INTER PARFUMS, INC. WARRANT TO PURCHASE COMMON STOCK
EXHIBIT
4.2
NEITHER
THIS WARRANT, NOR THE SHARES ISSUABLE HEREUNDER, HAVE BEEN REGISTERED UNDER
THE
SECURITIES ACT OF 1933, AS AMENDED. NEITHER THIS WARRANT, NOR THE SHARES
ISSUABLE HEREUNDER, MAY BE SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER SAID ACT OR THE AVAILABILITY OF AN EXEMPTION FROM
REGISTRATION THEREUNDER.
INTER
PARFUMS, INC.
WARRANT
TO PURCHASE COMMON STOCK
|
100,000
|
This
certifies that, for value received, The Gap, Inc., a Delaware corporation or
its
successors or registered transferees or assigns (sometimes each a “Holder”
and
collectively the “Holders”)
is
entitled, subject to the terms set forth below, to purchase from Inter Parfums,
Inc., a Delaware corporation (the “Company”),
one
hundred thousand (100,000) shares of the common stock of the Company (the
“Common
Stock”),
as
constituted on the date hereof, upon surrender hereof, at the principal office
of the Company referred to below, with the notice of exercise form attached
hereto duly executed, and simultaneous payment therefor in lawful money of
the
United States or otherwise as hereinafter provided, at the exercise price per
share as set forth in Section 2 below (the “Exercise
Price”).
The
number, character and Exercise Price of such shares of Common Stock are subject
to adjustment as provided below. The term “Warrant”
as
used
herein shall include this Warrant and any warrants delivered in substitution
or
exchange therefor as provided herein.
1. Term
of Warrant.
Subject
to the terms and conditions set forth herein and compliance with any applicable
regulatory requirements, this Warrant shall be exercisable, in whole or in
part,
from time to time during the term (the “Term”)
commencing on the date hereof and ending at 5:00 p.m., Pacific Standard Time,
on
July 14, 2010 (the “Expiration
Date”),
and,
except as otherwise provided herein, shall be void thereafter.
In
the
event that the Expiration Date of this Warrant falls on a day that is not a
Business Day, the Expiration Date shall be adjusted to the Business Day
immediately following such Expiration Date. As used herein, the term
“Business
Day”
means
each day other than a Saturday, Sunday or other day on which banks in the
location of the principal office of the Company are legally authorized to
close.
2. Exercise
Price.
The
Exercise Price for each share of Common Stock for which this Warrant may be
exercised shall be twenty-five dollars and nineteen and one-half cents
($25.195). The Exercise Price may be adjusted from time to time pursuant to
Section 9 hereof.
3. Exercise
of Warrant.
(a) Generally.
The
purchase rights represented by this Warrant are exercisable by Holder in whole
or in part, from time to time, subject to compliance with applicable regulatory
requirements, during the Term, by the surrender of this Warrant and delivery
of
the Notice of Exercise attached hereto as Exhibit
A
duly
completed and executed on behalf of Holder, at the office of the Company (or
such other office or agency of the Company as it may designate by notice in
writing to Holder at the address of Holder appearing on the books of the
Company), upon payment (i) in cash, by wire transfer of immediately available
funds or by check, (ii) by cancellation by Holder of indebtedness of the Company
to Holder, or (iii) by a combination of (i) and (ii), of an amount equal to
the
then applicable Exercise Price multiplied by the number of shares then being
purchased.
(b) Net
Issue Exercise.
In
addition to and without limiting the rights of the Holder under the terms of
the
Warrant, during anytime after the Registration Date (as defined in Section
10(b)(i)) the Company fails to maintain an effective Registration Statement
(as
defined in Section 10(b)(i)), except for extensions of time to file reports
permitted by Rule 12b-25 or any successor rule (but in such event, not more
than
five (5) calendar days for Quarterly Reports on Form 10-Q and not more than
fifteen (15) calendar days for Annual Reports on Form 10-K), the Holder shall
have the right to convert the Warrant or any portion thereof (the “Conversion
Right”)
into
shares of Common Stock as provided in this Section 3(b) at any time or from
time
to time during the term of the Warrant. Upon exercise of the Conversion Right
with respect to a particular number of shares subject to the Warrant (the
“Converted
Warrant Shares”),
the
Company shall deliver to the Holder (without payment by the Holder of any
exercise price or any cash or other consideration) that number of shares of
fully paid and nonassessable Common Stock computed using the following
formula:
X
=
Y(A
-
B)
A
Where
X
= the
number of shares of Common Stock to be issued to the Holder;
Y
= the
number of Converted Warrant Shares;
A
= the
fair market value of one share of the Company's Common Stock on the Conversion
Date (as defined below); and
B
= the
per share exercise price of the Warrant (as adjusted to the Conversion
Date).
The
Conversion Right may only be exercised with respect to a whole number of shares
subject to the Warrant. No fractional shares shall be issuable upon exercise
of
the Conversion Right, and if the number of shares to be issued determined in
accordance with the foregoing formula is other than a whole number, the Company
shall pay to the Holder an amount in cash equal to the fair market value of
the
resulting fractional share on the Conversion Date. Shares issued pursuant to
the
Conversion Right shall be treated as if they were issued upon the exercise
of
the Warrant.
The
Conversion Right may be exercised by the Holder by the surrender of the Warrant
at the principal office of the Company together with the Notice of Exercise
attached hereto as Exhibit
A,
duly
completed to indicate a net issuance exercise and indicating the number of
shares subject to the Warrant which are being surrendered (referred to in
Subsection 3(b) hereof as the Converted Warrant Shares) in exercise of the
Conversion Right. Such conversion shall be effective upon receipt by the Company
of the Warrant together with the aforesaid Exercise Notice, or on such later
date as is specified therein (the “Conversion
Date”).
(c) Fair
Market Value.
For
purposes of this Section 3, fair market value of a share of Common Stock shall
mean:
(i) If
traded
on a stock exchange, the fair market value of the Common Stock shall be deemed
to be the average of the closing selling prices of the Common Stock on the
stock
exchange determined by the Company’s Board of Directors to be the primary market
for the Common Stock over the twenty (20) trading day period ending on the
date
prior to the Conversion Date, as such prices are officially quoted in the
composite tape of transactions on such exchange;
(ii) If
traded
over-the-counter, the fair market value of the Common Stock shall be deemed
to
be the average of the closing bid prices (or, if such information is available,
the closing selling prices) of the Common Stock over the twenty (20) trading
day
period ending on the date prior to the Conversion Date, as such prices are
reported by the National Association of Securities Dealers through its NASDAQ
system or any successor system; and
(iii) If
there
is no public market for the Common Stock, then the fair market value shall
be
determined by mutual agreement of the Holder and the Company, and if the Holder
and the Company are unable to so agree, by an investment banker of national
reputation selected by the Company and reasonably acceptable to the
Holder.
(d) Stock
Certificates.
This
Warrant shall be deemed to have been exercised immediately prior to the close
of
business on the date of its surrender for exercise as provided above, and the
person entitled to receive the shares of Common Stock issuable upon such
exercise shall be treated for all purposes as the holder of record of such
shares as of the close of business on such date. As promptly as practicable
on
or after such date, and in any event within ten (10) days thereafter, the
Company, at its expense, shall issue and deliver to the person or persons
entitled to receive the same a certificate or certificates for the number of
shares issuable upon such exercise. In the event that this Warrant is exercised
in part, the Company, at its expense, will execute and deliver a new Warrant
of
like tenor exercisable for the number of shares for which this Warrant may
then
be exercised.
(e) Partial
Exercise.
If this
Warrant shall have been exercised in part, the Company shall, at the time of
delivery of the certificate or certificates representing Common Stock purchased
hereunder, deliver to Holder a new Warrant evidencing the rights of Holder
to
purchase the unpurchased shares of Common Stock subject to this Warrant, which
new Warrant shall in all other respects be identical with this Warrant, or,
at
the request of Holder, appropriate notation may be made on this Warrant and
the
same returned to Holder.
(f) Fractional
Shares.
The
Company shall not be required to issue a fractional share of Common Stock upon
exercise of any Warrant. As to any fraction of a share which the Holder of
one
or more Warrants, the rights under which are exercised in the same transaction,
would otherwise be entitled to purchase upon such exercise, the Company shall
pay a cash adjustment in respect of such final fraction in an amount equal
to
the same fraction of the fair market value per share of Common Stock on the
date
of exercise.
4. No
Rights as Stockholder.
Until
this Warrant shall have been exercised, in whole or in part, as provided herein,
Holder shall not be entitled to vote or receive dividends pursuant to this
Warrant or be deemed the holder of Common Stock pursuant to this Warrant, nor
shall anything contained herein be construed to confer upon Holder, as such,
any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action (whether
upon any recapitalization, issuance of stock, reclassification of stock, change
of par value, or change of stock to no par value, consolidation, merger,
conveyance, or otherwise) or to receive notice of meetings, or to receive
dividends or subscription rights or otherwise.
5. Transfer,
Exchange, or Loss of Warrant.
(a) No
Assignment.
This
Warrant may not be assigned or transferred except as provided in this Section
5
and in accordance with and subject to the provisions of the Securities Act
of
1933, as amended, and the Rules and Regulations promulgated thereunder
(collectively, the “Securities Act”). Any purported transfer or assignment made
other than in accordance with this Section 5 shall be null and void and of
no
force or effect.
(b) Legend.
Unless
a registration statement under the Securities Act is effective with respect
to
the shares of Common Stock or any other security issued upon exercise of this
Warrant (and the underlying Common Stock), the certificate representing such
shares or other securities shall bear the following legend, in addition to
any
legend imposed by applicable state securities laws:
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT
AND
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”). THESE SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED OR
TRANSFERRED UNLESS (I) THERE IS AN EFFECTIVE REGISTRATION STATEMENT COVERING
SUCH OFFER, SALE OR TRANSFER OR (II) AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT FOR SUCH OFFER, SALE OR TRANSFER IS
AVAILABLE.
(c) Surrender
of Warrant.
Any
assignment permitted hereunder shall be made by surrender of this Warrant to
the
Company at its principal office with the Assignment Form attached hereto as
Exhibit
B
duly
executed. In such event, the Company shall, without charge for any issuance
or
transfer tax or other cost incurred by the Company with respect to such
transfer, execute and deliver a new Warrant in the name of the assignee named
in
such instrument of assignment, and this Warrant shall be promptly cancelled.
This Warrant may be divided or combined with other Warrants which carry the
same
rights upon presentation thereof at the principal office of the Company,
together with a written notice signed by the Holders thereof, specifying the
name and denominations in which such new Warrants are to be issued.
(d) Loss,
Theft, Destruction or Mutilation.
Upon
receipt by the Company of satisfactory evidence of loss, theft, destruction
or
mutilation of this Warrant and of indemnity reasonably satisfactory to the
Company, and upon surrender and cancellation of this Warrant, if mutilated,
the
Company will execute and deliver a new Warrant of like tenor and date and any
such lost, stolen, or destroyed Warrant shall thereupon become void. Any such
new Warrant executed and delivered shall constitute an additional contractual
obligation on the part of the Company, whether or not the Warrant so lost,
stolen, destroyed or mutilated shall be at any time enforceable by
anyone.
6. Reservation
of Stock; Stock Fully Paid.
The
Company covenants and agrees that during the term this Warrant is exercisable,
the Company will reserve from its authorized and unissued Common Stock a
sufficient number of shares to provide for the issuance of Common Stock upon
the
exercise of this Warrant and, from time to time, will take all steps necessary
to amend its certificate of incorporation, as necessary, to provide sufficient
reserves of shares of Common Stock issuable upon exercise of the Warrant. The
Company further covenants and agrees that all shares that may be issued upon
the
exercise of rights represented by this Warrant, all as set forth herein, will
be
duly authorized, validly issued, fully paid and nonassessable, free from all
preemptive or any similar rights of any stockholder of the Company and free
from
all taxes, liens and charges with respect to the issue thereof, other than
such
liens as are imposed by Holder or have been agreed to by Holder. The Company
will take all such action as may be necessary to assure that such shares of
Common Stock may be issued as provided herein without violation of any domestic
securities exchange or automated quotation system upon which the Common Stock
may be listed. The Company agrees that its issuance of this Warrant shall
constitute full authority to its officers who are charged with the duty of
executing stock certificates to execute and issue the necessary certificates
for
shares of Common Stock upon the exercise of this Warrant.
7. Notices.
(a) Whenever
the Exercise Price or number of shares purchasable hereunder shall be adjusted
pursuant to Section 9 hereof or in the event of the dissolution or
liquidation of the Company, the Company shall issue a certificate signed by
its
chief financial officer setting forth, in reasonable detail, the event requiring
the adjustment, the amount of the adjustment, the method by which such
adjustment was calculated, and the Exercise Price and number of shares
purchasable hereunder after giving effect to such adjustment, and shall cause
a
copy of such certificate to be mailed (by first-class mail, postage prepaid)
to
Holder of this Warrant promptly upon the declaration of such event and at least
ten (10) business days prior to the record date for determination of
stockholders entitled thereto or to vote thereon (or, if no record date is
set,
prior to the event).
(b) In
case:
(i) the
Company shall take a record of the holders of its Common Stock (or other stock
or securities at the time receivable upon the exercise of this Warrant) for
the
purpose of entitling them to receive any dividend or other distribution, or
any
right to subscribe for or purchase any shares of stock of any class or any
other
securities, or to receive any other right, or
(ii) of
any
capital reorganization of the Company, any stock split or subdivision, or
reverse stock split or combination, or any similar event involving the Common
Stock, any reclassification of the capital stock of the Company, any
consolidation or merger of the Company with or into another corporation, or
any
sale, transfer or other conveyance of all or substantially all of the assets
of
the Company to another corporation, or
(iii) of
any
voluntary dissolution, liquidation or winding-up of the Company,
then,
and
in each such case, the Company will mail or cause to be mailed to Holder or
Holders a notice specifying, as the case may be, (A) the date on which a
record is to be taken for the purpose of such dividend, distribution or right,
and stating the amount and character of such dividend, distribution or right,
or
(B) the date on which a record is to be taken for determining stockholders
entitled to vote upon such reorganization, reclassification, consolidation,
merger, conveyance, dissolution, liquidation or winding-up, and the time, if
any
is to be fixed, as of which the holders of record of Common Stock (or such
stock
or securities at the time receivable upon the exercise of this Warrant) shall
be
entitled to exchange their shares of Common Stock (or such other stock or
securities) for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding-up. Such notice shall be mailed at least
ten
Business Days prior to the date therein specified.
(c) All
such
notices, advices and communications required or permitted to be given hereunder
shall be in writing and shall be delivered personally to such party (or, in
the
case of an entity, to an executive officer of such party) or shall be sent
by a
reputable express delivery service or by certified mail, postage prepaid with
return receipt requested, addressed as follows:
If
to
Holder, to:
The
Gap,
Inc.
Xxx
Xxxxxx Xxxxxx
Xxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention:
Xxxxxxx Xxxxxxx, Treasurer
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
With
a
separate copy thereof addressed to:
The
Gap,
Inc.
Xxx
Xxxxxx Xxxxxx
Xxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention:
General Counsel
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
If
to the
Company, to:
Inter
Parfums, Inc.
000
Xxxxx
Xxxxxx
Xxx
Xxxx,
XX 00000
Attention:
Xx. Xxxx Xxxxx, CEO
Attention:
Xx. Xxxxxxx Xxxxxxxxx, CFO
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
With
a
separate copy thereof addressed to:
Xxxxxx
X.
Xxxxxxx, Esq.
Xxxx
Xxxxxxxx
Attorneys
at Law
000
X.
Xxx Xxxx Xxxx.,
Xxxxx
0000
Xxxx
Xxxxxxxxxx, 00000
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
Any
party
may change the above-specified recipient and/or mailing address by notice to
the
other party given in the manner herein prescribed. All notices shall be deemed
given on the day when actually delivered as provided above (if delivered
personally or by telecopy) or on the day shown on the return receipt (if
delivered by mail or delivery service).
8. Amendments.
(a) This
Warrant and any term hereof may be changed, waived, discharged or terminated
only by an instrument in writing signed by the party against which enforcement
of such change, waiver, discharge or termination is sought.
(b) No
waivers of, or exceptions to, any term, condition or provision of this Warrant,
in any one or more instances, shall be deemed to be, or construed as, a further
or continuing waiver of any such term, condition or provision.
9. Adjustments.
(a) The
Exercise Price and the number of shares of Common Stock purchasable hereunder
shall be subject to adjustment from time to time upon the occurrence of certain
events described in this Section 9; provided,
however,
that if
a certain event shall cause the Exercise Price to be adjusted to a price less
than the par value of the Common Stock, then the Exercise Price shall be deemed
to equal par value of the Common Stock following the occurrence of such event
(and in the event the par value of the Common Stock decreases thereafter, the
Exercise Price shall decrease to the greater of the new par value or the
Exercise Price resulting from the application of the provisions of this
Warrant):
(i) In
the
event that the Company at any time or from time to time after the issuance
of
this Warrant shall declare or pay, without consideration, any dividend of its
Common Stock payable in Common Stock or in any right to acquire Common Stock
for
no consideration, or shall effect a subdivision of the outstanding shares of
Common Stock into a greater number of shares of Common Stock (by stock split,
reclassification or similar event other than by paying a dividend of Common
Stock or in any right to acquire Common Stock) (any such event, a “Split”),
or in
the event the outstanding shares of Common Stock shall be combined or
consolidated (by reclassification, reverse stock split or similar event), into
a
lesser number of shares of Common Stock (any such event, a “Combination”),
then
(X) concurrently with the effectiveness of any such Split, the Exercise Price
in
effect immediately prior to such event shall be proportionately decreased
(computed to the nearest cent) and the number of shares of Common Stock subject
to this Warrant shall be proportionately increased, and (Y) concurrently with
the effectiveness of any such Combination, the Exercise Price in effect
immediately prior to such event shall be proportionately increased (computed
to
the nearest cent) and the number of shares of Common Stock subject to this
Warrant shall be proportionately decreased. In the event that the Company shall
declare or pay, without consideration, any dividend on the Common Stock payable
in any right to acquire Common Stock for no consideration, then the Company
shall be deemed to have made a dividend payable in Common Stock in an amount
of
shares equal to the maximum number of shares issuable upon exercise of such
rights to acquire Common Stock. The provisions of this clause (i) shall
similarly apply to successive Splits and Combinations.
(ii) In
the
case of any capital reorganization or reclassification of the capital stock
of
the Company, or any consolidation or merger of the Company with another
corporation or the sale, transfer or other conveyance of all or substantially
all of its assets to another corporation (other than as provided for in (i)
above, or a change in par value or a change from par value to no par value
(subject in each case to the first paragraph of this Section 9(a))) in such
a
way that holders of Common Stock shall be entitled to receive cash, stock,
securities or assets with respect to or in exchange for Common Stock, then,
as a
condition of such reorganization, reclassification, consolidation, merger,
sale,
transfer or other conveyance, lawful and adequate provision shall be made
whereby the Company, its successor or any parent of the successor, as the case
may be, shall assume by written instrument executed and delivered to the
registered Holder of this Warrant at such Holder’s address as shown in the
registration books of the Company the obligation (A) to deliver to Holder of
this Warrant, upon due exercise thereof, the kind and amount of cash, shares
of
stock, securities or assets receivable upon such event by a holder of the number
of shares of Common Stock that would have been issued or delivered to such
Holder had this Warrant been exercised immediately prior thereto and (B) to
otherwise maintain the rights of the Holder, including the registration rights
set forth herein.
As
evidence of the kind and amount of stock or other securities or property which
shall be issuable or deliverable upon the exercise of this Warrant after any
such reclassification, change, consolidation, merger, sale, transfer or
conveyance, the Company shall maintain in its records at its principal office
a
certificate of any firm of independent public accountants (who may be the
regular auditors retained by the Company) with respect thereto.
The
provisions of this clause (ii) shall similarly apply to successive
reclassifications, changes, consolidations, mergers, sales, transfers or
conveyances.
(iii) Whenever
the Exercise Price or the number of shares purchasable upon the exercise of
this
Warrant is adjusted as herein provided, the Company shall:
(1) forthwith
place on file at its office a certificate signed by the chief financial officer
of the Company, showing in appropriate detail the facts requiring such
adjustment, the computation thereof, the Exercise Price after such adjustment,
and the number of shares purchasable upon the exercise of this Warrant after
such adjustment with respect to each share originally purchasable upon exercise
hereof, and shall exhibit the same from time to time to any holder of this
Warrant desiring an inspection thereof, and
(2) within
ten days thereafter cause a notice to be mailed to Holder hereof at its address
shown in the registration books of the Company stating that such adjustment
has
been effected and the adjusted Exercise Price and the number of shares
purchasable as aforesaid.
(iv) Irrespective
of any adjustments in the Exercise Price or the number of shares or the number
or kind of other securities purchasable upon exercise of this Warrant, this
Warrant document or any Warrant document thereafter issued may continue to
express the same price and number and kind of shares as are stated in the
Warrant initially issued by the Company.
(b) If
any
event occurs as to which in the opinion of the Board of Directors of the Company
the other provisions of this Section 9 are not strictly applicable or if
strictly applicable would not adequately protect from dilution the exercise
rights of Holder in accordance with the intent and principles of such
provisions, then the Board of Directors of the Company shall make an equitable
adjustment in the application of such provisions, in accordance with such intent
and principles of such provisions, so as to protect such exercise rights as
aforesaid, but in no event shall such adjustment have the effect of increasing
the Exercise Price. In addition, the Company shall not by any action, including,
without limitation, amending its certificate of incorporation or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue
or
sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Warrant, but will at
all
times in good faith assist in the carrying out of all such terms and in the
taking of all such actions as may be necessary or appropriate to protect the
rights of Holder against impairment. Without limiting the generality of the
foregoing, the Company will (a) not increase the par value of any shares of
Common Stock receivable upon the exercise of this Warrant above the amount
payable therefor upon such exercise immediately prior to such increase in par
value, (b) not close its stock transfer books or warrant transfer books so
as to
result in preventing or delaying the exercise or transfer of any Warrant, and
(c) use its best efforts to obtain all such authorizations, exemptions or
consents from any public regulatory body having jurisdiction thereof as may
be
necessary to enable the Company to perform its obligations under this
Warrant.
10. Registration
Rights.
(a) Certain
Definitions.
As used
in this Section 10, the following terms shall have the following respective
meanings:
(i) “Commission”
means
the Securities and Exchange Commission, or any other Federal agency at the
time
administering the Securities Act.
(ii) “Exchange
Act”
means
the Securities Exchange Act of 1934, as amended, or any similar Federal statute,
and the rules and regulations of the Commission issued under such Act, as they
each may, from time to time, be in effect.
(iii) “Registration
Expenses”
means
the expenses described in Section 10(d).
(iv) “Registrable
Shares”
means
(i) the shares of Common Stock issued or issuable upon conversion or exercise
of
the Warrant and (ii) any other shares of Common Stock issued in respect of
the
Warrant or the shares described in clause (i) (because of stock splits, stock
dividends, reclassifications, recapitalizations, or similar events). Wherever
reference is made in this Section 10 to a request or consent of holders of
a
certain percentage of Registrable Shares, or to a number or percentage of
Registrable Shares held by a Holder, such reference shall include shares of
Common Stock issuable upon conversion or exercise of the Warrant even though
such conversion or exercise has not yet been effected. Registrable Shares that
are sold in a public offering pursuant to a Registration Statement under the
Securities Act or pursuant to Rule 144 promulgated under the Securities Act
are
no longer subject to this Section 10 and shall lose their status as Registrable
Shares.
(b) Shelf
Registration.
At
any
time on or before the earlier of (A) January 1, 2007 or (B) a Change of Control
(as defined below) (“Registration
Date”),
the
Company shall file with the Commission, and use its reasonable best efforts
to
have declared effective as soon thereafter as possible, a “shelf” registration
statement pursuant to Rule 415 under the Securities Act (the “Registration
Statement”)
on
Form S-3 (or any successor form to Form S-3, or any similar short-form
registration statement), covering the resale of all Registrable Shares. As
used
in
this
Section 10, “Change of Control” shall mean the occurrence of any of the
following events on or after the date hereof:
(1) The
acquisition (other than by the Company, an entity that is a Company Affiliate
(as defined below), or by an employee benefit plan or related trust sponsored
or
maintained by the Company), directly or indirectly, in one or more transactions,
by any person or by any group of persons, within the meaning of Section 13(d)
or
14(d) of the Exchange Act of beneficial ownership (within the meaning of Rule
13d-3 of the Exchange Act) of thirty-two percent (32%) or more of either the
outstanding shares of Common Stock or the combined voting power of the Company’s
outstanding voting securities entitled to vote generally, if the acquisition
was
not previously approved by the existing directors;
(2) The
acquisition (other than by the Company, an entity that is a Company Affiliate,
or by an employee benefit plan or related trust sponsored or maintained by
the
Company), directly or indirectly, in one or more transactions, by any such
person or by any group of persons of beneficial ownership (within the meaning
of
Rule 13d-3 of the Exchange Act) of fifty percent (50%) or more of either the
outstanding shares of Common Stock or the combined voting power of the Company’s
outstanding voting securities entitled to vote generally, whether or not the
acquisition was approved by the existing directors, other than an acquisition
that complies with clause (x) and (y) of paragraph (3);
(3) Consummation
of a reorganization, merger or consolidation of the Company or the sale or
other
disposition of all or substantially all of the Company’s assets unless,
immediately following such event, (x) all or substantially all of the
stockholders of the Company immediately prior to such event own, directly or
indirectly, seventy-five percent (75%) or more of the then outstanding voting
securities entitled to vote generally of the resulting corporation (including,
without limitation, a corporation which as a result of such event owns the
Company or all or substantially all of the Company’s assets either directly or
through one or more subsidiaries) in substantially the same proportions as
their
ownership of the Company’s outstanding voting securities entitled to vote
generally immediately prior to such event and (y) the securities of the
surviving or resulting corporation received or retained by the stockholders
of
the Company are publicly traded;
(4) Approval
by the stockholders of the complete liquidation or dissolution of the
Company;
(5) A
greater
than one-third change in the composition of the Company’s Board of Directors
within twenty four (24) months if not approved by a majority of the pre-existing
directors; or
(6) Xxxx
Xxxxx is neither Chief Executive Officer of the Company nor President of Gap
Beauty at any time prior to July 14, 2007, or, in the event that Messr. Xxxx
Xxxxx is no longer a member of the Board of Directors of the
Company.
(7)
A
transaction shall not constitute a Change in Control if its sole purpose is
to
change the state of the Company’s incorporation or to create a holding company
that will be owned in substantially the same proportions by the persons who
held
the Company’s securities immediately before such transaction
.
“Company
Affiliate” as used in Section 10(a)(v) shall mean all individuals or entities
controlling, controlled by or under common control with the Company as of July
14, 2005, but for purposes of this definition, Company Affiliate shall not
include any person, firm or company appointed as a contractor to perform work
on
behalf of the Company.
(c) Registration
Procedures.
If and
whenever the Company is required by the provisions of this Section 10 to use
its
best efforts to effect the registration of any of the Registrable Shares under
the Securities Act, the Company shall:
(i) promptly
file with the Commission a Registration Statement with respect to such
Registrable Shares and, as expeditiously as possible, use its best efforts
to
cause that Registration Statement to become and remain effective;
(ii) as
expeditiously as possible prepare and file with the Commission any amendments
and supplements to the Registration Statement and the prospectus included in
the
Registration Statement as may be necessary to keep the Registration Statement
effective until all Registrable Shares are sold;
(iii) as
expeditiously as possible furnish to each selling Holder such reasonable numbers
of copies of the prospectus, including the preliminary prospectus, in conformity
with the requirements of the Securities Act, and such other documents as the
selling Holder may reasonably request in order to facilitate the public sale
or
other disposition of the Registrable Shares owned by the selling
Holder;
(iv) as
expeditiously as possible use its best efforts to register or qualify the
Registrable Shares covered by the Registration Statement under the securities
or
Blue Sky laws of such states as the selling Holder shall reasonably request,
and
do any and all other acts and things that may be necessary or desirable to
enable the selling Holder to consummate the public sale or other disposition
of
the Registrable Shares owned by the selling Holder in such jurisdictions;
provided, however, that the Company shall not be required in connection with
this Section 10(c)(iv) to qualify as a foreign corporation in any
jurisdiction;
(v) furnish
to each seller of Registrable Shares (i) an opinion of counsel for the Company,
dated the effective date of such Registration Statement (and, if such
registration includes an underwritten public offering, dated the date of the
closing under the underwriting agreement), addressed to and in form and
substance as is customarily given to underwriters in an underwritten public
offering to each such seller, and (ii) if such registration includes an
underwritten public offering, cause its independent public accountants who
have
certified the Company’s financial statements included in such Registration
Statement to deliver to each seller of Registrable Shares a “comfort” letter
substantially identical to the comfort letter delivered by such independent
public accountants to any underwriter in such offering;
(vi) notify
each seller of Registrable Shares covered by such Registration Statement, at
any
time when a prospectus relating thereto is required to be delivered under the
Securities Act, upon discovery that, or upon the happening of any event as
a
result of which, the prospectus included in such Registration Statement, as
then
in effect, includes an untrue statement of a material fact or omits to state
any
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances under which they were
made, and promptly prepare and furnish to such seller a reasonable number of
copies of a supplement to or an amendment of such prospectus as may be necessary
so that, as thereafter delivered to the purchasers of such securities, such
prospectus shall not include an untrue statement of a material fact or omit
to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances under which
they were made;
(vii) provide
and cause to be maintained a transfer agent and registrar for all Registrable
Shares covered by such Registration Statement from and after a date not later
than the effective date of such Registration Statement;
(viii) use
its
best efforts to list all Registrable Shares covered by such Registration
Statement on the Nasdaq National Market or the principal securities exchange
on
which any securities of the same class as such Registrable Shares are then
listed;
(ix) use
its
best efforts to prevent the issuance of any stop order or other order suspending
the effectiveness of a Registration Statement covering Registrable Shares and,
if such an order is issued, to obtain the withdrawal thereof at the earliest
possible time and to notify the Holder of the issuance of such order and the
resolution thereof;
(x) provide
the Holder and its representatives the opportunity to conduct a reasonable
inquiry of the Company’s financial and other records during normal business
hours and make available its officers, directors and employees for questions
regarding information which the Holder may reasonably request in order to
conduct any due diligence;
(xi) permit
counsel for the Holder to review a Registration Statement covering Registrable
Shares and all amendments and supplements thereto a reasonable period of time
prior to the filing thereof with the Commission; and
(xii) at
the
request of any Holder at any time after any Registrable Shares held by such
Holder become eligible for resale pursuant to Rule 144(k) under the Securities
Act, deliver a letter to the Company’s transfer agent irrevocably instructing
the transfer agent to remove any securities law legend from any certificate
representing such Registrable Shares which have become eligible for the sale
pursuant to Rule 144(k).
(d) Allocation
of Expenses.
The
Company shall pay the Registration Expenses for the Registration Statement.
For
purposes of this Section, the term “Registration
Expenses”
shall
mean all expenses incurred by the Company in complying with this Section 10,
including, without limitation, all registration and filing fees, exchange or
Nasdaq listing fees, printing expenses, fees and disbursements of counsel for
the Company and up to $20,000 for one counsel for the selling Holders,
out-of-pocket expenses of the Company and the underwriters, state Blue Sky
fees
and expenses, and the expense of any special audits incident to or required
by
any such registration, but excluding underwriting discounts and selling
commissions and fees of more than one counsel for the selling Holders. Such
underwriting discounts and selling commissions shall be borne pro rata by the
selling Holders in accordance with the number of their Registrable Shares
included in such registration.
(e) Indemnification.
In the
event of any registration of any of the Registrable Shares under the Securities
Act pursuant to this Section 10, then to the extent permitted by law the Company
shall indemnify and hold harmless the seller of such Registrable Shares, each
underwriter of such Registrable Shares and each other person, if any, who
controls such seller or underwriter within the meaning of the Securities Act
or
the Exchange Act against any losses, claims, damages or liabilities, joint
or
several, to which such seller, officer, director, underwriter or controlling
person may become subject under the Securities Act, the Exchange Act, state
securities laws 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 any material fact contained
in
any Registration Statement under which such Registrable Shares were registered
under the Securities Act, any preliminary prospectus or final prospectus
contained in the Registration Statement, or any amendment or supplement to
such
Registration Statement or such prospectuses, or arise out of or are based upon
the omission or alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; and the
Company shall reimburse each such seller, officer, director, underwriter and
controlling person for legal or any other expenses reasonably incurred by such
seller, underwriter or controlling person in connection with investigating
or
defending any such loss, claim, damage, liability or action; provided,
however,
that
the Company shall 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 untrue
statement or omission made in such Registration Statement, preliminary
prospectus or final prospectus, or any such amendment or supplement, in reliance
upon and in conformity with information furnished to the Company, in writing,
by
or on behalf of such seller, underwriter or controlling person specifically
for
use in the preparation thereof.
(f) In
the
event of any registration of any of the Registrable Shares under the Securities
Act pursuant to this Section 10, then to the extent permitted by law, each
seller of Registrable Shares, severally and not jointly, shall indemnify and
hold harmless the Company, each of its directors and officers and each
underwriter (if any) and each person, if any, who controls the Company or any
such underwriter within the meaning of the Securities Act or the Exchange Act,
against any losses, claims, damages or liabilities, joint or several, to which
the Company, such directors and officers, underwriter or controlling person
may
become subject under the Securities Act, Exchange Act, state securities laws
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 any Registration Statement
under which such Registrable Shares were registered under the Securities Act,
any preliminary prospectus or final prospectus contained in the Registration
Statement, or any amendment or supplement to the Registration Statement or
such
prospectuses, or arise out of or are based upon any omission or alleged omission
to state a material fact required to be stated therein or necessary to make
the
statements therein not misleading, if and to the extent that the statement
or
omission was made solely in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of such seller, specifically
for use in connection with the preparation of such Registration Statement,
prospectus, amendment or supplement or if such claim arises out of alleged
violations of xxxxxxx xxxxxxx or market manipulation by such seller; and such
seller shall reimburse the Company for legal or any other expenses reasonably
incurred by the Company in connection with investigating or defending any such
loss, claim, damage, liability or action; provided,
however,
that
the obligations of any seller of Registrable Shares hereunder shall not exceed
an amount equal to the net proceeds to such seller of the Registrable Shares
sold pursuant to the Registration Statement.
(g) An
underwriter shall not be entitled to indemnification pursuant to this Section
10
in the event that it fails to deliver to any selling Holder any preliminary
or
final or revised prospectus, as required by the rules and regulations of the
Commission. Finally, no indemnification shall be provided pursuant to this
Section 10(h) in the event that any error in a preliminary prospectus of the
Company is subsequently corrected in the final prospectus of the Company for
a
particular offering, and such final prospectus is delivered to all purchasers
in
the offering prior to the date of purchase of the securities.
(h) Each
party entitled to indemnification under this Section 10 (the “Indemnified
Party”)
shall
give notice to the party required to provide indemnification (the “Indemnifying
Party”)
promptly after such Indemnified Party has actual knowledge of any claim as
to
which indemnity may be sought, and shall permit the Indemnifying Party to assume
the defense of any such claim or any litigation resulting therefrom;
provided,
that
counsel for the Indemnifying Party, who shall conduct the defense of such claim
or litigation, shall be approved by the Indemnified Party (whose approval shall
not be unreasonably withheld); and, provided,
further,
that
the failure of any Indemnified Party to give notice as provided herein shall
not
relieve the Indemnifying Party of its obligations under this Section 10. The
Indemnified Party may participate in such defense at such party’s expense;
provided,
however,
that
the Indemnifying Party shall pay such expense if representation of such
Indemnified Party by the counsel retained by the Indemnifying Party would be
inappropriate due to actual or potential differing interests between the
Indemnified Party and any other party represented by such counsel in such
proceeding. No Indemnifying Party, in the defense of any such claim or
litigation shall, except with the consent of each Indemnified Party, consent
to
entry of any judgment or enter into any settlement that does not include as
an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect of such claim
or
litigation, and no Indemnified Party shall consent to entry of any judgment
or
settle such claim or litigation without the prior written consent of the
Indemnifying Party.
(i) Indemnification
with Respect to Underwritten Offerings.
In the
event that Registrable Shares are sold pursuant to a Registration Statement
in
an underwritten offering, the Company agrees to enter into an underwriting
agreement containing customary representations and warranties with respect
to
the business and operations of an issuer of the securities being registered
and
customary covenants and agreements to be performed by such issuer, including
without limitation customary provisions with respect to indemnification by
the
Company of the underwriters of such offering.
(j) Information
by Holder.
Each
holder of Registrable Shares included in any registration shall furnish to
the
Company such information regarding such holder and the distribution proposed
by
such holder as the Company may request in writing and as shall be required
in
connection with any registration, qualification or compliance referred to in
this Section 10.
(k) Rule
144 Requirements.
With a
view to making available to the Holders the benefits of Rule 144 promulgated
under the Securities Act and any other rule or regulation of the Commission
that
may at any time permit a Holder to sell securities of the Company to the public
without registration, the Company agrees to use its best efforts
to:
(i) make
and
keep public information available, as those terms are understood and defined
in
Rule 144 under the Securities Act);
(ii) file
with
the Commission in a timely manner all reports and other documents required
of
the Company under the Securities Act and the Exchange; and
(iii) furnish
to any holder of Registrable Shares upon request a written statement by the
Company as to its compliance with the reporting requirements of said Rule 144,
and of the Securities Act and the Exchange Act, a copy of the most recent annual
or quarterly report of the Company, and such other reports and documents of
the
Company as such holder may reasonably request to avail itself of any similar
rule or regulation of the Commission allowing it to sell any such securities
without registration.
(l) Termination.
The
provisions of this Section 10 shall terminate on the earlier of (i) the tenth
(10th) anniversary of the date hereof or (ii) the date on which any Holder
is
permitted to sell all of such Holder’s Registrable Shares in any three-month
period pursuant to Rule 144 promulgated under the Securities Act without
registration and without the use of the net exercise provisions set forth in
Section 3(b) hereof.
11. Specific
Performance.
The
parties hereto recognize and agree that money damages may be insufficient to
compensate the holders of any Registrable Shares for breaches by the Company
of
the terms hereof and, consequently, that the equitable remedy of specific
performance of the terms hereof will be available in the event of any such
breach.
12. Taxes.
The
issue of any stock or other certificate upon the exercise of this Warrant shall
be made without charge to Holder for any documentary, stamp or similar tax
in
respect of the issue of such stock or certificate.
13. Valid
Issuance.
Company
represents to Holder that this Warrant and the shares of Common Stock issuable
upon the exercise of this Warrant have been duly authorized by all necessary
corporate action, this Warrant has been duly executed and delivered and
constitutes a legally binding agreement of the Company enforceable in accordance
with the terms hereof, the Company has reserved out of its authorized and
unissued shares of Common Stock a number of shares sufficient to provide for
the
exercise of the rights represented by this Warrant, and the shares of Common
Stock issuable upon exercise of this Warrant, when issued in accordance with
the
terms hereof, will be validly issued, fully paid and nonassessable.
None
of
the execution and delivery by the Company of this Warrant, the consummation
of
the transactions contemplated hereby, or compliance by the Company with any
of
the provisions hereof will conflict with, or result in any violation of or
default (with or without notice or lapse of time, or both) under, or give rise
to a right of termination or cancellation under, any provision of (i) the
certificate of incorporation and by-laws or comparable organizational documents
of the Company; (ii) any contract to which Company is a party or by which
any of the properties or assets of the Company are bound; (iii) any order of
any
governmental body applicable to the Company or by which any of the properties
or
assets of the Company are bound; or (iv) any applicable law.
14. Representations
by Holder.
Holder
represents and warrants that it: (a) is an “accredited investor” within the
meaning of Rule 501 promulgated under the Securities Act of 1933; (b) is
acquiring this Warrant for Holder’s own account, not as a nominee or agent, and
not with a view to the distribution or resale of any part thereof; (c) has
full
power and authority to enter into this Warrant; (d) has had an opportunity
to
ask questions and receive answers from the Company regarding the terms and
conditions of the offering of this Warrant; and (e) is able to fend for itself,
can bear the economic risk of investment and has such knowledge and experience
in financial or business matters that it is capable of evaluating the merits
and
risks of the investment in the Warrant.
15. Governing
Law.
This
Warrant shall be governed by, construed, and enforced in accordance with the
laws of the State of Delaware without reference to its principles of conflicts
of law.
16. Board
Approval.
The
issuance of this Warrant has been duly authorized by the Board of Directors
of
the Company.
17. Removal
of Transfer Restrictions.
Any
legend endorsed on a certificate pursuant to Section 5 will be removed by the
Company and the Company will issue a certificate or certificates without such
legend to Holder or Holder’s transferee, at the request of Holder and upon
delivery by Holder of certificates therefor, at such time as (i) a registration
statement with respect to the sale of such securities has become effective
under
the Securities Act and such securities have been disposed of in accordance
with
such registration statement, or (ii) such securities may be properly sold in
a
transaction exempt from the registration and prospectus delivery requirements
of
the Securities Act and Holder provides the Company with an opinion of counsel
in
form and content reasonably satisfactory to legal counsel for the Company to
the
effect that a sale, transfer, assignment or other disposition of such securities
may be made without registration.
IN
WITNESS WHEREOF, Inter Parfums, Inc. and The Gap, Inc. have caused this Warrant
to be executed by its officer thereunto duly authorized.
|
Dated
as of: July 14, 1005
|
||
| INTER PARFUMS, INC. | ||
| |
|
|
| By: /s/ Xxxx Xxxxx | ||
|
Name:
Xxxx Xxxxx
Title:
Chief Executive Officer
|
||
|
THE
GAP,
INC.
|
||
| By: /s/ | ||
|
Name:
Title:
|
||
EXHIBIT
A
NOTICE
OF EXERCISE
To:
Inter
Parfums, Inc.
Attn:
The
undersigned hereby elects to purchase shares (the “Shares”)
of
Common Stock (“Stock”)
of
Inter Parfums, Inc. (the “Company”)
pursuant to the terms of the attached Warrant, and (check the applicable
box):
|
¨
|
Tenders
herewith payment of the Exercise Price in full in the form of cash,
or a
certified or official bank check or wire transfer in same-day funds,
or
the cancellation of outstanding indebtedness, in the amount of
$_______________________ for _____________________ shares of such
securities and any transfer taxes payable pursuant to the terms of
the
Warrant.
|
|
¨
|
Elects
the Net Issue Exercise option pursuant to Section 3(b) of the Warrant
with
respect to _____________________________ shares of such securities,
and
accordingly requests delivery of the net amount of such securities
as is
determined pursuant to such Section
3(b).
|
Please
issue a certificate or certificates representing said shares of Common Stock
in
the name of the undersigned or in such other name as is specified
below:
(Address)
Please
issue a new Warrant for the unexercised portion of the attached Warrant in
the
name of the undersigned or in such other name as is specified
below:
| (Name) | ||
| |
|
|
|
(Date) |
(Signature) |
|
EXHIBIT
B
ASSIGNMENT
FORM
(To
assign the foregoing Warrant, execute this form and supply required information.
Do
not
use this form to purchase shares.)
FOR
VALUE
RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby
assigned to
whose
address is
(Please Print)
Dated:
____________, ____
Holder’s
Signature:
Holder’s Address:
NOTE:
The
signature to this Assignment Form must correspond with the name as it appears
on
the face of the Warrant, without alteration or enlargement of any change
whatever. Officers of corporations and those acting in a fiduciary or other
representative capacity should file proper evidence of authority to assign
the
foregoing Warrant.
