SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
Perfumania, Inc.
(Name of Issuer)
Common Stock, $.01 par value
(Title of Class of Securities)
(CUSIP Number) 713766103
Frank A. Buttacavoli
Executive Vice President and Chief Financial Officer
Parlux Fragrances, Inc.
3725 SW 30th Avenue
Ft. Lauderdale, FL 33312
(954)316-8155
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(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
Copy to:
Barry P. Biggar
Mayer, Brown, & Platt
1675 Broadway
New York, NY 10019-5820
August 31, 1999
(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 Statement because of Rule
13d-1(b)(3) or (4), check the following: ( )
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SCHEDULE 13D
CUSIP No. 713766103
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(1) NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Parlux Fragrances, Inc. - IRS #: 22-2562955
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(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a) ( )
(b) ( )
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(3) SEC USE ONLY
(4) SOURCE OF FUNDS
OO
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) ( )
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(6) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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(7) SOLE VOTING POWER
NUMBER OF 1,512,406
SHARES -----------------------------------
BENEFICIALLY (8) SHARED VOTING POWER
OWNED BY None
EACH -----------------------------------
REPORTING (9) SOLE DISPOSITIVE POWER
PERSON 1,512,406
WITH -----------------------------------
(10) SHARED DISPOSITIVE POWER
None
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(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,512,406
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(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN
SHARES ( )
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(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
16.5%
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(14) TYPE OF REPORTING PERSON
CO
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Item 1. Security and Issuer.
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This statement on Schedule 13D (the "Statement")relates to the Common
Stock, par value $.01 per share ("Stock"), of Perfumania, Inc., a Florida
corporation (the "Company"), which has its principal executive offices at 11701
NW 101 Rd., Miami, FL 33178.
Item 2. Identity and Background.
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(a) This statement is being filed on behalf of Parlux Fragrances, Inc.,
a Delaware corporation ("Parlux"). The directors of Parlux are Ilia
Lekach("I. Lekach"), Frank A. Buttacavoli ("Buttacavoli"), Frederick E. Purches
("Purches"), Albert F. Vercillo ("Vercillo"), Zalman Lekach ("Z. Lekach"), Mayi
de la Vega ("Vega"), and Glenn Gopman ("Gopman")(the "Directors"). The officers
of Parlux are I. Lekach, Chief Executive Officer, President and Chairman,
Buttacavoli, Executive Vice President and Chief Financial Officer, and Purches,
Vice Chairman (the "Officers").
(b) The principal business address of Parlux and I. Lekach,
Buttacavoli, and Purches is 3725 SW 30th Avenue, Ft. Lauderdale, FL 33312.
(c) Parlux is engaged in the fragrance and beauty products business.
The Officers are principally employed by Parlux. Z. Lekach is currently employed
by IFX Corporation and his address is 17701 Biscayne Blvd., 3rd Fl., Aventura,
FL 33160. Vercillo is President of both Cambridge Development Corporation and
Schiaparelli, Inc. His address is 14 Vanderventer Ave., Suite 200A, Port
Washington, NY 11050. Gopman is a principal shareholder of the public accounting
firm Thaw, Gopman and Associates. His address is 2010 NE 198 Terrace, Miami, FL
33179. Vega is currently self-employed and her address is 7122 Lago Dr. East,
Coral Gables, FL 33143.
(d) During the last five years none of Parlux, the Officers, or the
Directors have been convicted in a criminal proceeding required to be reported
in accordance with Item 2(d) of Schedule 13D.
(e) During the last five years none of Parlux, the Officers, or the
Directors have been a party to a civil proceeding required to be reported in
accordance with Item 2(e) of Schedule 13D.
(f) All Officers and Directors are citizens of the United States.
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Item 3. Source and Amount of Funds or Other Consideration.
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The consideration for the purchase of the shares reported hereby was a
cancellation of trade indebtedness owed by the Company to Parlux in the amount
of $4,506,970.
Item 4. Purpose of Transaction.
----------------------
Parlux will acquire 1,512,406 shares of Stock in consideration of a
partial reduction of outstanding trade indebtedness due from the Company to
Parlux in the amount of $4,506,970. Parlux has no present plans or proposals
that relate to or would result in any of the actions specified in clauses (a)
through (j) of Item 4 of Schedule 13D. However, Parlux reserves the right to
propose or participate in future transactions which may result in one or more of
such actions, depending on the evaluation of the Company's business prospects
and financial condition, the market for the securities, other available
investment opportunities, money and stock market conditions and other future
developments.
Item 5. Interest in Securities of the Issuer.
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Parlux beneficially owns 1,512,406 shares, approximately 16.5%, of the
Company's outstanding Stock. Parlux has sole voting power and dispositive power
with respect to its shares of Stock.
Except as reported in this Statement, Parlux has not effected any
transactions in regard to the Stock during the past sixty days. No person other
than Parlux has the right to receive or the power to direct the receipt of
dividends from, or the proceeds from the sale of the Stock it holds.
I. Lekach beneficially owns 2,972,401 shares, approximately 36.7%, of
the outstanding Stock. This amount includes 684,995 shares of the Stock which he
holds directly, 775,000 vested options to acquire Stock which he holds directly,
as well as 1,512,406 shares of Stock which he holds indirectly through Parlux.
I. Lekach exercises sole voting and dispositive power with regard to the
directly owned shares and options, and he shares voting and dispositive power
over the shares held indirectly through Parlux.
Item 6. Contracts, Arrangements, Understandings or Relationships with
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Respect to Securities of the Issuer.
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Reference is made to the information disclosed under Items 3 and 4 of
this statement which is incorporated by reference in response to this Item. In
addition to such information, the following contracts, arrangements,
understandings or relationships are reported hereunder.
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The shares of Stock being reported hereby were purchased pursuant to a
Stock Purchase Agreement, dated August 31, 1999 between the Company and Parlux.
The Stock Purchase Agreement contains covenants, representations, and warranties
agreed upon by the parties herein.
The Company and Parlux entered into a Registration Rights Agreement,
dated August 31, 1999, which grants Parlux demand registration rights with
respect to all or a portion of the Stock reported hereby.
The Company and Parlux are currently negotiating the terms of a
Subordinated Secured Note Agreement which would convert $8,000,000 of
outstanding trade indebtedness due from the Company to Parlux into a short-term
note. The note would be due the earlier of the completion of perfumania.com's
proposed public offering in which the Company would generate sufficient funds to
pay down the short-term note, or May 31, 2000.
Parlux and the Company currently have a supplier relationship whereby
Parlux supplies the Company with fragrance and beauty products.
Ilia Lekach is currently Chief Executive Officer and Chairman of the
Board of Directors of the Company.
Item 7. Material to be Filed as Exhibits.
--------------------------------
Exhibit A Stock Purchase Agreement, dated as of August 31,
1999, by and between the Company and Parlux.
Exhibit B Registration Rights Agreement, dated as of August 31,
1999, by and between the Company and Parlux.
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<PAGE>
SIGNATURE
After reasonable inquiry and to the best of its knowledge and belief,
the undersigned certifies that the information set forth in this Statement is
true, complete and correct.
Dated: September 15, 1999 PARLUX FRAGRANCES, INC.
By: /s/ Frank A. Buttacavoli
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Frank A. Buttacavoli
Executive Vice President/
Chief Financial Officer
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<PAGE>
Exhibit A
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STOCK PURCHASE AGREEMENT
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STOCK PURCHASE AGREEMENT (the "Agreement") dated as of August
31, 1999, by and among PARLUX FRAGRANCES, INC., a Delaware corporation (the
"Purchaser"), and PERFUMANIA, INC., a Florida corporation (the "Seller").
WHEREAS, the Purchaser, desires to acquire from the Seller
1,512,406 shares of the Seller's common stock, par value $.01 per share, (the
"Stock"), and the Seller desires to sell the Stock to the Purchaser in
consideration for a partial reduction of outstanding trade indebtedness due from
the Seller to the Purchaser in the amount of $4,506,970;
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements set forth
herein, the Purchaser and the Seller agree as follows:
ARTICLE I
PURCHASE AND SALE
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1.1 The Purchase. (a) Upon satisfaction of all conditions precedent set
forth herein, on the Closing Date (as defined below), the Seller shall sell and
deliver the Stock to the Purchaser in consideration of a cancellation of the
amount of trade indebtedness owed by the Seller to the Purchaser in the amount
of $4,506,970.
(b) At the Closing, the Seller shall deliver to the Purchaser
a certificate representing the Stock which the Purchaser is purchasing and the
Purchaser shall deliver to the Seller an instrument executed by the Purchaser
cancelling $4,506,970 of trade indebtedness owed by the Seller to the Purchaser.
The certificate representing the Stock shall bear the following legend:
THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE UNITED STATES
SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES COMMISSION OF ANY
STATE UNDER ANY STATE SECURITIES LAW. THE SECURITIES MAY NOT BE
OFFERED, SOLD OR OTHERWISE DISTRIBUTED IN THE UNITED STATES OR TO ANY
U.S. PERSONS UNLESS THE SECURITIES ARE REGISTERED UNDER THE ACT AND
APPLICABLE STATE SECURITIES LAWS, OR SUCH OFFERS, SALES AND TRANSFERS
ARE MADE PURSUANT TO AVAILABLE EXEMPTIONS FROM THE REGISTRATION
REQUIREMENTS OF THE ACT AND THOSE LAWS.
1
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(c) The Seller acknowledges and agrees that the trade
indebtedness to be canceled shall be comprised of the indebtedness which has
been outstanding for the longest period.
1.2 Closing. The Closing of the transactions described in Section 1.1
shall take place at the offices of the Seller, on September 3, 1999 (the
"Closing Date") or such other date, time, and place as may be agreed upon by the
Purchaser and the Seller.
ARTICLE II
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REPRESENTATIONS AND WARRANTIES OF THE SELLER
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The Seller represents and warrants to the Purchaser that at the Closing
Date:
2.1 Due Incorporation; Organization. The Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Florida. Each of the Seller's significant subsidiaries (within the meaning of
Regulation S-X under the Securities Exchange Act of 1934, as amended, (the
"Significant Subsidiaries")) is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation.
The Seller and each of the Significant Subsidiaries has the requisite corporate
power and authority to own, operate or lease its assets and properties and to
carry on its business as it is now being conducted, and is duly qualified or
licensed to do business, and is in good standing, in each jurisdiction in which
the nature of its business or the properties owned, operated or leased by it
makes such qualification, licensing or good standing necessary, except where the
failure to have such power or authority, or the failure to be so qualified,
licensed or in good standing, would not have a Material Adverse Effect. The term
"Material Adverse Effect" as used in this Agreement, means any change in or
effect on the business, operations or financial condition of the Seller or any
of its subsidiaries that is materially adverse to the Seller and its
subsidiaries taken as a whole except for (i) any change or effect resulting from
general economic, financial or market conditions or (ii) any change or effect
resulting from conditions or circumstances generally effecting the fragrance and
cosmetics industry.
2.2 Certificate of Incorporation and By-Laws. The Seller has heretofore
made available to Purchaser a complete and correct copy of the certificate of
incorporation and the by-laws, each as amended to the date hereof, of the Seller
and no action to amend or modify either thereof has been taken.
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2.3 Capitalization; Shares. (a) The authorized capital stock of the
Seller consists of 25,000,000 common shares, par value $.01 per share. The
Seller has 7,644,028 shares of common stock outstanding and 1,512,406 shares of
common stock held as treasury stock as of July 31, 1999.
(b) The Stock when issued, sold and delivered in accordance
with the terms and for the consideration expressed in this Agreement, shall be
duly and validly issued, fully-paid and nonassessable.
2.4 Authority Relative to this Agreement. The Seller has all necessary
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement by the Seller and the consummation by the Seller of the
transactions contemplated hereby have been duly and validly authorized and
approved by the Board of Directors of the Seller and no other corporate
proceedings on the part of the Seller are necessary to authorize or approve this
Agreement or to consummate the transactions contemplated hereby. This Agreement
has been duly and validly executed and delivered by the Seller and constitutes a
valid and binding obligation of the Seller enforceable against the Seller in
accordance with its terms, except that such enforceability (i) may be limited by
bankruptcy, insolvency, moratorium or other similar laws affecting or relating
to the enforcement of creditor's rights generally and (ii) is subject to general
principles of equity.
2.5 No Conflict; Required Filings and Consents. (a) None of the
execution and delivery of this Agreement by the Seller, the consummation by the
Seller of the transactions contemplated hereby or compliance by the Seller with
any of the provisions hereof will (i) conflict with or violate the certificate
of incorporation or by-laws of the Seller or the comparable organizational
documents of any of its Significant Subsidiaries, (ii) conflict with or violate
any statute, ordinance, rule, regulation order, judgment or decree applicable to
the Seller or its Significant Subsidiaries, or by which any of them or any of
their respective properties or assets may be bound or affected, or (iii) result
in a violation or breach of or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation of, or result
in any loss of any material benefit, or the creation of any lien on any of the
property or assets of the Seller or any of its Significant Subsidiaries (any of
the foregoing referred to in clause (ii) or this clause (iii) being a
"Violation") pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which the Seller or any of its Significant Subsidiaries is a party or by
which the Seller or any of its subsidiaries or any of their respective
properties may be bound or affected, except in the case of the foregoing clauses
(ii) or (iii) for any such Violations which would not have a Material Adverse
Effect.
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(b) None of the execution and delivery of this Agreement by
the Seller, the consummation by the Seller of the transactions contemplated
hereby or compliance by the Seller with any of the provisions hereof will
require any consent, waiver, approval, authorization or permit of, or
registration or filing with or notification to (any of the foregoing being a
"Consent"), any government or subdivision thereof, or any administrative,
governmental or regulatory authority, agency, commission, tribunal or body,
domestic, foreign or supranational (a "Governmental Entity"), except for (i)
compliance with any applicable requirements of the Securities Act and the
Securities Exchange Act of 1934, as amended (the "Exchange Act") or (ii)
consents the failure of which to obtain or make would not have a Material
Adverse Effect or materially adversely effect the ability of the Seller to
consummate the transactions contemplated hereby.
2.6 SEC Reports and Financial Statements. (a) The Seller has filed with
the SEC all forms, reports, schedules, registration statements and definitive
proxy statements (the "SEC Reports") required to be filed by the Seller with the
Securities and Exchange Commission (the "SEC"). As of their respective dates,
the SEC Reports complied in all material respects with the requirements of the
Exchange Act or the Securities Act and the rules and regulations of the SEC
promulgated thereunder applicable, as the case may be, to such SEC Reports, and
none of the SEC Reports contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements made therein, in light of the circumstances under which they
were made, not misleading.
(b) The consolidated balance sheets as of January 30, 1999 and
the related consolidated statements of operations, common shareholders' equity
and cash flows for each of the three fiscal years in the period ended January
30, 1999 (including the related notes and schedules thereto) of the Seller
contained in the Seller's Form 10-K for the year ended January 30, 1999 included
in the SEC Reports present fairly, in all material respects, the consolidated
financial position and the consolidated results of operations and cash flows of
the Seller and its consolidated subsidiaries as of the dates or for the periods
presented therein in conformity with United States generally accepted accounting
principles applied on a consistent basis ("GAAP") during the periods involved
except as otherwise noted therein, including the related notes.
(c) The consolidated balance sheets and the related statements
of operations and cash flows (including in each case the related notes thereto)
of the Seller contained in the Form 10-Q for the period ended May 1, 1999
included in the SEC Reports (collectively, the "Quarterly Financial Statement")
have been prepared in accordance with the requirements for interim financial
statements contained in Regulation S-X. The Quarterly Financial Statement
reflects all adjustments, which include only normal recurring adjustments,
necessary to present fairly, in all material respects, the consolidated
financial position, results of operations and cash flows of the Seller for the
period presented therein in conformity with GAAP except as otherwise noted
therein, including the related notes.
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2.7 Litigation. As of the date hereof, there is no suit, action or
proceeding pending or, to the knowledge of the Seller, threatened against or
affecting the Seller or any of its subsidiaries that, individually or in the
aggregate, would have a Material Adverse Effect, nor is there any judgment,
decree, injunction or order of any Governmental Entity or arbitrator outstanding
against the Seller or any of its subsidiaries that would have, individually or
in the aggregate, a Material Adverse Effect.
2.8 Compliance with Applicable Laws. To the knowledge of the Seller,
the Seller and its subsidiaries are in substantial compliance with all laws,
regulations and orders of any Governmental Entity applicable to it or such
subsidiaries, except for such failures so to comply which would not have a
Material Adverse Effect. To the knowledge of the Seller, the business operations
of the Seller and its subsidiaries are not being conducted in violation of any
law, ordinance or regulation of any Governmental Entity, except for possible
violations which, individually or in the aggregate, would not have a Material
Adverse Effect on the Seller.
2.9 Material Adverse Change. Between May 1, 1999 and the date hereof,
there has not been any change in the business, operations or financial condition
of the Seller or any of its subsidiaries that is materially adverse to the
Seller and its subsidiaries taken as a whole, except for (i) any change
resulting from general economic, financial or market conditions or (ii) any
change resulting from conditions or circumstances generally affecting the
perfume industry.
2.10 Solvency. As of the date of this Agreement the Seller is Solvent.
For the purposes of this Agreement, "Solvent" means with respect to the Seller
on a particular date, that on such date (i) the fair value of the property of
the Seller is greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of the Seller, (ii) the present fair
saleable value of the assets of the Seller is not less than the amount that will
be required to pay the probable liability of the Seller on its debts as they
become absolute and matured, (iii) the Seller is able to realize upon its assets
and pay its debts and other liabilities, contingent obligations and other
commitments as they mature in the normal course of business, (iv) the Seller
does not intend to, and does not believe that it will, incur debts or
liabilities beyond the Seller's ability to pay as such debts and liabilities
mature, and (v) the Seller is not engaged in business or a transaction, and is
not about to engage in business or a transaction, for which the Seller's
property would constitute unreasonably small capital after giving due
consideration to the prevailing practice in the industry in which the Seller is
engaged. In computing the amount of contingent liabilities at any time, it is
intended that such liabilities will be computed at the amount which, in light of
all the facts and circumstances existing at such time, represents the amount
that can reasonably be expected to become an actual or matured liability taking
into account any subrogation and contribution rights.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PURCHASER
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3.1 Due Organization. Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
with all requisite power and authority to own and operate its assets and
properties as they are now being owned and operated.
3.2 Due Authorization. (a) Purchaser has duly and validly executed and
delivered this Agreement. This Agreement constitutes the legal, valid and
binding obligation of the Purchaser, enforceable against the Purchaser in
accordance with its terms.
(b) The Purchaser has full power and authority to enter into
this Agreement and to consummate the transactions contemplated hereby.
3.3 Consents and Approvals; Authority Relative to This Agreement.
Neither the execution and delivery of this Agreement, nor the consummation of
the transactions contemplated hereby will (a) violate any provisions of the
certificate of incorporation or by-laws of the Purchaser, (b) with or without
the giving of notice or passage , or both, violate , or be in conflict with, or
constitute a default, or permit the termination of, or cause the acceleration of
the maturity of, any agreement, instrument, contract, debt or obligation of the
Purchaser, (c) require the consent of any party to any agreement or commitment
to which the Purchaser is a party, or by which the Purchaser or its properties
or assets is bound, or (d) violate any regulation or any judgment or decree of
any court or authority to which the Purchaser is subject. No consent, approval
or authorization of, or declaration, filing or registration with, any
Governmental Entity is required to be made or obtained by the Purchaser in
connection with the execution, delivery and performance of this Agreement or the
consummation of the transactions contemplated hereby or thereby.
3.4 No Registration, Etc. The Purchaser acknowledges that the offering
and sale of the Stock pursuant to this Agreement (i) has not been registered
under the Securities Act, or under the securities or "blue sky" laws, rules
or regulations of any State (collectively, the "Securities Laws") and (ii) is
intended to be exempt from registration under the Securities Act, by virtue of
Section 4(2) of the Act and the provisions of Rule 506 of Regulation D
promulgated thereunder by the SEC. In furtherance thereof, the Purchaser
represents and warrants to the Seller that it is an "accredited investor", as
defined in Rule 501 of Regulation D promulgated under the Securities Act. The
Purchaser has been afforded, prior to the execution of this Agreement, the
opportunity to ask questions of, and to receive answers from, the Seller and its
management, and it has had access to all documents and information which is
deemed material to an investment decision with respect to the purchase of the
Stock hereunder. The Stock is being purchased for its own account, for
investment and not for distribution or resale to others. The Purchaser agrees
that it will not transfer the Stock unless the Stock is registered under any
applicable Securities Laws or the transfer is otherwise exempt therefrom. The
Purchaser further acknowledges that it is aware that it may be considered an
"affiliate" of the Seller for purposes of the Securities Act and, accordingly,
that any public sales of the Securities by the Purchaser will be subject to Rule
144 promulgated under the Securities Act.
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ARTICLE IV
CONDITIONS PRECEDENT TO OBLIGATIONS
-----------------------------------
OF PURCHASER
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The obligations of the Purchaser to purchase the Stock and to
consummate at Closing the transactions contemplated hereby is subject to the
satisfaction or waiver by the Purchaser of the following conditions precedent on
or before the Closing Date:
4.1 Representations and Warranties. The representations and warranties
of the Seller contained in this Agreement shall be accurate, true and correct on
and as of the Closing Date.
4.2 Compliance with Agreements and Covenants. The Seller shall have
performed and complied in all material respects with all of the covenants,
obligations and agreements contained in this Agreement to be performed and
complied with by the Seller on or prior to the Closing Date.
4.3 Required Consents. All material consents, authorizations and
approvals from, and all material declarations, filings and registrations with,
Governmental Entities or third parties required to consummate the transactions
contemplated by this Agreement or permit the Seller to continue its business
consistent with its prior practice without a Material Adverse Effect shall have
been obtained or made and delivered to the Purchaser, in form and substance to
the reasonable satisfaction of the Purchaser.
4.4 No Prohibition. No action or proceeding by any Authority shall have
been instituted or threatened that would enjoin, restrain, or prohibit the
consummation of the transactions as contemplated by this Agreement, or that
would, in the reasonable judgment of the Purchaser, make it inadvisable to
consummate such transactions, and no court order shall have been entered in any
action or proceeding instituted by any party that enjoins, restrains or
prohibits this Agreement or the complete consummation of the transactions
contemplated by this Agreement.
4.5 No Material Adverse Change. There shall not have occurred any
material adverse change (taken together with all other developments) since the
date of this Agreement that would have a Material Adverse Effect.
4.6 Documents. The Purchaser shall receive in form and substance
satisfactory to it:
(a) A certificate, dated the Closing Date, of the Seller
substantially to the effect set forth in Sections 4.1 and 4.2 with respect to
the representations, warranties and covenants of the Seller; and
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(b) A legal opinion from counsel to the Seller, dated the Closing
Date, in substantially the form of Exhibit A hereto.
4.7 Registration Rights. The Purchaser and the Seller shall have
executed and delivered a Registration Rights Agreement in form and substance
satisfactory to the Purchaser.
ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS OF
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THE SELLER
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The obligations of the Seller at the Closing Date under this Agreement
are subject to the satisfaction or waiver by the Seller of the following
conditions precedent on or before the Closing Date:
5.1 Representations and Warranties. The representations and warranties
of the Purchaser contained in this Agreement shall have been accurate, true and
correct in all material respects on and as of the date of this Agreement and
shall also be accurate, true and correct in all material respects on as of the
Closing Date with the same force and effect as though made on and as of the
Closing Date.
5.2 Compliance with Agreements and Covenants. The Purchaser shall have
performed and complied in all material respects with all of the covenants,
obligations and agreements contained in this Agreement to be performed and
complied with by the Purchaser on or prior to the Closing Date.
5.3 Required Consents. All material consents, authorizations and
approvals from, and all material declarations, filings and registrations with,
Governmental Entities or third parties required to consummate the transactions
contemplated by this Agreement shall have been obtained or made and delivered to
the Seller, in form and substance to the reasonable satisfaction of the Seller.
5.4 No Prohibition. No action or proceeding by any authority shall have
been instituted or threatened that would enjoin, restrain, or prohibit the
consummation of the transactions as contemplated by this Agreement, or that
would, in the reasonable judgment of the Seller, make it inadvisable to
consummate such transactions, and no court order shall have entered in any
action or proceeding instituted by any party that enjoins, restrains or
prohibits this Agreement or the complete consummation of the transactions as
contemplated by this Agreement.
5.5 Documents. The Seller shall receive, in form and substance
satisfactory to them a certificate, dated the Closing Date, of Purchaser
substantially to the effect set forth in Sections 5.1 and 5.2.
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ARTICLE VI
MISCELLANEOUS
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6.1 Termination. This Agreement may be terminated at any time on or
prior to the Closing Date:
(a) With the mutual consent of the Seller and the Purchaser;
(b) By written notice from the Seller or the Purchaser to the
other, if the Closing shall not have taken place on or before September 30,
1999; provided, however, that the right to terminate this Agreement under this
Section 6.1 shall not be available to any party whose failure to perform any
obligation under this Agreement has been the cause of or resulted in the failure
of the Closing to occur on or before such date;
(c) By the Purchaser, if there shall have been a material
breach of any covenant, representation or warranty of the Seller hereunder, and
such breach shall not have been remedied within thirty (30) business days after
receipt by the Seller of a notice in writing from the Purchaser specifying the
breach and requesting such be remedied;
(d) By the Seller, if there shall have been a material breach
of any covenant, representation or warranty of the Purchaser hereunder, and such
breach shall not have been remedied within thirty (30) business days after
receipt by the Purchaser of notice in writing from the Seller specifying the
breach and requesting such be remedied;
(e) By written notice from the Seller or the Purchaser to the
other, if any court of competent jurisdiction or other governmental body shall
have issued an order, decree or ruling or taken any other action permanently
restraining, enjoining or otherwise prohibiting the transactions contemplated by
this Agreement and such order, decree, ruling or other action shall have become
final and nonappealable; or
(f) Effect of Termination. If this Agreement is terminated
pursuant to Section 6.1(a), or (e) all obligations of the parties hereunder
shall terminate without liability of any party (or any stockholder, affiliate,
director, officer, employee, agent, consultant or representative of any party).
No termination pursuant to Section 6.1(b), or (d) shall relieve any party from
liability for any willful breach of this Agreement prior to such termination,
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<PAGE>
and the willfully breaching party shall be fully liable for any and all losses
sustained or incurred by any other party from such breach.
6.2 Public Announcements. So long as this Agreement is in effect, the
Purchaser and the Seller agree to use reasonable efforts to consult with each
other before issuing any press release or otherwise making any public statement
with respect to the transactions contemplated by this Agreement.
6.3 APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF FLORIDA
WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF.
6.4 Amendment; Effective Date. This Agreement may be amended, modified
or supplemented but only in writing signed by the Seller and the Purchaser.
6.5 Notices. Any notice, request, instruction or other document to be
given hereunder by a party hereto shall be in writing and shall be deemed to
have been given, (a) when received if given in person or by courier or a courier
service, or (b) on the business day after deposit with a reputable overnight
delivery service for next business day delivery.
6.6 Waivers. The failure of a party hereto at any time or times to
require performance of any provision hereof shall in no manner affect its right
at a later time to enforce the same. No waiver by a party of any condition or
any breach of any term, covenant, representation or warranty contained in this
Agreement shall be effective unless in writing, and no waiver in any one or more
instances shall be deemed to be a further or continuing waiver of any such
condition or breach in other instances or a waiver of any other condition or
breach of any other term, covenant, representation or warranty.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
PARLUX FRAGRANCES, INC.
By: /s/ Frank A. Buttacavoli
----------------------------
Name: Frank A. Buttacavoli
Title: Executive VP and CFO
PERFUMANIA, INC.
By: /s/ Jerome Falic
----------------------------
Name: Jerome Falic
Title: President
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<PAGE>
Exhibit B
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REGISTRATION RIGHTS AGREEMENT
-----------------------------
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made as of
August 31, 1999 among PARLUX FRAGRANCES, INC., a Delaware corporation (the
"Purchaser") and PERFUMANIA, INC., a Florida corporation (the "Company").
WHEREAS, Purchaser and the Company are parties to a Stock Purchase
Agreement, dated as of August 31, 1999 pursuant to which the Purchaser has
agreed to purchase 1,512,406 shares of Common Stock of the Company (the "Stock")
and
WHEREAS, as condition to such purchase, the Company has agreed to grant
to the Purchaser certain registration rights with respect to the Stock.
NOW, THEREFORE, the parties hereto agree as follows:
1. Demand Registrations.
--------------------
(a) Requests for Registration. At any time from and after February 29,
2000 the Purchaser may request registration under the Securities Act of all of
the Stock under the registration requirements of the Securities Act. The
registration requested pursuant to this paragraph 1(a) is referred to herein as
"Demand Registration." Such registration may be effected using any form that is
available to the Company for the purpose of effecting the Demand Registration.
The request for a Demand Registration shall specify the approximate number of
shares of the Stock requested to be registered and the requested per share price
range, if any, for such offering. Notwithstanding any registration request
pursuant to this Section 1(a), the Board of Directors of the Company can choose
to delay any registration in good faith for a period of sixty days. The Company
can only delay registration for one sixty day period.
(b) Long-Form Registration. The Purchaser will be entitled to request
one Demand Registration, in which the Company will pay all Registration Expenses
(as hereinafter defined) until all of the Stock has been distributed provided
that the Demand Registration requested was with respect to all of the Stock. The
Purchaser's demand registration right hereunder shall not be satisfied until one
or more registration statements under the Securities Act shall have been
declared effective with respect to all of the Stock and the requirements of
Section 3 hereof shall have been satisfied.
(c) Selection of Underwriters. The Purchaser will have the right to
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select the investment banker(s) and manager(s) to administer any future offering
of the Stock.
2. Holdback Agreements.
(a) The Purchaser agrees not to effect any public sale or distribution
(including sales pursuant to Rule 144) of equity securities of the Company, or
any securities convertible into or exchangeable or exercisable for such
securities, during the seven days prior to and the 90-day period beginning on
the effective date of any underwritten Demand Registration in which the Stock is
included (except as part of such underwritten registration), unless the
underwriters managing the registered public offering otherwise agree.
(b) The Company agrees (i) not to effect any public sale or
distribution of its equity securities, or any securities convertible into or
exchangeable or exercisable for such securities, during the seven days prior to
and during the 90-day period beginning on the effective date of any underwritten
Demand Registration (except as part of such underwritten registration or
pursuant to registrations on Form S-8 or any successor form), unless the
underwriters managing the registered public offering otherwise agree, and (ii)
to use reasonable efforts to cause each holder of at least 5% (on a
fully-diluted basis) of its common stock (other than the Purchaser), or any
securities convertible into or exchangeable or exercisable for common stock,
purchased from the Company at any time after the date of this Agreement (other
than in a registered public offering) to agree not to effect any public sale or
distribution (including sales pursuant to Rule 144) of any such securities
during such period (except as part of such underwritten registration, if
otherwise permitted), unless the underwriters managing the registered public
offering otherwise agree.
3. Registration Procedures. Whenever the Purchaser has requested that
any Stock be registered pursuant to this Agreement, the Company will use its
best efforts to effect the registration and the sale of the Stock in accordance
with the intended method of disposition thereof and pursuant thereto the Company
will as expeditiously as possible:
(a) prepare and file with the Securities and Exchange Commission a
registration statement with respect to the Stock and use its best efforts to
cause such registration statement to become effective (provided that before
filing a registration statement or prospectus or any amendments or supplements
thereto, the Company will furnish to the counsel selected by the Purchaser
copies of all such documents proposed to be filed, which documents will be
subject to the review and comment of such counsel);
(b) prepare and file with the Securities and Exchange Commission such
amendments and supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to keep such registration
statement effective for a period of not less than six months and comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement during such period in
accordance with the intended methods of disposition by the sellers thereof set
forth in such registration statement;
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(c) furnish to each seller and each underwriter of the Stock such
number of copies of such registration statement, each amendment and supplement
thereto, the prospectus included in such registration statement (including each
preliminary prospectus) and such other documents as such seller may reasonably
request in order to facilitate the disposition of the Stock owned by such seller
or to be disposed of by such underwriter;
(d) use its best efforts to register or qualify the Stock under blue
sky laws of such jurisdictions the Purchaser reasonably requests and do any and
all other acts and things which may be reasonably necessary or advisable to
enable the Purchaser to consummate the disposition in such jurisdictions of the
Stock; provided, that the Company will not be required to (i) qualify generally
to do business in any jurisdiction where it would not otherwise be required to
qualify but for this subparagraph, (ii) subject itself to taxation in any such
jurisdiction or (iii) consent to general service of process in any such
jurisdiction;
(e) notify the Purchaser, at any time when a prospectus relating
thereto is required to be delivered under the Securities Act, of the happening
of any event as a result of which the prospectus included in such registration
statement contains an untrue statement of a material fact or omits any fact
necessary to make the statements therein not misleading, and, at the request of
any such seller, the Company will prepare a supplement or amendment to such
prospectus so that, as thereafter delivered to the purchasers of the Stock, such
prospectus will not contain an untrue statement of a material fact or omit to
state any fact necessary to make the statements therein not misleading;
(f) cause all the Stock to be listed on each securities exchange on
which similar securities issued by the Company are then listed and, if not so
listed, to be listed on the NASD automated quotation system and, if listed on
the NASD automated quotation system, use its best efforts to secure designation
of all the Stock covered by such registration statement as a NASDAQ "national
market system security" within the meaning of Rule 11Aa2-1 of the Securities and
Exchange Commission or, failing that, to secure NASDAQ authorization for the
Stock and, without limiting the generality of the foregoing, to arrange for at
least two market makers to register as such with respect to the Stock with the
NASD;
(g) provide a transfer agent and registrar for all the Stock not later
than the effective date of such registration statement;
(h) enter into such customary agreements (including underwriting
agreements in customary form) and take all such other actions as the Purchaser
may reasonably request in order to expedite or facilitate the disposition of the
Stock;
(i) make available for inspection by the Purchaser, any underwriter
participating in any disposition pursuant to such registration statement and any
attorney, accountant or other agent retained by any such seller or underwriter,
all financial and other records, pertinent corporate documents and properties of
the Company, and cause the Company's officers, directors, employees and
independent accountants to supply all information reasonably requested by any
such seller, underwriter, attorney, accountant or agent in connection with such
registration statement;
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(j) otherwise use its best efforts to comply with all applicable rules
and regulations of the Securities and Exchange Commission, and make available to
its security holders, as soon as reasonably practicable, an earnings statement
covering the period of at least twelve months beginning with the first day of
the Company's first full calendar quarter after the effective date of the
registration statement, which earnings statement shall satisfy the provisions of
Section 11(a) of the Securities Act and Rule 158 thereunder;
(k) permit the Purchaser when, in its judgment, it might be deemed to
be an underwriter or a controlling person of the Company, to participate in the
preparation of such registration or comparable statement and to require the
insertion therein of material, furnished to the Company in writing, which in the
reasonable judgment of the Purchaser and its counsel should be included;
(l) in the event of the issuance of any stop order suspending the
effectiveness of a registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any common stock included in such registration statement for sale in any
jurisdiction, the Company will use its best efforts promptly to obtain the
withdrawal of such order;
(m) obtain a cold comfort letter from the Company's independent public
accountants in customary form and covering such matters of the type customarily
covered by cold comfort letters as the Purchaser, may reasonably request;
(n) obtain an opinion of counsel from the Company's independent counsel
in customary form and covering such matters, such as effectiveness of
registration statement, of the type customarily covered by an issuer's counsel
opinion.
4. Registration Expenses.
---------------------
(a) All expenses incident to the Company's performance of or compliance
with this Agreement, including without limitation all registration and filing
fees, fees and expenses of compliance with securities or blue sky laws, printing
expenses, messenger and delivery expenses, and fees and disbursements of counsel
for the Company and all independent certified public accountants, underwriters
(excluding discounts and commissions) and other persons retained by the Company
(all such expenses being herein called "Registration Expenses"), will be borne
as provided in this Agreement, except that the Company will, in any event, pay
its internal expenses (including, without limitation, all salaries and expenses
of its officers and employees performing legal or accounting duties), the
expense of any annual audit or quarterly review, the expense of any liability
insurance and the expenses and fees for listing the securities to be registered
on each securities exchange on which similar securities issued by the Company
are then listed or on the NASD automated quotation system.
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(b) In connection with the Demand Registration, the Company will
reimburse the Purchaser for the reasonable fees and disbursements of one counsel
chosen by the Purchaser.
5. Indemnification.
(a) The Company agrees to indemnify, to the extent permitted by law,
the Purchaser, its officers and directors against all losses, claims, damages,
liabilities and expenses caused by any untrue or alleged untrue statement of
material fact contained in any registration statement, prospectus or preliminary
prospectus or any amendment thereof or supplement thereto or any omission or
alleged omission of a material fact required to be stated therein or necessary
to make the statements therein not misleading, except insofar as the same are
caused by or contained in any information furnished in writing to the Company by
the Purchaser expressly for use therein or by the Purchaser's failure to deliver
a copy of the registration statement or prospectus or any amendments or
supplements thereto after the Company has furnished such holder with a
sufficient number of copies of the same. In connection with an underwritten
offering, the Company will indemnify such underwriters, their officers and
directors and each person who controls such underwriters (within the meaning of
the Securities Act) to the same extent as provided above with respect to the
indemnification of the Purchaser.
(b) In connection with any registration statement in which the
Purchaser is participating, the Purchaser will furnish to the Company in writing
such powers of attorney, custody agreements and letters of direction and other
information and affidavits as the Company reasonably requests for use in
connection with any such registration statement or prospectus and, to the extent
permitted by law, will only have to indemnify the Company, its directors and
officers against any losses, claims, damages, liabilities and expenses resulting
from any untrue or alleged untrue statement of material fact contained in the
registration statement, prospectus or preliminary prospectus or any amendment
thereof or supplement thereto or any omission or alleged omission of a material
fact required to be stated therein or necessary to make the statements therein
not misleading, but only to the extent that such untrue statement or omission is
contained in any information or affidavit so furnished in writing by such
holder; provided, that the obligation to indemnify will be limited to the net
amount of proceeds received by the Purchaser from the sale of the Stock pursuant
to such registration statement.
(c) Any person entitled to indemnification hereunder will (i) give
prompt written notice to the indemnifying party of any claim with respect to
which it seeks indemnification and (ii) unless in such indemnified party's
reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist with respect to such claim, permit such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party. If such defense is assumed, the
indemnifying party will not be subject to any liability for any settlement made
by the indemnified party without its consent (but such consent will not be
unreasonably withheld or delayed). An indemnifying party who is not
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entitled to, or elects not to, assume the defense of a claim will not be
obligated to pay the fees and expenses of more than one counsel for all parties
indemnified by such indemnifying party with respect to such claim, unless in the
reasonable judgment of any indemnified party a conflict of interest may exist
between such indemnified party and any other of such indemnified parties with
respect to such claim.
(d) The indemnification provided for under this Agreement will remain
in full force and effect regardless of any investigation made by or on behalf of
the indemnified party or any officer, director or controlling person of such
indemnified party and will survive the transfer of securities described herein.
The Company also agrees to make such provisions, as are reasonably requested by
any indemnified party, for contribution to such party in the event the Company's
indemnification is unavailable for any reason.
6. Participation in Underwritten Registrations. No person may
participate in any registration hereunder which is underwritten unless such
person (i) agrees to sell such person's securities on the basis provided in any
underwriting arrangements approved by the person or persons entitled hereunder
to approve such arrangements and (ii) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
required under the terms of such underwriting arrangements; provided that shall
not be required to make any representations or warranties to the Company or the
underwriters other than representations and warranties regarding the Purchaser=s
intended method of distribution.
7. Miscellaneous.
(a) No Inconsistent Agreements. The Company will not hereafter enter
into any agreement with respect to its securities which is inconsistent with or
violates the rights granted to the Purchaser in this Agreement.
(b) Adjustments Affecting the Stock. The Company will not take any
action, or permit any change to occur, with respect to its securities which
would materially adversely affect the ability of the Purchaser to include the
Stock in a registration undertaken pursuant to this Agreement or which would
materially adversely affect the marketability of the Stock in any such
registration (including, without limitation, effecting a stock split or a
combination of shares).
(c) Remedies. Any person having rights under any provision of this
Agreement will be entitled to enforce such rights specifically to recover
damages caused by reason of any breach of any provision of this Agreement and to
exercise all other rights granted by law. The parties hereto agree and
acknowledge that money damages may not be an adequate remedy for any breach of
the provisions of this Agreement and that any party may in its sole discretion
apply to any court of law or equity of competent jurisdiction (without posting
any bond or other security) for specific performance and for other injunctive
relief in order to enforce or prevent violation of the provisions of this
Agreement.
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(d) Amendments and Waivers. Except as otherwise provided herein, the
provisions of this Agreement may be amended or waived only upon the prior
written consent of the Company and the Purchaser.
(e) Successors and Assigns. All covenants and agreements in this
Agreement by or on behalf of any of the parties hereto will bind and inure to
the benefit of the respective successors and assigns of the parties hereto
whether so expressed or not. In addition, whether or not any express assignment
has been made, the provisions of this Agreement which are for the benefit of the
Purchaser are also for the benefit of, and enforceable by, any subsequent holder
of the Stock.
(f) Entire Agreement. Except as otherwise expressly set forth herein,
this document embodies the complete agreement and understanding among the
parties hereto with respect to the subject matter hereof and supersedes and
preempts any prior understandings, agreements or representations by or among the
parties, written or oral, which may have related to the subject matter hereof in
any way.
IN WITNESS WHEREOF the parties hereto have or have caused this
Agreement to be duly executed as of the date first above written.
PERFUMANIA, INC.
By: /s/ Jerome Falic
-------------------------
Name: Jerome Falic
Title: President
PARLUX FRAGRANCES, INC.
By: /s/ Frank A. Buttacavoli
----------------------------
Name: Frank A. Buttacavoli
Title: Executive VP and CFO
7
