EXHIBIT 10.2.1
AMENDMENT TO STOCK OPTION AGREEMENT
AND REGISTRATION RIGHTS AGREEMENT
THIS AMENDMENT TO STOCK OPTION AGREEMENT AND REGISTRATION RIGHTS
AGREEMENT ("Agreement") is made as of this 21st day of February, 1995, between
XXXXXXX XXXXXX FRAGRANCES, a Nevada corporation ("Company), and XXXXXXX XxXXXXX
("Holder").
WHEREAS, the Company granted options to Holder to purchase 45,000
shares of the authorized but unissued shares of Common Stock of the Company,
$.005 par value (the "Common Stock") at $.75 per share as evidenced by a Stock
Option Agreement dated September 20, 1993 (the "Stock Option Agreement");
WHEREAS, the Company effected a 1-for-3 reverse stock split of the
Common Stock in 1994;
WHEREAS, the such options to purchase are now for 15,000 shares at
$2.25 per share because of the reverse split;
WHEREAS, Section 3(b) of the Option Agreement stated that such options
would terminate if Holder's directorship ceased;
WHEREAS, the Company acknowledges Holder's services and contributions
as a director and desires to amend such Section 3(b) to provide that such
options not terminate in the event Holder's directorship ceases;
WHEREAS, the Company desires to provide certain registration rights
under the Securities Act of 1933, as amended, and the rules and regulations
thereunder (collectively, the "Act"), with respect to the Common Shares, in
accordance with the terms and conditions set forth in this Agreement;
IT IS AGREED:
1. Registration Rights.
1.1 Certain Definitions.
As used in this Agreement, the following terms shall have the
following respective meanings:
(a) "Commission" shall mean the Securities and Exchange
Commission or any other federal agency at the time administering the Act.
(b) The terms "Register," "Registered" and "Registration"
refer to a registration effected by preparing and filing a registration
statement in compliance with the Act ("Registration Statement"), and the
declaration or ordering by the Commission of the effectiveness of such
Registration Statement.
(c) "Registrable Securities" shall mean the Common Shares
issued or issuable to Holder upon exercise of the options evidenced by the Stock
Option Agreement (including shares received from the Company with respect to or
in replacement of such shares by reason of stock splits, reverse splits, stock
dividends or similar events).
(d) "Registration Expenses" shall mean all expenses incurred
by the Company in complying with Section 1 hereof, including, without
limitation, all federal and state registration, qualification and filing fees,
printing expenses, fees and disbursements of counsel for the Company, blue sky
fees and expenses, and the expense of any special audits incident to or required
by any such Registration.
(e) "Selling Expenses" shall mean all underwriting discounts
and selling commissions applicable to the sale of Registrable Securities by the
Holder pursuant to this Agreement and shall include the fees and costs of any
counsel, accountant or other agent engaged by the Holder.
1.2 "Piggy-Back" Registration Rights.
(a) If, at any time when Holder owns Registrable Securities,
the Company prepares and files a Registration Statement (other than Registration
Statements on Forms S-8 (if not permitted by Commission regulations), S-4, or
similar forms), with respect to a public offering of equity or debt securities
of the Company, or any of such securities held by its stockholders, the Company
will include in such Registration Statement such number of the Registrable
Securities as may be requested by the Holder; provided, however, that if, in the
written opinion of the Company's managing underwriter or underwriters, if any,
for such offering, the inclusion of the Registrable Securities, when added to
the securities being registered by the Company or the selling stockholders, will
exceed the maximum amount of the Company's securities that can be marketed (i)
at a price reasonably related to their then current market value or (ii) without
materially and adversely affecting the entire offering, then the Company may
exclude from such offering all or any portion of the Registrable Securities
requested to be so registered. If any of the Registrable Securities are so
excluded, then the number of securities to be sold by all stockholders in such
public offering will be apportioned pro rata among all such selling
stockholders, including the Holder, according to the total amount of securities
of the Company owned by such selling stockholders, including the Holder.
(b) In the event of such a proposed Registration, the Company
will furnish the Holder with not less than twenty days' written notice prior to
the proposed date of filing the Registration Statement. If the Holder desires to
exercise the "piggy-back" registration rights provided in this Section 1.2, it
must, within ten days after his or its receipt of the Company's notice, give
written notice of such exercise to the Company.
(c) Notwithstanding the foregoing, (i) the Company will have
no obligation hereunder in connection with any Registration Statement unless the
Holder provides to the Company information and documents with respect to its
ownership of Registrable Securities, compliance with the law, manner of proposed
disposition and such other matters as the Company may reasonably require for
disclosure in the Registration Statement; (ii) the Company will not be obligated
to register any Registrable Securities unless such registration is then
permitted by law and the policy of the Commission; and (iii) the foregoing
registration rights are non-assignable except as provided in Section 3.3 hereof
and are exercisable only at such time as the Holder cannot publicly sell any of
the Registrable Securities under an exemption from the registration requirements
of the Act.
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1.3 Blue Sky. In the event of any Registration pursuant to this
Agreement, the Company will exercise its best efforts to Register and qualify
the Registrable Securities covered by the Registration Statement under such
other securities or Blue Sky laws of such jurisdictions as shall be reasonably
requested by the Holder for the distribution of such securities; provided,
however, that the Company shall not be required to qualify to do business, or to
subject itself to taxation in any state or jurisdiction in which it is not now
qualified. The Company will furnish to the Holder written advice of its counsel
with respect to registration or exemption of such Registrable Securities in such
jurisdictions.
1.4 Expenses of Registration. All Registration Expenses incurred
in connection with a Registration pursuant to this Agreement shall be borne by
the Company. All Selling Expenses shall be borne by the Holder.
1.5 Registration Procedures.
1.5.1 Advice by Company. The Company will keep the Holder
advised as to the initiation and completion of such Registration. At its
expense, the Company will (i) use its reasonable efforts to cause the
Registration Statement to become effective; (ii) use its reasonable efforts to
keep such Registration effective until the earlier of the date on which the
Holder has completed the distribution described in the Registration Statement or
the date which is six months after the effective date of the Registration
Statement; and (iii) furnish such number of prospectuses (including preliminary
prospectuses) and other documents as the Holder from time to time may reasonably
request.
1.5.2 Amendments. The Company will promptly prepare and file
with the Commission such amendments and prospectus supplements, including
post-effective amendments, to the Registration Statement as the Company
determines may be necessary or appropriate, and use its best efforts to have
such post-effective amendments declared effective as promptly as practicable;
cause the related prospectus to be supplemented by any prospectus supplement,
and as so supplemented, to be filed with the Commission; and notify the Holder
of any securities included in such Registration Statement and the underwriter
thereof, if any, promptly when a prospectus, any prospectus supplement or
post-effective amendment must be filed or has been filed and, with respect to
any post-effective amendment, when the same has become effective.
1.6 Indemnification.
1.6.1 Company's Indemnification of the Holder. The Company
will indemnify the Holder and each person controlling the Holder within the
meaning of Section 15 of the Act or Section 20(a) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), with respect to which Registration,
qualification or compliance of Registrable Securities has been effected pursuant
to this Agreement, against all claims, losses, damages or liabilities (or
actions in respect thereof) to the extent such claim, losses, damages or
liabilities arise out of or are based upon any untrue statement (or alleged
untrue statement) of a material fact contained in any prospectus or any related
Registration Statement incident to any such Registration, qualification or
compliance, or any omission (or alleged omission) to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, or any violation by the Company of any rule or regulation
promulgated under the Act applicable to the Company and relating to action or
inaction required of the Company in connection with any such Registration; and
the Company will reimburse the Holder, and each person who controls the Holder,
for any legal and any other expenses reasonably incurred in connection with
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investigating or defending any such claim, loss, damage, liability or action;
provided, however, that the indemnity contained in this Section 1.6.1 shall not
apply to amounts paid in settlement of any such claim, loss, damage, liability
or action if settlement is effected without the consent of the Company (which
consent shall not unreasonably be withheld or delayed); and provided, further,
that the Company will not be liable in any such case to the extent that any such
claim, loss, damage, liability or expense arises out of or is based upon any
untrue statement or omission based upon written information furnished to the
Company by the Holder or controlling person specifically for use in the
Registration Statement. Notwithstanding the above, the foregoing indemnity
agreement is subject to the condition that, insofar as it relates to any such
untrue statement, alleged untrue statement, omission or alleged omission made in
a preliminary prospectus, such indemnity agreement shall not inure to the
benefit of the Holder, if a copy of the final prospectus was not furnished to
the person asserting the loss, liability, claim or damage at or prior to the
time such action is required by the Act if the final prospectus corrected the
untrue statement or omission or alleged untrue statement or omission.
1.6.2 Holder's Indemnification of Company. The Holder will,
if Registrable Securities held by the Holder are included in the securities as
to which a Registration is being effected pursuant to this Agreement, indemnify
the Company, each of its directors and officers and each person who controls the
Company within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, and all other holders of securities who are required to use the
Registration Statement to sell their securities of the Company, against all
claims, losses, damages and liabilities (or actions in respect thereof) arising
out of or based upon any untrue statement (or alleged untrue statement) of a
material fact contained in any such Registration Statement or related
prospectus, or any omission (or alleged omission) to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading; and will reimburse the Company, such directors, officers or
control persons for any legal and any other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage,
liability or action, in each case to the extent, but only to the extent, that
such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such Registration Statement or prospectus in reliance upon
and in conformity with written information furnished to the Company by the
Holder specifically for use in the Registration Statement; provided, however,
that the Holder's liability under this Section 1.6.2 shall not exceed the gross
proceeds generated from the sale by the Holder of Registrable Securities made in
connection with such Registration.
1.6.3 Indemnification Procedure. Promptly after receipt by
an indemnified party under this Section 1.6 of notice of the commencement of any
action, such indemnified party will, if a claim in respect thereof is to be made
against an indemnifying party under this Section 1.6, notify the indemnifying
party in writing of the commencement thereof and generally summarize such
action. The indemnifying party shall have the right to participate in and to
assume the defense of such claim and shall be entitled to select counsel for the
defense of such claim with the approval of any parties entitled to
indemnification, which approval shall not be unreasonably withheld.
Notwithstanding the foregoing, the parties entitled to indemnification shall
have the right to employ separate counsel (reasonably satisfactory to the
indemnifying party) to participate in the defense thereof, but the fees and
expenses of such counsel shall be the expense of such indemnified parties unless
the named parties to such action or proceedings include both the indemnifying
party and the indemnified parties and the indemnifying party or such indemnified
parties shall have been advised by counsel that there are one or more legal
defenses available to it which are different from or additional to those
available to the indemnifying party (in which case, if the indemnified party
notifies the indemnifying party in writing that it elects to employ separate
counsel at the reasonable expense of the indemnifying party, the indemnifying
party shall not have the right to assume the defense of such action or
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proceeding on behalf of the indemnified party, as the case may be, it being
understood, however, that the indemnifying party shall not, in connection with
any such action or proceeding or separate or substantially similar or related
action or proceeding in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
more than one separate counsel at any time for the indemnifying party and all
indemnified parties, which counsel shall be designated in writing by the Holder.
If the indemnifying party withholds consent to a settlement or proposed
settlement by the indemnified party, it shall acknowledge to the indemnified
party its indemnification obligations hereunder.
1.6.4 Contribution. If the indemnification provided for in
this Section 1.6 from an indemnifying party is unavailable to an indemnified
party hereunder in respect to any losses, claims, damages, liabilities or
expenses referred to herein, then the indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages,
liabilities or expenses in such proportion as is appropriate to reflect the
relative fault of the indemnifying party and indemnified party in connection
with the statements or omissions which result in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative fault of such indemnifying party and indemnified party shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by such indemnifying party or
indemnified party and the parties' relative intent, knowledge, access to
information supplied by such indemnifying party or indemnified party and
opportunity to correct or prevent such statement or omission. The amount paid or
payable by a party as a result of the losses, claims, damages, liabilities and
expenses referred to above shall be deemed to include any legal or other fees or
expenses reasonably incurred by such party in connection with investigating or
defending any action, suit, proceeding or claim. In no event shall the amount of
any such contribution payable by the Holder exceed the amount payable by the
Holder under Section 1.6.2 hereunder.
2. Covenants of the Company. In connection with the Registration of
the Registrable Securities pursuant to this Agreement, the Company agrees to:
(a) Notify the Holder, at any time when a prospectus relating to
Registrable Securities covered by the Registration Statement is required to be
delivered under the Act, of the happening of any event as a result of which the
prospectus included in the Registration Statement, as then in effect, includes
an untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances then existing. The Company shall use
its reasonable efforts to promptly amend or supplement the Registration
Statement to correct any such untrue statement or omission.
(b) Notify the Holder of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose. The Company will make every
reasonable effort to prevent the issuance of any stop order and, if any stop
order is issued, to obtain the lifting thereof at the earliest possible time.
(c) Make available for inspection by the Holder and the counsel,
accountants or other agents retained by the Holder, all pertinent financial and
other records, corporate documents and properties of the Company, and cause the
Company's officers, directors and employees to supply all information reasonably
requested by the Holder in connection with the Registration Statement, subject
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in each case to reasonable confidentiality restrictions imposed by the Company
and to the Company's right to refuse access to any agent of Holder who is
reasonably unacceptable to the Company.
(d) If the Common Stock is then listed on a national securities
exchange, use its best efforts to cause the Registrable Securities to be listed
on such exchange if the listing of such Registrable Securities is then permitted
under the rules of such exchange.
(e) Take all actions reasonably necessary to facilitate the timely
preparation and delivery of certificates (not bearing any restrictive legend)
representing the Registrable Securities to be sold pursuant to the Registration
Statement and to enable such certificates to be in such denominations and
registered in such names as the Holder or any underwriter may reasonably
request.
(f) With the view to making the benefits of Rule 144 promulgated
under the Act ("Rule 144") available to the Holder, until such time that the
Company shall have no obligation under Section 1 hereunder, the Company shall
use its reasonable efforts to: (i) make and keep available adequate current
public information with the meaning of Rule 144; and (ii) promptly furnish to
the Holder upon request (a) a written statement by the Company that it has
complied with the provisions of Section 2(f)(i) hereunder, (b) a copy of the
most recent annual or other quarterly report of the Company, and (c) such other
reports and documents so filed by the Company with the SEC as may reasonably be
requested by the Holder.
3. Amendment to Section 3(b) of Stock Option Agreement. Notwithstanding
any provision of the Stock Option Agreement, Section 3(b) of the Stock Option
Agreement is hereby amended to provide that if the Holder ceases to be a
director of the Company, the options granted under the Stock Option Agreement
shall not expire or terminate, and shall continue in full force and effect
during the exercise period and shall become and remain exercisable pursuant to
the schedule provided in Section 3(a) of the Stock Option Agreement.
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4. Miscellaneous.
4.1 Notices. Notices required or permitted to be given
hereunder shall be in writing and shall be deemed to be sufficiently given when
personally delivered or sent by certified mail, return receipt requested,
addressed (i) if to the Company, at Xxxxxxx Xxxxxx Fragrances, Inc., 00
Xxxxxxxxx Xxxxxxxxx, Xxxxxx, Xxxxxxxxxxx 00000, Attention: President; (ii) if to
Holder, at 00000 X.X. 00xx Xxxxxx, Xxxxx, Xxxxxxx 00000, c/o Royce Laboratories,
or at such other address as each such party furnishes by notice given in
accordance with this Section 4.1.
4.2 Waiver. Failure of any party to exercise any right or
remedy under this Agreement or otherwise, or delay by a party in exercising such
right or remedy, will not operate as a waiver thereof. No waiver will be
effective unless and until it is in writing and signed by the party giving the
waiver.
4.3 Assignability. The Holder shall not be permitted to
assign any of its rights or obligations under this Agreement except to a
successor trust or trusts of the Holder or its beneficiaries.
4.4 Governing Law. This Agreement shall be enforced, governed
and construed in all respects in accordance with the laws of the State of New
York. In the event that any provision of this Agreement is invalid or
unenforceable under any applicable statute or rule of law, then such provision
shall be deemed inoperative to the extent that it may conflict therewith and
shall be deemed modified to conform with such statute or rule of law. Any
provision hereof which may prove invalid or unenforceable under any law shall
not affect the validity or enforceability of any other provision hereof.
4.5 Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof.
Any provision of this Agreement may be amended and the observance thereof may be
waived (either generally or in a particular instance and either retroactively or
prospectively), only by a writing executed by the Company and the Holder. Any
amendment or waiver effected in accordance with this Section 4.5 shall be
binding upon the Holder and the Company.
IN WITNESS WHEREOF, this Agreement has been executed as of the date and
year first above written.
XXXXXXX XXXXXX FRAGRANCES
By: /s/ Xxxxxxx Xxxxxx
------------------------------
Name: Xxxxxxx Xxxxxx
Title: President
HOLDER:
By: /s/ Xxxxxxx XxXxxxx
------------------------------
Xxxxxxx XxXxxxx
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