over-allotments (the "Option Securities"; the Option Securities,
together with the Underwritten Securities, being hereinafter called the
"Securities"). To the extent there are no additional Underwriters listed on
Schedule II other than you, the term Representatives as used herein shall mean
you, as Underwriters, and the terms Representatives and Underwriters shall mean
either the singular or plural as the context requires. The use of the neuter in
this Agreement shall include the feminine and masculine wherever appropriate.
Any reference herein to the Registration Statement, the Basic Prospectus, any
Preliminary Final Prospectus or the Final Prospectus shall be deemed to refer to
and include the documents incorporated by reference therein pursuant to Item 12
of Form S-3 which were filed under the Exchange Act on or before the Effective
Date of the Registration Statement or the issue date of the Basic Prospectus,
any Preliminary Final Prospectus or the Final Prospectus, as the case may be;
and any reference herein to the terms "amend", "amendment" or "supplement" with
respect to the Registration Statement, the Basic Prospectus, any Preliminary
Final Prospectus or the Final Prospectus shall be deemed to refer to
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* Plus an option to purchase up to 650,408 additional Securities to cover
over-allotments
and include the filing of any document under the Exchange Act after the
Effective Date of the Registration Statement or the issue date of the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus, as the
case may be, deemed to be incorporated therein by reference. Certain terms used
herein are defined in Section 18 hereof.
1. REPRESENTATIONS AND WARRANTIES.
(i) The Company and each of the Selling Stockholders jointly
and severally represent and warrant to, and agree with, each Underwriter as set
forth below in this Section 1.
(a) The Company meets the requirements for use of
Form S-3 under the Act and has prepared and filed with the
Commission a registration statement (file number 333-128170) on
Form S-3, including a related basic prospectus, for registration
under the Act of the offering and sale of the Securities. The
Company may have filed one or more amendments thereto, including
a Preliminary Final Prospectus, each of which has previously
been furnished to you. The Company will next file with the
Commission one of the following: (1) after the Effective Date of
such registration statement, a final prospectus supplement
relating to the Securities in accordance with Rules 430A and
424(b), (2) prior to the Effective Date of such registration
statement, an amendment to such registration statement
(including the form of final prospectus supplement) or (3) a
final prospectus in accordance with Rules 415 and 424(b). In the
case of clause (1), the Company has included in such
registration statement, as amended at the Effective Date, all
information (other than Rule 430A Information) required by the
Act and the rules thereunder to be included in such registration
statement and the Final Prospectus. As filed, such final
prospectus supplement or such amendment and form of final
prospectus supplement shall contain all Rule 430A Information,
together with all other such required information, and, except
to the extent the Representatives shall agree in writing to a
modification, shall be in all substantive respects in the form
furnished to you prior to the Execution Time or, to the extent
not completed at the Execution Time, shall contain only such
specific additional information and other changes (beyond that
contained in the Basic Prospectus and any Preliminary Final
Prospectus) as the Company has advised you, prior to the
Execution Time, will be included or made therein. The
Registration Statement, at the Execution Time, meets the
requirements set forth in Rule 415(a)(1).
(b) On the Effective Date, the Registration
Statement did or will, and when the Final Prospectus is first
filed (if required) in accordance with Rule 424(b) and on the
Closing Date (as defined herein) and on any date on which Option
Securities are purchased, if such date is not the Closing Date
(a "settlement date"), the Final Prospectus (and any supplement
thereto) will, comply in all material respects with the
applicable requirements of the Act and the Exchange Act and the
respective rules thereunder; on the Effective Date and at the
Execution Time, the Registration Statement did not or will not
contain any
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untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in
order to make the statements therein not misleading; and, on the
Effective Date, the Final Prospectus, if not filed pursuant to
Rule 424(b), will not, and on the date of any filing pursuant to
Rule 424(b) and on the Closing Date and any settlement date, the
Final Prospectus (together with any supplement thereto) will
not, include any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading; PROVIDED, HOWEVER, that the Company and
the Selling Stockholders make no representations or warranties
as to the information contained in or omitted from the
Registration Statement or the Final Prospectus (or any
supplement thereto) in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf
of any Underwriter through the Representatives specifically for
inclusion in the Registration Statement or the Final Prospectus
(or any supplement thereto).
(c) Each of the Company and its subsidiaries has
been duly incorporated or organized and is validly existing as a
corporation or limited liability company in good standing under
the laws of the jurisdiction in which it is chartered or
organized with full corporate power and authority to own or
lease, as the case may be, and to operate its properties and
conduct its business as described in the Final Prospectus, and
is duly qualified to do business as a foreign corporation and is
in good standing under the laws of each jurisdiction which
requires such qualification, except where the failure to so
qualify would not have a material adverse effect on the
condition (financial or otherwise), prospects, earnings,
business or properties of the Company and its subsidiaries,
taken as a whole, whether or not arising from transactions in
the ordinary course of business, except as set forth in or
contemplated in the Final Prospectus (exclusive of any
supplement thereto).
(d) The Company's authorized equity capitalization
is as set forth in the Final Prospectus; the capital stock of
the Company conforms in all material respects to the description
thereof contained in the Final Prospectus; the outstanding
shares of Common Stock (including the Securities being sold
hereunder by the Selling Stockholders) have been duly and
validly authorized and issued and are fully paid and
nonassessable; the Securities being sold by the Selling
Stockholders are duly listed, and admitted and authorized for
trading, on The Nasdaq National Market; the certificates for the
Securities are in valid and sufficient form; the holders of
outstanding shares of capital stock of the Company are not
entitled to preemptive or other rights to subscribe for the
Securities; and, except as set forth in the Final Prospectus, no
options, warrants or other rights to purchase, agreements or
other obligations to issue, or rights to convert any obligations
into or exchange any securities for, shares of capital stock of
or ownership interests in the Company are outstanding; all the
outstanding shares of
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capital stock of each subsidiary have been duly and validly
authorized and issued and are fully paid and nonassessable, and,
except as otherwise set forth in the Final Prospectus, all
outstanding shares of capital stock of the subsidiaries are
owned by the Company either directly or through wholly owned
subsidiaries free and clear of any perfected security interest
or any other security interests, claims, liens or encumbrances.
(e) There is no franchise, contract or other
document of a character required to be described in the
Registration Statement or Final Prospectus, or to be filed as an
exhibit thereto, which is not described or filed as required;
and the statements in the Final Prospectus under the headings
"Summary--Our Business--Our Prestige Business", "Risk
Factors--We are dependent upon Burberry for a significant
portion of our sales, and the loss of this license will have a
material adverse effect on us.", "Risk Factors--If we are unable
to protect our intellectual property rights, specifically
trademarks and brand names, our ability to compete could be
negatively impacted.", "Risk Factors--We are dependent upon The
Gap, Inc. to approve and sell products that we develop for Gap.
In addition, we anticipate incurring expenses prior to any
products being launched and the initial lines of products are
not scheduled to be launched until 2006 and 2007.", "Risk
Factors--Our business is subject to governmental regulation,
which could impact our operations.", "Risk Factors--We may
become subject to possible liability for improper comparative
advertising or 'Trade Dress'.", "Management's Discussion and
Analysis of Financial Condition and Results of
Operations--Recent Important Events", "Management's Discussion
and Analysis of Financial Condition and Results of
Operations--Results of Operations--Three and Six Months Ended
June 30, 2005 as Compared to the Three and Six Months Ended June
30, 2004--Selling, General & Administrative Expense",
"Management's Discussion and Analysis of Financial Condition and
Results of Operations--Results of Operations--Year Ended
December 31, 2005 as Compared to the Year Ended December 31,
2004--Selling, General & Administrative Expense", "Management's
Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources", "Certain U.S.
Federal Tax Matters", and "Description of Our Capital Stock",
the statements in the Company's Annual Report on Form 10-K/A for
the year ended December 31, 2004 under the headings "Item 1.
Business--2004 Important Events", "Item 1. Business--Fragrance
and Cosmetic Products", "Item 1. Business--Mass Market
Products", "Item 1. Business--Government Regulation", "Item 1.
Business--Forward Looking Information and Risk Factors--We are
dependent upon Burberry for a significant portion of our sales,
and the loss of this license will have a material adverse affect
on us.", "Item 1. Business--Forward Looking Information and Risk
Factors--Our business is subject to governmental regulation,
which could impact our operations.", "Item 1. Business--Forward
Looking Information and Risk Factors--We may become subject to
possible liability for improper comparative advertising or
'trade dress'.", "Item 2.
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Properties", "Item 3. Legal Proceedings", "Item 7. Management's
Discussion and Analysis of Financial Condition and Results of
Operation--2004 Important Events", "Item 7. Management's
Discussion and Analysis of Financial Condition and Results of
Operation--Selling, General & Administrative", "Item 7.
Management's Discussion and Analysis of Financial Condition and
Results of Operation--Liquidity and Financed Resources", "Item
11. Executive Compensation--Employment Agreements", and "Item
13. Certain Relationships and Related Transactions" and the
statements in the Company's Current Reports on Form 8-K dated
July 19, 2005, August 5, 2005 and October 11, 2005 insofar as
such statements summarize legal matters, agreements, documents
or proceedings discussed therein, are accurate and fair
summaries of such legal matters, agreements, documents or
proceedings in all material respects.
(f) This Agreement has been duly authorized,
executed and delivered by the Company.
(g) The Company is not and, after giving effect to
the offering and sale of the Securities and the application of
the proceeds thereof as described in the Final Prospectus, will
not be an "investment company" as defined in the Investment
Company Act of 1940, as amended.
(h) No consent, approval, authorization, filing with
or order of any court, governmental agency or body or regulatory
authority is required in connection with the transactions
contemplated herein, except such as have been obtained under the
Act and such as may be required under the blue sky laws of any
jurisdiction and the regulations of the National Association of
Securities Dealers, Inc. in connection with the purchase and
distribution of the Securities by the Underwriters in the manner
contemplated herein and in the Final Prospectus.
(i) Neither the issue and sale of the Securities nor
the consummation of any other of the transactions herein
contemplated nor the fulfillment of the terms hereof will
conflict with, result in a breach or violation of, or imposition
of any lien, charge or encumbrance upon any property or assets
of the Company or any of its subsidiaries pursuant to, (i) the
charter or by-laws of the Company or any of its subsidiaries,
(ii) the terms of any indenture, contract, lease, mortgage, deed
of trust, note agreement, loan agreement or other agreement,
obligation, condition, covenant or instrument to which the
Company or any of its subsidiaries is a party or bound or to
which its or their property is subject, or (iii) any statute,
law, rule, regulation, judgment, order or decree applicable to
the Company or any of its subsidiaries of any court, regulatory
body, administrative agency, governmental body, arbitrator or
other authority having jurisdiction over the Company or any of
its subsidiaries or any of its or their properties.
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(j) No holders of securities of the Company, other
than LV Capital USA, Inc., a Selling Stockholder, have rights to
the registration of such securities under the Registration
Statement.
(k) The consolidated historical financial statements
and schedules of the Company and its consolidated subsidiaries
included in the Final Prospectus and the Registration Statement
present fairly in all material respects the financial condition,
results of operations and cash flows of the Company as of the
dates and for the periods indicated, comply as to form with the
applicable accounting requirements of the Act and have been
prepared in conformity with generally accepted accounting
principles applied on a consistent basis throughout the periods
involved (except as otherwise noted therein). The selected
financial data set forth under the caption "Selected Financial
Data" in the Final Prospectus and Registration Statement and in
Item 6 of the Company's Annual Report on Form 10-K/A for the
year ended December 31, 2004 and the supplemental financial data
set forth under the caption "Supplementary Data" in Item 6 of
the Company's Annual Report on Form 10-K/A for the year ended
December 31, 2004 fairly present, on the basis stated in the
Final Prospectus and the Registration Statement, the information
included therein.
(l) No action, suit or proceeding by or before any
court or governmental agency, authority or body or any
arbitrator involving the Company or any of its subsidiaries or
its or their property is pending or, to the best knowledge of
the Company, threatened that (i) could reasonably be expected to
have a material adverse effect on the performance of this
Agreement or the consummation of any of the transactions
contemplated hereby or (ii) could reasonably be expected to have
a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the
Company and its subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business,
except as set forth in or contemplated in the Final Prospectus
(exclusive of any supplement thereto).
(m) Each of the Company and each of its subsidiaries
owns, leases or has a contract for the use of all such
properties as are necessary to the conduct of its operations as
presently conducted.
(n) Neither the Company nor any subsidiary is in
violation or default of (i) any provision of its charter or
bylaws, (ii) the terms of any indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument to
which it is a party or bound or to which its property is
subject, or (iii) any statute, law, rule, regulation, judgment,
order or decree of any court, regulatory body, administrative
agency, governmental body, arbitrator or other authority having
jurisdiction over the Company or such subsidiary or any of its
properties, as applicable except, in the
6
case of clauses (ii) and (iii) above for such violations or
defaults as would not have a material adverse effect on the
condition (financial or otherwise), prospects, earnings,
business or properties of the Company and its subsidiaries,
taken as a whole, whether or not arising from transactions in
the ordinary course of business, except as set forth in or
contemplated in the Final Prospectus (exclusive of any
supplement thereto).
(o) Mazars LLP, who have certified certain financial
statements of the Company and its consolidated subsidiaries for
the year ended December 31, 2004, whose report with respect to
the audited consolidated financial statements and schedules
incorporated by reference in the Final Prospectus, are
independent public accountants with respect to the Company
within the meaning of the Act and the applicable published rules
and regulations thereunder.
(p) KPMG LLP, who have certified certain financial
statements of the Company and its consolidated subsidiaries for
the year ended December 31, 2003, whose report with respect to
the audited consolidated financial statements and schedules
incorporated by reference in the Final Prospectus, are
independent public accountants with respect to the Company
within the meaning of the Act and the applicable published rules
and regulations thereunder.
(q) Xxxxxx LLP, who have certified certain financial
statements of the Company and its consolidated subsidiaries for
the year ended December 31, 2002, whose report with respect to
the audited consolidated financial statements and schedules
incorporated by reference in the Final Prospectus, were
independent public accountants with respect to the Company at
the time they performed such audit within the meaning of the Act
and the applicable published rules and regulations thereunder.
(r) KPMG Audit, a division of KPMG S.A., who have
certified certain financial statements of Inter Parfums
Holdings, S.A and its consolidated subsidiaries for the year
ended December 31, 2002, whose report with respect to the
audited consolidated financial statements and schedules
incorporated by reference in the Final Prospectus, were
independent public accountants with respect to the Company at
the time they performed such audit within the meaning of the Act
and the applicable published rules and regulations thereunder.
(s) There are no transfer taxes or other similar
fees or charges under Federal law or the laws of any state, or
any political subdivision thereof, required to be paid in
connection with the execution and delivery of this Agreement or
the sale by the Selling Stockholders of the Securities other
than transfer taxes under the laws of the state of New York for
the prompt payment of which the Selling Stockholders have made
provision.
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(t) The Company has filed all foreign, federal,
state and local tax returns that are required to be filed or has
requested extensions thereof (except in any case in which the
failure so to file would not have a material adverse effect on
the condition (financial or otherwise), prospects, earnings,
business or properties of the Company and its subsidiaries,
taken as a whole, whether or not arising from transactions in
the ordinary course of business, except as set forth in or
contemplated in the Final Prospectus (exclusive of any
supplement thereto) and has paid all taxes required to be paid
by it and any other assessment, fine or penalty levied against
it, to the extent that any of the foregoing is due and payable,
except for any such assessment, fine or penalty that is
currently being contested in good faith or as would not have a
material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the
Company and its subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business,
except as set forth in or contemplated in the Final Prospectus
(exclusive of any supplement thereto).
(u) No labor problem or dispute with the employees
of the Company or any of its subsidiaries exists or, to the
knowledge of the Selling Stockholders and the Company, is
threatened or imminent, and the Company is not aware of any
existing or imminent labor disturbance by the employees of any
of its or its subsidiaries' principal suppliers, contractors or
customers, that could have a material adverse effect on the
condition (financial or otherwise), prospects, earnings,
business or properties of the Company and its subsidiaries,
taken as a whole, whether or not arising from transactions in
the ordinary course of business, except as set forth in or
contemplated in the Final Prospectus (exclusive of any
supplement thereto).
(v) The Company and each of its subsidiaries are
insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as are prudent
and customary in the businesses in which they are engaged; all
policies of insurance and, if applicable, fidelity or surety
bonds insuring the Company or any of its subsidiaries or their
respective businesses, assets, employees, officers and directors
are in full force and effect; the Company and its subsidiaries
are in compliance with the terms of such policies and
instruments in all material respects; and there are no claims by
the Company or any of its subsidiaries under any such policy or
instrument as to which any insurance company is denying
liability or defending under a reservation of rights clause;
neither the Company nor any such subsidiary has been refused any
insurance coverage sought or applied for; and neither the
Company nor any such subsidiary has any reason to believe that
it will not be able to renew its existing insurance coverage as
and when such coverage expires or to obtain similar coverage
from similar insurers as may be necessary to continue its
business at a cost that would not have a material adverse effect
on the condition (financial or otherwise), prospects, earnings,
business or properties of the Company and its
8
subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set
forth in or contemplated in the Final Prospectus (exclusive of
any supplement thereto).
(w) No subsidiary of the Company is currently
prohibited, directly or indirectly, from paying any dividends to
the Company, from making any other distribution on such
subsidiary's capital stock, from repaying to the Company any
loans or advances to such subsidiary from the Company or from
transferring any of such subsidiary's property or assets to the
Company or any other subsidiary of the Company, except as
described in or contemplated by the Final Prospectus (exclusive
of any supplement thereto).
(x) The Company and its subsidiaries possess all
licenses, certificates, permits and other authorizations issued
by the appropriate federal, state or foreign regulatory
authorities necessary to conduct their respective businesses,
and neither the Company nor any such subsidiary has received any
notice of proceedings relating to the revocation or modification
of any such certificate, authorization or permit which, singly
or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would have a material adverse effect on the
condition (financial or otherwise), prospects, earnings,
business or properties of the Company and its subsidiaries,
taken as a whole, whether or not arising from transactions in
the ordinary course of business, except as set forth in or
contemplated in the Final Prospectus (exclusive of any
supplement thereto).
(y) The Company and each of its subsidiaries
maintain a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed
in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain asset
accountability; (iii) access to assets is permitted only in
accordance with management's general or specific authorization;
and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(z) The Company has not taken, directly or
indirectly, any action designed to or that would constitute or
that might reasonably be expected to cause or result in, under
the Exchange Act or otherwise, stabilization or manipulation of
the price of any security of the Company for the purpose of
facilitating the sale or resale of the Securities.
(aa) The Company and its subsidiaries are (i) in
compliance with any and all applicable foreign, federal, state
and local laws and regulations relating to the protection of
human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("Environmental
Laws"), (ii)
9
have received and are in compliance with all permits, licenses
or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and
(iii) have not received notice of any actual or potential
liability under any environmental law, except where such
non-compliance with Environmental Laws, failure to receive
required permits, licenses or other approvals, or liability
would not, individually or in the aggregate, have a material
adverse change in the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and
its subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set
forth in or contemplated in the Final Prospectus (exclusive of
any supplement thereto). Except as set forth in the Final
Prospectus, neither the Company nor any of the subsidiaries has
been named as a "potentially responsible party" under the
Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended.
(bb) The minimum funding standard under Section 302
of the Employee Retirement Income Security Act of 1974, as
amended, and the regulations and published interpretations
thereunder ("ERISA"), has been satisfied by each "pension plan"
(as defined in Section 3(2) of ERISA) which has been established
or maintained by the Company and/or one or more of its
subsidiaries, if any, and the trust forming part of each such
plan which is intended to be qualified under Section 401 of the
Code is so qualified; each of the Company and its subsidiaries
has fulfilled its obligations, if any, under Section 515 of
ERISA; neither the Company nor any of its subsidiaries maintains
or is required to contribute to a "welfare plan" (as defined in
Section 3(1) of ERISA) which provides retiree or other
post-employment welfare benefits or insurance coverage (other
than "continuation coverage" (as defined in Section 602 of
ERISA)); each pension plan and welfare plan established or
maintained by the Company and/or one or more of its subsidiaries
is in compliance in all material respects with the currently
applicable provisions of ERISA; and neither the Company nor any
of its subsidiaries has incurred or could reasonably be expected
to incur any withdrawal liability under Section 4201 of ERISA,
any liability under Section 4062, 4063, or 4064 of ERISA, or any
other liability under Title IV of ERISA.
(cc) There is and has been no failure on the part of
the Company and any of the Company's directors or officers, in
their capacities as such, to comply with any provision of the
Sarbanes Oxley Act of 2002 and the rules and regulations
promulgated in connection therewith (the "Sarbanes Oxley Act"),
including Section 402 related to loans and Sections 302 and 906
related to certifications.
(dd) Neither the Company nor any of its subsidiaries
nor, to the knowledge of the Selling Stockholders, or the
Company, any director, officer,
10
agent, employee or affiliate of the Company or any of its
subsidiaries is aware of or has taken any action, directly or
indirectly, that would result in a violation by such Persons of
the FCPA, including, without limitation, making use of the mails
or any means or instrumentality of interstate commerce corruptly
in furtherance of an offer, payment, promise to pay or
authorization of the payment of any money, or other property,
gift, promise to give, or authorization of the giving of
anything of value to any "foreign official" (as such term is
defined in the FCPA) or any foreign political party or official
thereof or any candidate for foreign political office, in
contravention of the FCPA and the Company, its subsidiaries and,
to the knowledge of the Company, its affiliates have conducted
their businesses in compliance with the FCPA and have instituted
and maintain policies and procedures designed to ensure, and
which are reasonably expected to continue to ensure, continued
compliance therewith.
"FCPA" means Foreign Corrupt Practices Act of 1977, as
amended, and the rules and regulations thereunder.
(ee) The operations of the Company and its
subsidiaries are and have been conducted at all times in
compliance with applicable financial recordkeeping and reporting
requirements of the Currency and Foreign Transactions Reporting
Act of 1970, as amended, the money laundering statutes of all
jurisdictions, the rules and regulations thereunder and any
related or similar rules, regulations or guidelines, issued,
administered or enforced by any governmental agency
(collectively, the "Money Laundering Laws") and no action, suit
or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company or any
of its subsidiaries with respect to the Money Laundering Laws is
pending or, to the best knowledge of the Company, threatened.
(ff) Neither the Company nor any of its subsidiaries
nor, to the knowledge of the Company, any director, officer,
agent, employee or affiliate of the Company or any of its
subsidiaries is currently subject to any U.S. sanctions
administered by the Office of Foreign Assets Control of the U.S.
Treasury Department ("OFAC"); and the Company will not directly
or indirectly use the proceeds of the offering, or lend,
contribute or otherwise make available such proceeds to any
subsidiary, joint venture partner or other person or entity, for
the purpose of financing the activities of any person currently
subject to any U.S. sanctions administered by OFAC.
(gg) The subsidiaries listed on Exhibit 21 to the
Company's Annual Report on Form 10-K for the year ended December
31, 2004 (the "Subsidiaries") are the only significant
subsidiaries of the Company as defined by Rule 1-02 of
Regulation S-X.
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(hh) The Company and its subsidiaries own, possess,
license or have other rights to use, on reasonable terms, all
patents, patent applications, trade and service marks, trade and
service xxxx registrations, trade names, copyrights, licenses,
inventions, trade secrets, technology, know-how and other
intellectual property (collectively, the "Intellectual
Property") necessary for the conduct of the Company's business
as now conducted or as proposed in the Final Prospectus to be
conducted. (a) There are no rights of third parties to any such
Intellectual Property except as set forth in the Registration
Statement; (b) to the knowledge of the Company or the Selling
Shareholders, there is no infringement by third parties of any
such Intellectual Property; (c) there is no pending or to the
knowledge of the Company or the Selling Shareholders, threatened
action, suit, proceeding or claim by others challenging the
Company's rights in or to any such Intellectual Property, and
the Company is unaware of any facts which would form a
reasonable basis for any such claim; (d) there is no pending or,
to the knowledge of the Company or the Selling Shareholders,
threatened action, suit, proceeding or claim by others
challenging the validity or scope of any such Intellectual
Property, and the Company is unaware of any facts which would
form a reasonable basis for any such claim; (e) there is no
pending or to the knowledge of the Company or the Selling
Shareholders, threatened action, suit, proceeding or claim by
others that the Company infringes or otherwise violates any
patent, trademark, copyright, trade secret or other proprietary
rights of others, and the Company is unaware of any other fact
which would form a reasonable basis for any such claim; (f)
there is no U.S. patent or published U.S. patent application
which contains claims that dominate or may dominate any
Intellectual Property described in the Final Prospectus as being
owned by or licensed to the Company or that interferes with the
issued or pending claims of any such Intellectual Property; and
(g) there is no prior art of which the Company is aware that may
render any U.S. patent held by the Company invalid or any U.S.
patent application held by the Company unpatentable which has
not been disclosed to the U.S. Patent and Trademark Office,
except, in the case of clauses (d) through (g) above for such
matters as would not, singly or in the aggregate, have a
material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the
Company and its subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business,
except as set forth in or contemplated in the Final Prospectus
(exclusive of any supplement thereto).
Any certificate signed by any officer of the Company and
delivered to the Representatives or counsel for the Underwriters
in connection with the offering of the Securities shall be
deemed a representation and warranty by the Company, as to
matters covered thereby, to each Underwriter.
(ii) Each Selling Stockholder represents and warrants to, and
agrees with, each Underwriter that:
12
(a) Such Selling Stockholder is the record and
beneficial owner of the Securities to be sold by it hereunder
free and clear of all liens, encumbrances, equities and claims
and has duly endorsed such Securities in blank, and, assuming
that each Underwriter acquires its interest in the Securities it
has purchased from such Selling Stockholder without notice of
any adverse claim (within the meaning of Section 8-105 of the
New York Uniform Commercial Code ("UCC")), each Underwriter that
has purchased such Securities delivered on the Closing Date to
The Depository Trust Company or other securities intermediary by
making payment therefor as provided herein, and that has had
such Securities credited to the securities account or accounts
of such Underwriters maintained with The Depository Trust
Company or such other securities intermediary will have acquired
a security entitlement (within the meaning of Section
8-102(a)(17) of the UCC) to such Securities purchased by such
Underwriter, and no action based on an adverse claim (within the
meaning of Section 8-105 of the UCC) may be asserted against
such Underwriter with respect to such Securities.
(b) Such Selling Stockholder has not taken, directly
or indirectly, any action designed to or that would constitute
or that might reasonably be expected to cause or result in,
under the Exchange Act or otherwise, stabilization or
manipulation of the price of any security of the Company to
facilitate the sale or resale of the Securities.
(c) Certificates in negotiable form for such Selling
Stockholder's Securities have been placed in custody, for
delivery pursuant to the terms of this Agreement, under a
Custody Agreement and Power of Attorney duly authorized (if
applicable) executed and delivered by such Selling Stockholder,
in the form heretofore furnished to you (the "Custody
Agreement") with American Stock Transfer & Trust Company, as
Custodian (the "Custodian"); the Securities represented by the
certificates so held in custody for each Selling Stockholder are
subject to the interests hereunder of the Underwriters; the
arrangements for custody and delivery of such certificates, made
by such Selling Stockholder hereunder and under the Custody
Agreement, are not subject to termination by any acts of such
Selling Stockholder, or by operation of law, whether by the
death or incapacity of such Selling Stockholder or the
occurrence of any other event; and if any such death, incapacity
or any other such event shall occur before the delivery of such
Securities hereunder, certificates for the Securities will be
delivered by the Custodian in accordance with the terms and
conditions of this Agreement and the Custody Agreement as if
such death, incapacity or other event had not occurred,
regardless of whether or not the Custodian shall have received
notice of such death, incapacity or other event.
(d) No consent, approval, authorization or order of
any court or governmental agency or body is required for the
consummation by such Selling Stockholder of the transactions
contemplated herein, except such as may have
13
been obtained under the Act and such as may be required under
the blue sky laws of any jurisdiction in connection with the
purchase and distribution of the Securities by the Underwriters
and such other approvals as have been obtained.
(e) Neither the sale of the Securities being sold by
such Selling Stockholder nor the consummation of any other of
the transactions herein contemplated by such Selling Stockholder
or the fulfillment of the terms hereof by such Selling
Stockholder will conflict with, result in a breach or violation
of, or constitute a default under any law or (in the case of LV
Capital USA, Inc.) the charter or by-laws of such Selling
Stockholder or the terms of any indenture or other agreement or
instrument to which such Selling Stockholder or (in the case of
LV Capital USA, Inc.) any of its subsidiaries is a party or
bound, or any judgment, order or decree applicable to such
Selling Stockholder or (in the case of LV Capital USA, Inc.) any
of its subsidiaries of any court, regulatory body,
administrative agency, governmental body or arbitrator having
jurisdiction over such Selling Stockholder or (in the case of LV
Capital USA, Inc.) any of its subsidiaries.
Any certificate signed by any officer of any Selling Stockholder
and delivered to the Representatives or counsel for the Underwriters in
connection with the offering of the Securities shall be deemed a representation
and warranty by such Selling Stockholder, as to matters covered thereby, to each
Underwriter.
2. PURCHASE AND SALE. (a) Subject to the terms and
conditions and in reliance upon the representations and warranties herein set
forth, the Selling Stockholders agree, severally and not jointly, to sell to
each Underwriter, and each Underwriter agrees, severally and not jointly, to
purchase from the Selling Stockholders, at a purchase price of $ [_] per share,
the amount of the Underwritten Securities set forth opposite such Underwriter's
name in Schedule II hereto.
(b) Subject to the terms and conditions and in
reliance upon the representations and warranties herein set
forth, the Option Stockholders hereby grant an option to the
several Underwriters to purchase, severally and not jointly, up
to 650,408 Option Securities at the same purchase price per
share as the Underwriters shall pay for the Underwritten
Securities. Said option may be exercised only to cover
over-allotments in the sale of the Underwritten Securities by
the Underwriters. Said option may be exercised in whole or in
part at any time on or before the 30th day after the date of the
Final Prospectus upon written or telegraphic notice by the
Representatives to such Option Stockholders setting forth the
number of shares of the Option Securities as to which the
several Underwriters are exercising the option and the
settlement date. The maximum number of Option Securities to be
sold by the Option Stockholders is 650,408. The maximum number
of Option Securities which each Option Stockholder agrees to
sell is set forth in Schedule I hereto. In the event that the
Underwriters
14
exercise less than their full over-allotment option, the number
of Option Securities to be sold by each Option Stockholder shall
be, as nearly as practicable, in the same proportion as the
maximum number of Option Securities to be sold by each Option
Stockholder and the number of Option Securities to be sold. The
number of Option Securities to be purchased by each Underwriter
shall be the same percentage of the total number of shares of
the Option Securities to be purchased by the several
Underwriters as such Underwriter is purchasing of the
Underwritten Securities, subject to such adjustments as you in
your absolute discretion shall make to eliminate any fractional
shares.
3. DELIVERY AND PAYMENT. Delivery of and payment for the
Underwritten Securities and the Option Securities (if the option provided for in
Section 2(b) hereof shall have been exercised on or before the third Business
Day prior to the Closing Date) shall be made at 10:00 AM, New York City time, on
[_], 2005, or at such time on such later date not more than three Business Days
after the foregoing date as the Representatives shall designate, which date and
time may be postponed by agreement among the Representatives, the Company and
the Selling Stockholders or as provided in Section 9 hereof (such date and time
of delivery and payment for the Securities being herein called the "Closing
Date"). Delivery of the Securities shall be made to the Representatives for the
respective accounts of the several Underwriters against payment by the several
Underwriters through the Representatives of the respective aggregate purchase
prices of the Securities being sold by each of the Selling Stockholders to or
upon the order of the Selling Stockholders by wire transfer payable in same-day
funds to the accounts specified by the Selling Stockholders. Delivery of the
Underwritten Securities and the Option Securities shall be made through the
facilities of The Depository Trust Company unless the Representatives shall
otherwise instruct.
Each Selling Stockholder will pay all applicable state transfer
taxes, if any, involved in the transfer to the several Underwriters of the
Securities to be purchased by them from such Selling Stockholder and the
respective Underwriters will pay any additional stock transfer taxes involved in
further transfers.
If the option provided for in Section 2(b) hereof is exercised
after the third Business Day prior to the Closing Date, the Option Stockholders
will deliver the Option Securities (at the expense of the Company) to the
Representatives, at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, xx the date
specified by the Representatives (which shall be within three Business Days
after exercise of said option) for the respective accounts of the several
Underwriters, against payment by the several Underwriters through the
Representatives of the purchase price thereof to or upon the order of the Option
Stockholders by wire transfer payable in same-day funds to the accounts
specified by the Option Stockholders. If settlement for the Option Securities
occurs after the Closing Date, the Option Stockholders will deliver to the
Representatives on the settlement date for the Option Securities, and the
obligation of the Underwriters to purchase the Option Securities shall be
conditioned upon receipt of, supplemental opinions, certificates and letters
confirming as of such date the opinions, certificates and letters delivered on
the Closing Date pursuant to Section 6 hereof.
15
4. OFFERING BY UNDERWRITERS. It is understood that the
several Underwriters propose to offer the Securities for sale to the public as
set forth in the Final Prospectus.
5. AGREEMENTS.
(i) The Company agrees with the several Underwriters that:
(a) The Company will use its best efforts to cause
the Registration Statement, if not effective at the Execution
Time, and any amendment thereof, to become effective. Prior to
the termination of the offering of the Securities, the Company
will not file any amendment of the Registration Statement or
supplement (including the Final Prospectus or any Preliminary
Final Prospectus) to the Basic Prospectus or any Rule 462(b)
Registration Statement unless the Company has furnished you a
copy for your review prior to filing and will not file any such
proposed amendment or supplement to which you reasonably object.
Subject to the foregoing sentence, if the Registration Statement
has become or becomes effective pursuant to Rule 430A, or filing
of the Final Prospectus is otherwise required under Rule 424(b),
the Company will cause the Final Prospectus, properly completed,
and any supplement thereto to be filed in a form approved by the
Representatives with the Commission pursuant to the applicable
paragraph of Rule 424(b) within the time period prescribed and
will provide evidence satisfactory to the Representatives of
such timely filing. The Company will promptly advise the
Representatives (1) when the Registration Statement, if not
effective at the Execution Time, shall have become effective,
(2) when the Final Prospectus, and any supplement thereto, shall
have been filed (if required) with the Commission pursuant to
Rule 424(b) or when any Rule 462(b) Registration Statement shall
have been filed with the Commission, (3) when, prior to
termination of the offering of the Securities, any amendment to
the Registration Statement shall have been filed or become
effective, (4) of any request by the Commission or its staff for
any amendment of the Registration Statement, or any Rule 462(b)
Registration Statement, or for any supplement to the Final
Prospectus or for any additional information, (5) of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the institution
or threatening of any proceeding for that purpose and (6) of the
receipt by the Company of any notification with respect to the
suspension of the qualification of the Securities for sale in
any jurisdiction or the institution or threatening of any
proceeding for such purpose. The Company will use its best
efforts to prevent the issuance of any such stop order or the
suspension of any such qualification and, if issued, to obtain
as soon as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to
the Securities is required to be delivered under the Act, any
event occurs as a result of which the Final Prospectus as then
supplemented would include any untrue statement of a
16
material fact or omit to state any material fact necessary to
make the statements therein in the light of the circumstances
under which they were made not misleading, or if it shall be
necessary to amend the Registration Statement or supplement the
Final Prospectus to comply with the Act or the Exchange Act or
the respective rules thereunder, the Company promptly will (1)
notify the Representatives of such event, (2) prepare and file
with the Commission, subject to the second sentence of paragraph
(i)(a) of this Section 5, an amendment or supplement which will
correct such statement or omission or effect such compliance and
(3) supply any supplemented Final Prospectus to you in such
quantities as you may reasonably request.
(c) As soon as practicable, the Company will make
generally available to its security holders and to the
Representatives an earnings statement or statements of the
Company and its subsidiaries which will satisfy the provisions
of Section 11(a) of the Act and Rule 158 under the Act.
(d) The Company will furnish to the Representatives
and counsel for the Underwriters, without charge, signed copies
of the Registration Statement (including exhibits thereto) and
to each other Underwriter a copy of the Registration Statement
(without exhibits thereto) and, so long as delivery of a
prospectus by an Underwriter or dealer may be required by the
Act, as many copies of each Preliminary Final Prospectus and the
Final Prospectus and any supplement thereto as the
Representatives may reasonably request. The Company will pay the
expenses of printing or other production of all documents
relating to the offering.
(e) The Company will arrange, if necessary, for the
qualification of the Securities for sale under the laws of such
jurisdictions as the Representatives may designate, will
maintain such qualifications in effect so long as required for
the distribution of the Securities and will pay any fee of the
National Association of Securities Dealers, Inc., in connection
with its review of the offering; provided that in no event shall
the Company be obligated to qualify to do business in any
jurisdiction where it is not now so qualified or to take any
action that would subject it to service of process in suits,
other than those arising out of the offering or sale of the
Securities, in any jurisdiction where it is not now so subject.
(f) The Company will not, without the prior written
consent of Citigroup Global Markets Inc., offer, sell, contract
to sell, pledge, or otherwise dispose of, (or enter into any
transaction which is designed to, or might reasonably be
expected to, result in the disposition (whether by actual
disposition or effective economic disposition due to cash
settlement or otherwise) by the Company or any affiliate of the
Company or any person in privity with the Company or any
affiliate of the Company) directly or indirectly, including the
filing (or participation in the filing) of a registration
statement with the
17
Commission in respect of, or establish or increase a put
equivalent position or liquidate or decrease a call equivalent
position within the meaning of Section 16 of the Exchange Act,
any other shares of Common Stock or any securities convertible
into, or exercisable, or exchangeable for, shares of Common
Stock; or publicly announce an intention to effect any such
transaction, for a period of 90 days after the date of the
Underwriting Agreement, provided, however, that the Company may
issue and sell Common Stock pursuant to any employee stock
option plan, stock ownership plan or dividend reinvestment plan
of the Company in effect at the Execution Time and the Company
may issue Common Stock issuable upon the conversion of
securities or the exercise of warrants outstanding at the
Execution Time. Notwithstanding anything to the contrary
contained in this Agreement, nothing shall be deemed to prohibit
the sale of shares of Common Stock registered under the
Registration Statements on Form S-8, file numbers 333-125177 and
333-115867 by the selling shareholders identified therein.
(g) The Company will comply with all applicable
securities and other laws, rules and regulations, including,
without limitation, the Sarbanes Oxley Act, and use its best
efforts to cause the Company's directors and officers, in their
capacities as such, to comply with such laws, rules and
regulations, including, without limitation, the provisions of
the Sarbanes Oxley Act.
(h) The Company will not take, directly or
indirectly, any action designed to or that would constitute or
that might reasonably be expected to cause or result in, under
the Exchange Act or otherwise, stabilization or manipulation of
the price of any security of the Company to facilitate the sale
or resale of the Securities.
(ii) Each Selling Stockholder agrees with the several
Underwriters that:
(a) Such Selling Stockholder will not, without the
prior written consent of Citigroup Global Markets Inc., offer,
sell, contract to sell, pledge or otherwise dispose of, (or
enter into any transaction which is designed to, or might
reasonably be expected to, result in the disposition (whether by
actual disposition or effective economic disposition due to cash
settlement or otherwise) by the Selling Stockholder or any
affiliate of the Selling Stockholder or any person in privity
with the Selling Stockholder or any affiliate of the Selling
Stockholder) directly or indirectly, or file (or participate in
the filing of) a registration statement with the Commission in
respect of, or establish or increase a put equivalent position
or liquidate or decrease a call equivalent position within the
meaning of Section 16 of the Exchange Act with respect to, any
shares of capital stock of the Company or any securities
convertible into or exercisable or exchangeable for such capital
stock, or publicly announce an intention to effect any such
transaction, for a period of 90 days after the date of this
Agreement, other than
18
shares of Common Stock disposed of as bona fide gifts approved
by Citigroup Global Markets Inc.
(b) Such Selling Stockholder will not take, directly
or indirectly, any action designed to or that would constitute
or that might reasonably be expected to cause or result in,
under the Exchange Act or otherwise, stabilization or
manipulation of the price of any security of the Company to
facilitate the sale or resale of the Securities.
(c) Such Selling Stockholder will advise you
promptly, and if requested by you, will confirm such advice in
writing, so long as delivery of a prospectus relating to the
Securities by an underwriter or dealer may be required under the
Act, of (i) any material change in the Company's condition
(financial or otherwise), prospects, earnings, business or
properties, (ii) any change in information in the Registration
Statement or the Final Prospectus relating to such Selling
Stockholder or (iii) any new material information relating to
the Company or relating to any matter stated in the Final
Prospectus, if any of the items listed in clauses (i) through
(iii) comes to the attention of such Selling Stockholder.
6. CONDITIONS TO THE OBLIGATIONS OF THE UNDERWRITERS. The
obligations of the Underwriters to purchase the Underwritten Securities and the
Option Securities, as the case may be, shall be subject to the accuracy of the
representations and warranties on the part of the Company and the Selling
Stockholders contained herein as of the Execution Time, the Closing Date and any
settlement date pursuant to Section 3 hereof, to the accuracy of the statements
of the Company and the Selling Stockholders made in any certificates pursuant to
the provisions hereof, to the performance by the Company and the Selling
Stockholders of their respective obligations hereunder and to the following
additional conditions:
(a) If the Registration Statement has not become
effective prior to the Execution Time, unless the
Representatives agree in writing to a later time, the
Registration Statement will become effective not later than (i)
6:00 PM New York City time on the date of determination of the
public offering price, if such determination occurred at or
prior to 3:00 PM New York City time on such date or (ii) 9:30 AM
on the Business Day following the day on which the public
offering price was determined, if such determination occurred
after 3:00 PM New York City time on such date; if filing of the
Final Prospectus, or any supplement thereto, is required
pursuant to Rule 424(b), the Final Prospectus, and any such
supplement, will be filed in the manner and within the time
period required by Rule 424(b); and no stop order suspending the
effectiveness of the Registration Statement shall have been
issued and no proceedings for that purpose shall have been
instituted or threatened.
(b) The Company shall have requested and caused Xxxx
Xxxxxxxx, Attorneys at Law, counsel for the Company and the
Selling Stockholders, to have
19
furnished to the Representatives their opinion, dated the
Closing Date and addressed to the Representatives, to the effect
that:
(i) each of the Company and the Subsidiaries
incorporated or organized under the laws of the United
States has been duly incorporated and is validly
existing as a corporation in good standing under the
laws of the jurisdiction in which it is chartered or
organized, with full corporate power and authority to
own or lease, as the case may be, and to operate its
properties and conduct its business as described in the
Final Prospectus, and is duly qualified to do business
as a foreign corporation and is in good standing under
the laws of each jurisdiction which requires such
qualification, except where the failure to so qualify
would not have a material adverse effect on the
condition (financial or otherwise), prospects, earnings,
business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising
from transactions in the ordinary course of business,
except as set forth in or contemplated in the Final
Prospectus (exclusive of any supplement thereto);
(ii) all the outstanding shares of capital
stock or membership interests of each Subsidiary have
been duly and validly authorized and issued and are
fully paid and nonassessable, and, except as otherwise
set forth in the Final Prospectus, all outstanding
shares of capital stock or membership interests of the
Subsidiaries are owned by the Company either directly or
through wholly owned subsidiaries free and clear of any
perfected security interest and, to the knowledge of
such counsel, after due inquiry, any other security
interest, claim, lien or encumbrance;
(iii) the Company's authorized equity
capitalization is as set forth in the Final Prospectus;
the capital stock of the Company conforms in all
material respects to the description thereof contained
in the Final Prospectus; the outstanding shares of
Common Stock (including the Securities being sold
hereunder by the Selling Stockholders) have been duly
and validly authorized and issued and are fully paid and
nonassessable; the Securities being sold by the Selling
Stockholders are duly listed, and admitted and
authorized for trading, on The Nasdaq National Market;
the certificates for the Securities are in valid and
sufficient form; the holders of outstanding shares of
capital stock of the Company are not entitled to
preemptive or other rights to subscribe for the
Securities; and, except as set forth in the Final
Prospectus, no options, warrants or other rights to
purchase, agreements or other obligations to issue, or
rights to convert any obligations into or exchange any
securities for, shares of capital stock of or ownership
interests in the Company are outstanding;
20
(iv) to the knowledge of such counsel, there
is no pending or threatened action, suit or proceeding
by or before any court or governmental agency, authority
or body or any arbitrator involving the Company or any
of its subsidiaries or its or their property of a
character required to be disclosed in the Registration
Statement which is not adequately disclosed in the Final
Prospectus, and there is no franchise, contract or other
document of a character required to be described in the
Registration Statement or Final Prospectus, or to be
filed as an exhibit thereto, which is not described or
filed as required; and the statements included or
incorporated by reference in the Final Prospectus under
the headings "Summary--Our Business--Our Prestige
Business", "Risk Factors--We are dependent upon Burberry
for a significant portion of our sales, and the loss of
this license will have a material adverse effect on
us.", "Risk Factors--If we are unable to protect our
intellectual property rights, specifically trademarks
and brand names, our ability to compete could be
negatively impacted.", "Risk Factors--We are dependent
upon The Gap, Inc. to approve and sell products that we
develop for Gap. In addition, we anticipate incurring
expenses prior to any products being launched and the
initial lines of products are not scheduled to be
launched until 2006 and 2007.", "Risk Factors--Our
business is subject to governmental regulation, which
could impact our operations.", "Risk Factors--We may
become subject to possible liability for improper
comparative advertising or 'Trade Dress'.",
"Management's Discussion and Analysis of Financial
Condition and Results of Operations--Recent Important
Events", "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Results
of Operations--Three and Six Months Ended June 30, 2005
as Compared to the Three and Six Months Ended June 30,
2004--Selling, General & Administrative Expense",
"Management's Discussion and Analysis of Financial
Condition and Results of Operations--Results of
Operations--Year Ended December 31, 2005 as Compared to
the Year Ended December 31, 2004--Selling, General &
Administrative Expense", "Management's Discussion and
Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources", "Certain
U.S. Federal Tax Matters" and "Description of Our
Capital Stock", the statements in the Company's Annual
Report on Form 10-K/A for the year ended December 31,
2004 under the headings "Item 1. Business--2004
Important Events", "Item 1. Business--Fragrance and
Cosmetic Products", "Item 1. Business--Mass Market
Products", "Item 1. Business--Government Regulation",
"Item 1. Business--Forward Looking Information and Risk
Factors--We are dependent upon Burberry for a
significant portion of our sales, and the loss of this
license will have a material adverse affect on us.",
"Item 1. Business--Forward Looking Information and Risk
Factors--Our business is subject to governmental
regulation, which could
21
impact our operations.", "Item 1. Business--Forward
Looking Information and Risk Factors--We may become
subject to possible liability for improper comparative
advertising or 'trade dress'.", "Item 2. Properties",
"Item 3. Legal Proceedings", "Item 7. Management's
Discussion and Analysis of Financial Condition and
Results of Operation--2004 Important Events", "Item 7.
Management's Discussion and Analysis of Financial
Condition and Results of Operation--Selling, General &
Administrative", "Item 7. Management's Discussion and
Analysis of Financial Condition and Results of
Operation--Liquidity and Financed Resources", "Item 11.
Executive Compensation--Employment Agreements", and
"Item 13. Certain Relationships and Related
Transactions" and the statements in the Company's
Current Reports on Form 8-K dated July 19, 2005, August
5, 2005 and October 11, 2005 insofar as such statements
summarize legal matters, agreements, documents or
proceedings discussed therein, are accurate and fair
summaries of such legal matters, agreements, documents
or proceedings in all material respects (though such
counsel need express no opinion as to any financial and
statistical information contained therein);
(v) the Registration Statement has become
effective under the Act; any required filing of the
Basic Prospectus, any Preliminary Final Prospectus and
the Final Prospectus, and any supplements thereto,
pursuant to Rule 424(b) has been made in the manner and
within the time period required by Rule 424(b); to the
knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement has been
issued, no proceedings for that purpose have been
instituted or threatened and the Registration Statement
and the Final Prospectus (other than the financial
statements and other financial and statistical
information contained therein, as to which such counsel
need express no opinion) comply as to form in all
material respects with the applicable requirements of
the Act and the Exchange Act and the respective rules
thereunder; and such counsel has no reason to believe
that on the Effective Date or the date the Registration
Statement was last deemed amended the Registration
Statement contained any untrue statement of a material
fact or omitted to state any material fact required to
be stated therein or necessary to make the statements
therein not misleading or that the Final Prospectus as
of its date and on the Closing Date included or includes
any untrue statement of a material fact or omitted or
omits to state a material fact necessary to make the
statements therein, in the light of the circumstances
under which they were made, not misleading (in each
case, other than the financial statements and other
financial and statistical information contained therein,
as to which such counsel need express no opinion);
(vi) this Agreement has been duly authorized,
executed and delivered by the Company and the Selling
Stockholders, the Custody
22
Agreement and Power of Attorney have been duly
authorized, executed and delivered by the Selling
Stockholders, the Custody Agreement is valid and binding
on the Selling Stockholders and each Selling Stockholder
has full legal right and authority to sell, transfer and
deliver in the manner provided in this Agreement and the
Custody Agreement the Securities being sold by such
Selling Stockholder hereunder;
(vii) the Company is not and, after giving
effect to the offering and sale of the Securities and
the application of the proceeds thereof as described in
the Final Prospectus, will not be, an "investment
company" as defined in the Investment Company Act of
1940, as amended;
(viii) no consent, approval, authorization,
filing with or order of any court or governmental agency
or body is required in connection with the transactions
contemplated herein (or the consummation thereof by the
Selling Stockholders), except such as have been obtained
under the Act and such as may be required under the blue
sky laws of any jurisdiction in connection with the
purchase and distribution of the Securities by the
Underwriters in the manner contemplated in this
Agreement and in the Final Prospectus and such other
approvals (specified in such opinion) as have been
obtained;
(ix) neither the issue and sale of the
Securities, nor the consummation of any other of the
transactions herein contemplated nor the fulfillment of
the terms hereof will conflict with, result in a breach
or violation of, or imposition of any lien, charge or
encumbrance upon any property or assets of the Company
or its subsidiaries pursuant to, (i) the charter or
by-laws of the Company, its subsidiaries, (ii) the terms
of any indenture, contract, lease, mortgage, deed of
trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument
to which the Company, its subsidiaries or any Selling
Stockholder, other than LV Capital USA, Inc., is a party
or bound or to which its or their property is subject,
or (iii) any statute, law, rule, regulation, judgment,
order or decree applicable to the Company, its
subsidiaries or any Selling Stockholder, other than LV
Capital USA, Inc., of any court, regulatory body,
administrative agency, governmental body, arbitrator or
other authority having jurisdiction over the Company or
its subsidiaries or any of its or their properties or
any Selling Stockholder, other than LV Capital USA, Inc;
(x) no holders of securities of the Company,
other than LV Capital USA, Inc., a Selling Stockholder,
have rights to the registration of such securities under
the Registration Statement; and
23
(xi) assuming that each Underwriter acquires
its interest in the Securities it has purchased from
such Selling Stockholder without notice of any adverse
claim (within the meaning of Section 8-105 of the UCC),
each Underwriter that has purchased such Securities
delivered on the Closing Date to The Depository Trust
Company or other securities intermediary by making
payment therefor as provided herein, and that has had
such Securities credited to the securities account or
accounts of such Underwriters maintained with The
Depository Trust Company or such other securities
intermediary will have acquired a security entitlement
(within the meaning of Section 8-102(a)(17) of the UCC)
to such Securities purchased by such Underwriter, and no
action based on an adverse claim (within the meaning of
Section 8-105 of the UCC) may be asserted against such
Underwriter with respect to such Securities.
In rendering such opinion, such counsel may rely (A) as to matters involving the
application of laws of any jurisdiction other than the State of New York or the
Federal laws of the United States, to the extent they deem proper and specified
in such opinion, upon the opinion of other counsel of good standing whom they
believe to be reliable and who are satisfactory to counsel for the Underwriters
and (B) as to matters of fact, to the extent they deem proper, on certificates
of responsible officers of the Company or (in the case of L.V. Capital USA,
Inc.) the Selling Stockholders and public officials. References to the Final
Prospectus in this paragraph (b) shall also include any supplements thereto at
the Closing Date.
(c) The Company shall have requested and caused
Xxxxxx Xxxxxxxxx, Senior Vice President and General Counsel,
LVMH Moet Xxxxxxxx Xxxxx Vuitton Inc. and counsel for LV Capital
USA, Inc., to have furnished to the Representatives their
opinion, dated the Closing Date and addressed to the
Representatives, to the effect that neither the issue and sale
of the Securities, nor the consummation of any other of the
transactions herein contemplated nor the fulfillment of the
terms hereof will conflict with, result in a breach or violation
of, or imposition of any lien, charge or encumbrance upon any
property or assets of L.V. Capital USA, Inc. pursuant to, (i)
the charter or by-laws of LV Capital USA, Inc., (ii) the terms
of any indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation,
condition, covenant or instrument to which LV Capital USA, Inc.
is a party or bound or to which its property is subject, or
(iii) any statute, law, rule, regulation, judgment, order or
decree applicable to LV Capital USA, Inc. of any court,
regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over LV
Capital USA, Inc. or any of its subsidiaries;
(d) The Company shall have requested and caused, or
have requested or caused its wholly owned consolidated
subsidiary Inter Parfums Holdings S.A. to have requested and
caused, Xxxxxxxxx Xxxxxx-Xxxx, French counsel for Inter
24
Parfums Holdings S.A., to have furnished to the Representatives
her opinion, dated the Closing Date and addressed to the
Representatives, to the effect that:
(i) each of Inter Parfums Holdings S.A. and
Inter Parfums, S.A., Inter Parfums Grand Public, S.A.,
Inter Parfums Trademark, S.A., and Nickel, S.A. (the
"French Subsidiaries") has been duly incorporated and is
validly existing as a corporation in good standing under
the laws of the jurisdiction in which it is chartered or
organized, with full corporate power and authority to
own or lease, as the case may be, and to operate its
properties and conduct its business as described in the
Final Prospectus, and is duly qualified to do business
as a foreign corporation and is in good standing under
the laws of each jurisdiction which requires such
qualification, except where the failure to so qualify
would not have a material adverse effect on the
condition (financial or otherwise), prospects, earnings,
business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising
from transactions in the ordinary course of business,
except as set forth in or contemplated in the Final
Prospectus (exclusive of any supplement thereto);
(ii) all the outstanding shares of capital
stock of each French Subsidiary have been duly and
validly authorized and issued and are fully paid and
nonassessable, and, except as otherwise set forth in the
Final Prospectus, all outstanding shares of capital
stock of the French Subsidiaries are owned by the
Company either directly or through wholly owned
subsidiaries free and clear of any perfected security
interest and, to the knowledge of such counsel, after
due inquiry, any other security interest, claim, lien or
encumbrance; and
(iii) to the knowledge of such counsel, there
is no pending or threatened action, suit or proceeding
by or before any court or governmental agency, authority
or body or any arbitrator involving any of the French
Subsidiaries or its property of a character required to
be disclosed in the Registration Statement which is not
adequately disclosed in the Final Prospectus, and there
is no franchise, contract or other document of a
character required to be described in the Registration
Statement or Final Prospectus, or to be filed as an
exhibit thereto, which is not described or filed as
required;
In rendering such opinion, such counsel may rely (A) as to matters involving the
application of laws of any jurisdiction other than the Republic of France, to
the extent they deem proper and specified in such opinion, upon the opinion of
other counsel of good standing whom they believe to be reliable and who are
satisfactory to counsel for the Underwriters, and (B) as to matters of fact, to
the extent they deem proper, on certificates of responsible officers of Inter
Parfums Holdings S.A. and public officials.
25
(e) The Representatives shall have received from
Xxxxxx Xxxxxxxx Xxxxx & Xxxxxxxx LLP, counsel for the
Underwriters, such opinion and letter, dated the Closing Date
and addressed to the Representatives, with respect to the
issuance and sale of the Securities, the Registration Statement,
the Final Prospectus (together with any supplement thereto) and
other related matters as the Representatives may reasonably
require, and the Company and each Selling Stockholder shall have
furnished to such counsel such documents as they request for the
purpose of enabling them to pass upon such matters.
(f) The Company shall have furnished to the
Representatives a certificate of the Company, signed by the
Chairman of the Board or the Chief Executive Officer, and the
principal financial or accounting officer of the Company, dated
the Closing Date, to the effect that the signers of such
certificate have carefully examined the Registration Statement,
the Final Prospectus, any supplements to the Final Prospectus
and this Agreement and that:
(i) the representations and warranties of
the Company in this Agreement are true and correct on
and as of the Closing Date with the same effect as if
made on the Closing Date and the Company has complied
with all the agreements and satisfied all the conditions
on its part to be performed or satisfied at or prior to
the Closing Date;
(ii) no stop order suspending the
effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been
instituted or, to the Company's knowledge, threatened;
and
(iii) since the date of the most recent
financial statements included or incorporated by
reference in the Final Prospectus (exclusive of any
supplement thereto), there has been no material adverse
effect on the condition (financial or otherwise),
prospects, earnings, business or properties of the
Company and its subsidiaries, taken as a whole, whether
or not arising from transactions in the ordinary course
of business, except as set forth in or contemplated in
the Final Prospectus (exclusive of any supplement
thereto).
(g) Each Selling Stockholder shall have furnished to
the Representatives a certificate, signed by such Selling
Stockholder or (in the case of LV Capital USA, Inc.) the
Chairman of the Board or the President and the principal
financial or accounting officer of such Selling Stockholder,
dated the Closing Date, to the effect that the signers of such
certificate have carefully examined the Registration Statement,
the Final Prospectus, any supplement to the Final Prospectus and
this Agreement and that the representations and warranties of
such Selling Stockholder in this Agreement are true and correct
in all material respects on and as of the Closing Date to the
same effect as if made on the Closing Date.
26
(h) The Company shall have requested and caused each
of Mazars LLP, KPMG LLP, Xxxxxx LLP, and KPMG Audit (a division
of KPMG S.A.) to have furnished to the Representatives, at the
Execution Time and at the Closing Date, letters (which may refer
to letters previously delivered to one or more of the
Representatives), dated respectively as of the Execution Time
and as of the Closing Date, in form and substance satisfactory
to the Representatives, confirming that they are independent
accountants within the meaning of the Act and the Exchange Act
and the respective applicable rules and regulations adopted by
the Commission thereunder for the respective periods such firms
were providing auditing services, and cumulatively stating (with
division of the following provisions to be discussed and
allocated among them) in effect that:
(i) they have performed a review of the
unaudited interim financial information of the Company
for the six-month period ended June 30, 2005 and at June
30, 2005, in accordance with Statement on Auditing
Standards No. 100;
(ii) in their opinion the audited financial
statements and financial statement schedules included or
incorporated by reference in the Registration Statement
and the Final Prospectus and reported on by them comply
as to form in all material respects with the applicable
accounting requirements of the Act and the Exchange Act
and the related rules and regulations adopted by the
Commission;
(iii) on the basis of a reading of the latest
unaudited financial statements made available by the
Company and its subsidiaries; their limited review, in
accordance with standards established under Statement on
Auditing Standards No. 100, of the unaudited interim
financial information for the six-month period ended
June 30, 2005, and as at June 30, 2005; carrying out
certain specified procedures (but not an examination in
accordance with generally accepted auditing standards)
which would not necessarily reveal matters of
significance with respect to the comments set forth in
such letter; a reading of the minutes of the meetings of
the stockholders, directors and audit and executive
compensation and stock option committees of the Company
and the Subsidiaries; and inquiries of certain officials
of the Company who have responsibility for financial and
accounting matters of the Company and its subsidiaries
as to transactions and events subsequent to December 31,
2004, nothing came to their attention which caused them
to believe that:
(1) any unaudited financial
statements included or incorporated by reference
in the Registration Statement and the Final
Prospectus do not comply as to form in all
material respects with applicable accounting
requirements of the Act and with the
27
related rules and regulations adopted by the
Commission with respect to financial statements
included or incorporated by reference in
quarterly reports on Form 10-Q under the
Exchange Act; and said unaudited financial
statements are not in conformity with generally
accepted accounting principles applied on a
basis substantially consistent with that of the
audited financial statements included or
incorporated by reference in the Registration
Statement and the Final Prospectus;
(2) with respect to the period
subsequent to June 30, 2005, there were any
changes, at a specified date not more than five
days prior to the date of the letter, in the
long-term debt of the Company and its
subsidiaries or preferred or common stock of the
Company or decreases in the shareholders' equity
of the Company as compared with the amounts
shown on the June 30, 2005, consolidated balance
sheet included or incorporated by reference in
the Registration Statement and the Final
Prospectus, or for the period from July 1, 2005
to such specified date there were any decreases,
as compared with the corresponding period in the
preceding quarter in net revenues or income
before income taxes or in total or per share
amounts of net income of the Company and its
subsidiaries, except in all instances for
changes or decreases set forth in such letter,
in which case the letter shall be accompanied by
an explanation by the Company as to the
significance thereof unless said explanation is
not deemed necessary by the Representatives;
(3) the information included or
incorporated by reference in the Registration
Statement and Final Prospectus in response to
Regulation S-K, Item 301 (Selected Financial
Data), Item 302 (Supplementary Financial
Information), Item 402 (Executive Compensation)
and Item 503(d) (Ratio of Earnings to Fixed
Charges) is not in conformity with the
applicable disclosure requirements of Regulation
S-K; and
(iv) they have performed certain other
specified procedures as a result of which they
determined that certain information of an accounting,
financial or statistical nature (which is limited to
accounting, financial or statistical information derived
from the general accounting records of the Company and
its subsidiaries) set forth in the Registration
Statement and the Final Prospectus and in Exhibit 12 to
the Registration Statement, including the information
set forth under the captions "Selected Financial Data"
and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" in the Final
Prospectus, the
28
information included or incorporated by reference in
Items 1, 2, 6, 7, 8 and 11 of the Company's Annual
Report on Form 10-K/A for the year ended December 31,
2004, incorporated by reference in the Registration
Statement and the Final Prospectus, the information
included in the "Management's Discussion and Analysis of
Financial Condition and Results of Operations" included
or incorporated by reference in the Company's Quarterly
Reports on Form 10-Q, incorporated by reference in the
Registration Statement and the Final Prospectus, and the
information included in any Form 8-K's incorporated by
reference in the Registration Statement and the Final
Prospectus agrees with the accounting records of the
Company and its subsidiaries, excluding any questions of
legal interpretation.
References to the Final Prospectus in this paragraph (g)
include any supplement thereto at the date of the letter.
(i) Subsequent to the Execution Time or, if earlier,
the dates as of which information is given in the Registration
Statement (exclusive of any amendment thereof) and the Final
Prospectus (exclusive of any supplement thereto), there shall
not have been (i) any change or decrease specified in the letter
or letters referred to in paragraph (g) of this Section 6 or
(ii) any change, or any development involving a prospective
change, in or affecting the condition (financial or otherwise),
earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set
forth in or contemplated in the Final Prospectus (exclusive of
any supplement thereto) the effect of which, in any case
referred to in clause (i) or (ii) above, is, in the sole
judgment of the Representatives, so material and adverse as to
make it impractical or inadvisable to proceed with the offering
or delivery of the Securities as contemplated by the
Registration Statement (exclusive of any amendment thereof) and
the Final Prospectus (exclusive of any supplement thereto).
(j) Prior to the Closing Date, the Company and the
Selling Stockholders shall have furnished to the Representatives
such further information, certificates and documents as the
Representatives may reasonably request.
(k) Subsequent to the Execution Time, there shall
not have been any decrease in the rating of any of the Company's
debt securities, if any, by any "nationally recognized
statistical rating organization" (as defined for purposes of
Rule 436(g) under the Act) or any notice given of any intended
or potential decrease in any such rating or of a possible change
in any such rating that does not indicate the direction of the
possible change.
If any of the conditions specified in this Section 6 shall not
have been fulfilled when and as provided in this Agreement, or if any of the
opinions and certificates mentioned
29
above or elsewhere in this Agreement shall not be reasonably satisfactory in
form and substance to the Representatives and counsel for the Underwriters, this
Agreement and all obligations of the Underwriters hereunder may be canceled at,
or at any time prior to, the Closing Date by the Representatives. Notice of such
cancelation shall be given to the Company and each Selling Stockholder in
writing or by telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 6 shall
be delivered at the office of Xxxxxx Xxxxxxxx Xxxxx & Xxxxxxxx LLP, counsel for
the Underwriters, at Xxx Xxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, on the Closing
Date.
7. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the sale of
the Securities provided for herein is not consummated because any condition to
the obligations of the Underwriters set forth in Section 6 hereof is not
satisfied, because of any termination pursuant to Section 10 hereof or because
of any refusal, inability or failure on the part of the Company or any Selling
Stockholders to perform any agreement herein or comply with any provision hereof
other than by reason of a default by any of the Underwriters, the Selling
Stockholders will reimburse the Underwriters severally through Citigroup Global
Markets Inc. on demand for all out-of-pocket expenses (including reasonable fees
and disbursements of counsel) that shall have been incurred by them in
connection with the proposed purchase and sale of the Securities. If the Company
is required to make any payments to the Underwriters under this Section 7
because of any Selling Stockholder's refusal, inability or failure to satisfy
any condition to the obligations of the Underwriters set forth in Section 6, the
Selling Stockholders PRO RATA in proportion to the percentage of Securities to
be sold by each shall reimburse the Company on demand for all amounts so paid.
8. INDEMNIFICATION AND CONTRIBUTION. (a) The Company and
the Selling Stockholders jointly and severally agree to indemnify and hold
harmless each Underwriter, the directors, officers, employees and agents of each
Underwriter and each person who controls any Underwriter within the meaning of
either the Act or the Exchange Act against any and all losses, claims, damages
or liabilities, joint or several, to which they or any of them may become
subject under the Act, the Exchange Act or other Federal or state statutory law
or regulation, at common law or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact
contained in the registration statement for the registration of the Securities
as originally filed or in any amendment thereof, or in the Basic Prospectus, any
Preliminary Final Prospectus or the Final Prospectus, or in any amendment
thereof or supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and agrees to
reimburse each such indemnified party, as incurred, for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; PROVIDED, HOWEVER,
that the Company and the Selling Stockholders will not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon any such untrue statement or alleged untrue statement or
omission or alleged omission made therein in reliance upon and in conformity
with written information furnished to
30
the Company by or on behalf of any Underwriter through the Representatives
specifically for inclusion therein. This indemnity agreement will be in addition
to any liability, which the Company or the Selling Stockholders may otherwise
have.
(b) Each Underwriter severally and not jointly
agrees to indemnify and hold harmless the Company, each of its directors, each
of its officers who signs the Registration Statement, and each person who
controls the Company within the meaning of either the Act or the Exchange Act
and each Selling Stockholder, to the same extent as the foregoing indemnity to
each Underwriter, but only with reference to written information relating to
such Underwriter furnished to the Company by or on behalf of such Underwriter
through the Representatives specifically for inclusion in the documents referred
to in the foregoing indemnity. This indemnity agreement will be in addition to
any liability that any Underwriter may otherwise have. The Company and each
Selling Stockholder acknowledge that the statements set forth in the last
paragraph of the cover page regarding delivery of the Securities and, under the
heading "Underwriting", (i) the list of Underwriters and their respective
participation in the sale of the Securities, (ii) the sentences related to
concessions and reallowances and (iii) the paragraph related to stabilization,
syndicate covering transactions and penalty bids in any Preliminary Final
Prospectus and the Final Prospectus constitute the only information furnished in
writing by or on behalf of the several Underwriters for inclusion in any
Preliminary Final Prospectus or the Final Prospectus.
(c) Promptly after receipt by an indemnified party
under this Section 8 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party in
writing of the commencement thereof; but the failure so to notify the
indemnifying party (i) will not relieve it from liability under paragraph (a) or
(b) above unless and to the extent it did not otherwise learn of such action and
such failure results in the forfeiture by the indemnifying party of substantial
rights and defenses and (ii) will not, in any event, relieve the indemnifying
party from any obligations to any indemnified party other than the
indemnification obligation provided in paragraph (a) or (b) above. The
indemnifying party shall be entitled to appoint counsel of the indemnifying
party's choice at the indemnifying party's expense to represent the indemnified
party in any action for which indemnification is sought (in which case the
indemnifying party shall not thereafter be responsible for the fees and expenses
of any separate counsel retained by the indemnified party or parties except as
set forth below); PROVIDED, HOWEVER, that such counsel shall be satisfactory to
the indemnified party. Notwithstanding the indemnifying party's election to
appoint counsel to represent the indemnified party in an action, the indemnified
party shall have the right to employ separate counsel (including local counsel),
and the indemnifying party shall bear the reasonable fees, costs and expenses of
such separate counsel if (i) the use of counsel chosen by the indemnifying party
to represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii) the
31
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. An indemnifying party will not, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in
paragraph (a) or (b) of this Section 8 is unavailable to or insufficient to hold
harmless an indemnified party for any reason, the Company and the Selling
Stockholders, jointly and severally, and the Underwriters severally agree to
contribute to the aggregate losses, claims, damages and liabilities (including
legal or other expenses reasonably incurred in connection with investigating or
defending same) (collectively "Losses") to which the Company, the Selling
Stockholders and one or more of the Underwriters may be subject in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Selling Stockholders on the one hand and by the Underwriters on
the other from the offering of the Securities; PROVIDED, HOWEVER, that in no
case shall any Underwriter (except as may be provided in any agreement among
underwriters relating to the offering of the Securities) be responsible for any
amount in excess of the underwriting discount or commission applicable to the
Securities purchased by such Underwriter hereunder. If the allocation provided
by the immediately preceding sentence is unavailable for any reason, the Company
and the Selling Stockholders, jointly and severally, and the Underwriters
severally shall contribute in such proportion as is appropriate to reflect not
only such relative benefits but also the relative fault of the Company and the
Selling Stockholders on the one hand and of the Underwriters on the other in
connection with the statements or omissions which resulted in such Losses as
well as any other relevant equitable considerations. Benefits received by the
Company and the Selling Stockholders shall be deemed to be equal to the total
net proceeds from the offering (before deducting expenses), and benefits
received by the Underwriters shall be deemed to be equal to the total
underwriting discounts and commissions, in each case as set forth on the cover
page of the Final Prospectus. Relative fault shall be determined by reference
to, among other things, whether any untrue or any alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information provided by the Company or the Selling Stockholders on
the one hand or the Underwriters on the other, the intent of the parties and
their relative knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. The Company, the Selling Stockholders
and the Underwriters agree that it would not be just and equitable if
contribution were determined by pro rata allocation or any other method of
allocation that does not take account of the equitable considerations referred
to above. Notwithstanding the provisions of this paragraph (d), no person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 8, each person who
controls an Underwriter
32
within the meaning of either the Act or the Exchange Act and each director,
officer, employee and agent of an Underwriter shall have the same rights to
contribution as such Underwriter, and each person who controls the Company
within the meaning of either the Act or the Exchange Act, each officer of the
Company who shall have signed the Registration Statement and each director of
the Company shall have the same rights to contribution as the Company, subject
in each case to the applicable terms and conditions of this paragraph (d).
(e) The liability of each Selling Stockholder under
such Selling Stockholder's representations and warranties contained in Section 1
hereof and under the indemnity and contribution agreements contained in this
Section 8 shall be limited to an amount equal to the initial public offering
price of the Securities sold by such Selling Stockholder to the Underwriters.
The Company and the Selling Stockholders may agree, as among themselves and
without limiting the rights of the Underwriters under this Agreement, as to the
respective amounts of such liability for which they each shall be responsible.
9. DEFAULT BY AN UNDERWRITER. If any one or more
Underwriters shall fail to purchase and pay for any of the Securities agreed to
be purchased by such Underwriter or Underwriters hereunder and such failure to
purchase shall constitute a default in the performance of its or their
obligations under this Agreement, the remaining Underwriters shall be obligated
severally to take up and pay for (in the respective proportions which the amount
of Securities set forth opposite their names in Schedule II hereto bears to the
aggregate amount of Securities set forth opposite the names of all the remaining
Underwriters) the Securities which the defaulting Underwriter or Underwriters
agreed but failed to purchase; PROVIDED, HOWEVER, that in the event that the
aggregate amount of Securities which the defaulting Underwriter or Underwriters
agreed but failed to purchase shall exceed 10% of the aggregate amount of
Securities set forth in Schedule II hereto, the remaining Underwriters shall
have the right to purchase all, but shall not be under any obligation to
purchase any, of the Securities, and if such nondefaulting Underwriters do not
purchase all the Securities, this Agreement will terminate without liability to
any nondefaulting Underwriter, the Selling Stockholders or the Company. In the
event of a default by any Underwriter as set forth in this Section 9, the
Closing Date shall be postponed for such period, not exceeding five Business
Days, as the Representatives shall determine in order that the required changes
in the Registration Statement and the Final Prospectus or in any other documents
or arrangements may be effected. Nothing contained in this Agreement shall
relieve any defaulting Underwriter of its liability, if any, to the Company, the
Selling Stockholders and any nondefaulting Underwriter for damages occasioned by
its default hereunder.
10. TERMINATION. This Agreement shall be subject to
termination in the absolute discretion of the Representatives, by notice given
to the Company prior to delivery of and payment for the Securities, if at any
time prior to such time (i) trading in the Company's Common Stock shall have
been suspended by the Commission or the Nasdaq National Market or trading of
Inter Parfums S.A.'s Common Stock shall have been suspended by the Paris Stock
Exchange or trading in securities generally on the New York Stock Exchange, the
Paris Stock Exchange or the Nasdaq National Market shall have been suspended or
limited or minimum prices shall have been established on either of such
Exchanges or the Nasdaq National Market,
33
(ii) a banking moratorium shall have been declared by French, United States
Federal or New York State authorities or (iii) there shall have occurred any
outbreak or escalation of hostilities, declaration by the Republic of France or
the United States of a national emergency or war, or other calamity or crisis
the effect of which on financial markets is such as to make it, in the sole
judgment of the Representatives, impractical or inadvisable to proceed with the
offering or delivery of the Securities as contemplated by the Final Prospectus
(exclusive of any supplement thereto).
11. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The
respective agreements, representations, warranties, indemnities and other
statements of the Company or its officers, of each Selling Stockholder and of
the Underwriters set forth in or made pursuant to this Agreement will remain in
full force and effect, regardless of any investigation made by or on behalf of
any Underwriter, any Selling Stockholder or the Company or any of the officers,
directors, employees, agents or controlling persons referred to in Section 8
hereof, and will survive delivery of and payment for the Securities. The
provisions of Sections 7 and 8 hereof shall survive the termination or
cancelation of this Agreement.
12. NOTICES. All communications hereunder will be in writing
and effective only on receipt, and, if sent to the Representatives, will be
mailed, delivered or telefaxed to the Citigroup Global Markets Inc. General
Counsel (fax no.: (000) 000-0000) and confirmed to the General Counsel,
Citigroup Global Markets Inc., at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx,
00000, Attention: General Counsel; or, if sent to the Company, will be mailed,
delivered or telefaxed to (000) 000-0000 and confirmed to it at 000 Xxxxx
Xxxxxx, Xxx Xxxx, XX 00000, attention Xx. Xxxxxxx Xxxxxxxxx, Executive Vice
President; or if sent to any Selling Stockholder, will be mailed, delivered or
telefaxed and confirmed to it at the address set forth in Schedule I hereto.
13. SUCCESSORS. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and the
officers, directors, employees, agents and controlling persons referred to in
Section 8 hereof, and no other person will have any right or obligation
hereunder.
14. APPLICABLE LAW. This Agreement will be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York.
15. NO FIDUCIARY DUTY. The Company and the Selling
Stockholders hereby acknowledge that (a) the Underwriters are acting as
principal and not as agents or fiduciaries of the Company or the Selling
Stockholders and (b) their engagement of the Underwriters in connection with the
Offering is as independent contractors and not in any other capacity.
Furthermore, each of the Selling Shareholders agrees that it is solely
responsible for making its own judgments in connection with the Offering
(irrespective of whether any of the Underwriters has advised or is currently
advising the Company or the Selling Shareholders on related or other matters).
34
16. COUNTERPARTS. This Agreement may be signed in one or
more counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
17. HEADINGS. The section headings used herein are for
convenience only and shall not affect the construction hereof.
18. DEFINITIONS. The terms which follow, when used in this
Agreement, shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder.
"Basic Prospectus" shall mean the prospectus referred to in
paragraph 1(a) above contained in the Registration Statement at the
Effective Date including any Preliminary Final Prospectus.
"Business Day" shall mean any day other than a Saturday, a
Sunday or a legal holiday or a day on which banking institutions or
trust companies are authorized or obligated by law to close in New York
City.
"Commission" shall mean the Securities and Exchange Commission.
"Effective Date" shall mean each date and time that the
Registration Statement, any post-effective amendment or amendments
thereto and any Rule 462(b) Registration Statement became or become
effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean the date and time that this
Agreement is executed and delivered by the parties hereto.
"Final Prospectus" shall mean the prospectus supplement relating
to the Securities that was first filed pursuant to Rule 424(b) after the
Execution Time, together with the Basic Prospectus.
"Preliminary Final Prospectus" shall mean any preliminary
prospectus supplement to the Basic Prospectus which describes the
Securities and the offering thereof and is used prior to filing of the
Final Prospectus, together with the Basic Prospectus.
"Registration Statement" shall mean the registration statement
referred to in paragraph 1(i)(a) above, including exhibits and financial
statements, as amended at the Execution Time (or, if not effective at
the Execution Time, in the form in which it shall
35
become effective) and, in the event any post-effective amendment thereto
or any Rule 462(b) Registration Statement becomes effective prior to the
Closing Date, shall also mean such registration statement as so amended
or such Rule 462(b) Registration Statement, as the case may be. Such
term shall include any Rule 430A Information deemed to be included
therein at the Effective Date as provided by Rule 430A.
"Rule 415", "Rule 424", "Rule 430A" and "Rule 462" refer to such
rules under the Act.
"Rule 430A Information" shall mean information with respect to
the Securities and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A.
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b)
relating to the offering covered by the registration statement referred
to in Section 1(i)(a) hereof.
36
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company, the Selling Stockholders and the several Underwriters.
Very truly yours,
INTER PARFUMS, INC.
By:
------------------------------------
Name:
Title:
LV CAPITAL USA, INC.
By:
------------------------------------
Name: Xxxx Xxxxxxxx
Title: Chief Executive Officer
XXXX XXXXX
------------------------------------
Xxxx Xxxxx
XXXXXXXX XXXXXXX
------------------------------------
Xxxxxxxx Xxxxxxx
37
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
CITIGROUP GLOBAL MARKETS INC.
XXXXXXXXXXX & CO. INC.
XX XXXXX & CO., LLC
By: CITIGROUP GLOBAL MARKETS INC.
By:
--------------------------------
Name:
Title:
For themselves and the other
several Underwriters named in
Schedule II to the foregoing
Agreement.
38
SCHEDULE I
----------
NUMBER OF
UNDERWRITTEN MAXIMUM NUMBER OF
SECURITIES OPTION SECURITIES
SELLING STOCKHOLDERS: TO BE SOLD TO BE SOLD
-------------------- ------------ -----------------
LV Capital USA, Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
[fax no.] .................................... 3,436,050 0
Xxxx Xxxxx
c/o Inter Parfums, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
(000) 000-0000 ............................... 450,000 325,204
Xxxxxxxx Xxxxxxx
c/o Inter Parfums, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
(000) 000-0000 ............................... 450,000 325,204
--------- -------
Total ............................... 4,336,050 650,408
========= =======
SCHEDULE II
-----------
NUMBER OF UNDERWRITTEN
UNDERWRITERS SECURITIES TO BE PURCHASED
------------ --------------------------
Citigroup Global Markets Inc.......................
Xxxxxxxxxxx & Co. Inc..............................
XX Xxxxx & Co., LLC................................
---------------
Total .............................................
===============
