UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 3)*
Bernard Chaus, Inc.
---------------------------------------
(Name of Issuer)
Common Stock, par value $.01 per share
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(Title of Class of Securities)
162510101
----------------------------------------
(CUSIP Number)
Josephine Chaus
---------------------------------------
(Name of Person Filing Statement)
Richard A. Goldberg, Esq.
Shereff, Friedman, Hoffman & Goodman, LLP
919 Third Avenue
New York, New York 10022
(212) 758-9500
--------------------------------------------
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
November 15, 1995
----------------------------------------------
(Date of Event which Requires Filing of
this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
statement because of Rule 13d-1(b) (3) or (4), check the following: [ ].
Check the following box if a fee is being paid with this statement: [ ]. (A
fee is not required only if the reporting person: (1) has a previous statement
on file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of less than five percent of such class.
See Rule 13d-7.
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
SCHEDULE 13D
CUSIP No. 162510101 Page 2 of 7 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Josephine Chaus
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
3 SEC USE ONLY
4 SOURCE OF FUNDS*
PF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) or 2(e) / /
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
7 SOLE VOTING POWER
16,168,550
8 SHARED VOTING POWER
118,000
9 SOLE DISPOSITIVE POWER
16,168,550
10 SHARED DISPOSITIVE POWER
118,000
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
16,286,550
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
/ /
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
54.8%
14 TYPE OF REPORTING PERSON*
IN
*SEE INSTRUCTIONS BEFORE FILLING OUT! SEC 1746 (9-88) 2 OF
AMENDMENT NO. 3 TO SCHEDULE 13D
This Amendment No. 3 to the Original Schedule 13D (as defined below)
amends and supplements the Statement on Schedule 13D relating to the event date
of April 5, 1990 (the "Original Schedule 13D"), Amendment No. 1 to the Original
Schedule 13D relating to the event date of October 16, 1992 ("Amendment No. 1"),
and Amendment No. 2 to the Original Schedule 13D relating to the event date of
November 22, 1994 ("Amendment No. 2"), reported by Josephine Chaus (the
"Reporting Person"), relating to the common stock, par value $.01 per share (the
"Common Stock"), of Bernard Chaus, Inc., a New York corporation (the "Issuer").
The Original Schedule 13D, Amendment No. 1 and Amendment No. 2 are collectively
referred to herein as the "Schedule 13D."
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The response set forth in Item 3 of the Schedule 13D is hereby amended
and supplemented as follows:
In February 1995, the Reporting Person provided additional credit
support to the Issuer in the form of (a) an increase from $7,200,000 to
$10,000,000 in the letter of credit (the "Letter of Credit") previously provided
by her and an extension of its term until October 31, 1995 (the "February
Increase/Extension"), and (b) a personal guarantee in the amount of $5,000,000
(the "Guarantee"). In addition, in September 1995, the Reporting Person further
extended the term of the Letter of Credit to January 31, 1996 (the "September
Extension").
In return for her provision of such additional credit support to the
Issuer, the Special Committee authorized the issuance, subject to stockholder
approval, of warrants (the "1995 Warrants") to purchase an aggregate of
1,580,000 shares of Common Stock. The stockholders of the Issuer approved the
issuance of the 1995 Warrants at the November 15, 1995 Annual Meeting of
Stockholders. The 1995 Warrants consist of (a) warrants (the "February Increase
Warrants") to purchase 815,000 shares of Common Stock at an exercise price of
$4.05 per share, (b) warrants (the "Guarantee Warrants") to purchase 535,000
shares of Common Stock at an exercise price of $4.05 per share, and (c) warrants
(the "September Extension Warrants") to purchase 230,000 shares of Common Stock
at an exercise price of $6.75 per share. The exercise prices of the February
Increase Warrants and the Guarantee Warrants are equal to 120% of the closing
price of the Common Stock on the New York Stock Exchange, Inc. (the "NYSE") on
May 17, 1995, the date immediately preceding the date when the Special Committee
approved the issuance of such warrants; and the exercise price of the September
Extension Warrants is equal to 120% of the closing price of the Common Stock on
the NYSE on September 14, 1995, the date when the Special Committee approved the
issuance of the September Extension Warrants. In approving the issuance of the
1995 Warrants, the Special Committee sought the advice of Lehman Brothers, which
provided its view as to the commercial reasonableness of the transaction.
3
In addition, the Issuer has granted to the Reporting Person an option
(the "July Option"), exercisable by the Special Committee, to further extend
the Letter of Credit until July 31, 1996. If the Issuer (upon a determination
by the Special Committee) exercises the July Option, the Reporting Person will
be entitled to certain additional warrants (the number of such warrants shall
be determined by the Special Committee in a manner consistent with past
practices, and shall be subject to receipt of a letter of a nationally
recognized investment banking firm as to the commercial reasonableness thereof
and to stockholder approval).
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
The responses set forth in subsections (a) and (b) of Item 5 of the
Schedule 13D are hereby amended and restated in their entirety as follows:
(a) The aggregate number of shares of Common Stock
beneficially owned by the Reporting Person is 16,286,550, or approximately
54.8% of the outstanding shares of Common Stock, based on the number of
outstanding shares of Common Stock of the Issuer as of November 22, 1995. Such
shares beneficially owned by the Reporting Person include an aggregate of
2,796,500 shares issuable upon the exercise of warrants, consisting of (i)
1,216,500 shares of Common stock issuable upon the exercise of the warrants
issued to the Reporting Person in 1994 (the "1994 Warrants") and (ii) 1,580,000
shares of Common Stock issuable upon the exercise of the 1995 Warrants.
(b) The Reporting Person has the sole power to vote, direct
the vote or dispose of an aggregate of 16,168,550 shares of Common Stock
beneficially owned by her. The Reporting Person shares power to vote, direct
the vote or dispose of an aggregate of 118,000 shares of Common Stock held by
her and Daniel Rosenbloom as co-trustees for her children.
Mr. Rosenbloom acts as an investment advisor with First
Manhattan Co., an investment advisory firm. His business address, and the
principal address of First Manhattan Co., is 437 Madison Avenue, New York, New
York 10022. During the last five years, Mr. Rosenbloom has not been convicted
in a criminal proceeding (excluding traffic violations or similar
misdemeanors). In addition, during the last five years, Mr. Rosenbloom has not
been a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding been subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state securities laws or finding
any violation with respect to such laws.
ITEM 6. CONTRACTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES
OF THE ISSUER.
The response set forth in Item 6 of the Schedule 13D is hereby amended
and restated in its entirety as follows:
The 1994 Warrants were issued pursuant to a series of warrant
agreements, each dated November 22, 1994, which are incorporated by reference
herein. The 1995 Warrants
4
were issued pursuant to a series of warrant agreements, each dated November 15,
1995, which are incorporated by reference herein. The 1994 Warrants became
exercisable on November 22, 1994, and the 1995 Warrants became exercisable on
November 15, 1995. The 1994 Warrants and the 1995 Warrants will expire five
years from their issuance and contain customary anti-dilution provisions. The
1994 Warrants are nontransferable, and, with respect to the 1995 Warrants, the
February Increase Warrants and the Guarantee Warrants are fully transferable
and the September Extension Warrants are nontransferable.
On September 1, 1994, the Reporting Person entered into a letter
agreement (the "Letter Agreement") with Andrew Grossman, the Issuer's Chief
Executive Officer, in connection with the Issuer's hiring of Mr. Grossman.
Pursuant to the Letter Agreement, the Reporting Person agreed to vote all of
her shares of Common Stock of the Issuer at the 1994 Annual Meeting of
Stockholders in favor of, among other things, a bonus plan and an option plan
for Mr. Grossman. In addition, in the Letter Agreement, the Reporting Person
agreed that, at each Annual Meeting of Stockholders held during the term of the
employment agreement between Mr. Grossman and the Issuer, she would vote all of
her shares of Common Stock of the Issuer in favor of Mr. Grossman's re-election
to the Issuer's Board of Directors. In September 1995, the Issuer exercised
its option to renew the term of the employment agreement with Mr. Grossman
until 2004. The Letter Agreement is incorporated herein by reference.
ITEM 7. MATERIALS TO BE FILED AS EXHIBITS.
Exhibit 1 Agreement dated November 22, 1994 between the Company and the
Reporting Person issuing 32,500 warrants to purchase Common
Stock of the Issuer.
Exhibit 2 Agreement dated November 22, 1994 between the Company and the
Reporting Person issuing 206,000 warrants to purchase Common
Stock of the Issuer.
Exhibit 3 Agreement dated November 22, 1994 between the Company and the
Reporting Person issuing 338,000 warrants to purchase Common
Stock of the Issuer.
Exhibit 4 Agreement dated November 22, 1994 between the Company and the
Reporting Person issuing 640,000 warrants to purchase Common
Stock of the Issuer.
Exhibit 5 Agreement dated November 15, 1995 between the Company and the
Reporting Person issuing 815,000 warrants to purchase Common
Stock of the Issuer.
Exhibit 6 Agreement dated November 15, 1995 between the Company and the
Reporting Person issuing 535,000 warrants to purchase Common
Stock of the Issuer.
Exhibit 7 Agreement dated November 15, 1995 between the Company and the
Reporting Person issuing 230,000 warrants to purchase Common
Stock of the Issuer.
Exhibit 8 Letter Agreement dated September 1, 1994 between the Reporting
Person and Andrew Grossman (previously filed as Exhibit A to
Amendment No. 2).
5
SIGNATURE
After reasonable inquiry and to the best of the undersigned's knowledge
and belief, the undersigned certifies that the information set forth in this
Statement is true, complete and correct.
Dated: November 21, 1995
\s\ Josephine Chaus
------------------------------
Josephine Chaus
6
EXHIBIT INDEX
Exhibit Description
- ------- -----------
1 Agreement dated November 22, 1994 between the Company and the
Reporting Person issuing 32,500 warrants to purchase Common
Stock of the Issuer.
2 Agreement dated November 22, 1994 between the Company and the
Reporting Person issuing 206,000 warrants to purchase Common
Stock of the Issuer.
3 Agreement dated November 22, 1994 between the Company and the
Reporting Person issuing 338,000 warrants to purchase Common
Stock of the Issuer.
4 Agreement dated November 22, 1994 between the Company and the
Reporting Person issuing 640,000 warrants to purchase Common
Stock of the Issuer.
5 Agreement dated November 15, 1995 between the Company and the
Reporting Person issuing 815,000 warrants to purchase Common
Stock of the Issuer.
6 Agreement dated November 15, 1995 between the Company and the
Reporting Person issuing 535,000 warrants to purchase Common
Stock of the Issuer.
7 Agreement dated November 15, 1995 between the Company and the
Reporting Person issuing 230,000 warrants to purchase Common
Stock of the Issuer.
8 Letter Agreement dated September 1, 1994 between the Reporting
Person and Andrew Grossman (previously filed as Exhibit A to
Amendment No. 2 to the Statement on Schedule 13D relating to
the event date of November 22, 1994).
7
NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF
THIS WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND NEITHER
THIS WARRANT NOR SUCH SHARES MAY BE SOLD, ENCUMBERED OR OTHERWISE TRANSFERRED
EXCEPT IN COMPLIANCE WITH THIS WARRANT AGREEMENT AND PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT OR AN EXEMPTION FROM SUCH REGISTRATION
REQUIREMENT, AND, IF AN EXEMPTION SHALL BE APPLICABLE, THE HOLDER SHALL HAVE
DELIVERED AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.
Void after 5:00 p.m. Eastern Standard Time, on November 22, 1999.
WARRANT TO PURCHASE COMMON STOCK
OF
BERNARD CHAUS, INC.
WARRANT dated and effective as of November 22, 1994, by and
between BERNARD CHAUS, INC. (the "Company"), a New York corporation with
offices at 1410 Broadway, New York, New York 10018 and JOSEPHINE CHAUS (the
"Warrantholder"), an individual residing at 128 East 73rd Street, New York, New
York 10021.
FOR VALUE RECEIVED, the Company hereby certifies that the
Warrantholder is entitled to purchase from the Company, at any time or from
time to time commencing November 22, 1994, and prior to 5:00 P.M., Eastern
Standard Time, on November 22, 1999, 32,500 fully paid and nonassessable shares
of Common Stock, par value $0.01 per share, of the Company, at $4.62 per share
for an aggregate purchase price of $150,150.00. Hereinafter, (i) said Common
Stock, together with any other equity securities which may be issued by the
Company with respect thereto or in substitution therefor, is referred to as the
"Common Stock," (ii) the shares of the Common Stock purchasable hereunder are
referred to as the "Warrant Shares," (iii) the aggregate purchase price payable
hereunder for the Warrant Shares is referred to as the "Aggregate Warrant
Price," (iv) the price payable hereunder for each of the Warrant Shares is
referred to as the "Per Share Warrant Price," and (v) this Warrant, and all
warrants hereafter issued in exchange or substitution for this Warrant are
referred to as the "Warrant." The number of Warrant Shares for which this
Warrant is exercisable is subject to adjustment as hereinafter provided.
1. This Warrant may be exercised, in whole at any time or
in part from time to time, commencing November 22, 1994, and prior to 5:00
P.M., Eastern Standard Time, on November 22, 1999, by the Warrantholder by the
surrender of this Warrant (with the subscription form at the end hereof duly
executed) at the address of the Company set forth on the first page hereof,
evidencing proper payment of the Aggregate Warrant Price, or the proportionate
part thereof if this Warrant is exercised in part.
2. (a) The issuance of this Warrant was
approved by, and the Per Share Warrant Price of $4.62 was determined by, the
Special Committee of the Company's Board of Directors on September 27, 1994
(the "Committee Approval Date"), subject to approval of the Company's
shareholders. The Company's shareholders approved the issuance of this Warrant
on November 22, 1994. The Per Share Warrant Price represents a 20% premium
over the average closing price of the Common Stock on the New York Stock
Exchange over the five trading day period commencing September 27, 1994.
3. In no event shall this Warrant be converted, and this
Warrant shall no longer be exercisable, at any time after five years from the
date hereof. Any conversion of this Warrant may be either in whole at any time
or in part at any time or from time to time.
4. Neither the Warrantholder nor the Warrantholder's legal
representatives, legatees or distributees shall be or be deemed to be the
holder of any shares of the Common Stock covered by this Warrant unless and
until certificates for such shares have been issued. Upon payment of the
purchase price thereof, shares issued upon conversion of this Warrant shall be
validly issued, fully paid and nonassessable.
5. In order to exercise this Warrant, the Warrantholder
shall give a signed written notice of intent to exercise this Warrant to the
Treasurer of the Company specifying the number of shares of the Common Stock
with respect to which this Warrant is being exercised, and accompanied by
payment to the Company of the full amount of the Aggregate Warrant Price for
the number of shares of Common Stock so specified. If permitted under
applicable securities laws, all or any portion of such payment may be made
through a "cashless exercise" arrangement with a broker designated by the
Warrantholder by delivery of shares of Common Stock having a fair market value
(as hereinafter determined) on the date of delivery equal to the portion of the
Aggregate Warrant Price so paid; provided, that in connection therewith, the
Warrantholder shall certify to the Company that such delivery will not result
in "short-swing" profit to her under Section 16 of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and the rules and regulations
promulgated thereunder ("Section 16").
For the purposes hereof, the fair market value of a
share of the Common Stock on any date shall be equal to the closing sale price
of a share of the Common Stock as published by the national securities exchange
on which the shares of the Common Stock are primarily traded on such date or,
if there is no such sale of the Common Stock on such date, the average of the
bid and asked price on such exchange at the close of trading on such date or,
if the shares of the Common Stock are not listed on a national securities
exchange on such date, the average of the bid and asked prices in the over the
counter market on such date or, if the Common Stock is not traded on a national
securities exchange or the over the counter market, the fair market value of a
share of the Common Stock on such date as shall be determined in good faith by
the Company.
6. (a) Unless the shares to be issued upon the
exercise of the Warrant shall be registered under the Securities Act of 1933,
as amended (the "Act"), prior to the issuance thereof (which the Company shall
use its best efforts to do at its expense at the Warrantholder's request), the
Warrantholder shall, as a condition to the Company's obligation to issue such
shares, give a representation in writing that she is acquiring such shares for
her own account as an investment and not with a view to, or for sale in
connection with, the distribution of such shares.
(b) In the event of the death of the Warrantholder,
an additional condition of exercising the Warrant shall be the delivery to the
Company of such tax waivers and other documents as the Company shall reasonably
determine. The executors, administrators, legal representatives, distributees
and legatees of the Warrantholder are, after the death of the Warrantholder,
referred to as the Warrantholder with respect to this Warrant.
(c) The Warrantholder shall, as an additional
condition of converting this Warrant, make appropriate arrangements with the
Company for the payment of all federal, state or local withholding taxes
applicable as a result of the exercise of this Warrant. If permitted under
applicable securities laws, all or any portion of such payment may be made
through a "cashless exercise" arrangement with a broker designated by the
Warrantholder by delivery of shares of Common Stock having a fair market value
(as determined pursuant to paragraph 5 hereof) on the date of delivery equal to
the portion of such taxes so paid; provided, that in connection therewith the
Warrantholder shall certify to the Company that such delivery will not result
in "short-swing" profit to her under Section 16.
The Company covenants and agrees that it will pay, when
due and payable, any and all Federal and state stamp, original issue or similar
taxes that may be payable in respect of the issue of any Warrant Shares or
certificates therefor.
7. The Company agrees that, prior to the expiration of
this Warrant, the Company will at all times have authorized and in reserve, and
will keep available, solely for issuance or delivery upon the exercise of this
Warrant, the shares of the Common Stock as from time to time shall be
receivable upon the exercise of this Warrant.
8. In the event that a dividend shall be declared upon the
Common Stock payable in shares of the Common Stock, the Warrant Shares shall be
adjusted by adding to each such share the number of shares which would be
distributable thereon if such shares had been outstanding on the date fixed for
determining the shareholders entitled to receive such stock dividend. In the
event that the outstanding shares of the Common Stock shall be changed into or
exchanged for a different number or kind of shares of stock and/or other
securities of the Company or of another corporation or cash or other property,
whether through reorganization, recapitalization, extraordinary dividend, stock
split-up, combination of shares, sale of assets, spin off or merger or
consolidation in which the Company is the surviving corporation, then, there
shall be substituted for each Warrant Share the number and kind of shares of
stock and/or other securities, cash or other property into which each
outstanding share of the Common Stock shall be so changed or for which each
such share shall be exchanged. In the event that there shall be any change,
other than as specified in this paragraph 8, in the number or kind of
outstanding shares of the Common Stock, or of any stock or other securities
into which the Common Stock shall have been changed, or for which it shall have
been exchanged, then, the Board of Directors of Company shall, in its
reasonable discretion, equitably adjust this Warrant with respect to the number
or kind of Warrant Shares and the Warrant Price, such adjustment to be made by
the Company and notice thereof shall be delivered to the Warrantholder within
30 calendar days thereafter, accompanied by a certificate of the Chief
Financial Officer of the Company setting forth such adjustment, the method of
calculation of such adjustment and the facts upon which such adjustment was
based, all in reasonable detail. In the case of any such substitution or
adjustment as provided for in this paragraph 8, the Warrant Price for each
Warrant Share shall be the Warrant Price for all shares of stock or other
securities which shall have been substituted for such Warrant Share or to which
such shares shall have been adjusted in accordance with the provisions in this
paragraph 8. No adjustment or substitution provided for in this paragraph 8
shall require the Company to sell a fractional share hereunder.
9. The existence of this Warrant shall not affect in any
way the right or power of the Company or its shareholders to make or authorize
any or all adjustments, recapitalizations, reorganizations or other changes in
the Company's capital structure or its business, or any merger or consolidation
of the Company, or any issue of bonds, debentures, preferred or prior
preference stock ahead of or affecting the Common Stock or the rights thereof,
or dissolution or liquidation of the Company, or any sale or transfer of all or
any part of its assets or business, or any other corporate act or proceeding
whether of a similar character or otherwise.
10. This Warrant shall be governed by and construed in
accordance with the internal laws of the State of New York.
11. Upon receipt of evidence satisfactory to the Company of
the loss, theft, destruction or mutilation of this Warrant, and of indemnity
reasonably satisfactory to the Company, if lost, stolen or destroyed, and upon
surrender and cancellation of this Warrant if mutilated, the Company shall
execute and deliver to the Warrantholder a new Warrant of like date, tenor and
denomination.
12. Any notice or other communication required or permitted
to be given hereunder shall be in writing and shall be mailed by certified
mail, return receipt requested, or delivered against receipt to the party to
whom it is to be given at the address of such party set forth in the preamble
to this Warrant (or to such other address as the party shall have furnished in
writing in accordance with the provisions of this paragraph 12). Notice to the
estate of the Warrantholder shall be sufficient if addressed to the
Warrantholder as provided in this paragraph 12. Any notice or other
communication given by certified mail shall be deemed given at the time of
certification thereof, except for a notice changing a party's address which
shall be deemed given at the time of receipt thereof.
13. Except as may be permitted by Rule 16b-3 promulgated
under the Exchange Act for transfers to a trust or similar estate planning
vehicle, this Warrant is not transferable otherwise than by will or the laws of
descent and distribution and may be exercised, during the lifetime of the
Warrantholder, only by her or, in the event of her disability, her duly
appointed guardian or conservator. The Warrantholder's rights shall not be
subject to commutation, encumbrance, or the claims of the Warrantholder's
creditors, and any attempt to do any of the foregoing shall be void. The
provisions of this Warrant shall be binding upon and inure to the benefit of
the Warrantholder and her heirs and personal representatives under this
Warrant.
14. This Warrant does not create, and shall not be
construed as creating, any rights enforceable by any person not a party to this
Warrant (except as expressly provided in this Warrant).
IN WITNESS WHEREOF, BERNARD CHAUS, INC. has caused this Warrant
to be signed by a duly authorized officer the day and year first above written.
ATTEST: BERNARD CHAUS, INC.
\s\ Mark A. Zuckerman By: \s\ Wayne S. Miller
- --------------------------- -----------------------------
Mark A. Zuckerman Name: Wayne S. Miller
Treasurer and Assistant Secretary Title: Executive Vice President-
Finance and Administration and
Chief Financial Officer
SUBSCRIPTION
The undersigned, ,
pursuant to the provisions of the foregoing Warrant, hereby agrees to subscribe
for the purchase of shares of the Common Stock of BERNARD
CHAUS, INC. covered by said Warrant, and makes payment therefor in full at the
price per share provided by said Warrant.
Dated ____________ Signature ___________________
Address ___________________
___________________
NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF
THIS WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND NEITHER
THIS WARRANT NOR SUCH SHARES MAY BE SOLD, ENCUMBERED OR OTHERWISE TRANSFERRED
EXCEPT IN COMPLIANCE WITH THIS WARRANT AGREEMENT AND PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT OR AN EXEMPTION FROM SUCH REGISTRATION
REQUIREMENT, AND, IF AN EXEMPTION SHALL BE APPLICABLE, THE HOLDER SHALL HAVE
DELIVERED AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.
Void after 5:00 p.m. Eastern Standard Time, on November 22, 1999.
WARRANT TO PURCHASE COMMON STOCK
OF
BERNARD CHAUS, INC.
WARRANT dated and effective as of November 22, 1994, by and
between BERNARD CHAUS, INC. (the "Company"), a New York corporation with
offices at 1410 Broadway, New York, New York 10018 and JOSEPHINE CHAUS (the
"Warrantholder"), an individual residing at 128 East 73rd Street, New York, New
York 10021.
FOR VALUE RECEIVED, the Company hereby certifies that the
Warrantholder is entitled to purchase from the Company, at any time or from
time to time commencing November 22, 1994, and prior to 5:00 P.M., Eastern
Standard Time, on November 22, 1999, 206,000 fully paid and nonassessable
shares of Common Stock, par value $0.01 per share, of the Company, at $2.25 per
share for an aggregate purchase price of $463,500. Hereinafter, (i) said
Common Stock, together with any other equity securities which may be issued by
the Company with respect thereto or in substitution therefor, is referred to as
the "Common Stock," (ii) the shares of the Common Stock purchasable hereunder
are referred to as the "Warrant Shares," (iii) the aggregate purchase price
payable hereunder for the Warrant Shares is referred to as the "Aggregate
Warrant Price," (iv) the price payable hereunder for each of the Warrant Shares
is referred to as the "Per Share Warrant Price," and (v) this Warrant, and all
warrants hereafter issued in exchange or substitution for this Warrant are
referred to as the "Warrant." The number of Warrant Shares for which this
Warrant is exercisable is subject to adjustment as hereinafter provided.
1. This Warrant may be exercised, in whole at any time or
in part from time to time, commencing November 22, 1994, and prior to 5:00
P.M., Eastern Standard Time, on November 22, 1999, by the Warrantholder by the
surrender of this Warrant (with the subscription form at the end hereof duly
executed) at the address of the Company set forth on the first page hereof,
evidencing proper payment of the Aggregate Warrant Price, or the proportionate
part thereof if this Warrant is exercised in part.
2. (a) The issuance of this Warrant was
approved by, and the Per Share Warrant Price of $2.25 was determined by, the
Special Committee of the Company's Board of Directors on June 23, 1994 (the
"Committee Approval Date"), subject to approval of the Company's shareholders.
The Company's shareholders approved the issuance of this Warrant on November
22, 1994. The Per Share Warrant Price represents a 20% premium over the
closing price of the Common Stock on the New York Stock Exchange on the
Committee Approval Date.
3. In no event shall this Warrant be converted, and this
Warrant shall no longer be exercisable, at any time after five years from the
date hereof. Any conversion of this Warrant may be either in whole at any time
or in part at any time or from time to time.
4. Neither the Warrantholder nor the Warrantholder's legal
representatives, legatees or distributees shall be or be deemed to be the
holder of any shares of the Common Stock covered by this Warrant unless and
until certificates for such shares have been issued. Upon payment of the
purchase price thereof, shares issued upon conversion of this Warrant shall be
validly issued, fully paid and nonassessable.
5. In order to exercise this Warrant, the Warrantholder
shall give a signed written notice of intent to exercise this Warrant to the
Treasurer of the Company specifying the number of shares of the Common Stock
with respect to which this Warrant is being exercised, and accompanied by
payment to the Company of the full amount of the Aggregate Warrant Price for
the number of shares of Common Stock so specified. If permitted under
applicable securities laws, all or any portion of such payment may be made
through a "cashless exercise" arrangement with a broker designated by the
Warrantholder by delivery of shares of Common Stock having a fair market value
(as hereinafter determined) on the date of delivery equal to the portion of the
Aggregate Warrant Price so paid; provided, that in connection therewith, the
Warrantholder shall certify to the Company that such delivery will not result
in "short-swing" profit to her under Section 16 of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and the rules and regulations
promulgated thereunder ("Section 16").
For the purposes hereof, the fair market value of a
share of the Common Stock on any date shall be equal to the closing sale price
of a share of the Common Stock as published by the national securities exchange
on which the shares of the Common Stock are primarily traded on such date or,
if there is no such sale of the Common Stock on such date, the average of the
bid and asked price on such exchange at the close of trading on such date or,
if the shares of the Common Stock are not listed on a national securities
exchange on such date, the average of the bid and asked prices in the over the
counter market on such date or, if the Common Stock is not traded on a national
securities exchange or the over the counter market, the fair market value of a
share of the Common Stock on such date as shall be determined in good faith by
the Company.
6. (a) Unless the shares to be issued upon the
exercise of the Warrant shall be registered under the Securities Act of 1933,
as amended (the "Act"), prior to the issuance thereof (which the Company shall
use its best efforts to do at its expense at the Warrantholder's request), the
Warrantholder shall, as a condition to the Company's obligation to issue such
shares, give a representation in writing that she is acquiring such shares for
her own account as an investment and not with a view to, or for sale in
connection with, the distribution of such shares.
(b) In the event of the death of the Warrantholder,
an additional condition of exercising the Warrant shall be the delivery to the
Company of such tax waivers and other documents as the Company shall reasonably
determine. The executors, administrators, legal representatives, distributees
and legatees of the Warrantholder are, after the death of the Warrantholder,
referred to as the Warrantholder with respect to this Warrant.
(c) The Warrantholder shall, as an additional
condition of converting this Warrant, make appropriate arrangements with the
Company for the payment of all federal, state or local withholding taxes
applicable as a result of the exercise of this Warrant. If permitted under
applicable securities laws, all or any portion of such payment may be made
through a "cashless exercise" arrangement with a broker designated by the
Warrantholder by delivery of shares of Common Stock having a fair market value
(as determined pursuant to paragraph 5 hereof) on the date of delivery equal to
the portion of such taxes so paid; provided, that in connection therewith the
Warrantholder shall certify to the Company that such delivery will not result
in "short-swing" profit to her under Section 16.
The Company covenants and agrees that it will pay, when
due and payable, any and all Federal and state stamp, original issue or similar
taxes that may be payable in respect of the issue of any Warrant Shares or
certificates therefor.
7. The Company agrees that, prior to the expiration of
this Warrant, the Company will at all times have authorized and in reserve, and
will keep available, solely for issuance or delivery upon the exercise of this
Warrant, the shares of the Common Stock as from time to time shall be
receivable upon the exercise of this Warrant.
8. In the event that a dividend shall be declared upon the
Common Stock payable in shares of the Common Stock, the Warrant Shares shall be
adjusted by adding to each such share the number of shares which would be
distributable thereon if such shares had been outstanding on the date fixed for
determining the shareholders entitled to receive such stock dividend. In the
event that the outstanding shares of the Common Stock shall be changed into or
exchanged for a different number or kind of shares of stock and/or other
securities of the Company or of another corporation or cash or other property,
whether through reorganization, recapitalization, extraordinary dividend, stock
split-up, combination of shares, sale of assets, spin off or merger or
consolidation in which the Company is the surviving corporation, then, there
shall be substituted for each Warrant Share the number and kind of shares of
stock and/or other securities, cash or other property into which each
outstanding share of the Common Stock shall be so changed or for which each
such share shall be exchanged. In the event that there shall be any change,
other than as specified in this paragraph 8, in the number or kind of
outstanding shares of the Common Stock, or of any stock or other securities
into which the Common Stock shall have been changed, or for which it shall have
been exchanged, then, the Board of Directors of Company shall, in its
reasonable discretion, equitably adjust this Warrant with respect to the number
or kind of Warrant Shares and the Warrant Price, such adjustment to be made by
the Company and notice thereof shall be delivered to the Warrantholder within
30 calendar days thereafter, accompanied by a certificate of the Chief
Financial Officer of the Company setting forth such adjustment, the method of
calculation of such adjustment and the facts upon which such adjustment was
based, all in reasonable detail. In the case of any such substitution or
adjustment as provided for in this paragraph 8, the Warrant Price for each
Warrant Share shall be the Warrant Price for all shares of stock or other
securities which shall have been substituted for such Warrant Share or to which
such shares shall have been adjusted in accordance with the provisions in this
paragraph 8. No adjustment or substitution provided for in this paragraph 8
shall require the Company to sell a fractional share hereunder.
9. The existence of this Warrant shall not affect in any
way the right or power of the Company or its shareholders to make or authorize
any or all adjustments, recapitalizations, reorganizations or other changes in
the Company's capital structure or its business, or any merger or consolidation
of the Company, or any issue of bonds, debentures, preferred or prior
preference stock ahead of or affecting the Common Stock or the rights thereof,
or dissolution or liquidation of the Company, or any sale or transfer of all or
any part of its assets or business, or any other corporate act or proceeding
whether of a similar character or otherwise.
10. This Warrant shall be governed by and construed in
accordance with the internal laws of the State of New York.
11. Upon receipt of evidence satisfactory to the Company of
the loss, theft, destruction or mutilation of this Warrant, and of indemnity
reasonably satisfactory to the Company, if lost, stolen or destroyed, and upon
surrender and cancellation of this Warrant if mutilated, the Company shall
execute and deliver to the Warrantholder a new Warrant of like date, tenor and
denomination.
12. Any notice or other communication required or permitted
to be given hereunder shall be in writing and shall be mailed by certified
mail, return receipt requested, or delivered against receipt to the party to
whom it is to be given at the address of such party set forth in the preamble
to this Warrant (or to such other address as the party shall have furnished in
writing in accordance with the provisions of this paragraph 12). Notice to the
estate of the Warrantholder shall be sufficient if addressed to the
Warrantholder as provided in this paragraph 12. Any notice or other
communication given by certified mail shall be deemed given at the time of
certification thereof, except for a notice changing a party's address which
shall be deemed given at the time of receipt thereof.
13. Except as may be permitted by Rule 16b-3 promulgated
under the Exchange Act for transfers to a trust or similar estate planning
vehicle, this Warrant is not transferable otherwise than by will or the laws of
descent and distribution and may be exercised, during the lifetime of the
Warrantholder, only by her or, in the event of her disability, her duly
appointed guardian or conservator. The Warrantholder's rights shall not be
subject to commutation, encumbrance, or the claims of the Warrantholder's
creditors, and any attempt to do any of the foregoing shall be void. The
provisions of this Warrant shall be binding upon and inure to the benefit of
the Warrantholder and her heirs and personal representatives under this
Warrant.
14. This Warrant does not create, and shall not be
construed as creating, any rights enforceable by any person not a party to this
Warrant (except as expressly provided in this Warrant).
IN WITNESS WHEREOF, BERNARD CHAUS, INC. has caused this Warrant
to be signed by a duly authorized officer the day and year first above written.
ATTEST: BERNARD CHAUS, INC.
\s\ Mark A. Zuckerman By: \s\ Wayne S. Miller
- --------------------------- -----------------------------
Mark A. Zuckerman Name: Wayne S. Miller
Treasurer and Assistant Secretary Title: Executive Vice President-
Finance and Administration and
Chief Financial Officer
SUBSCRIPTION
The undersigned, ,
pursuant to the provisions of the foregoing Warrant, hereby agrees to subscribe
for the purchase of shares of the Common Stock of BERNARD
CHAUS, INC. covered by said Warrant, and makes payment therefor in full at the
price per share provided by said Warrant.
Dated ____________ Signature ____________________
Address ____________________
____________________
NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF
THIS WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND NEITHER
THIS WARRANT NOR SUCH SHARES MAY BE SOLD, ENCUMBERED OR OTHERWISE TRANSFERRED
EXCEPT IN COMPLIANCE WITH THIS WARRANT AGREEMENT AND PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT OR AN EXEMPTION FROM SUCH REGISTRATION
REQUIREMENT, AND, IF AN EXEMPTION SHALL BE APPLICABLE, THE HOLDER SHALL HAVE
DELIVERED AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.
Void after 5:00 p.m. Eastern Standard Time, on November 22, 1999.
WARRANT TO PURCHASE COMMON STOCK
OF
BERNARD CHAUS, INC.
WARRANT dated and effective as of November 22, 1994, by and
between BERNARD CHAUS, INC. (the "Company"), a New York corporation with
offices at 1410 Broadway, New York, New York 10018 and JOSEPHINE CHAUS (the
"Warrantholder"), an individual residing at 128 East 73rd Street, New York, New
York 10021.
FOR VALUE RECEIVED, the Company hereby certifies that the
Warrantholder is entitled to purchase from the Company, at any time or from
time to time commencing November 22, 1994, and prior to 5:00 P.M., Eastern
Standard Time, on November 22, 1999, 338,000 fully paid and nonassessable
shares of Common Stock, par value $0.01 per share, of the Company, at $3.00 per
share for an aggregate purchase price of $1,014,000.00. Hereinafter, (i) said
Common Stock, together with any other equity securities which may be issued by
the Company with respect thereto or in substitution therefor, is referred to as
the "Common Stock," (ii) the shares of the Common Stock purchasable hereunder
are referred to as the "Warrant Shares," (iii) the aggregate purchase price
payable hereunder for the Warrant Shares is referred to as the "Aggregate
Warrant Price," (iv) the price payable hereunder for each of the Warrant Shares
is referred to as the "Per Share Warrant Price," and (v) this Warrant, and all
warrants hereafter issued in exchange or substitution for this Warrant are
referred to as the "Warrant." The number of Warrant Shares for which this
Warrant is exercisable is subject to adjustment as hereinafter provided.
1. This Warrant may be exercised, in whole at any time or
in part from time to time, commencing November 22, 1994, and prior to 5:00
P.M., Eastern Standard Time, on November 22, 1999, by the Warrantholder by the
surrender of this Warrant (with the subscription form at the end hereof duly
executed) at the address of the Company set forth on the first page hereof,
evidencing proper payment of the Aggregate Warrant Price, or the proportionate
part thereof if this Warrant is exercised in part.
2. (a) The issuance of this Warrant was
approved by, and the Per Share Warrant Price of $3.00 was determined by, the
Special Committee of the Company's Board of Directors on April 15, 1994 (the
"Committee Approval Date"), subject to approval of the Company's shareholders.
The Company's shareholders approved the issuance of this Warrant on November
22, 1994. The Per Share Warrant Price represents a 20% premium over the
closing price of the Common Stock on the New York Stock Exchange on the
Committee Approval Date.
3. In no event shall this Warrant be converted, and this
Warrant shall no longer be exercisable, at any time after five years from the
date hereof. Any conversion of this Warrant may be either in whole at any time
or in part at any time or from time to time.
4. Neither the Warrantholder nor the Warrantholder's legal
representatives, legatees or distributees shall be or be deemed to be the
holder of any shares of the Common Stock covered by this Warrant unless and
until certificates for such shares have been issued. Upon payment of the
purchase price thereof, shares issued upon conversion of this Warrant shall be
validly issued, fully paid and nonassessable.
5. In order to exercise this Warrant, the Warrantholder
shall give a signed written notice of intent to exercise this Warrant to the
Treasurer of the Company specifying the number of shares of the Common Stock
with respect to which this Warrant is being exercised, and accompanied by
payment to the Company of the full amount of the Aggregate Warrant Price for
the number of shares of Common Stock so specified. If permitted under
applicable securities laws, all or any portion of such payment may be made
through a "cashless exercise" arrangement with a broker designated by the
Warrantholder by delivery of shares of Common Stock having a fair market value
(as hereinafter determined) on the date of delivery equal to the portion of the
Aggregate Warrant Price so paid; provided, that in connection therewith, the
Warrantholder shall certify to the Company that such delivery will not result
in "short-swing" profit to her under Section 16 of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and the rules and regulations
promulgated thereunder ("Section 16").
For the purposes hereof, the fair market value of a
share of the Common Stock on any date shall be equal to the closing sale price
of a share of the Common Stock as published by the national securities exchange
on which the shares of the Common Stock are primarily traded on such date or,
if there is no such sale of the Common Stock on such date, the average of the
bid and asked price on such exchange at the close of trading on such date or,
if the shares of the Common Stock are not listed on a national securities
exchange on such date, the average of the bid and asked prices in the over the
counter market on such date or, if the Common Stock is not traded on a national
securities exchange or the over the counter market, the fair market value of a
share of the Common Stock on such date as shall be determined in good faith by
the Company.
6. (a) Unless the shares to be issued upon the
exercise of the Warrant shall be registered under the Securities Act of 1933,
as amended (the "Act"), prior to the issuance thereof (which the Company shall
use its best efforts to do at its expense at the Warrantholder's request), the
Warrantholder shall, as a condition to the Company's obligation to issue such
shares, give a representation in writing that she is acquiring such shares for
her own account as an investment and not with a view to, or for sale in
connection with, the distribution of such shares.
(b) In the event of the death of the Warrantholder,
an additional condition of exercising the Warrant shall be the delivery to the
Company of such tax waivers and other documents as the Company shall reasonably
determine. The executors, administrators, legal representatives, distributees
and legatees of the Warrantholder are, after the death of the Warrantholder,
referred to as the Warrantholder with respect to this Warrant.
(c) The Warrantholder shall, as an additional
condition of converting this Warrant, make appropriate arrangements with the
Company for the payment of all federal, state or local withholding taxes
applicable as a result of the exercise of this Warrant. If permitted under
applicable securities laws, all or any portion of such payment may be made
through a "cashless exercise" arrangement with a broker designated by the
Warrantholder by delivery of shares of Common Stock having a fair market value
(as determined pursuant to paragraph 5 hereof) on the date of delivery equal to
the portion of such taxes so paid; provided, that in connection therewith the
Warrantholder shall certify to the Company that such delivery will not result
in "short-swing" profit to her under Section 16.
The Company covenants and agrees that it will pay, when
due and payable, any and all Federal and state stamp, original issue or similar
taxes that may be payable in respect of the issue of any Warrant Shares or
certificates therefor.
7. The Company agrees that, prior to the expiration of
this Warrant, the Company will at all times have authorized and in reserve, and
will keep available, solely for issuance or delivery upon the exercise of this
Warrant, the shares of the Common Stock as from time to time shall be
receivable upon the exercise of this Warrant.
8. In the event that a dividend shall be declared upon the
Common Stock payable in shares of the Common Stock, the Warrant Shares shall be
adjusted by adding to each such share the number of shares which would be
distributable thereon if such shares had been outstanding on the date fixed for
determining the shareholders entitled to receive such stock dividend. In the
event that the outstanding shares of the Common Stock shall be changed into or
exchanged for a different number or kind of shares of stock and/or other
securities of the Company or of another corporation or cash or other property,
whether through reorganization, recapitalization, extraordinary dividend, stock
split-up, combination of shares, sale of assets, spin off or merger or
consolidation in which the Company is the surviving corporation, then, there
shall be substituted for each Warrant Share the number and kind of shares of
stock and/or other securities, cash or other property into which each
outstanding share of the Common Stock shall be so changed or for which each
such share shall be exchanged. In the event that there shall be any change,
other than as specified in this paragraph 8, in the number or kind of
outstanding shares of the Common Stock, or of any stock or other securities
into which the Common Stock shall have been changed, or for which it shall have
been exchanged, then, the Board of Directors of Company shall, in its
reasonable discretion, equitably adjust this Warrant with respect to the number
or kind of Warrant Shares and the Warrant Price, such adjustment to be made by
the Company and notice thereof shall be delivered to the Warrantholder within
30 calendar days thereafter, accompanied by a certificate of the Chief
Financial Officer of the Company setting forth such adjustment, the method of
calculation of such adjustment and the facts upon which such adjustment was
based, all in reasonable detail. In the case of any such substitution or
adjustment as provided for in this paragraph 8, the Warrant Price for each
Warrant Share shall be the Warrant Price for all shares of stock or other
securities which shall have been substituted for such Warrant Share or to which
such shares shall have been adjusted in accordance with the provisions in this
paragraph 8. No adjustment or substitution provided for in this paragraph 8
shall require the Company to sell a fractional share hereunder.
9. The existence of this Warrant shall not affect in any
way the right or power of the Company or its shareholders to make or authorize
any or all adjustments, recapitalizations, reorganizations or other changes in
the Company's capital structure or its business, or any merger or consolidation
of the Company, or any issue of bonds, debentures, preferred or prior
preference stock ahead of or affecting the Common Stock or the rights thereof,
or dissolution or liquidation of the Company, or any sale or transfer of all or
any part of its assets or business, or any other corporate act or proceeding
whether of a similar character or otherwise.
10. This Warrant shall be governed by and construed in
accordance with the internal laws of the State of New York.
11. Upon receipt of evidence satisfactory to the Company of
the loss, theft, destruction or mutilation of this Warrant, and of indemnity
reasonably satisfactory to the Company, if lost, stolen or destroyed, and upon
surrender and cancellation of this Warrant if mutilated, the Company shall
execute and deliver to the Warrantholder a new Warrant of like date, tenor and
denomination.
12. Any notice or other communication required or permitted
to be given hereunder shall be in writing and shall be mailed by certified
mail, return receipt requested, or delivered against receipt to the party to
whom it is to be given at the address of such party set forth in the preamble
to this Warrant (or to such other address as the party shall have furnished in
writing in accordance with the provisions of this paragraph 12). Notice to the
estate of the Warrantholder shall be sufficient if addressed to the
Warrantholder as provided in this paragraph 12. Any notice or other
communication given by certified mail shall be deemed given at the time of
certification thereof, except for a notice changing a party's address which
shall be deemed given at the time of receipt thereof.
13. Except as may be permitted by Rule 16b-3 promulgated
under the Exchange Act for transfers to a trust or similar estate planning
vehicle, this Warrant is not transferable otherwise than by will or the laws of
descent and distribution and may be exercised, during the lifetime of the
Warrantholder, only by her or, in the event of her disability, her duly
appointed guardian or conservator. The Warrantholder's rights shall not be
subject to commutation, encumbrance, or the claims of the Warrantholder's
creditors, and any attempt to do any of the foregoing shall be void. The
provisions of this Warrant shall be binding upon and inure to the benefit of
the Warrantholder and her heirs and personal representatives under this
Warrant.
14. This Warrant does not create, and shall not be
construed as creating, any rights enforceable by any person not a party to this
Warrant (except as expressly provided in this Warrant).
IN WITNESS WHEREOF, BERNARD CHAUS, INC. has caused this Warrant
to be signed by a duly authorized officer the day and year first above written.
ATTEST: BERNARD CHAUS, INC.
\s\ Mark A. Zuckerman By: \s\ Wayne S. Miller
- --------------------------- -----------------------------
Mark A. Zuckerman Name: Wayne S. Miller
Treasurer and Assistant Secretary Title: Executive Vice President-
Finance and Administration and
Chief Financial Officer
SUBSCRIPTION
The undersigned, ,
pursuant to the provisions of the foregoing Warrant, hereby agrees to subscribe
for the purchase of shares of the Common Stock of BERNARD
CHAUS, INC. covered by said Warrant, and makes payment therefor in full at the
price per share provided by said Warrant.
Dated ____________ Signature ____________________
Address ____________________
____________________
NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF
THIS WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND NEITHER
THIS WARRANT NOR SUCH SHARES MAY BE SOLD, ENCUMBERED OR OTHERWISE TRANSFERRED
EXCEPT IN COMPLIANCE WITH THIS WARRANT AGREEMENT AND PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT OR AN EXEMPTION FROM SUCH REGISTRATION
REQUIREMENT, AND, IF AN EXEMPTION SHALL BE APPLICABLE, THE HOLDER SHALL HAVE
DELIVERED AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.
Void after 5:00 p.m. Eastern Standard Time, on November 22, 1999.
WARRANT TO PURCHASE COMMON STOCK
OF
BERNARD CHAUS, INC.
WARRANT dated and effective as of November 22, 1994, by and
between BERNARD CHAUS, INC. (the "Company"), a New York corporation with
offices at 1410 Broadway, New York, New York 10018 and JOSEPHINE CHAUS (the
"Warrantholder"), an individual residing at 128 East 73rd Street, New York, New
York 10021.
FOR VALUE RECEIVED, the Company hereby certifies that the
Warrantholder is entitled to purchase from the Company, at any time or from
time to time commencing November 22, 1994, and prior to 5:00 P.M., Eastern
Standard Time, on November 22, 1999, 640,000 fully paid and nonassessable
shares of Common Stock, par value $0.01 per share, of the Company, at $4.62 per
share for an aggregate purchase price of $2,956,800.00. Hereinafter, (i) said
Common Stock, together with any other equity securities which may be issued by
the Company with respect thereto or in substitution therefor, is referred to as
the "Common Stock," (ii) the shares of the Common Stock purchasable hereunder
are referred to as the "Warrant Shares," (iii) the aggregate purchase price
payable hereunder for the Warrant Shares is referred to as the "Aggregate
Warrant Price," (iv) the price payable hereunder for each of the Warrant Shares
is referred to as the "Per Share Warrant Price," and (v) this Warrant, and all
warrants hereafter issued in exchange or substitution for this Warrant are
referred to as the "Warrant." The number of Warrant Shares for which this
Warrant is exercisable is subject to adjustment as hereinafter provided.
1. This Warrant may be exercised, in whole at any time or
in part from time to time, commencing November 22, 1994, and prior to 5:00
P.M., Eastern Standard Time, on November 22, 1999, by the Warrantholder by the
surrender of this Warrant (with the subscription form at the end hereof duly
executed) at the address of the Company set forth on the first page hereof,
evidencing proper payment of the Aggregate Warrant Price, or the proportionate
part thereof if this Warrant is exercised in part.
2. (a) The issuance of this Warrant was
approved by, and the Per Share Warrant Price of $4.62 was determined by, the
Special Committee of the Company's Board of Directors on September 27, 1994
(the "Committee Approval Date"), subject to approval of the Company's
shareholders. The Company's shareholders approved the issuance of this Warrant
on November 22, 1994. The Per Share Warrant Price represents a 20% premium
over the average closing price of the Common Stock on the New York Stock
Exchange over the five trading day period commencing September 27, 1994.
(b) To assist the Company increase the
availability under its working capital credit line with its bank in excess of
the amount available under the Company's borrowing base formula, the
Warrantholder agreed to provide credit support to the Company in 1994 in the
form of a letter of credit (the "Letter of Credit"). The Warrantholder
initially provided the Letter of Credit in the amount of $3,000,000 on April
15, 1994 which was increased to $5,000,000 on June 14, 1994 and further
increased on September 13, 1994 to $7,200,000. The expiration date of the
Letter of Credit, initially in effect through October 15, 1994, was extended to
April 15, 1995 (the "Extension"). In consideration for the Extension, the
Special Committee of the Company's Board of Directors authorized, and the
Company's shareholders approved, the issuance of these Warrants to the
Warrantholder. The Warrantholder has agreed to forfeit a pro rata portion of
this Warrant if the Letter of Credit is terminated before April 15, 1995, i.e.
for each full thirty day period prior to April 15, 1995 that the Letter of
Credit is not outstanding, the Warrantholder shall forfeit one sixth of the
Warrant Shares.
3. In no event shall this Warrant be converted, and this
Warrant shall no longer be exercisable, at any time after five years from the
date hereof. Any conversion of this Warrant may be either in whole at any time
or in part at any time or from time to time.
4. Neither the Warrantholder nor the Warrantholder's legal
representatives, legatees or distributees shall be or be deemed to be the
holder of any shares of the Common Stock covered by this Warrant unless and
until certificates for such shares have been issued. Upon payment of the
purchase price thereof, shares issued upon conversion of this Warrant shall be
validly issued, fully paid and nonassessable.
5. In order to exercise this Warrant, the Warrantholder
shall give a signed written notice of intent to exercise this Warrant to the
Treasurer of the Company specifying the number of shares of the Common Stock
with respect to which this Warrant is being exercised, and accompanied by
payment to the Company of the full amount of the Aggregate Warrant Price for
the number of shares of Common Stock so specified. If permitted under
applicable securities laws, all or any portion of such payment may be made
through a "cashless exercise" arrangement with a broker designated by the
Warrantholder by delivery of shares of Common Stock having a fair market value
(as hereinafter determined) on the date of delivery equal to the portion of the
Aggregate Warrant Price so paid; provided, that in connection therewith, the
Warrantholder shall certify to the Company that such delivery will not result
in "short-swing" profit to her under Section 16 of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and the rules and regulations
promulgated thereunder ("Section 16").
For the purposes hereof, the fair market value of a
share of the Common Stock on any date shall be equal to the closing sale price
of a share of the Common Stock as published by the national securities exchange
on which the shares of the Common Stock are primarily traded on such date or,
if there is no such sale of the Common Stock on such date, the average of the
bid and asked price on such exchange at the close of trading on such date or,
if the shares of the Common Stock are not listed on a national securities
exchange on such date, the average of the bid and asked prices in the over the
counter market on such date or, if the Common Stock is not traded on a national
securities exchange or the over the counter market, the fair market value of a
share of the Common Stock on such date as shall be determined in good faith by
the Company.
6. (a) Unless the shares to be issued upon the
exercise of the Warrant shall be registered under the Securities Act of 1933,
as amended (the "Act"), prior to the issuance thereof (which the Company shall
use its best efforts to do at its expense at the Warrantholder's request), the
Warrantholder shall, as a condition to the Company's obligation to issue such
shares, give a representation in writing that she is acquiring such shares for
her own account as an investment and not with a view to, or for sale in
connection with, the distribution of such shares.
(b) In the event of the death of the Warrantholder,
an additional condition of exercising the Warrant shall be the delivery to the
Company of such tax waivers and other documents as the Company shall reasonably
determine. The executors, administrators, legal representatives, distributees
and legatees of the Warrantholder are, after the death of the Warrantholder,
referred to as the Warrantholder with respect to this Warrant.
(c) The Warrantholder shall, as an additional
condition of converting this Warrant, make appropriate arrangements with the
Company for the payment of all federal, state or local withholding taxes
applicable as a result of the exercise of this Warrant. If permitted under
applicable securities laws, all or any portion of such payment may be made
through a "cashless exercise" arrangement with a broker designated by the
Warrantholder by delivery of shares of Common Stock having a fair market value
(as determined pursuant to paragraph 5 hereof) on the date of delivery equal to
the portion of such taxes so paid; provided, that in connection therewith the
Warrantholder shall certify to the Company that such delivery will not result
in "short-swing" profit to her under Section 16.
The Company covenants and agrees that it will pay, when
due and payable, any and all Federal and state stamp, original issue or similar
taxes that may be payable in respect of the issue of any Warrant Shares or
certificates therefor.
7. The Company agrees that, prior to the expiration of
this Warrant, the Company will at all times have authorized and in reserve, and
will keep available, solely for issuance or delivery upon the exercise of this
Warrant, the shares of the Common Stock as from time to time shall be
receivable upon the exercise of this Warrant.
8. In the event that a dividend shall be declared upon the
Common Stock payable in shares of the Common Stock, the Warrant Shares shall be
adjusted by adding to each such share the number of shares which would be
distributable thereon if such shares had been outstanding on the date fixed for
determining the shareholders entitled to receive such stock dividend. In the
event that the outstanding shares of the Common Stock shall be changed into or
exchanged for a different number or kind of shares of stock and/or other
securities of the Company or of another corporation or cash or other property,
whether through reorganization, recapitalization, extraordinary dividend, stock
split-up, combination of shares, sale of assets, spin off or merger or
consolidation in which the Company is the surviving corporation, then, there
shall be substituted for each Warrant Share the number and kind of shares of
stock and/or other securities, cash or other property into which each
outstanding share of the Common Stock shall be so changed or for which each
such share shall be exchanged. In the event that there shall be any change,
other than as specified in this paragraph 8, in the number or kind of
outstanding shares of the Common Stock, or of any stock or other securities
into which the Common Stock shall have been changed, or for which it shall have
been exchanged, then, the Board of Directors of Company shall, in its
reasonable discretion, equitably adjust this Warrant with respect to the number
or kind of Warrant Shares and the Warrant Price, such adjustment to be made by
the Company and notice thereof shall be delivered to the Warrantholder within
30 calendar days thereafter, accompanied by a certificate of the Chief
Financial Officer of the Company setting forth such adjustment, the method of
calculation of such adjustment and the facts upon which such adjustment was
based, all in reasonable detail. In the case of any such substitution or
adjustment as provided for in this paragraph 8, the Warrant Price for each
Warrant Share shall be the Warrant Price for all shares of stock or other
securities which shall have been substituted for such Warrant Share or to which
such shares shall have been adjusted in accordance with the provisions in this
paragraph 8. No adjustment or substitution provided for in this paragraph 8
shall require the Company to sell a fractional share hereunder.
9. The existence of this Warrant shall not affect in any
way the right or power of the Company or its shareholders to make or authorize
any or all adjustments, recapitalizations, reorganizations or other changes in
the Company's capital structure or its business, or any merger or consolidation
of the Company, or any issue of bonds, debentures, preferred or prior
preference stock ahead of or affecting the Common Stock or the rights thereof,
or dissolution or liquidation of the Company, or any sale or transfer of all or
any part of its assets or business, or any other corporate act or proceeding
whether of a similar character or otherwise.
10. This Warrant shall be governed by and construed in
accordance with the internal laws of the State of New York.
11. Upon receipt of evidence satisfactory to the Company of
the loss, theft, destruction or mutilation of this Warrant, and of indemnity
reasonably satisfactory to the Company, if lost, stolen or destroyed, and upon
surrender and cancellation of this Warrant if mutilated, the Company shall
execute and deliver to the Warrantholder a new Warrant of like date, tenor and
denomination.
12. Any notice or other communication required or permitted
to be given hereunder shall be in writing and shall be mailed by certified
mail, return receipt requested, or delivered against receipt to the party to
whom it is to be given at the address of such party set forth in the preamble
to this Warrant (or to such other address as the party shall have furnished in
writing in accordance with the provisions of this paragraph 12). Notice to the
estate of the Warrantholder shall be sufficient if addressed to the
Warrantholder as provided in this paragraph 12. Any notice or other
communication given by certified mail shall be deemed given at the time of
certification thereof, except for a notice changing a party's address which
shall be deemed given at the time of receipt thereof.
13. Except as may be permitted by Rule 16b-3 promulgated
under the Exchange Act for transfers to a trust or similar estate planning
vehicle, this Warrant is not transferable otherwise than by will or the laws of
descent and distribution and may be exercised, during the lifetime of the
Warrantholder, only by her or, in the event of her disability, her duly
appointed guardian or conservator. The Warrantholder's rights shall not be
subject to commutation, encumbrance, or the claims of the Warrantholder's
creditors, and any attempt to do any of the foregoing shall be void. The
provisions of this Warrant shall be binding upon and inure to the benefit of
the Warrantholder and her heirs and personal representatives under this
Warrant.
14. This Warrant does not create, and shall not be
construed as creating, any rights enforceable by any person not a party to this
Warrant (except as expressly provided in this Warrant).
IN WITNESS WHEREOF, BERNARD CHAUS, INC. has caused this Warrant
to be signed by a duly authorized officer the day and year first above written.
ATTEST: BERNARD CHAUS, INC.
\s\ Mark A. Zuckerman By: \s\ Wayne S. Miller
- --------------------------- -----------------------------
Mark A. Zuckerman Name: Wayne S. Miller
Treasurer and Assistant Secretary Title: Executive Vice President-
Finance and Administration and
Chief Financial Officer
SUBSCRIPTION
The undersigned, ,
pursuant to the provisions of the foregoing Warrant, hereby agrees to subscribe
for the purchase of shares of the Common Stock of BERNARD
CHAUS, INC. covered by said Warrant, and makes payment therefor in full at the
price per share provided by said Warrant.
Dated ____________ Signature _____________________
Address _____________________
_____________________
NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF
THIS WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND NEITHER THIS WARRANT NOR SUCH SHARES MAY BE SOLD, ENCUMBERED OR OTHERWISE
TRANSFERRED EXCEPT IN COMPLIANCE WITH THIS WARRANT AGREEMENT AND PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR AN EXEMPTION FROM SUCH
REGISTRATION REQUIREMENT, AND, IF AN EXEMPTION SHALL BE APPLICABLE, THE HOLDER
SHALL HAVE DELIVERED AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.
Void after 5:00 p.m. Eastern Standard Time, on November 15, 2000
WARRANT TO PURCHASE COMMON STOCK
OF
BERNARD CHAUS, INC.
WARRANT dated and effective as of November 15, 1995, by and
between BERNARD CHAUS, INC. (the "Company"), a New York corporation with
offices at 1410 Broadway, New York, New York 10018 and JOSEPHINE CHAUS (the
"Warrantholder"), an individual residing at 128 East 73rd Street, New York, New
York 10021.
FOR VALUE RECEIVED, the Company hereby certifies that the
Warrantholder is entitled to purchase from the Company, at any time or from
time to time commencing November 15, 1995, and prior to 5:00 P.M., Eastern
Standard Time, on November 15, 2000, 815,000 fully paid and nonassessable
shares of Common Stock, par value $0.01 per share, of the Company, at $4.05 per
share for an aggregate purchase price of $3,300,750. Hereinafter, (i) said
Common Stock, together with any other equity securities which may be issued by
the Company with respect thereto or in substitution therefor, is referred to as
the "Common Stock," (ii) the shares of the Common Stock purchasable hereunder
are referred to as the "Warrant Shares," (iii) the aggregate purchase price
payable hereunder for the Warrant Shares is referred to as the "Aggregate
Warrant Price," (iv) the price payable hereunder for each of the Warrant Shares
is referred to as the "Per Share Warrant Price," and (v) this Warrant, and all
warrants hereafter issued in exchange or substitution for this Warrant are
referred to as the "Warrant." The number of Warrant Shares for which this
Warrant is exercisable is subject to adjustment as hereinafter provided.
1. This Warrant may be exercised, in whole at any time or
in part from time to time, commencing November 15, 1995, and prior to 5:00
P.M., Eastern Standard Time, on November 15, 2000, by the Warrantholder by the
surrender of this Warrant (with the subscription form at the end hereof duly
executed) at the address of the Company set forth on the first page hereof,
evidencing proper payment of the Aggregate Warrant Price, or the proportionate
part thereof if this Warrant is exercised in part.
2. The issuance of this Warrant was approved by, and the
Per Share Warrant Price of $4.05 was determined by, the Special Committee of
the Company's Board of Directors on May 18, 1995 (the "Committee Approval
Date"), subject to approval of the Company's shareholders. The Company's
shareholders approved the issuance of this Warrant on November 15, 1995. The
Per Share Warrant Price represents a 20% premium over the closing price of the
Common Stock on the New York Stock Exchange on the date immediately preceding
the Committee Approval Date.
3. In no event shall this Warrant be converted, and this
Warrant shall no longer be exercisable, at any time after five years from the
date hereof. Any conversion of this Warrant may be either in whole at any time
or in part at any time or from time to time.
4. Neither the Warrantholder nor the Warrantholder's legal
representatives, legatees, distributees, or, successors or assigns shall be or
be deemed to be the holder of any shares of the Common Stock covered by this
Warrant unless and until certificates for such shares have been issued. Upon
payment of the purchase price thereof, shares issued upon conversion of this
Warrant shall be validly issued, fully paid and nonassessable.
5. In order to exercise this Warrant, the Warrantholder
shall give a signed written notice of intent to exercise this Warrant to the
Treasurer of the Company specifying the number of shares of the Common Stock
with respect to which this Warrant is being exercised, and accompanied by
payment to the Company of the full amount of the Aggregate Warrant Price for
the number of shares of Common Stock so specified. If permitted under
applicable securities laws, all or any portion of such payment may be made
through a "cashless exercise" arrangement with a broker designated by the
Warrantholder by delivery of shares of Common Stock having a fair market value
(as hereinafter determined) on the date of delivery equal to the portion of the
Aggregate Warrant Price so paid; provided, that in connection therewith, the
Warrantholder shall, as applicable, certify to the Company that such delivery
will not result in "short-swing" profit to the Warrantholder under Section 16
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
the rules and regulations promulgated thereunder ("Section 16").
For the purposes hereof, the fair market value of a
share of the Common Stock on any date shall be equal to the closing sale price
of a share of the Common Stock as published by the national securities exchange
on which the shares of the Common Stock are primarily traded on such date or,
if there is no such sale of the Common Stock on such date, the average of the
bid and asked price on such exchange at the close of trading on such date or,
if the shares of the Common Stock are not listed on a national securities
exchange on such date, the average of the bid and asked prices in the over the
counter market on such date or, if the Common Stock is not traded on a national
securities exchange or the over-the-counter market, the fair market value of a
share of the Common Stock on such date as shall be determined in good faith by
the Company.
6. (a) In the event of the death of the Warrantholder,
an additional condition of exercising the Warrant shall be the delivery to the
Company of such tax waivers and other documents as the Company shall reasonably
determine. The executors, administrators, legal representatives, distributees
and legatees of the Warrantholder are, after the death of the Warrantholder,
referred to as the Warrantholder with respect to this Warrant.
(b) The Warrantholder shall, as an additional
condition of converting this Warrant, make appropriate arrangements with the
Company for the payment of all federal, state or local withholding taxes
applicable as a result of the exercise of this Warrant. If permitted under
applicable securities laws, all or any portion of such payment may be made
through a "cashless exercise" arrangement with a broker designated by the
Warrantholder by delivery of shares of Common Stock having a fair market value
(as determined pursuant to paragraph 5 hereof) on the date of delivery equal to
the portion of such taxes so paid; provided, that, as applicable, in connection
therewith the Warrantholder shall certify to the Company that such delivery
will not result in "short-swing" profit to the Warrantholder under Section 16.
The Company covenants and agrees that it will pay, when
due and payable, any and all Federal and state stamp, original issue or similar
taxes that may be payable in respect of the issue of any Warrant Shares or
certificates therefor.
7. The Company agrees that, prior to the expiration of
this Warrant, the Company will at all times have authorized and in reserve, and
will keep available, solely for issuance or delivery upon the exercise of this
Warrant, the shares of the Common Stock as from time to time shall be
receivable upon the exercise of this Warrant.
8. (a) Neither this Warrant nor the Warrant Shares
issuable upon the exercise hereof have been registered under the Securities Act
of 1933, as amended (the "Act"), or under any state securities laws and unless
so registered may not be transferred, sold, pledged, hypothecated or otherwise
disposed of (any of the foregoing, a "transfer") unless an exemption from such
registration is available. In the event the Warrantholder desires to transfer
this Warrant or any of the Warrant Shares issued, the Warrantholder must give
the Company prior written notice of such proposed transfer including the name
and address of the proposed transferee. Such transfer may be made only (i)
upon publication by the Securities and Exchange Commission (the "Commission")
of a ruling, interpretation, opinion or "no action letter" based upon facts
presented to said Commission, or (ii) upon receipt by the Company of an opinion
of counsel to the Company to the effect that (A) the proposed transfer will not
violate the provisions of the Act or the rules and regulations promulgated
thereunder or (B) the Warrant or Warrant Shares to be transferred have been
registered under the Act and there is in effect a current prospectus meeting
the requirements of subsection 10(a) of the Act, which is being or will be
delivered to the transferee at or prior to the time of delivery of the
certificates evidencing the Warrant or Warrant Shares to be transferred. Upon
request of the Warrantholder, the Company will use its reasonable efforts to
register the Warrants under the Act, at the Company's expense. Any transferee
of this Warrant or the Warrant Shares issuable upon the exercise hereof is
referred to as the Warrantholder with respect to this Warrant.
(b) Prior to any such proposed transfer, and as a condition
thereto, if such transfer is not made pursuant to an effective registration
statement under the Act, the Warrantholder will, if requested by the Company,
deliver to the Company (i) an investment covenant signed by the proposed
transferee, (ii) an agreement by such transferee to the restrictive investment
legend set forth herein on the certificate or certificates representing the
shares acquired by such transferee, (iii) an agreement by such transferee that
the Company may place a "stop transfer order" with its transfer agent or
registrar, and (iv) an agreement by the transferee to indemnify the Company to
the same extent as set forth in subparagraph (c) below.
(c) The Warrantholder acknowledges that the Warrantholder
understands the meaning and legal consequences of this paragraph 8, and the
Warrantholder hereby agrees to indemnify and hold harmless the Company, its
representatives and each officer and director thereof from and against any and
all loss, damage or liability (including all attorneys' fees and costs incurred
in enforcing this indemnity provision) due to or arising out of (i) the
inaccuracy of any representation or the breach of any warranty of the
Warrantholder contained in, or any other breach by the Warrantholder of, this
Warrant, (ii) any transfer of the Warrant or any of the Warrant Shares in
violation of the Act, the Exchange Act, or the rules and regulations
promulgated under either such act, or (iii) any untrue statement or omission to
state any material fact in connection with the investment representations or
with respect to the facts and representations supplied by the Warrantholder to
counsel to the Company upon which its opinion as to a proposed transfer shall
have been based.
(d) Upon surrender of this Warrant to the Company or at the
office of its transfer agent, with assignment documentation duly executed and
funds sufficient to pay any transfer tax, and upon compliance with the
foregoing provisions, the Company shall, without charge, execute and deliver a
new Warrant in the name of the transferee named in such instrument of transfer,
and this Warrant shall promptly be cancelled. Any transfer of this Warrant
attempted contrary to the provisions of this Warrant, or any levy of execution,
attachment or other process attempted upon the Warrant, shall be null and void
and without effect.
(e) Unless the Warrant Shares have been registered under
the Act, upon exercise of any part of the Warrant and the issuance of any of
the Warrant Shares, the Company shall instruct its transfer agent to enter stop
transfer orders with respect to such Warrant Shares, and all certificates
representing Warrant Shares shall bear on the face thereof substantially the
following legend, insofar as is consistent with New York law:
"The shares of common stock represented by this certificate have not
been registered under the Securities Act of 1933, as amended, and may not be
sold, offered for sale, assigned, transferred or otherwise disposed of unless
registered pursuant to the provisions of that Act or an opinion of counsel to
the Company is obtained stating that such disposition is in compliance with an
available exemption from such registration."
9. In the event that a dividend shall be declared upon the
Common Stock payable in shares of the Common Stock, the Warrant Shares shall be
adjusted by adding to each such share the number of shares which would be
distributable thereon if such shares had been outstanding on the date fixed for
determining the shareholders entitled to receive such stock dividend. In the
event that the outstanding shares of the Common Stock shall be changed into or
exchanged for a different number or kind of shares of stock and/or other
securities of the Company or of another corporation or cash or other property,
whether through reorganization, recapitalization, extraordinary dividend, stock
split-up, combination of shares, sale of assets, spin off or merger or
consolidation in which the Company is the surviving corporation, then, there
shall be substituted for each Warrant Share the number and kind of shares of
stock and/or other securities, cash or other property into which each
outstanding share of the Common Stock shall be so changed or for which each
such share shall be exchanged. In the event that there shall be any change,
other than as specified in this paragraph 9, in the number or kind of
outstanding shares of the Common Stock, or of any stock or other securities
into which the Common Stock shall have been changed, or for which it shall have
been exchanged, then the Board of Directors of Company shall, in its reasonable
discretion, equitably adjust this Warrant with respect to the number or kind of
Warrant Shares and the Warrant Price, such adjustment to be made by the Company
and notice thereof shall be delivered to the Warrantholder within 30 calendar
days thereafter, accompanied by a certificate of the Chief Financial Officer of
the Company setting forth such adjustment, the method of calculation of such
adjustment and the facts upon which such adjustment was based, all in
reasonable detail. In the case of any such substitution or adjustment as
provided for in this paragraph 9, the Warrant Price for each Warrant Share
shall be the Warrant Price for all shares of stock or other securities which
shall have been substituted for such Warrant Share or to which such shares
shall have been adjusted in accordance with the provisions in this paragraph 9.
No adjustment or substitution provided for in this paragraph 9 shall require
the Company to sell a fractional share hereunder. Notwithstanding the
foregoing, the issuance by the Company of additional shares of Common Stock (or
securities convertible into shares of Common Stock), for fair consideration
(which need not be cash), as determined by the Board of Directors of the
Company in good faith, shall not give rise to any equitable adjustment of this
Warrant pursuant to this paragraph 9.
10. The existence of this Warrant shall not affect in any
way the right or power of the Company or its shareholders to make or authorize
any or all adjustments, recapitalizations, reorganizations or other changes in
the Company's capital structure or its business, or any merger or consolidation
of the Company, or any issue of bonds, debentures, preferred or prior
preference stock ahead of or affecting the Common Stock or the rights thereof,
or dissolution or liquidation of the Company, or any sale or transfer of all or
any part of its assets or business, or any other corporate act or proceeding
whether of a similar character or otherwise.
11. This Warrant shall be governed by and construed in
accordance with the internal laws of the State of New York.
12. Upon receipt of evidence satisfactory to the Company of
the loss, theft, destruction or mutilation of this Warrant, and of indemnity
reasonably satisfactory to the Company, if lost, stolen or destroyed, and upon
surrender and cancellation of this Warrant if mutilated, the Company shall
execute and deliver to the Warrantholder a new Warrant of like date, tenor and
denomination.
13. Any notice or other communication required or permitted
to be given hereunder shall be in writing and shall be mailed by certified
mail, return receipt requested, or delivered against receipt to the party to
whom it is to be given at the address of such party set forth in the preamble
to this Warrant (or to such other address as the party shall have furnished in
writing in accordance with the provisions of this paragraph 13). Notice to the
estate of the Warrantholder shall be sufficient if addressed to the
Warrantholder as provided in this paragraph 13. Any notice or other
communication given by certified mail shall be deemed given at the time of
certification thereof, except for a notice changing a party's address which
shall be deemed given at the time of receipt thereof.
14. The provisions of this Warrant shall be binding upon
and inure to the benefit of the Warrantholder and the Warrantholder's heirs,
personal representatives, successors and assigns under this Warrant.
15. This Warrant does not create, and shall not be
construed as creating, any rights enforceable by any person not a party to this
Warrant (except as expressly provided in this Warrant).
IN WITNESS WHEREOF, BERNARD CHAUS, INC. has caused this Warrant
to be signed by a duly authorized officer the day and year first above written.
ATTEST: BERNARD CHAUS, INC.
\s\ Karen A. Maloney By: \s\ Wayne S. Miller
- --------------------------- -----------------------------
Karen A. Maloney Name: Wayne S. Miller
Vice President-Corporate Controller Title: Executive Vice President-
Finance and Administration and
Chief Financial Officer
and Secretary
SUBSCRIPTION
The undersigned, ,
pursuant to the provisions of the foregoing Warrant, hereby agrees to subscribe
for the purchase of shares of the Common Stock of BERNARD
CHAUS, INC. covered by said Warrant, and makes payment therefor in full at the
price per share provided by said Warrant.
Dated ____________ Signature _____________________
Address _____________________
_____________________
ASSIGNMENT
FOR VALUE RECEIVED _________________________ hereby sells,
assigns and transfers unto _______________________________________ the
foregoing Warrant and all rights evidenced thereby, and does irrevocably
constitute and appoint _______________________, attorney, to transfer said
Warrant on the books of BERNARD CHAUS, INC.
Dated ______________________ Signature_________________________
Address _________________________
__________________________
PARTIAL ASSIGNMENT
FOR VALUE RECEIVED __________________________ hereby sells,
assigns and transfers unto _______________________ the right to purchase
_____________________ shares of the Common Stock of BERNARD CHAUS, INC. by the
foregoing Warrant, and a proportionate part of said Warrant and the rights
evidenced hereby, and does irrevocably constitute and appoint
__________________________, attorney, to transfer that part of said Warrant on
the books of BERNARD CHAUS, INC.
Dated___________________ Signature_________________________
Address _________________________
_________________________
NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF
THIS WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND NEITHER THIS WARRANT NOR SUCH SHARES MAY BE SOLD, ENCUMBERED OR OTHERWISE
TRANSFERRED EXCEPT IN COMPLIANCE WITH THIS WARRANT AGREEMENT AND PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR AN EXEMPTION FROM SUCH
REGISTRATION REQUIREMENT, AND, IF AN EXEMPTION SHALL BE APPLICABLE, THE HOLDER
SHALL HAVE DELIVERED AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.
Void after 5:00 p.m. Eastern Standard Time, on November 15, 2000
WARRANT TO PURCHASE COMMON STOCK
OF
BERNARD CHAUS, INC.
WARRANT dated and effective as of November 15, 1995, by and
between BERNARD CHAUS, INC. (the "Company"), a New York corporation with
offices at 1410 Broadway, New York, New York 10018 and JOSEPHINE CHAUS (the
"Warrantholder"), an individual residing at 128 East 73rd Street, New York, New
York 10021.
FOR VALUE RECEIVED, the Company hereby certifies that the
Warrantholder is entitled to purchase from the Company, at any time or from
time to time commencing November 15, 1995, and prior to 5:00 P.M., Eastern
Standard Time, on November 15, 2000, 535,000 fully paid and nonassessable
shares of Common Stock, par value $0.01 per share, of the Company, at $4.05 per
share for an aggregate purchase price of $2,166,750. Hereinafter, (i) said
Common Stock, together with any other equity securities which may be issued by
the Company with respect thereto or in substitution therefor, is referred to as
the "Common Stock," (ii) the shares of the Common Stock purchasable hereunder
are referred to as the "Warrant Shares," (iii) the aggregate purchase price
payable hereunder for the Warrant Shares is referred to as the "Aggregate
Warrant Price," (iv) the price payable hereunder for each of the Warrant Shares
is referred to as the "Per Share Warrant Price," and (v) this Warrant, and all
warrants hereafter issued in exchange or substitution for this Warrant are
referred to as the "Warrant." The number of Warrant Shares for which this
Warrant is exercisable is subject to adjustment as hereinafter provided.
1. This Warrant may be exercised, in whole at any time or
in part from time to time, commencing November 15, 1995, and prior to 5:00
P.M., Eastern Standard Time, on November 15, 2000, by the Warrantholder by the
surrender of this Warrant (with the subscription form at the end hereof duly
executed) at the address of the Company set forth on the first page hereof,
evidencing proper payment of the Aggregate Warrant Price, or the proportionate
part thereof if this Warrant is exercised in part.
2. The issuance of this Warrant was approved by, and the
Per Share Warrant Price of $4.05 was determined by, the Special Committee of
the Company's Board of Directors on May 18, 1995 (the "Committee Approval
Date"), subject to approval of the Company's shareholders. The Company's
shareholders approved the issuance of this Warrant on November 15, 1995. The
Per Share Warrant Price represents a 20% premium over the closing price of the
Common Stock on the New York Stock Exchange on the date immediately preceding
the Committee Approval Date.
3. In no event shall this Warrant be converted, and this
Warrant shall no longer be exercisable, at any time after five years from the
date hereof. Any conversion of this Warrant may be either in whole at any time
or in part at any time or from time to time.
4. Neither the Warrantholder nor the Warrantholder's legal
representatives, legatees, distributees or successors or assigns shall be or
be deemed to be the holder of any shares of the Common Stock covered by this
Warrant unless and until certificates for such shares have been issued. Upon
payment of the purchase price thereof, shares issued upon conversion of this
Warrant shall be validly issued, fully paid and nonassessable.
5. In order to exercise this Warrant, the Warrantholder
shall give a signed written notice of intent to exercise this Warrant to the
Treasurer of the Company specifying the number of shares of the Common Stock
with respect to which this Warrant is being exercised, and accompanied by
payment to the Company of the full amount of the Aggregate Warrant Price for
the number of shares of Common Stock so specified. If permitted under
applicable securities laws, all or any portion of such payment may be made
through a "cashless exercise" arrangement with a broker designated by the
Warrantholder by delivery of shares of Common Stock having a fair market value
(as hereinafter determined) on the date of delivery equal to the portion of the
Aggregate Warrant Price so paid; provided, that in connection therewith, the
Warrantholder shall, as applicable, certify to the Company that such delivery
will not result in "short-swing" profit to the Warrantholder under Section 16
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
the rules and regulations promulgated thereunder ("Section 16").
For the purposes hereof, the fair market value of a
share of the Common Stock on any date shall be equal to the closing sale price
of a share of the Common Stock as published by the national securities exchange
on which the shares of the Common Stock are primarily traded on such date or,
if there is no such sale of the Common Stock on such date, the average of the
bid and asked price on such exchange at the close of trading on such date or,
if the shares of the Common Stock are not listed on a national securities
exchange on such date, the average of the bid and asked prices in the over the
counter market on such date or, if the Common Stock is not traded on a national
securities exchange or the over-the-counter market, the fair market value of a
share of the Common Stock on such date as shall be determined in good faith by
the Company.
6. (a) In the event of the death of the Warrantholder,
an additional condition of exercising the Warrant shall be the delivery to the
Company of such tax waivers and other documents as the Company shall reasonably
determine. The executors, administrators, legal representatives, distributees
and legatees of the Warrantholder are, after the death of the Warrantholder,
referred to as the Warrantholder with respect to this Warrant.
(b) The Warrantholder shall, as an additional
condition of converting this Warrant, make appropriate arrangements with the
Company for the payment of all federal, state or local withholding taxes
applicable as a result of the exercise of this Warrant. If permitted under
applicable securities laws, all or any portion of such payment may be made
through a "cashless exercise" arrangement with a broker designated by the
Warrantholder by delivery of shares of Common Stock having a fair market value
(as determined pursuant to paragraph 5 hereof) on the date of delivery equal to
the portion of such taxes so paid; provided, that, as applicable, in connection
therewith the Warrantholder shall certify to the Company that such delivery
will not result in "short-swing" profit to the Warrantholder under Section 16.
The Company covenants and agrees that it will pay, when
due and payable, any and all Federal and state stamp, original issue or similar
taxes that may be payable in respect of the issue of any Warrant Shares or
certificates therefor.
7. The Company agrees that, prior to the expiration of
this Warrant, the Company will at all times have authorized and in reserve, and
will keep available, solely for issuance or delivery upon the exercise of this
Warrant, the shares of the Common Stock as from time to time shall be
receivable upon the exercise of this Warrant.
8. (a) Neither this Warrant nor the Warrant Shares
issuable upon the exercise hereof have been registered under the Securities Act
of 1933, as amended (the "Act"), or under any state securities laws and unless
so registered may not be transferred, sold, pledged, hypothecated or otherwise
disposed of (any of the foregoing, a "transfer") unless an exemption from such
registration is available. In the event the Warrantholder desires to transfer
this Warrant or any of the Warrant Shares issued, the Warrantholder must give
the Company prior written notice of such proposed transfer including the name
and address of the proposed transferee. Such transfer may be made only (i)
upon publication by the Securities and Exchange Commission (the "Commission")
of a ruling, interpretation, opinion or "no action letter" based upon facts
presented to said Commission, or (ii) upon receipt by the Company of an opinion
of counsel to the Company to the effect that (A) the proposed transfer will not
violate the provisions of the Act or the rules and regulations promulgated
thereunder or (B) the Warrant or Warrant Shares to be transferred have been
registered under the Act and there is in effect a current prospectus meeting
the requirements of subsection 10(a) of the Act, which is being or will be
delivered to the transferee at or prior to the time of delivery of the
certificates evidencing the Warrant or Warrant Shares to be transferred. Upon
request of the Warrantholder, the Company will use its reasonable efforts to
register the Warrants under the Act, at the Company's expense. Any transferee
of this Warrant or the Warrant Shares issuable upon the exercise hereof is
referred to as the Warrantholder with respect to this Warrant.
(b) Prior to any such proposed transfer, and as a condition
thereto, if such transfer is not made pursuant to an effective registration
statement under the Act, the Warrantholder will, if requested by the Company,
deliver to the Company (i) an investment covenant signed by the proposed
transferee, (ii) an agreement by such transferee to the restrictive investment
legend set forth herein on the certificate or certificates representing the
shares acquired by such transferee, (iii) an agreement by such transferee that
the Company may place a "stop transfer order" with its transfer agent or
registrar, and (iv) an agreement by the transferee to indemnify the Company to
the same extent as set forth in subparagraph (c) below.
(c) The Warrantholder acknowledges that the Warrantholder
understands the meaning and legal consequences of this paragraph 8, and the
Warrantholder hereby agrees to indemnify and hold harmless the Company, its
representatives and each officer and director thereof from and against any and
all loss, damage or liability (including all attorneys' fees and costs incurred
in enforcing this indemnity provision) due to or arising out of (i) the
inaccuracy of any representation or the breach of any warranty of the
Warrantholder contained in, or any other breach by the Warrantholder of, this
Warrant, (ii) any transfer of the Warrant or any of the Warrant Shares in
violation of the Act, the Exchange Act, or the rules and regulations
promulgated under either such act, or (iii) any untrue statement or omission to
state any material fact in connection with the investment representations or
with respect to the facts and representations supplied by the Warrantholder to
counsel to the Company upon which its opinion as to a proposed transfer shall
have been based.
(d) Upon surrender of this Warrant to the Company or at the
office of its transfer agent, with assignment documentation duly executed and
funds sufficient to pay any transfer tax, and upon compliance with the
foregoing provisions, the Company shall, without charge, execute and deliver a
new Warrant in the name of the transferee named in such instrument of transfer,
and this Warrant shall promptly be cancelled. Any transfer of this Warrant
attempted contrary to the provisions of this Warrant, or any levy of execution,
attachment or other process attempted upon the Warrant, shall be null and void
and without effect.
(e) Unless the Warrant Shares have been registered under
the Act, upon exercise of any part of the Warrant and the issuance of any of
the Warrant Shares, the Company shall instruct its transfer agent to enter stop
transfer orders with respect to such Warrant Shares, and all certificates
representing Warrant Shares shall bear on the face thereof substantially the
following legend, insofar as is consistent with New York law:
"The shares of common stock represented by this certificate have not
been registered under the Securities Act of 1933, as amended, and may not be
sold, offered for sale, assigned, transferred or otherwise disposed of unless
registered pursuant to the provisions of that Act or an opinion of counsel to
the Company is obtained stating that such disposition is in compliance with an
available exemption from such registration."
9. In the event that a dividend shall be declared upon the
Common Stock payable in shares of the Common Stock, the Warrant Shares shall be
adjusted by adding to each such share the number of shares which would be
distributable thereon if such shares had been outstanding on the date fixed for
determining the shareholders entitled to receive such stock dividend. In the
event that the outstanding shares of the Common Stock shall be changed into or
exchanged for a different number or kind of shares of stock and/or other
securities of the Company or of another corporation or cash or other property,
whether through reorganization, recapitalization, extraordinary dividend, stock
split-up, combination of shares, sale of assets, spin off or merger or
consolidation in which the Company is the surviving corporation, then, there
shall be substituted for each Warrant Share the number and kind of shares of
stock and/or other securities, cash or other property into which each
outstanding share of the Common Stock shall be so changed or for which each
such share shall be exchanged. In the event that there shall be any change,
other than as specified in this paragraph 9, in the number or kind of
outstanding shares of the Common Stock, or of any stock or other securities
into which the Common Stock shall have been changed, or for which it shall have
been exchanged, then the Board of Directors of Company shall, in its reasonable
discretion, equitably adjust this Warrant with respect to the number or kind of
Warrant Shares and the Warrant Price, such adjustment to be made by the Company
and notice thereof shall be delivered to the Warrantholder within 30 calendar
days thereafter, accompanied by a certificate of the Chief Financial Officer of
the Company setting forth such adjustment, the method of calculation of such
adjustment and the facts upon which such adjustment was based, all in
reasonable detail. In the case of any such substitution or adjustment as
provided for in this paragraph 9, the Warrant Price for each Warrant Share
shall be the Warrant Price for all shares of stock or other securities which
shall have been substituted for such Warrant Share or to which such shares
shall have been adjusted in accordance with the provisions in this paragraph 9.
No adjustment or substitution provided for in this paragraph 9 shall require
the Company to sell a fractional share hereunder. Notwithstanding the
foregoing, the issuance by the Company of additional shares of Common Stock (or
securities convertible into shares of Common Stock), for fair consideration
(which need not be cash), as determined by the Board of Directors of the
Company in good faith, shall not give rise to any equitable adjustment of this
Warrant pursuant to this paragraph 9.
10. The existence of this Warrant shall not affect in any
way the right or power of the Company or its shareholders to make or authorize
any or all adjustments, recapitalizations, reorganizations or other changes in
the Company's capital structure or its business, or any merger or consolidation
of the Company, or any issue of bonds, debentures, preferred or prior
preference stock ahead of or affecting the Common Stock or the rights thereof,
or dissolution or liquidation of the Company, or any sale or transfer of all or
any part of its assets or business, or any other corporate act or proceeding
whether of a similar character or otherwise.
11. This Warrant shall be governed by and construed in
accordance with the internal laws of the State of New York.
12. Upon receipt of evidence satisfactory to the Company of
the loss, theft, destruction or mutilation of this Warrant, and of indemnity
reasonably satisfactory to the Company, if lost, stolen or destroyed, and upon
surrender and cancellation of this Warrant if mutilated, the Company shall
execute and deliver to the Warrantholder a new Warrant of like date, tenor and
denomination.
13. Any notice or other communication required or permitted
to be given hereunder shall be in writing and shall be mailed by certified
mail, return receipt requested, or delivered against receipt to the party to
whom it is to be given at the address of such party set forth in the preamble
to this Warrant (or to such other address as the party shall have furnished in
writing in accordance with the provisions of this paragraph 13). Notice to the
estate of the Warrantholder shall be sufficient if addressed to the
Warrantholder as provided in this paragraph 13. Any notice or other
communication given by certified mail shall be deemed given at the time of
certification thereof, except for a notice changing a party's address which
shall be deemed given at the time of receipt thereof.
14. The provisions of this Warrant shall be binding upon
and inure to the benefit of the Warrantholder and the Warrantholder's heirs,
personal representatives, successors and assigns under this Warrant.
15. This Warrant does not create, and shall not be
construed as creating, any rights enforceable by any person not a party to this
Warrant (except as expressly provided in this Warrant).
IN WITNESS WHEREOF, BERNARD CHAUS, INC. has caused this Warrant
to be signed by a duly authorized officer the day and year first above written.
ATTEST: BERNARD CHAUS, INC.
\s\ Karen A. Maloney By: \s\ Wayne S. Miller
- --------------------------- -----------------------------
Karen A. Maloney Name: Wayne S. Miller
Vice President-Corporate Controller Title: Executive Vice President-
Finance and Administration and
Chief Financial Officer
and Secretary
SUBSCRIPTION
The undersigned,______________________________________,
pursuant to the provisions of the foregoing Warrant, hereby agrees to subscribe
for the purchase of_________________shares of the Common Stock of BERNARD
CHAUS, INC. covered by said Warrant, and makes payment therefor in full at the
price per share provided by said Warrant.
Dated ____________ Signature _____________________
Address _____________________
_____________________
ASSIGNMENT
FOR VALUE RECEIVED _________________________ hereby sells,
assigns and transfers unto _______________________________________ the
foregoing Warrant and all rights evidenced thereby, and does irrevocably
constitute and appoint _______________________, attorney, to transfer said
Warrant on the books of BERNARD CHAUS, INC.
Dated ______________________ Signature_________________________
Address___________________________
___________________________
PARTIAL ASSIGNMENT
FOR VALUE RECEIVED __________________________ hereby sells,
assigns and transfers unto _______________________ the right to purchase
_____________________ shares of the Common Stock of BERNARD CHAUS, INC. by the
foregoing Warrant, and a proportionate part of said Warrant and the rights
evidenced hereby, and does irrevocably constitute and appoint
__________________________, attorney, to transfer that part of said Warrant on
the books of BERNARD CHAUS, INC.
Dated___________________ Signature_________________________
Address___________________________
____________________________
NEITHER THIS WARRANT NOR THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF
THIS WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND NEITHER THIS WARRANT NOR SUCH SHARES MAY BE SOLD, ENCUMBERED OR OTHERWISE
TRANSFERRED EXCEPT IN COMPLIANCE WITH THIS WARRANT AGREEMENT AND PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR AN EXEMPTION FROM SUCH
REGISTRATION REQUIREMENT, AND, IF AN EXEMPTION SHALL BE APPLICABLE, THE HOLDER
SHALL HAVE DELIVERED AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.
Void after 5:00 p.m. Eastern Standard Time, on November 15, 2000.
WARRANT TO PURCHASE COMMON STOCK
OF
BERNARD CHAUS, INC.
WARRANT dated and effective as of November 15, 1995, by and
between BERNARD CHAUS, INC. (the "Company"), a New York corporation with
offices at 1410 Broadway, New York, New York 10018 and JOSEPHINE CHAUS (the
"Warrantholder"), an individual residing at 128 East 73rd Street, New York, New
York 10021.
FOR VALUE RECEIVED, the Company hereby certifies that the
Warrantholder is entitled to purchase from the Company, at any time or from
time to time commencing November 15, 1995, and prior to 5:00 P.M., Eastern
Standard Time, on November 15, 2000, 230,000 fully paid and nonassessable
shares of Common Stock, par value $0.01 per share, of the Company, at $6.75 per
share for an aggregate purchase price of $1,552,500. Hereinafter, (i) said
Common Stock, together with any other equity securities which may be issued by
the Company with respect thereto or in substitution therefor, is referred to as
the "Common Stock," (ii) the shares of the Common Stock purchasable hereunder
are referred to as the "Warrant Shares," (iii) the aggregate purchase price
payable hereunder for the Warrant Shares is referred to as the "Aggregate
Warrant Price," (iv) the price payable hereunder for each of the Warrant Shares
is referred to as the "Per Share Warrant Price," and (v) this Warrant, and all
warrants hereafter issued in exchange or substitution for this Warrant are
referred to as the "Warrant." The number of Warrant Shares for which this
Warrant is exercisable is subject to adjustment as hereinafter provided.
1. This Warrant may be exercised, in whole at any time or
in part from time to time, commencing November 15, 1995, and prior to 5:00
P.M., Eastern Standard Time, on November 15, 2000, by the Warrantholder by the
surrender of this Warrant (with the subscription form at the end hereof duly
executed) at the address of the Company set forth on the first page hereof,
evidencing proper payment of the Aggregate Warrant Price, or the proportionate
part thereof if this Warrant is exercised in part.
2. The issuance of this Warrant was approved by, and the
Per Share Warrant Price of $6.75 was determined by, the Special Committee of
the Company's Board of Directors on September 14, 1995 (the "Committee Approval
Date"), subject to approval of the Company's shareholders. The Company's
shareholders approved the issuance of this Warrant on November 15, 1995. The
Per Share Warrant Price represents a 20% premium over the average closing price
of the Common Stock on the New York Stock Exchange on the Committee Approval
Date.
3. In no event shall this Warrant be converted, and this
Warrant shall no longer be exercisable, at any time after five years from the
date hereof. Any conversion of this Warrant may be either in whole at any time
or in part at any time or from time to time.
4. Neither the Warrantholder nor the Warrantholder's legal
representatives, legatees or distributees shall be or be deemed to be the
holder of any shares of the Common Stock covered by this Warrant unless and
until certificates for such shares have been issued. Upon payment of the
purchase price thereof, shares issued upon conversion of this Warrant shall be
validly issued, fully paid and nonassessable.
5. In order to exercise this Warrant, the Warrantholder
shall give a signed written notice of intent to exercise this Warrant to the
Treasurer of the Company specifying the number of shares of the Common Stock
with respect to which this Warrant is being exercised, and accompanied by
payment to the Company of the full amount of the Aggregate Warrant Price for
the number of shares of Common Stock so specified. If permitted under
applicable securities laws, all or any portion of such payment may be made
through a "cashless exercise" arrangement with a broker designated by the
Warrantholder by delivery of shares of Common Stock having a fair market value
(as hereinafter determined) on the date of delivery equal to the portion of the
Aggregate Warrant Price so paid; provided, that in connection therewith, the
Warrantholder shall certify to the Company that such delivery will not result
in "short-swing" profit to her under Section 16 of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and the rules and regulations
promulgated thereunder ("Section 16").
For the purposes hereof, the fair market value of a
share of the Common Stock on any date shall be equal to the closing sale price
of a share of the Common Stock as published by the national securities exchange
on which the shares of the Common Stock are primarily traded on such date or,
if there is no such sale of the Common Stock on such date, the average of the
bid and asked price on such exchange at the close of trading on such date or,
if the shares of the Common Stock are not listed on a national securities
exchange on such date, the average of the bid and asked prices in the over the
counter market on such date or, if the Common Stock is not traded on a national
securities exchange or the over the counter market, the fair market value of a
share of the Common Stock on such date as shall be determined in good faith by
the Company.
6. (a) Unless the shares to be issued upon the
exercise of the Warrant shall be registered under the Securities Act of 1933,
as amended (the "Act"), prior to the issuance thereof (which the Company shall
use its best efforts to do at its expense at the Warrantholder's request), the
Warrantholder shall, as a condition to the Company's obligation to issue such
shares, give a representation in writing that she is acquiring such shares for
her own account as an investment and not with a view to, or for sale in
connection with, the distribution of such shares.
(b) In the event of the death of the Warrantholder,
an additional condition of exercising the Warrant shall be the delivery to the
Company of such tax waivers and other documents as the Company shall reasonably
determine. The executors, administrators, legal representatives, distributees
and legatees of the Warrantholder are, after the death of the Warrantholder,
referred to as the Warrantholder with respect to this Warrant.
(c) The Warrantholder shall, as an additional
condition of converting this Warrant, make appropriate arrangements with the
Company for the payment of all federal, state or local withholding taxes
applicable as a result of the exercise of this Warrant. If permitted under
applicable securities laws, all or any portion of such payment may be made
through a "cashless exercise" arrangement with a broker designated by the
Warrantholder by delivery of shares of Common Stock having a fair market value
(as determined pursuant to paragraph 5 hereof) on the date of delivery equal to
the portion of such taxes so paid; provided, that in connection therewith the
Warrantholder shall certify to the Company that such delivery will not result
in "short-swing" profit to her under Section 16.
The Company covenants and agrees that it will pay, when
due and payable, any and all Federal and state stamp, original issue or similar
taxes that may be payable in respect of the issue of any Warrant Shares or
certificates therefor.
7. The Company agrees that, prior to the expiration of
this Warrant, the Company will at all times have authorized and in reserve, and
will keep available, solely for issuance or delivery upon the exercise of this
Warrant, the shares of the Common Stock as from time to time shall be
receivable upon the exercise of this Warrant.
8. In the event that a dividend shall be declared upon the
Common Stock payable in shares of the Common Stock, the Warrant Shares shall be
adjusted by adding to each such share the number of shares which would be
distributable thereon if such shares had been outstanding on the date fixed for
determining the shareholders entitled to receive such stock dividend. In the
event that the outstanding shares of the Common Stock shall be changed into or
exchanged for a different number or kind of shares of stock and/or other
securities of the Company or of another corporation or cash or other property,
whether through reorganization, recapitalization, extraordinary dividend, stock
split-up, combination of shares, sale of assets, spin off or merger or
consolidation in which the Company is the surviving corporation, then, there
shall be substituted for each Warrant Share the number and kind of shares of
stock and/or other securities, cash or other property into which each
outstanding share of the Common Stock shall be so changed or for which each
such share shall be exchanged. In the event that there shall be any change,
other than as specified in this paragraph 8, in the number or kind of
outstanding shares of the Common Stock, or of any stock or other securities
into which the Common Stock shall have been changed, or for which it shall have
been exchanged, then, the Board of Directors of Company shall, in its
reasonable discretion, equitably adjust this Warrant with respect to the number
or kind of Warrant Shares and the Warrant Price, such adjustment to be made by
the Company and notice thereof shall be delivered to the Warrantholder within
30 calendar days thereafter, accompanied by a certificate of the Chief
Financial Officer of the Company setting forth such adjustment, the method of
calculation of such adjustment and the facts upon which such adjustment was
based, all in reasonable detail. In the case of any such substitution or
adjustment as provided for in this paragraph 8, the Warrant Price for each
Warrant Share shall be the Warrant Price for all shares of stock or other
securities which shall have been substituted for such Warrant Share or to which
such shares shall have been adjusted in accordance with the provisions in this
paragraph 8. No adjustment or substitution provided for in this paragraph 8
shall require the Company to sell a fractional share hereunder.
Notwithstanding the foregoing, the issuance by the Company of additional shares
of Common Stock (or securities convertible into shares of Common Stock), for
fair consideration (which need not be cash), as determined by the Board of
Directors of the Company in good faith, shall not give rise to any equitable
adjustment of this Warrant pursuant to this paragraph 8.
9. The existence of this Warrant shall not affect in any
way the right or power of the Company or its shareholders to make or authorize
any or all adjustments, recapitalizations, reorganizations or other changes in
the Company's capital structure or its business, or any merger or consolidation
of the Company, or any issue of bonds, debentures, preferred or prior
preference stock ahead of or affecting the Common Stock or the rights thereof,
or dissolution or liquidation of the Company, or any sale or transfer of all or
any part of its assets or business, or any other corporate act or proceeding
whether of a similar character or otherwise.
10. This Warrant shall be governed by and construed in
accordance with the internal laws of the State of New York.
11. Upon receipt of evidence satisfactory to the Company of
the loss, theft, destruction or mutilation of this Warrant, and of indemnity
reasonably satisfactory to the Company, if lost, stolen or destroyed, and upon
surrender and cancellation of this Warrant if mutilated, the Company shall
execute and deliver to the Warrantholder a new Warrant of like date, tenor and
denomination.
12. Any notice or other communication required or permitted
to be given hereunder shall be in writing and shall be mailed by certified
mail, return receipt requested, or delivered against receipt to the party to
whom it is to be given at the address of such party set forth in the preamble
to this Warrant (or to such other address as the party shall have furnished in
writing in accordance with the provisions of this paragraph 12). Notice to the
estate of the Warrantholder shall be sufficient if addressed to the
Warrantholder as provided in this paragraph 12. Any notice or other
communication given by certified mail shall be deemed given at the time of
certification thereof, except for a notice changing a party's address which
shall be deemed given at the time of receipt thereof.
13. Except as may be permitted by Rule 16b-3 promulgated
under the Exchange Act for transfers to a trust or similar estate planning
vehicle, this Warrant is not transferable otherwise than by will or the laws of
descent and distribution and may be exercised, during the lifetime of the
Warrantholder, only by her or, in the event of her disability, her duly
appointed guardian or conservator. The Warrantholder's rights shall not be
subject to commutation, encumbrance, or the claims of the Warrantholder's
creditors, and any attempt to do any of the foregoing shall be void. The
provisions of this Warrant shall be binding upon and inure to the benefit of
the Warrantholder and her heirs and personal representatives under this
Warrant.
14. This Warrant does not create, and shall not be
construed as creating, any rights enforceable by any person not a party to this
Warrant (except as expressly provided in this Warrant).
IN WITNESS WHEREOF, BERNARD CHAUS, INC. has caused this Warrant
to be signed by a duly authorized officer the day and year first above written.
ATTEST: BERNARD CHAUS, INC.
\s\ Karen A. Maloney By: \s\ Wayne S. Miller
- --------------------------- -----------------------------
Karen A. Maloney Name: Wayne S. Miller
Vice President-Corporate Controller Title: Executive Vice President-
Finance and Administration and
Chief Financial Officer
and Secretary
SUBSCRIPTION
The undersigned, ,
pursuant to the provisions of the foregoing Warrant, hereby agrees to subscribe
for the purchase of shares of the Common Stock of BERNARD
CHAUS, INC. covered by said Warrant, and makes payment therefor in full at the
price per share provided by said Warrant.
Dated ____________ Signature _____________________
Address _____________________
_____________________
